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Business & Economic Development:
Increasing Productivity & GDP

It's the health care costs, stupid!

No, Warren Buffett didn’t say that. But he could not have stated it more vividly, at his famed Berkshire-Hathaway annual meeting, in May 2017:

“Medical costs are the tapeworm of American economic competitiveness.”


He continued:

“If you talk about world competitiveness of American industry, health care is
the single biggest variable where we keep getting
more and more out of whack with the rest of the world.”

Not good! But he was getting people’s attention…Then he started adding up the numbers:

“If you go back to 1960, or thereabouts, corporate taxes were about 4% of GDP, now they’re
about 2% of GDP….
healthcare was 5% of GDP, and now it’s about 17% of GDP.

(Update: health spending is now close to 18% of US GDP…heading to 20% this decade, according to government estimates!?!)

(Note: there is a misconception that the aging of America is driving the increase in our health care costs—but it actually only accounts for about 12% of health cost increases.)

Warning graphic

Take just one state example: In 2003 Arizona’s GDP was $17 billion smaller than it would have been–if our population had no chronic disease. In 2016—just 13 years later, AZ’s GDP loss had gotten 3x worse$55B smaller than it could have been. (Other states shared much the same fate.)  Half of that loss is due to the cumulative health effects of decades of inactivity and unhealthy nutrition.

Lost GDP graphic

Child obesity and teen prediabetes from the last 30+ years continues to turn into more & more young adult, and then even more harmful middle-age, chronic disease. So this chronic collateral damage will get much worse by 2050—as the lifelong consequences of our multi-decade inaction on inactivity and unhealthy nutrition play out throughout our population as it ages.

Imagine how much healthier employees would be now, if the schools they had attended developed a “culture of health” among all their students–in other words, among virtually all the future employees in the state? That impact spreads even further & speeds up even more, by including parents, and through a range of school-community partnerships especially via Healthy Students Healthy State.

And employers and employees would save A LOT of money.

  • Employers would improve their productivity and profits, with less absenteeism & presenteeism (i.e., at work but less efficient), while being able to pay higher salaries—instead of having to choose between paying for higher employee health costs OR higher wages.
  • Employees would have lower health insurance premiums, lower out-of-pocket costs—and much higher wages and disposable income instead.

More Info:  Controlling Government Spending
More Info:  Notes on Chronic/Health Costs, Incomes, Taxes
More Info: Support by Business People / Economic Developers