Here’s the story that trumps any HIMSS announcement today because it sets the context for the future health of health care in America: spending on health care could double by 2017. This would calculate to $1 in every $5 in our economy.

The story, written by researchers from the Centers for Medicare and Medicaid Services (CMS), was published yesterday in Health Affairs.

That’s the macro view; within that spending trajectory, more would shift from the private to the public sector. The burdens will be on Medicare (read: the first phase of Baby Boomer retirements) and Medicaid.

At a steady growth rate of 6.7% a year, the result will mean a doubling of health care costs in the U.S.

Compounding the challenge of rising health costs and the growing public burden is the forecast of slowing economic growth for the U.S. at 4.7% per annum.

More unhappy news: the CMS researchers expect that our wallets will be thinner: personal disposable income is anticipated to fall.

One of the big line items for growth will be prescription drugs, more than doubling from $231.3 billion in 2007 to $515.7 billion in 2017.

Health Populi’s Hot Points: Without greater economic growth in the U.S., the private sector — which is employer-based health care — cannot sustain our current health financing model under these projections. As the public sector burden grows, Americans’ tax burden will grow, as well — further thinning out our wallets and pushing our disposable income down. Taxation can only go so far, though. There’s just so much cash to be wrung out of personal income.

Who are the winners in such a dismal scenario? Generic drug manufacturers, perhaps, as the bulk of people covered by public plans will access a formulary of cheap meds to manage chronic conditions; Wal-Mart and discount retailers, as people will be driven to low-cost goods.

But we all could lose, and more than cash. Innovation could dearly suffer as we as a nation struggle to keep our health-heads above water. Whether you need new-new therapies for Parkinson’s, Alzheimer’s, cancers, HIV, or infectious diseases; or, breakthrough diagnostics and personalized medicines that will do a better job than existing modalities, innovation needs funding. Our National Institutes of Health will be greatly constrained in this scenario. We’ll need the private sector to fund health innovation under new models.

We could, of course, get on with the work of addressing these problems now. Our entrepreneurial and creative spirits can come together to craft a remarkable solution to our health care challenge. The people with whom I’ve spent time at HIMSS this week, especially in the networking environments provided by Google last night (thank you, Missy Krasner!) and the Mr. HISTalk reception, gave me inspiration. There are so many of us working at the intersection of health and technology who have been somehow called to do this work. If the New York Philharmonic and Eric Clapton can play on Kim Jong-Il’s turf, I believe we can breach our differences here to address the challenges of health in our democracy.

Leave a Reply

Your email address will not be published. Required fields are marked