The Charlotte Lozier Institute has reviewed the letter of September 22, 2015 from the Congressional Budget Office (CBO) outlining the speculative impact of a permanent reduction in federal funding for the Planned Parenthood Federation of America. An estimated increase in government spending as a result of reallocating federal dollars to other health agencies is uncertain at best, as CBO acknowledges four times in its communication to Congress, but it is especially doubtful in this instance.
First and foremost, CBO takes no account of potentially massive savings in federal spending due to an increase in the range of care, including preventive services, which will be provided to women of childbearing age who transfer to federally qualified health centers as a result of the new resources that will become available to them. As the National Association of Community Health Centers writes, the “local approach to healthcare, combined with an emphasis on comprehensive preventative care, generates $24 billion in annual savings to the healthcare system - for the American taxpayer, local, state and federal governments and public and private payers alike.” These savings amount to about $1,000 annually per CHC patient, and there is no reason to believe the savings would be significantly different for the women attending community health centers, many of whom go without this care presently. CBO acknowledges that the transfer of Planned Parenthood patients to CHCs would be largely complete by 2020, but aggressive efforts at publicizing the CHCs, including by Planned Parenthood itself – already a well-funded federal healthcare navigator - could accelerate that process.
At CBO’s mid-range estimate of 15 percent of Planned Parenthood’s current client load, the number of women affected by the fund transfer is a maximum of 400,000. If it is true that CHCs reduce other healthcare spending by an average of $1,000 per person per year, and if federal health care spending amounts to an estimated 50 cents of every dollar spent on U.S. health care, annual federal savings for women who move from Planned Parenthood to a CHC would amount to hundreds of millions of dollars annually in reduced costs for emergency room visits, hospital stays and uncompensated care. This would dwarf the added cost to Medicaid of several thousand more births a year.
Second, Planned Parenthood’s ability to recover from the envisioned reductions is far stronger than the typical nonprofit. Planned Parenthood’s revenue over expense in 2013-14 alone was more than $127 million, enough to provide continuity of care for 375,000 women at Planned Parenthood’s current per-patient per-year cost of $339. Moreover, Planned Parenthood executive salaries far outstrip the modest costs at the typical community health center, with some PP affiliates paying $400,000 or more annually to top officials. Cost containment here in the interest of patient care is clearly an option.
Third, Planned Parenthood is a wealthy nonprofit overall, listed 38th in the Forbes listing of largest U.S. private charities, with access to billionaire donors with the capacity to give (and a history of giving) the organization gifts in the mid-eight figures range. Few nonprofits in the nation are better situated to absorb a change in federal funding patterns, especially when the agency itself is already delivering fewer services due to women’s acquisition of their own health insurance and access to more options under the Affordable Care Act (ACA).
Moreover, though CBO and other agencies are generally constrained by a 10-year budget horizon (an exception was made for the long-term economic impact of the ACA), attributing new costs to “unwanted births” is a grossly misleading and economically obtuse manner by which to set federal policy. All births impose new short-term costs on society, as investments in the young are rarely offset until they reach adulthood, earn income, produce goods, make inventions, or voluntarily serve their country. If such grounds as CBO’s were applied to U.S. society and the economy generally, it would be prudent to prevent all births and thereby “save” immense sums. This is sheer foolishness, and an instance where CBO’s “uncertainty” about its projections is in fact welcome. The U.S. Environmental Protection Agency, for example, uses a figure of $7.4 million (2006 dollars) for the “value of a statistical life.”
Lastly, there is the enormous economic imposition of abortion. As a 2014 study by Henry Potrykus and Anna Higgins concluded, “Legalizing abortion causes a loss of between $70 billion and $135 billion of economic activity (valued work) each year in the United States.” At an assumed tax rate of from 15 to 25 percent, the authors conclude, “Between $10 billion and $33 billion is lost presently in annual tax revenue. This is a significantly larger loss than the less than $2 billion of public funds some estimate abortion saves.”
Ultimately, the question before Congress is about much more than dollars and cents. Does women’s healthcare mean abortion on request and a vigorous trade in the organs of the unborn, or is it something better than that?
Donovan is president of the Charlotte Lozier Institute, the education and research arm of Susan B. Anthony List.