From the August 28, 2009 Investor's Business Daily
August 28, 2009
by Jeremiah Norris
The health overhaul debate has generated plenty of heat. Yet no one has offered a solution to one vital and unavoidable dimension: the future.
In 20 years the country will have many more retired people as a proportion of the population. The population will therefore suffer from far higher rates of chronic diseases such as diabetes and cancer.
If a public option will exist for health insurance, the cost of paying these bills will be an intolerable burden on the dwindling band of economically active U.S. taxpayers.
The costs of treating chronic diseases already weigh heavily on the health sector. Nearly half of Americans suffer from one or more chronic (long-lasting) diseases. These are frequently only manageable rather than curable and come with a big price tag.
According to the Centers for Disease Control, 75% of every dollar spent on health care is for treatment of patients with one or more chronic conditions, rising to 96% in public programs. These costs will increase massively the next 30 years.
The management of diabetes requires expensive monitoring and drugs for the life of the patient. One-third of children born in 2000 will develop diabetes.
Obesity is another portent of trouble ahead for U.S. medical care: 67% of Americans are officially obese — with an alarming increase in children and teenagers.
The Milken Institute predicts that by 2015, 75% of Americans will be obese, significantly contributing to the rise in chronic diseases such as heart disease, stroke, diabetes and renal failure.
According to Emory University, the doubling of obesity rates is responsible for about one-third of the rise in health care costs since the mid-1980s.
Old age inevitably means increased health care costs. According to the National Cancer Institute, the risk of being diagnosed with cancer doubles from age 50 to 60. In 1900, the average U.S. life expectancy was 47.3 years, and in 2008 it reached 78. By 2020, it is estimated at 82 years.
It is little wonder, therefore, that health spending as a proportion of GDP has risen from 1% in 1900 to 16% today.
The current debate simply does not factor in the massive increased costs of an aging population. In 2000, America had 4.6 workers per retired person. By 2040, that will plummet to just 2.6.
These few workers will be asked to underwrite existing Medicare and Medicaid commitments, plus President Obama's proposed public insurance option, on behalf of an aging and increasingly sickly society. This is just not sustainable.
Proponents of an overhaul argue that it will lead to new techniques for preventing illness and saving costs, such as computerized medical records. These claims just don't add up. Almost all savings from prevention are achieved by age 5, when childhood immunizations end. Chronic illnesses, developed later in life, are managed rather than prevented by early intervention.
A 2008 study published in the New England Journal of Medicine found that "although some preventive measures do save money, the vast majority reviewed in the health economics literature do not."
Many analysts have emphasized what is wrong and what is worsening in our medical system.
In fact, the rise of chronic diseases is a result of innovative drugs, improving health care and rising prosperity, giving more and more people unprecedented longevity.
The final decisions on a medical overhaul rest atop Capitol Hill. One-sixth of the nation's economy will be decided without reference to the massive changes in disease and population that are set to render America a very difference place from today.
By increasing government's role in health care, the proposed public option will make the health system less flexible and innovative — the opposite of what is needed to adapt to these unstoppable demographic and epidemiological changes.
It won't be today's voters who will pay for this error. It will be their children and grandchildren.
Jeremiah Norris is a Senior Fellow and Director of Hudson Institute's Center for Science in Public Policy. He specializes in public-private partnerships in development assistance, trade and development, and global AIDS, tuberculosis, and malaria policies.
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