Pain and Disability Clinical, Behavioral, and Public Policy Perspectives (1987) / Chapter Skim
Currently Skimming:
5. Economic Issues and the Cost of Disability
5. Economic Issues and the Cost of Disability
Pages 85-100
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From page 87... ...
This chapter summarizes current disability-related expenditures and recent trends, and presents an overview of some economic explanations for the observed growth of the Social Security Administration (SSA) disability programs.
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From page 88... ...
Given the distribution of these expenditures, for cash payments, medical care, and direct services, would some other distribution better meet social and programmatic objectives? Could the level of transfer payments and medical care costs be reduced by preventing disabilities in the first place or by rehabilitating disabled persons?
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From page 89... ...
Disability transfer payments resulting from automotive-related bodily injuries accounted for $4 billion, and indemnity transfers resulting from other bodily injuries amounted to another $5.9 billion in fiscal 1982. The third category of transfer payments are the income support programs for the disabled "needy" who are subject to a financial means test in order to qualify.
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From page 90... ...
Direct Services Direct sernces provided to disabled persons include vocational rehabilitation provided by the states under a joint federal-state progr~m and a separate vocational rehabilitation program for veterans; various other services for disabled veterans, including appropriately adapted vehicles, prosthetic appliances, and domiciliary care; and government services for the deaf, blind, mentally ill, and developmentally impaired. In addition to the direct services provided to the disabled only, under Title XX some disabled people are eligible for benefits from general federal programs that provide food stamps and social services.
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From page 91... ...
TRENDS IN EXPENDITURES Between 1970 and 1982, estimated total disability expenditures from all sources for members of the population age 18 to 64 years old more than doubled, from $60.2 billion to $121.5 billion in real 1982 dollars (see Table 5-41. These costs increased as transfer payments and medical care payments escalated.
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From page 92... ...
Even if the disability program were administered in exactly the same way over the period of a business cycle, economists would expect the number of applicants to vary in accordance with changing economic activity, especially local unemployment rates (I~ando, 1979~.
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From page 93... ...
to rates of application to the Social Security disability insurance programs. The most sophisticated of these studies use some measure of the relative value of disability benefits compared with earnings to determine the ejects of disability benefits on labor force participation.
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From page 94... ...
For all of these reasons, the number of disabled people cannot be estimated precisely. The best we can do is to calculate the number using the sources most appropriate to the particular question of interest—that is, the number of people receiving benefits, the number who consider themselves disabled, or the number who have stopped working because of a medical condition.
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From page 95... ...
Although a disabled person may be persuaded to give up a monthly disability check for labor market earnings, he or she may be more cautious about relinquishing Medicare eligibility if faced with an unknown future medical liability. Treite]
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From page 96... ...
The efficiency test becomes more complicated if we assume that certain errors are worse than others and seek to eliminate egregious errors, such as denying benefits to the older, uneducated paraplegic, while perhaps tolerating marginal errors, such as denying benefits to the middIe-ciass, educated applicant with Tow back pain. As discussed in earlier chapters, the sheer size of the work load faced by the Social Security disability program boggles the imagination.
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From page 97... ...
Largely because of the rapid increases in medical care payments, the proportion of total disability expenditures allocated to direct services had shrunk to 2.4 percent. Not enough is known about prevention and rehabilitation to warrant making major changes in the distribution of disability expenditures at this time.
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From page 98... ...
Finally, given the elasticity in the system associated with changing economic and political conditions, allowance rates for symptom complaints such as chronic pain may vary more than for more clear-cut impairments. CONCLUSIONS Examination of the basic trends in disability, be they the fluctuations of cash benefits over time or the distribution of disabled persons
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From page 99... ...
No matter what the eligibility criteria, it is likely that a number of people in the population could qualify, but for various reasons they do not apply; it is also likely that some people who deserve benefits apply and are found ineligible. The purpose of the Social Security disability system is to pay a portion of predisab~lity wages as an income maintenance benefit to those who are "truly" disabled.
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From page 100... ...
The Social Security disability program and labor force participation. National Bureau of Economic Research Working Paper No.
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