Health Care and Government and Manufacturing & Technology

EYE ON THE PIE: What if we moved the elderly out of state?

June 12, 2006

"Don't write about this," Sid Simpleton told me. He is the state's social policy director. "People who have recently experienced the loss of a loved one do not like death discussed without appropriate gravity."

"I'll warn them not to read the column if they have recently had such a loss," I said. Sipping gin and tonics on a warm spring afternoon does make the troubles of the world seem less serious.

"OK, if you think it's safe," Sid said. "This is the story. You know Gov. Daniels is really strong on getting Hoosiers to improve their health. He wants us aware of health risks. He wants us out there exercising. He encourages us to cut out smoking, to eat moderately and drink with discretion."

"Right," I said. "He's shown good leadership on this issue. Not only has he taken the moral high ground, but it's good economics. If we could spend less on health care, the pressure to raise government expenditures would be reduced. Then more could be spent on the joys of life, rather than on illness, pain and death."

"Exactly," Sid said. "At every adult age, except 35 to 44, and that difference is very small, the mortality rate in Indiana exceeds the national rate. It's the same with child and adolescent mortality; we exceed the national rates. Our infant mortality rate is 7.7 per thousand infants (33rd in the United States). The national rate is 6.9; Massachusetts and Maine have rates under 6.0. Of course, we're still better off than Mississippi (10.5) and Louisiana (9.8)."

"So," I said, "if we live healthier lives, fewer folks would be dying at relatively young ages. That preserves the investment we make in people and saves us from the grief of early deaths."

"Yeah," Sid said solemnly, "but some of us who think about policy are thinking the unthinkable. We don't have any support from the governor on this, but we see ourselves as the advance phalanx of progress for Indiana's prosperity."

"What do you have in mind?" I asked.

"Ship out the old people," Sid said. I gasped. He continued.

"Old folks-people like you, people 65 and older-account for about three-quarters of the deaths in the state. Everyone knows that the bulk of health expenses are spent in the last weeks of life. We need to get those who are likely to be dying out of Indiana before they kick off here, before they start using our resources."

"That's the most brutal idea I ever heard," I objected. But fascinated, I asked, "How would you do it?"

"Market incentives," Sid smiled, sipping on another drink. "First, we would make mailing lists of poor and sick Hoosiers available to retirement colonies outside Indiana. All those places in Alabama, Arkansas, Mexico and East Timor that want retired people are perfect for our purposes.

"Second, we offer a 'sunshine subsidy,' a flat payment to anyone 65 and older who volunteers to leave Indiana and not come back. Third, there is the 'loved-one lottery.' This is open to out-of-state relatives of older Hoosiers. The winners get a generous lump sum of money or annual payments to maintain their relatives somewhere else. Of course, the amount we pay out will be less than our anticipated costs."

"But retired people," I objected, "have all that pension money we would be giving up while they are healthy."

"Pensions," Sid said, sighing, "are things of the past. A good bear market and 401(k) accounts will be paupers' portfolios. But health care costs are going to go up."

"Then we could prosper by providing health care services," I insisted.

"Services don't fit our long-term economic plan," Sid sneered. "They have no agricultural basis and thus no political support. Plus, services are not manufacturing. Indiana says it's interested mainly in hightech manufacturing jobs like pharmaceuticals and medical supplies. We want to make the bedpans, not remove them."

"I'm glad you've not reached the governor with this thinking," I said tottering away. Sid stayed seated, thinking.



Marcus taught economics more than 30 years at Indiana University and is the former director of IU's Business Research Center. His column appears weekly. To comment on this column, go to IBJ Forum at www.ibj.comor send e-mail to mortonjmarcus@yahoo.com.
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