(C) Common Dreams
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Projected Healthcare Spending: A Look Within the Numbers [1]
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Date: 2024-09-12 09:29:32-05:00
Our GDP in 2024 is expected to reach $28.49 trillion and $39.16 trillion in 2032. As a percentage of the Gross Domestic Product (GDP), NHE is expected to grow from 17.7% to 19.7%. In accounting for a greater share of the GDP, healthcare spending may be viewed as an economic engine. The healthcare sector currently employs 17.7 million people (11% of all employees).[5] The median pay for healthcare practitioners and technical occupations was $80,820 in May 2023 compared to the median annual wage of $48,060 for all occupations.[6] In many communities, hospitals are among the largest and best paying employers. Healthcare is adept at creating new kinds of workers with over 50 occupational classifications.
However, the shift in the sources of funding to Medicare and Medicaid may also be threatened by the national debt of $35.18 trillion which now exceeds GDP, not to mention unfunded liabilities looming ahead.[7] Medicare is only partially funded through payroll taxes and beneficiary contributions. As OACT released its projections of NHE expenditures in June, the Congressional Budget Office (CBO) also released its Update to the Budget and Economic Outlook: 2024 to 2034. According to CBO, net interest on the debt will cost $892 billion this year which exceeds the federal cost of Medicaid, CHIP, and subsidies for purchasing individual coverage in the Marketplace.[8]
Something has to give. Lowering the growth in healthcare cost to the same percentage of GDP and addressing the improper payment levels in Medicare and Medicaid would make a significant difference. Next year is the 60th anniversary of Medicare and Medicaid. After all this time, the payment structures are still substantially based on cost-based fee schedules, even in the private sector. Economics tell us that price fixing is never the answer over time.
The solution lies in rethinking how services, especially LTSS services are delivered, where they are delivered, and by whom are they delivered with an absolute focus on total cost of care rather than individual service categories. Closing the gaps in the continuum of care supported by constant communication and coordination are vital in order to improve health outcomes and lower costs.
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