Health Care Costs Seen Soaring as Baby Boomers Age
Unless lawmakers, businesses, and consumers act now to control the cost of caring for the rapidly aging baby boom population, soaring health care expenditures could easily cause the U.S. economy to stagnate during the first half of the 21st century. According to a new report from Hudson Institute, the Nation's health care expenditures will rise sharply during the next 40 years, absorbing most of the income generated by gains in productivity and increasing the financial burden on both retirees and workers.
Hudson's report, The Curable Crisis: Rethinking America's Health-Care Priorities, was written by Dr. David J. Weinschrott, a Hudson Research Fellow who specializes in the economics of health care. His report is based on a study Hudson prepared in 1992 for the U.S. Department of Health and Human Services.
The Curable Crisis warns that none of the health care fixes now under discussion by the White House and Congress can truly mend the health care delivery system if they are not geared to deal with the Nation's long-term demographic trends. Indeed, many of the solutions being debated in Washington could exacerbate health care's financial problems.
Hudson Institute's 40-year forecast for the health care financing system reveals why policymakers should examine the long-term effects of proposed programs. Health care expenditures by both private and government payers (under programs such as Medicare and Medicaid) will rise from nearly 13 percent of the gross national product (GNP) today to 16 percent of GNP in the year 2000. By 2030, Americans can expect to devote 30 percent of GNP for health care. To cover the mounting bills, Americans would have to allocate most of the Nation's productivity growth, reducing the resources available for investment and other uses.
"Long-term considerations must dominate discussion of health-policy reforms," writes Dr. …