Health Care Spending to Double
Over the Next Decade Increasing Costs will Push Spending
Health care spending will soar as the population continues to age and grow over the next decade.
Twenty eight percent of the population of developed countries which includes North America, Europe, Japan, Australia and New Zealand will be over age 60 by 2025, according to the Bureau of Labor Statistics. This equates to 500 million people.
Even More are Over 80
Of greater significance perhaps is the fact that of this elder segment, those over age 80 are the fastest growing segment. This impacts health care because this aging population is already demanding more and better health care and will continue to do so over the next decade.
With more and better health care the population is healthier and will live even longer. Consequently, as the population ages and grows, the demands will continue to increase.
Shortages of Nurses and Doctors will Continue to Grow
These demands are stretching and pushing an overwhelmed health care industry to its limits. There is already a tremendous shortage of nurses and physicians worldwide. This shortage is expected to continue to grow throughout the coming decades due to the increased demands as well as the fact that there are not enough candidates entering nursing and medical programs. In addition there is a shortage of RN and MD educators which restricts the number of candidates accepted into these programs each year.
By 2017, the U.S. alone projects that health care costs will double to $4.3 trillion. This amount will account for twenty percent of the Gross Domestic Product according to a recent report released by CMS (the Centers for Medicare and Medical Services). In 2007, health care spending accounted for 16.3% of the Gross Domestic Product.
Baby Boomers Growing Older
The largest segment of the population (76 million) in the U.S. is the Baby Boom generation born in the aftermath of World War II from 1946 to 1964. In 2017, members of this generation will age in range from 53 to 71.
As a result, Medicare spending accounts for a large portion of the health care spending in the U.S. each year. In 2007, $427 billion was spent on Medicare beneficiaries. The projected spending for 2017 is $844 billion.
Medicaid spending in 2007 was $338 billion and again, it is expected to double by 2017 to $717 billion.
Out-of-Pocket Spending Increases Six Percent
In addition to government spending on health care, Americans are expected to pay out-of-pocket expenses totalling $464.3 billion by 2017. This expense is expected to increase by six percent from $269.3 billion in 2007. Private insurance costs are expected to increase from 40 to 49 percent between 2007 to 2017.
Sources:
California Healthline, Feb. 26, 2008 (subscription required)
