By BEN WHEATLEY
The U.S. is currently facing a growing crisis in healthcare costs, with medical debt becoming a burden even for those with insurance. According to top executives at large employers, providing health benefits to employees may become unsustainable in the next 5-10 years. The Congressional Budget Office (CBO) has warned about the rising federal debt, primarily driven by health expenditures, leading to a potential fiscal crisis in the future.
Notable figures have been predicting a fiscal collapse for decades. In the late 1980s, Benjamin Friedman raised concerns about the increasing federal debt, warning of a “Day of Reckoning.” Similarly, Peter G. Peterson highlighted runaway medical costs as a major factor contributing to uncontrollable federal spending.
However, not everyone perceived deficits and debt as problematic. In 2003, Vice President Dick Cheney famously stated that “deficits don’t matter,” despite concerns raised by experts like David Stockman, who criticized the Reagan administration for failing to control spending and increasing the federal debt.
In recent years, economists like Stephanie Kelton have called for a paradigm shift in thinking about federal spending. Kelton argues that since the U.S. can print its own money, federal spending is not constrained by tax revenue or borrowing. She emphasizes that the real deficit lies in unmet societal needs, rather than fiscal deficits.
Amidst discussions about healthcare cost containment and budget savings, some advocate for making “hard choices” such as cutting Medicare and Medicaid. However, these cuts could have significant consequences, as seen in France when it raised the retirement age and faced protests.
Some states are implementing spending limits to curb healthcare cost growth, with California leading the way in strict accountability measures. While cost containment strategies are being explored nationwide, the common theme is the challenge of balancing savings with potential negative impacts on patients and providers.
In light of these challenges, a potential solution to healthcare cost containment lies in improving patient health to reduce the demand for services. By focusing on health improvement strategies, such as digital health tools and disease management programs, significant cost savings can be achieved while benefiting patients and purchasers alike.
My own experience with developing a mood tracking device for managing bipolar disorder highlights the potential of such interventions in reducing hospitalizations and generating significant cost savings. By investing in innovative solutions that prioritize patient health, we can address the growing healthcare cost crisis in a sustainable and effective manner.
