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The hidden costs of the health care status quo

In the cradle of American innovation, workers are making career choices based on co-payments, pre-existing conditions and other minutiae of health insurance. They are not necessarily making decisions based on what would be best for their careers and, in turn, for the American economy — that is, “where their skills match and where they can grow the most,” as another Silicon Valley entrepreneur, Cyriac Roeding, says. Health insurance, Mr. Roeding adds, “is distorting the decision-making.”

It is impossible to know how much economic damage these distortions are causing, but they clearly aren’t good. Economic research suggests that more than 1.5 million workers who would otherwise have switched jobs fail to do so every year because of fears about health insurance. Some of them would have moved to companies where they could have contributed more, and others would have started their own businesses.

David Leonhardt: If Health Reform Fails, America’s Innovation Gap Will Grow.

2 Comments

  1. I’m not sure this is as large a factor as he is arguing. People have always done had to weigh these trade offs. Most people don’t have the luxury of making a job decision based strictly on the job – there is location, benefits (health and other), commute, schools, cost of living, housing affordability, etc.

  2. Of course many factors go into whether or not you move from one job to another, but that’s no reason not to minimize them. 1.5 million people is a lot. Maybe that number is inaccurate, but if it is accurate, it’s pretty important. Even if it’s half that, its pretty important. I have declined job offers in the past because of health care considerations, and it’s incredibly frustrating, because it’s not like the health insurance I couldn’t afford to give up was that great.

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