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The Huge Cost of Health Care: Is America’S Viability As a Superpower Imperiled?

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The Huge Cost of Health Care: Is America’S Viability As a Superpower Imperiled? The Huge Cost of Health Care: Is America’s Viability as a Superpower Imperiled? Victor Basiuk Huber Warner Consultant Former Professor Science, Technology, & Security University of Minnesota Washington has been struggling with the issues of the deficit and the national debt for some time. In the short term, these issues can be addressed by conventional although not necessarily palatable means such as raising taxes, increasing the age for receiving Medicare and Social Security benefits, and implementing legal measures to reduce the pay for physicians. In the long term, however, there is no apparent solution. The reason for this is that the single most important factor in increasing deficits and calling for borrowing is the rising cost of health care, which affects the federal government because of Medicare and Medicaid. The cost of health care is rising because of the aging population 87 and the continual improvements in medicine that are increasingly expensive. The cost for the federal government will run into trillions of dollars per year, which it may not be able to afford. There is, however, a solution in sight, which at present is well outside of the realm of conventional wisdom. And yet, as we look at recent history, many schemes that once seemed mere utopian dreams are now accepted as parts of the policy fabric. This potential solution, which may be the single most important means to cut the cost of health care—including Medicare—is to increase human longevity for a number of years, while freeing it of age-related diseases such as cancer, cardiovascular illnesses, diabetes, and Alzheimer’s disease, thus extending Victor Basiuk is a consultant on Science, Technology, and National Security Policy based in Vienna, Virginia. Basiuk taught at the U.S. Naval War College, Columbia University, and Case Western Reserve University, and has been a consultant in the Washington area since 1973. He is the author of Technology, World Politics, and American Policy, a monograph on Technology and World Power, and of numerous articles, contributions to collective volumes, and expert testimonies before Congressional committees. At present, Basiuk is writing a book entitled After World Dominance, Whither America? Huber Warner is a former professor and former associate dean for research of the College of Biological Sciences at the University of Minnesota. He previously served as the associate director responsible for the extramural biology of aging program at the National Institutes on Aging. He has extensive experience in the field of gerontology research and is the author of numerous publications on aging. Copyright © 2013 by the Brown Journal of World Affairs Fall/Winter 2013 • volume xx, issue 1 Victor Basiuk & Huber Warner human health span (the time of life free of diseases). While extension of health span is a compelling factor in upholding America’s fiscal viability, its impact is far-reaching. It affects the distribution of world power and the international system. It could revitalize some economies and would affect immigration poli- cies of certain countries. We will address these and other issues in this article. THE BURDEN OF HEALTH CARE ON INTERNATIONAL POWER During the 2008 U.S. presidential campaigns, both parties conveniently swept the issue of Medicare under the rug—and for a good reason. In the coming years, the cost of Medicare will rival, if not dwarf, the cost of the recent financial and economic crises. It was not until the reform of the health care system and its accompanying debate that the full magnitude of the cost of Medicare was brought to the surface. This calls for a look at the specifics. The 2013 Report of the Trustees of Medicare and Social Security provided cost projections for the next 75 years. According to the Medicare Report’s pro- jections under the current laws, the cost of Medicare will grow from the pres- ent $565 billion (3.6 percent of GDP, roughly equivalent to the share of the U.S. Defense budget) to $3.1 trillion (5.8 percent of projected GDP) in 2040. 88 From that point, the cost of Medicare will rise to $33.7 trillion (7.2 percent of GDP) by 2087. The reports, however, provide an important caveat to these figures. This year’s projections are based on the assumption that the cost-saving legislation of 2010—especially the Affordable Care Act—will be fully implemented. This is an optimistic assumption not likely to materialize because of entrenched vested interests and political opposition to some of its provisions. The report warns that if the cost-saving measures are not fully implemented, the projected Medicare costs will rise to $3.8 trillion (6.5 percent of GDP) in 2040 and a staggering $45.9 trillion (9.8 percent of GDP) per year by 2087. According to the pro- jections of the reports, the Hospital Insurance (HI) Trust Fund component of Medicare, which comprises most of Medicare, will be exhausted in 2026, and from then on the federal general budget will have to cover Medicare’s deficit. 1 The burden of Medicare is especially troubling in the context of the changing distribution of world power. China’s GDP is growing at a rate of 7.5 to 9 percent annually and India’s at about 6 to 7 percent. The United States’ growth, in contrast, is 2.5 to 3 percent and that of the European Union is 1 to 1.5 percent.2 The recent financial and economic crisis has been more damaging to the United States than to China. The United States is very heavily in debt, the brown journal of world affairs The Huge Cost of Health Care while China’s foreign exchange reserves have been reported to be $3.4 trillion.3 In 2010, China’s GDP exceeded that of Japan, becoming the second largest in the world after the United States. By 2019, China’s GDP will likely surpass that of the United States.4 Moreover, the United States has suffered a serious setback in soft power.5 The American model of free-market capitalism spread across the globe as the ideal in the past 30 years is now being questioned in the context of the recent economic crisis. On the other hand, China’s quick recovery from the worldwide financial meltdown seems to have shown the strength of its brand of state-led capitalism.6 The extremely high cost of Medicare—and health care in general—will impose severe constraints on the U.S. budget. Such areas in the budget as armed forces, science and technology, foreign aid, public diplomacy, and education are not protected by entitlement legislation; they are discretionary. Therefore, they are likely to suffer more than others under budgetary constraints. America’s viability as a superpower could be seriously jeopardized, given that these areas are critical to strengthening U.S. influence abroad diplomatically, economically, and militarily. In the longer run, the growing cost of health care will slow down the United States’ economic growth. Perhaps even more important for the nation’s viability, it will modify the composition of U.S. GDP. Its health care component will be expanding at the expense of areas such as manufacturing, science and technol- 89 ogy, defense, the environment, and education. A POWERFUL REMEDY TO REDUCE THE COST OF HEALTH CARE: EXTENSION OF HEALTH SPAN There are several ways to reduce the cost of health care: improving our health care system, cutting the cost of drugs, and reducing the charges of physicians are only some of them. While these and other cost-reducing measures need to be instituted, there is another more dramatic and potentially much more effec- tive policy that has not yet been discussed in the health care cost debate. This policy lies outside such conventional policy fields as economics, law, and political science; it comes from the realm of science, namely biogerontology. Extension of health span—by increasing human longevity for a number of years without age-related diseases such as diabetes, cardiovascular illnesses, cancer, Alzheimer’s disease, and others—is likely to produce a reduction of the cost of heath care much greater than all the other means of health care cost reduction combined. It would save society trillions of dollars in the coming years and add millions of healthy, vigorous individuals to the workforce, thus potentially invigorating Fall/Winter 2013 • volume xx, issue 1 Victor Basiuk & Huber Warner the economy. Likely, it will also be less complicated and cumbersome politically. Human longevity in the United States increased by 30 years in the past century and is now about 79 years.7 This was achieved by better nutrition, sani- tation, discovery of antibiotic drugs, and progress in conventional medicine, which ameliorated or virtually eliminated a number of diseases. But people are still aging, and the costs of supporting an aging population will grow. In recent years, biogerontologists have made major progress in elucidating the molecular basis of aging, and they have been able to increase the longevity of worms, fruit flies, and mice by 30–100 percent using a variety of strategies. If adequate funding for research Whether similar biological strategies will work in humans has not been clinically were available, within five to 10 proven. However, the scientific infra- years the human health span could structure for extending longevity and for corresponding delay in the onset of age- be extended by up to 20 years. related diseases has been built and clini- cally demonstrated on mice. Leading U.S. biogerontologists—such as Leonard Guarente (MIT), David A. Sinclair (Harvard), Cynthia Kenyon (University of California, San Francisco), Thomas E. Johnson (University of Colorado), and others—believe that if adequate funding for research were available, within five 90 to 10 years the human health span could be extended by up to 20 years.8 Hu- man appearance will likely not age.
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