Back in 2000, when my father was dying – but desperately wanted to die at home – we talked about the cost of ’round-the-clock’ care for him. And he said, “Leah, I can’t spend that money. I’m saving it for a rainy day!” And I said, “Dad, it is raining. Now. And it’s raining about as hard as it’s ever going to rain.” Well, Dad ‘bit the bullet’ and forked over the dough. What brought that story back to me was the combination of our economic crisis, the aging of America, and the costs of health care (or to be more exact, illness care.) Barack Obama speaks eloquently of change…and that includes in healthcare. And not everyone will like the changes. And not everyone will benefit from the changes. By 2017, one dollar out of every five spent in America will go toward healthcare costs according to a report in Health Affairs. Let’s look at a few fairly well-established facts:
- With all the lay-offs, we have an unemployment rate of about 7% and some pundits say it will rise to 10% by the end of 2009 (that means 10% fewer people paying into either Social Security or Medicare).
- The average one earner couple retiring today will get about $123,000 more out of Social Security than they and their employer put in. Omit the employer’s contribution and the windfall rises to $173,000. With Medicare included, it rises to nearly $310,000, much of it tax-free.
- FICA contributions have never been saved by the government. Its ‘assets’ consist of Treasury IOUs. The federal government has already promised today’s adults $8.3 trillion in future Social Security benefits beyond the value of the taxes they have paid to date!
- By 2040, the cost of Social Security as a share of worker payroll is expected to rise to 22%. Add both parts of Medicare (which currently cost about 5.3% of payroll) and benefits for seniors will consume 35 to 55% of every workers paycheck. And this prediction was made before the Great Recession!
- In the last century, life-expectancy of the average person increased by 30 years. Of that amount, 25 years is attributed to public health measures, and 5 years is attributed to clinical medicine – most of that due to prenatal and childhood care. Today with massive amounts of medical technology, Medicare adds only about one year of additional life that can be attributed to clinical medicine. And that additional one year of life cost about 335 billion dollars in 2006 in the USA.
One wonders what Barack Obama might do to meet this crisis. Unfortunately, his healthcare plan is strong on vision but short on details. The one element of Obama’s plan is his call for major expansion of the government’s role in improving the quality of care. Obama’s plan would link payment with reported quality. A New England Journal of Medicine article claims that 31% of health care expenditures in the US went for administrative costs. Obama’s plan also calls for a ten billion dollar federal investment in healthcare information technology over five years to improve quality and save money. So, in practical terms, what might this mean?
(a.) Reform entitlement programs (affluence test to progressively reduce benefits to households more than $5000 above the U.S. mean household income.
(b.) Raise the eligibility age for full benefits to 72.
And (c.) Set limits on Federal Spending (a back-end on Medicare)…
What do you think this might mean for the Health care system, nurses and nursing care?