As part of the stimulus act, the portion of Small Business Administration loans backed by the government was increased by nearly $20 billion. Health care providers picked up about 12 percent of that.  At first blush, this seems unproblematic. But some observers are concerned that spending money to help build up the nation’s health care infrastructure could leave us all with even higher bills in the future. Consider the following from Kaiser Health News:

"These types of loans could absolutely backfire," said Elliott Fisher, director of the Center for Health Policy Research at the Dartmouth Medical School in New Hampshire. Fisher is head of the Dartmouth Atlas of Health Care, which has done studies showing that regions with more hospitals, specialists or diagnostic services tend to have higher per-capita health costs. He argued that "most of these loans will not reduce costs, but in fact they are quite likely to lead to higher costs. ... We know that a lot of health care resources are devoted to unnecessary and wasteful services." 

But doctors and others health providers who have received loans say consumers will benefit. “Our patients will be thrilled,” said Dr. Mark Rattinger, a West Palm Beach, Fla., internist who used a $935,000 loan guaranteed through the SBA to move into larger, more modern office space that will allow his group practice, which has six doctors, to add two more.

We wonder whether this conflict is part of the ongoing tension between the short term goals of the stimulus act and their longer term consequences. In the short term, it would appear that the focus on creating jobs might obscure longer-term considerations on health care costs.

One last thought:  Kaiser’s article goes on to note that some of the loans were taken out to help businesses cover government reimbursement cutbacks. Are we just moving money from one pocket to another—calling it savings on the one side and stimulus on the other?