April 6, 2015

The costly connections between education and health have profound economic implications for health care spending.

  • If people with limited education tend to have more illness, as the data suggest, they are more likely to generate higher health care costs and to be less productive workers and students.
  • Higher costs for employee health insurance are threatening the profit margins of American businesses and the pocketbooks of workers, whose premiums are climbing.
  • Ballooning entitlement budgets (e.g. Medicare, Medicaid) are consuming an ever-increasing share of federal and state budgets, a concern for elected officials and voters.

The diseases responsible for spiraling health care costs, like diabetes and heart disease, would occur at one third to one half of current rates if Americans had higher levels of education, making education a potentially powerful lever for controlling health care costs.

Education is in the country’s economic interest for reasons besides the control of health care costs.

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  • In today’s knowledge economy, American competitiveness depends on an educated workforce, but U.S. students rank behind the youth of other countries on proficiency scores in math and science and have lower graduation rates.
  • Americans with less education earn less and contribute less to local economies, leaving an inadequate tax base to support local public schools and other resources.
  • Americans with less education place more demands on the social safety net and exert a greater economic burden on social services and income support programs.

The business case for investing in education—for the wellbeing of families, workers, and the economy—is compelling. However, health care costs—which education could help to control—make investments in education less affordable, at least in the public sector.

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  • Medicaid is often the biggest expense for state government, and climbing health care costs make it difficult to balance state budgets without cuts in education.
  • Health care costs limit allocations to state universities, shifting the costs of rising tuitions onto families and pricing low-income students out of a college education.
  • Health care costs often siphon dollars away from local school systems and teachers, as well as from education policies with a solid return on investment, such as universal preschool (pre-K).
The bottom line: investments in education are investments in health. 

Education and Health: The Return on Investment is part four of the Education and Health Initiative, a four-part series seeking to raise awareness about the important connections between education and health. Learn more about the initiative here, and explore the other phases below:

Education: It Matters More to Health than Ever Before: An issue brief, animated video, and expanded web content highlighting the growing divergence in health status between Americans with and without an education.

Why Education Matters to Health: Exploring the Causes: An issue brief, video, causal model, and expanded web content exploring the association between education and health has deeper root causes, such as the economic and social conditions young children experience before reaching school age, the skills and networks they build as they mature, and the jobs and resources they can access later in life.

Health Care: Necessary but not Sufficient: An issue brief discussing the role of improved access to health care (and health insurance) in countering the effects of an inadequate education. Health care is necessary but not sufficient in the face of determinants like education – even in places where health care is guaranteed, people with limited education tend to be sicker.

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