Obamacare Good for the Economy

¶ … Obamacare good for the economy?

The issue must be looked at from three points-of-view, One the development that goes on in the health care and how the policy ahs affected the health care industry and particularly various sections of the society, secondly the economic changes and developments that have come about in the medical care industry, and the burden and changes in the nations economy as a whole and whether all these changes are good, or have a favourable impact. It must be noted that health care is a very contentious subject that is often made the issue in elections and therefore have a political angle too.

Why must there be Obamacare?:

In the American system, there is no concept of social support in the economy that is largely controlled by the capitalist system. However social concerns have become paramount in the changing society. Fundamentally even doctors are divided on the issue of universal health care: Thus the question is if socialized medicine or a compassionate, necessary program? The basics behind supporting the program are that health insurance is expensive, and not everyone can afford it. And there are opinions that the Government must subsidize health care. Looking at the beneficial and the positive side it can be established that for the maintenance of health and removing disparity there is a need to subsidize care and insurance as proposed by the universal health policy. The truth is that social action is necessary for the maintenance of health, because according to the study conducted by the Institutes of Medicine shows that over eighteen thousand Americans die every year because they're uninsured. Thus systematic and charitable health coverage would mean that fewer people would die of dangerous disease from asthma to cancer. This would be beneficial to the minority communities and fewer veterans who depend on emergency rooms for their primary care. Thus the concept of the universal care can be welcomed as a better social measure. (Warner, 2001)

The reason is that there have been vast changes in the health industry. Earlier the government had hospitals and public services that would cater to the lower income group and these services are slowly vanishing giving place to corporate giants with a profit motive. Health care organizations were basically non-profit corporations, with the earlier government hospitals are usually non-profit and founded for the purpose of public service. Before entering the actual economic impact it is necessary to examine the health care system and its working and the desirability of insisting on social health.

Understanding the system:

The governance structure of which the law is concerned can prohibit certain structures in the health care industry for social reasons. The health care system comprises of a hierarchy in the pyramid structure with a chief executive at the helm and a board and subordinates. (Miller; Hutton, 2004) The Government hospitals are usually non-profit and founded for the purpose of public service. Hospitals under this structure are created by law, statutes that are passed by the concerned legislature to bring in the creation of the hospital. Such a law will automatically create the entire system including staffing, and the way the unit operates. Such a system is governed entirely by the statute and judicial reviews in case of disputes. The corporation is a legal entity that is made up of many investors who limit their liability to their investments. Incorporated companies have limited liability but can be profit oriented. (Miller; Hutton, 2004)

The corporation has the benefit of perpetuity because it goes on for ever irrespective of the death of shareholders. The corporation can also be set up as a non-profit organization that renders social service. The comparison between both the types shows that the non-profit corporation cannot distribute the earnings to the individuals but can distribute it to the same charity. Such hospitals are also called charity hospitals. In contrast the for-profit corporation is created with the intention of bringing about profits for the investors. The profit motive is the force behind the venture. For profit concerns can be private or public and this concern is essentially a commercial enterprise. Such enterprises are now proliferating. (Miller; Hutton, 2004)

The reason is not far to seek. Today the health industry is highly commercial and thus the economic theories that were suited to commercial organizations are now suited to medical realms too. Thus some of the tools and their importance can be seen in the following information. The face of the industry has changed and so has the requirements. These differences will bring about a change or the way the actual implementation of the policy is done in practice because there are many competitive advantages that health care units that are going to be declared as ACOs are going to take that may not be exactly as per the policy. The ACOs have also to become competitive and thus the competitive advantage can be had through many ways that is not envisaged in the policy including human resource practice initiatives. Priorities and practices are changing day by day. For example today's youth have less social awareness and there would be lesser males in the workplace and more women will occupy male dominated jobs in future and the competition is going to be high. (Blau, 2006)

This means that the policies for the new generation of prospective employees will usher in changing conditions the departments will still be the basic job of building and maintaining good relationships, processing complaints, and looking to continuous improvement. Companies have to reduce costs improve quality and along with this there is a need manage all employees in the organization with the nature of the business. Such service institutions are created by a statute. On the other hand incorporated companies have limited liability but have to be profit oriented. Its sole motive profits for the investors. While it is true that the investor owned systems will raise the rate of hospital care for the patients, the non-profit increase the cost of medical care in terms of operations but subsidize the patient cost. As legal entities the responsibilities and duties of both types in health care are similar. Though this anomaly exists the fact that medical services are meant to serve the public is not to be forgotten. Without such policies many minority groups, poor persons and especially the old and retired will have no access to medical facilities. (Peterson, 1999)

Going back we can see that some of the social programs that came about during the 1900s was cause by the depression of 1920 and 1930 and there stands out two concepts, one the social security and another housing of the poor. It was the widespread destitution and suffering the old aged people and other insecurities that threatened the security of the working man that it was felt that leaving the society to its own devices was not enough. While these are still issues, the major issue comes with the aging population of America. Social Security is based on 'Social insurance.' Social Security is the largest element in America's system of social insurance, and while there are insurance for life, fire, theft, liability, and so on, the pooling of risks of fortuitous-unexpected and unforeseen-losses and compensation for victims of a loss, especially loss of income due to the loss of life or of old age. (Peterson, 1999)

The needs of security vary with age and these types of occupation because the occupation tends to indicate the probability of employment at the older ages. One example given is of professional athletes, where the expectation of occupational life is relatively low, "as it is for men in other occupations that require full physical vigour, quick reaction, and other physical and psychological qualities normally blunted by increasing age." (Cavanaugh; Blanchard-Fields, 2010) Thus the working career and the employment opportunities for older persons are the basic considerations. Today therefore the rules have been changed to meet this need. The process is still evolving. These are the fundamentals of the health industry. The second stem of the argument is to see the issues in general social policy that may or may not affect the economy.

Other pertinent issues that necessitate such programs

Most of the social programs including the Obama care affect the poor and most of the elder adults. These include policies on medical issues, physical issues, pensions, and the well-being of aging persons. The development policies are generally shaped by four forces, primarily biological, psychological, socio cultural and the life cycle factors. These have always shaped the thinking of the society. (Cavanaugh; Blanchard-Fields, 2010) In this context taking on of these forces, the first example is the changes that were ushered in to the capitalism with the inclusion of some form of public service shows that any system has to be oriented to the welfare of the community and that these services are aimed at providing key services that must be available to all on an equitable basis. These changes make the free services with minimum or no returns out of the question for the state because such services place burden on the exchequer. (Farazmand, 2001)

However social policies have been reflected in a number of areas including education, poverty and Medicare. There has been great progress post globalization where there was a revision of this trend where government moves the welfare services to the private sector to help it continue the services is unique to the United States, while in other countries the duality exists with the states bearing the burden of not only providing but also maintaining and innovating such services. (Farazmand, 2001)

There have been success previously in the medical policies and there is no reason why in the case of the Obamacare also it would not be a success. For example the medical policy like accountable care organizations -- ACO has solved the issues like incentive, gain sharing and cost reduction arrangements, and the methods of evaluating financial risk, and lastly the clinical integration are questions of policy. (Peterson, 1999)

It also means that there would be predictability in the form of clearer guidelines and would bring about the better corporate practice of medicine which has now been accepted as a doctrine in many states like California, Colorado, Illinois, Iowa, New York, New Jersey, and Texas and such a doctrine has created a policy that actually prevents a doctor and hospitals from employing physicians in the provision of out-patient services. Secondly the involvement of the Government would enhance the quality of the care. The basis of this is the economic priorities.

Economic factors

Some of the issues between both these types also relate to the quality of care that the patients get. There are issues that the non-profits offer more patient based and cost effective services but are of poor qualities but the high cost private services are better. The reverse is also being argued. Congress provides reduction in taxes and other subsidies to see that the patient gets better service with non-profits and the health industry generally. Investor owned systems will raise the rate of hospital care for the patients while the non-profit increase the cost of medical care in terms of operations but subsidize the patient cost. Thus one is based on profit entirely and the other is based n service. Somehow the non-profit is not being favoured as of now with more growth in the investor created profit systems. Newly there are issues that the non-profits offer more patient based and cost effective services but are of poor qualities but the high cost private services are better. The reverse is also being argued.

Congress provides reduction in taxes and other subsidies to see that the patient gets better service with non-profits and the health industry generally. That is why in this case the Government is keen to create a policy that would be beneficial to both the sectors. The congress has set up many study groups and while these groups made different recommendations in the health care sector, none have come forward with a statement that shows the declining quality of service in either of these types of organization. (Torrisi; Hansen-Turton, 2005) For example the normal methods of treating the abusers are by using the counselling centres and also the de-addiction centres that have various methods of effecting a cure. However the counselling and the programs have not been able to provide full changes and often the abuser shows recidivist tendencies. Many agencies like the medical researchers try experiments to see the effects of drugs and the methods of nullifying the craving.

However the actual treatment requires support of the family, the will for the abuser to change and many factors will determine the success of the programs. No doubt some of the social care measures and the universal health policy proposed by the President is a welcome action for the underprivileged of the society. However evidence shows that such programs always backfire in the well-being of the economy as a whole on account of the fact that all these programs need revenue to be generated for the maintenance that requires more taxes, and consequently inflation and more price rise, making the same services ironically unreachable in the log run. There are thus a lot of economic negative factors that would affect the U.S. economy as a whole the basis of which would be the programs like the universal health.

Negative factors that will affect the economy:

Primarily the rising cost of Medicare "is placing an increasing burden on current and future taxpayers, as well as exacerbating the poor financial condition of a program on which America's seniors depend in their retirement. The traditional program's fee-for-service payment system, in which doctors and hospitals are paid a fixed price for each and every procedure or service that they perform, encourages an increase in the volume of services provided, which drives excessive spending." (Moffit; Senger, 2013)

The system as hoped does not deliver quality care but creates unnecessary costs and higher spending as well. The programs like Obama care and universal health care result in a lot of taxes. One tax that Obama had to content with, which was used to fund the social program was the corporate tax. It is pointed out that the unusual burden on the corporate for financing state ventures eventually brought on the depression. The corporate tax is the curse for economic growth. According to the former Presidential adviser Boskin (2010) President Obama should look up corporate income tax. This suggestion was put forth in 2010. At that time the U.S. had the second-highest corporate income tax rate of any advanced economy. On the other hand the countries like Germany and Canada reduced their corporate tax rate, rendering American companies in poor position globally. (Boskin, 2010)

Though the deductions for interest and other features helped in reduce tax, corporate tax sees to it that there is no investment and the capital has become internationally mobile. Again the taxes along with corporate tax suffer a second tax as the dividends are taxed. It was shown in 2010 that the capital from the U.S. is moving out and in future the corporate tax will cause the workers too bear the burden because of the lower tax for the competitors. To cite the Organization for Economic Cooperation and Development Boskin states that 'corporate taxes are found to be most harmful for growth, followed by personal income taxes and then consumption taxes.' (Boskin, 2010) Many types of taxes like consumption tax, a value-added Tax, the Fair Tax retail sales tax all go to hamper the economic growth. Thus to eliminate the negative effects of the corporate tax would mean increasing the GDP and future wages significantly.

Why is the government taxing so?

The need for revenue is acute. Government spending has gone out of control, and some of the adventures abroad are the reason for this. The major revenue for the government actions come from corporate taxes. The government also spends on other issues and these are also clubbed together in considering the overall effect. For example one government expenditure is for example in Afghanistan. The cost incurred by the U.S. And the cost of the projects that Afghanistan can never fulfil on their own makes the issue more pointed. For example the building security cost $82 million contract just for the Afghan Defence University. Another out lay of $40 million a year to operate it is necessary. Likewise there has been another $11.4 billion program to construct nearly 900 facilities for the Afghan National Security Forces -- ANSF. (Farazmand, 2001) This is only the tip of the iceberg. (Dixon; Younglai, 2012)

Thus it was hoped that Obama will go with a tax break. That would be almost impossible and then the Obama care must be shelved. Though the Obama administration's corporate tax reform plan will end 'dozens and dozens' of tax breaks, and the White House's election-year call for higher taxes on the wealthy. (Dixon; Younglai, 2012) As of now companies are subject to differing levels of taxes, and a cut in the top 35% corporate tax rate and the counter balance was suggested in manufacturing tax break for oil and gas companies, and according to Obama the bulk of other tax cuts would go and the place of the corporate tax would be taken by them. Thus it is shifting the burden.