Doing Well by Doing Good

By David Shern, Ph.D. and Andrea Blanch, Ph.D.

Whenever doing the right thing and doing the smart thing coincide, it increases the chances that something will happen. Elsewhere, we have presented data demonstrating that investments in prevention, especially in early childhood, have lifelong positive impact. They also save money.
Econometric models by the Washington State Institute of Public Policy estimate that these prevention programs save many more dollars than they cost. They are smart public investments as well as the ‘right’ thing to do.

Health care for children also shows significant return on investment. Recent work by the National Bureau of Economic Research - the nation’s leading non-profit, non-partisan economic research institute - documents the impact of Medicaid health insurance on lifetime productivity. This research shows
that by age 28, individuals with Medicaid coverage as children paid  significantly more taxes, used less earned income tax credits and, for women, had significantly greater income than persons without coverage. The researchers speculate that access to contraception may be an important part
of this story – reducing the rate of unwanted pregnancy. Also, they documented that people with insurance as children had lower overall mortality. (You can read the full report here.)
http://www.nber.org/papers/w20835 [1]

We increasingly realize that the seeds of lifelong illness are planted when we are young.  Extrapolating to age 60, the federal government would completely recoup its initial investment. If anything, this analysis is
likely to underestimate the overall benefit of these programs.  Other probable long-term outcomes include increased educational achievement, decreased involvement with the criminal justice system, and decreased rates of chronic illnesses. These are big ticket items.  If the savings from these
anticipated outcomes were included in the analysis, our guess is that the government would earn back its investment many years earlier than 60.

David Brooks recently argued that the moral dimension of our public policy is an important and often missing part of our public dialogue.  We are suggesting here that increasing access to health care for children is not only the morally correct thing to do, it is also the economically smart thing to do. We all benefit from these investments. Our challenge is to create the sense of common bond and the political will to get this done.