This post from Leif Wellington Haase, Director of the New America Foundation in California, also appears over at Zócalo Public Square. Check it out to hear what he and other experts have to say about the impact of the new health care reform law on California's economy. And be sure to RSVP for the California health policy program's upcoming alternative town hall event, Putting the Care in "Obamacare," where state health care leaders and our own Dr. Kavita Patel will discuss the challenges and opportunities associated with health reform implementation.
Health care is big business, accounting for over 20 percent of U.S. GDP. It makes up a similar percentage of California’s economy. Medicine is mostly practiced, however, at the local level. Consequently, the impact of reform is likely to be felt unevenly. Health reform in itself won’t dramatically increase the amount of money spent on health care, but the way it is distributed within the system will change. Reform’s early effects in California will be felt on a sector by sector and even on a hospital-by-hospital basis. Large private urban hospitals, which will probably consolidate, should do well. So will clinics, which receive a new boost of federal funding under federal legislation. Public hospitals are likely to struggle as their patients move into private coverage and their reimbursements may decline. Device makers, whose products will be taxed to help pay for the cost of the bill, may have their wings clipped.