National Healthcare Could Boost the Economy
The financial numbers from some retailers indicate that scrapping Obamacare and setting up a real national healthcare system would be very good for the U.S. economy. Even the convoluted mess known as Obamacare has boosted revenues at some companies and created good-paying jobs in communities.
Even with all its faults, the Affordable Healthcare Act has provided health insurance to 16.4 million Americans, CNN reported. This modest increase in the health insurance rolls has had the following effects on the economy:
- Pharmacy and prescription plan operator CVS Health (NYSE: CVS) saw its revenue grow by $3.31 billion between December 2014 and March 2015. CVS reported a TTM revenue of $139.37 billion in December that grew to $143.01 billion in March.
- Walgreen Boots Alliance (NSDAQ: WBA), America’s largest operator of drugstores, saw its revenue grow by $6.96 billion between November 2014 and February 2015. Walgreen reported a TTM revenue of $77.62 billion in November that grew to $84.58 billion by February.
- Revenues at CVS’s MinuteClinics (an in-store health clinic manned by nurse practitioners) increased by 33% in the first quarter of 2015, CVS’s CEO Larry Merlo revealed during a Feb. 10 earnings call. Merlo also noted that foot traffic at the clinics increased by 36% in the same period.
- That revenue increase can be tied to Obamacare because four out of five visits to in-store clinics at CVS and Walgreens are paid for by health insurance, according to Forbes contributor Bruce Japsen.
- Kroger (NYSE: KR) is now making $100 million a year from its Little Clinics, according to Cincinnati TV station WPCO.
How Expanding Healthcare Can Create Good Jobs
Expanding healthcare can also create good jobs in American communities. In-store health clinics like Walgreens Walk-In Clinic, MinuteClinics and the Little Clinic employ nurse practitioners.
The average salary for a nurse practitioner in the United States was $92,670 a year in 2013, according to U.S. News & World Report. The lowest paid 10% of nurse practitioners earned $66,960 a year, or more than $22,000 more than the Social Security Administration’s estimate of the average U.S. salary, which was $44,888 in 2013.
The retail clinics alone could provide a lot of nurse practitioners’ jobs. Kroger is currently operating 155 Little Clinics in nine states and 25 Little Clinics in the Cincinnati area alone. CVS is operating over 1,000 Minute Clinics, and Walmart Stores Inc. (NYSE: WMT) has entered the business, opening 17 clinics in its supercenters.
Each of the clinics could employ two or three nurse practitioners, meaning the creation of a number of well-paying middle class jobs in American communities. That includes many poorer communities and rural areas.
Nor is nurse practitioner the only good-paying job that could be created. More health insurance means more prescriptions filled, which means more work for pharmacists. The average pharmacist in the United States made $119,280 a year, or $57.35 an hour, in 2013, according to U.S. News & World Report. The lowest paid pharmacist made an average of $89,000 a year, or more than twice the average American salary.
This does not mean that I support Obamacare; it simply shows that expanding healthcare can produce economic benefits. If something as shoddy, as poorly designed and as inefficient as Obamacare can have such benefits, just imagine what would result from a real national healthcare program like the expansion of Medicare to cover all Americans.
Some Other Economic Benefits
There would be some other obvious economic benefits from such a program. The most obvious would be that large numbers of Americans would be enabled to change jobs or careers or go into business for themselves.
Many Americans are currently stuck in jobs they do not want simply to get health insurance. An example of this might be a man who works as a janitor at his local school because it provides health coverage for his kids. A real national health insurance program could enable that man to pursue higher-paying construction work, which would increase his family’s income.
Another is that employers would be spared the expense and hassle of providing health insurance. That would make job creation easier and cheaper. Obamacare actually kills jobs because it requires all organizations that employ more than 50 full-time workers to provide health insurance.
Providing real national health insurance would increase employment and make more full-time jobs available. It would also enable companies to offer more short-term and seasonal employment because they would not have the hassle of benefits.
There is yet another way real health insurance reform could create more real jobs and grow the economy. Companies and other organizations could get rid of their human resources departments and instead spend the money on expanding their businesses.
A car dealer could hire another salesperson and sell more cars, generating more sales tax for the community and more jobs at auto factories with the savings. A factory could hire more factory workers or buy more equipment.
This could also benefit government; your local school district could get rid of its human resources department and use the savings to put another teacher in the classroom if it did not need to provide health insurance. Your police department could put another officer on the street.
Unfortunately, our leaders cannot see these benefits. The Democrats in particular seem to be completely invested in Obamacare and refuse to admit they were wrong about it, largely because they do not want look stupid. The more Democrats defend Obamacare, the more they become like Lyndon Johnson during the Vietnam War; their efforts to defend the policy make them look stupider, and they become less popular.
One problem with the Democrats’ mindless defense of Obamacare is that it prevents the discussion of real alternatives. Another is that it frees Republicans from having to offer a real alternative.
A Real Alternative to Obamacare
Okay, there are a few politicians trying to offer alternatives. The chairman of the U.S. House’s Budget Committee, Rep. Tom Price (R-Georgia), has proposed one in a piece of legislation called The Empowering Patients First Act.
That proposal would give Americans tax credits of $1,200 to $3,000 a year to use to buy health insurance. Unlike the Obamacare Credit’s Prices, credits would be distributed directly by the IRS, eliminating the imbecilic bureaucracy of the state health insurance exchanges.
This system could work and be implemented because it utilizes existing resources. It would also be more readily adaptable to the current U.S. economy in which large numbers of people are self-employed or working as freelancers. A combination of this and Medicare expansion might work even better.
Disclosure: The Blogger author of this post owns shares of Kroger.