Policy Insights just published a major cost-effectiveness analysis of several strands of public policy programs. They find that over a lifetime, early childhood medical interventions including Medicaid/CHIP expansions, and some educational programs, these programs are socially profitable and more than pay for themselves. Most other programs don’t pay for themselves which is fine as we are a wealthy country and there are things that cost money but bring value in return.
The one thing that I am stuck on is the financing question for these interventions. There is often a big gap between a societal perspective and the payer perspective. Any payer except the federal government faces a mismatch in incentives as there is a significant current period cash outlay and some benefits will not accrue for a generation or more. There are financing mechanisms like social impact bonds that can claw forward some of those benefits to the current period for the payer to internalize but those are not widespread. In a world of both policy heterogeneity and significant inter-state migration, states that are losing population are effectively paying for a healthier population in the future for states where the lost residents are emigrating to.
Even within the context of a state government budget, a Medicaid expansion for kids collects future benefits from a variety of programs; some of the savings are in the context of lower future Medicaid costs which directly accrue to the Medicaid program’s budget projection, other savings are in less educational interventions which accrue to a combination of the state education department and dozens to hundreds of local school districts, while some of the future benefits are in the form of higher tax revenues that accrue to the state general fund. Most Medicaid programs can’t or won’t extract cash flows from non-Medicaid governmental entities. Cross-department and cross levels of government transfers are tough to automate and can lead to huge political fights.
This is something that I’m stuck on whenever I’m thinking about broad based early interventions.
Barbara
This is such a complex issue to study. I would say that at least in the U.S., many interventions that subsidize the welfare of adults sabotage themselves on this point, by making continuing eligibility contingent on not working at all. This is certainly true for the Social Security disability program, where many people care much more about eligibility for Medicare than they do about receiving relatively modest monthly income payments. Congress modified this aspect of the program to some extent, but not nearly enough.
Of course, once someone is retired, there is no reason to think that social spending would be repaid, but even there, I think you have to consider that adult children are not paying for things out of their own pockets, or losing more time from work attending to their elderly parents. So while those amounts might not be “repaid” they might represent the most efficient way of paying for something that most people believe has to be provided. That would still make it a net gain for society, compared to the alternatives.
Sometimes it’s all in how you frame the question.
Duane
Meanwhile the state of Missouri dropped 90,000 children and 23,000 adults from the Medicaid program in the past year.
dr. bloor
I don’t know that I’d think of it as being something to get “stuck on;” as long as we continue to be a society driven by election cycles, annual municipal/state/federal budget gaps, and quarterly earnings statements, programs with longer-term benefits will continue to be nonexistent or chronically underfunded. Simple, really.
Chris Johnson
@Duane: Yeah, war via internet trolling and capturing our government is one thing, but they DO have to also literally kill us as fast as possible by every means possible because they won’t hang onto the levers of governmental power forever. Things get bad enough, people will revolt and burn it all down, and while that can take out the enemy it also leaves wreckage and ruined infrastructure.
It would be better if we took back our country from hostile enemy control without said country getting destroyed, but until then, our government is literally trying to kill as many of us as it possibly can. That includes the folks in the category of ‘Trump voters’ because bottom line: it’s not about furthering the glory of Trump. It’s about taking down America and Trump has always been there to take a dive, and Pence after him, the whole thing orchestrated to be a catastrophic decline and fall leaving the world clear for Russian rule.
It’s going pretty well, but propaganda makes it out to be way more successful than it is. Which is why people around here despair easily: you have to be prepared to believe that practically everything you’re being shown is enemy action.
We are more tenacious than they think, and we will be very hard to defeat completely.
Duane
It’s easier when you realize the republicans are the enemy of the people. Now AG Barr will resume federal executions. Of course he will.No surprise.
Got to start somewhere.