With the crisis in the financial markets reaching what many call historic proportions, another crisis long brewing is threatening to surface that, if some experts are correct, could have even greater consequences than the financial crisis for the US health care system.
Explore this issue:November 2008
In the keynote address that opened the 2008 annual meeting of the American Academy of Otolaryngology-Head and Neck Surgery Foundation (AAO-HNS/F), Nancy M. Kane, DBA, Professor and Associate Dean for Educational Programs in the Department of Health Policy and Management at Harvard School of Public Health, said that the financial crisis should serve as a wake-up call for a pending similar crisis in the health care industry.
And she laid out the numbers. Of the $53 trillion in liabilities and unfunded entitlement promises that make up the current federal deficit, $41 trillion is due to Medicare and Social Security-promises already made to today’s workers and retirees. At the same time, the cost burden on elderly beneficiaries is taking a substantial bite out of their Social Security checks, on which many depend for their primary source of retirement income. The average cost of Medicare premiums and cost sharing absorbs 26% of the average Social Security benefits, and costs are growing faster than benefits.