In today’s global economy, workforce training and retraining are a big key to business success, says Katherine Baicker of the White House Council of Economic Advisers.
U.S. health care and education, as well as globalization were the main topics discussed by Katherine Baicker of the White House Council of Economic Advisers. She opened her session addressing the way in which globalization is affecting the U.S. economy.
"The advantages of globalization," she said, "will come from liberalizing the trade of goods and services." Benefits would be complemented by gains in U.S. living standards of living; those gains from trade are spread out across the population, she explained, while negative effects tend to be more focused, such as the loss of jobs in a specific industry.
Thus, she noted, workforce training and retraining are key to successful competition in the global business arena. "Investing in human capital has a much higher return than ever before," she said, suggesting that, from an economic perspective, investment in human capital should receive the same tax incentives as investment in physical capital.
Education requires good governance and accountability, as well as metrics so that parents can make informed decisions about their children's K-12 education, according to Baicker. And workers who complete their K-12 education generally adapt and retrain more easily in the face of changing economic conditions.
Baicker also addressed the U.S. health-care system, which she acknowledged is hinged on policies drawn up years ago -- a situation that fails to recognize changes in the sector.
An increasing a percentage of U.S. GDP is being spent on health care, but the country is not really achieving proportional increments in health-care quality, she explained, adding that the United States spends twice as much in health care than many other countries but doesn′t get twice the quality of health care. Nor does Baicker see sufficient transparency. She argued that a lack of clarity between how much a medical service costs and its associated quality forces individuals to make the ill-informed decisions about their options. Many physicians don′t know the cost of the medical procedures because there aren't incentives for them to know this information.
The federal government (as the purchaser of half of the health care in the country) has the role of promoting electronic recordkeeping in order to avoid test duplication, which Baicker identified as a major source of the high costs of health care.
President Bush has called for reforming health care through reforming the tax code; existing legislation does not provide the incentives to make health-care spending more efficient. Preventative medicine, said Baicker, generally pays for itself in the long run. But without proper transparency for costs, patients again may not be making the best-informed choices. If the cost of preventative medicine is negative, she even went on to say, health-insurance companies could do better paying for preventative health care.
In response to an audience question, she also suggested that Americans have to face tough reality: health care will always be rationed because of budgetary concerns. By this, she meant that not every person can get access to every procedure. And in those areas that receive high percentages of federal health spending, people may not even have adequate access to health care. "It is an unpleasant reality that we must look at the costs and benefits of health-care spending," she added.
Global Conference 2013
Former Prime Minister Tony Blair, philanthropist Bill Gates and Strive Masiyiwa of Econet Wireless discuss advancing prosperity in Africa.
