Healthcare costs will account for about 50 percent of the U.S economy over the next 75 years, according to a Congressional Budget Office (CBO) report.
The report also states Medicare and Medicaid spending combined will grow to 19 percent of the gross domestic product (GDP) in 75 years. The two programs currently account for 4 percent of the GDP.
The CBO report also estimated that by 2082, Medicare spending will be 50 percent higher than the Medicare trustees projected in April.
CBO Director Peter Orszag cautioned that media coverage of unsustainable healthcare spending growth focuses policymakers too much on the aging of the U.S. population, according to CQ Healthbeat. Instead, it should illuminate a more fundamental cause: rising per capita healthcare expenses for Americans in general that too often go toward paying for unproven treatments.
Orszag pointed out that the growth in healthcare costs accounts for about 90 percent of the projected growth in federal Medicare and Medicaid spending over the next 75 years, while the aging population will only account for 10 percent.
In response, AARP spokesperson Drew Nannis said that the “healthcare conversation in this country needs a radical change…Talking about programs while ignoring the costs that drive them is like replacing the roof while the house is burning.” He added that the “leaders are focused on federal programs when they should be talking about healthcare costs — costs that can be lowered through health IT initiatives, comparative effectiveness research, care coordination and speeding generic drugs to market.”
Reuters reported that Orszag said that “the nature of the long-term fiscal problem has been misdiagnosed," and added that the aging population "is not by any means the main factor" behind the projected rise in cost growth.
Orszag also noted that many new medical treatments and tests are "of dubious value," Reuters reported. In their efforts to curtail healthcare costs, Congress and federal policymakers need to promote cost-effectiveness and evidence-based medicine, according to Reuters.