The Healthcare Reform is in full swing. All sides come to the plate swinging away at the ball. No one seems to have figured out the “knuckle-balls’ being thrown.
Of Aging and Debt:
Of Aging and Debt:
The Baby-boomers are in full blossom. Lots of them have been laid-off due to cost-restructure and others from early retirement. The projected data from the CDC shows us that a person at age 65 years in good health has a 50% chance of living to 85 and a 25% chance to seen age 92! Okay, that is good news for all. Or is it? Continue the line of reasoning to the current state of affairs with healthcare reform and we end up with a larger then previously anticipated population in the next two decades, who will be around to collect on the “government owed debt” to them in both Social Security and Medical Health benefits. This has been a steady-state rise from 8.03% in 1910 to 41.3% in 2009 of Gross Domestic Product (GDP). The 2010 public debt stands at a $14.1 Trillion or 60% of GDP! Unfortunately public debt only creates more debt through interest but does not create a single widget to help the Gross Domestic Product.. So then what? You say.
Spend, Borrow and Print - Asset Allocation:
Aha! And here is the juxtaposed alarming problem. With a population consistently rising in average age and lower than average people at work, given the steady trend of the employed, unemployed and the underemployed the people funding those treasure chests cannot maintain the rate of withdrawal. So if that cannot be done, what happens next? Oh simple, you answer, if you are in the government, “we print more money, devalue the dollar make artificially higher the costs of things.” Ah! But then the sad face of inflation rears its ugly head and the interest on that extra printed money goes up too raising the debt higher and higher, until the piper calls in the debt and the whole house of cards is in jeopardy. Well what then? You ask. And that is where we have to pause and take a deep information gleaned, knowledgeable, well-reasoned breath. For up until then, which by way of simple mathematics is NOW, life has been humming along in debt land very well. Payments were slower then expenses but we manage to print and sell our debt to everyone with shaky futures or shaky systems. But now the countries financing our debts are reconsidering and their thoughts will turn into action one day. It may be that their circumstance change, for example, Japan, or they feel the value of their savings is declining or they just get plain tired of financing our life-styles and refuse to allocate more of their savings in our Treasuries or worse simply recall their debt (Recall: Iceland, Ireland, Greece).
Costs and Benefits of Medicine:
Costs and Benefits of Medicine:
Keeping the same window of view open we also see the rising cost of health care due to anticipated newer modalities of treatments. (Costs of PET scans, Monoclonal antibodies like “Provenge” therapy for Prostate Cancer, Organ transplants and their upkeep etc.) These newer modalities have already paid dividends in various fields of medicine, including orthopedics; more patients are now “un-crippled” to live healthier lives, cardiology: more patients live longer with known heart disease, Infectious Disease; more people survive deadly infections than before, case in point 1.1 million individuals living with HIV, Cancer: there are 9.8 million cancer survivors in 2001 compared with 3 million in 1972. The burden of those living and being cared for will exponentially rise to keep them alive.
The answers I have are few but they are worth sharing;
- Project more personal responsibility by raising the premiums for the elderly with means (Medicare recipients) and limit Prescription drug entitlements for the needy.
- Limit the expansion of the signatories to free medical entitlements.
- Medical Malpractice reform with capped limits on losses against pain and suffering.
- Encourage R & D in all medical fields and allow the private sector to continue to take the lead without unnecessary regulations.
- Foster “Fee-for-service” that puts the onus of responsibility on the individual rather then a third party (If I do this then I have to pay for the consequence to get rid of it, mentality)
- Allow decision-making in medicine to remain in the realm of the physician.
- Allow Insurance companies to a competitive bidding rather then become the “market-makers”.
- Limit patents on orphan drugs and medical products exclusivity for 7 and 10 years respectively (this will accelerate the pipelines).
- Limit the regulatory costs on the practice of medicine.
- Encourage health-savings at individual level.
- Stop special committees of the FDA and make the process user-friendly (It will reduce costs of newer innovation and allow the companies to recoup their R&D costs faster). There are 2000 applications under review by the FDA and 800 Applications are filed annually. (The FDA currently charges $86,520 per (NDA)New Drug Application).
In medicine, caring for a small wound requires limited assets and is quickly cured but allow it to fester it can become gangrenous requiring large number of assets and potentially can be fatal. We are beyond the band-aid state