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Construction growth?! Hospitals are huge capital projects. Plus most hospitals are LARPing as outpatient clinic. Lastly America’s infrastructure is in shambles. Hospital projects could be replacing old facilities that fail current fire safety codes and other codes/regulations to make sure they don’t fall into squalor.
All of that's fine but beside the point. It's a lot of activity going towards ends that are more like symptom management (if not an outright grift).
That it's good for the construction sector is akin to a broken window being good for the local glazier.
But even the grift comes with high salaries. The pills don’t dispense themselves (yet!).
Government salaries can be high, too. That doesn't mean they're good for the overall economy.
What matters is what else could be done with those resources. The medical system is highly subsidized and distorted, so it's very unlikely for it to be economically efficient.
We all need healthcare. I agree that its current form is corrupted by enrollment caps imposed by medical schools and the disparity in pay between CEOs and healthcare providers. However, I believe that healthcare is a benefit in maintaining people’s health when an ailment does occur. Additionally, the general idea of having a place to go if something goes wrong is crucial.
The point is more subtle than that. Given all the mal-aligned incentives, a hospital may be the best use for the space but this system that is leading to so much demand for medical services is making us poorer.
It's not about whether health care is a good or not. The idea of economic growth is supposed to represent greater prosperity, not just expending more resources for the same or worse outcomes.
So it’s the current system that inhibits growth not the act of keeping humans alive is what I am gathering.
You got me curious about the empirical evidence on this and the first paper I found supports my priors that hospitals don't really keep people alive on net.
I use variation in access to hospitals caused by nearly 1,300 hospital entries and exits to show that hospital entries cause sharp increases and exits cause sharp decreases in the quantity of inpatient care and emergency department visits with no short-term effect on the mortality rate.
This is a top journal in this field of economics. I haven't scrutinized the paper but it would be shocking if the authors weren't put through the ringer for coming to this conclusion. They would definitely have had to do many robustness checks on their methodology.
Remember @simplestacker's point about hospitals being a driver of growth isn't great. They aren't so much productive in and of themselves as they are a remediation of social problems.
In other words, it's not clear that more hospitals mean more prosperity, because if people were healthier we'd have fewer of them and people would be better off and be able to put those resources elsewhere.