A nation’s healthcare system reflects its values. As people look at how they care for themselves and their fellow citizens, they are looking into a mirror showing them the best and worst of who they are.
In that light, America’s healthcare system is a paradox, reflecting the strengths and weaknesses of our society. On the one hand, we have brought incredible innovations to the world in healthcare technology, diagnosis, treatments and drug therapies.
Our system has improved quality of life and longevity for millions of people, increased coverage for the elderly, poor and disabled, and is on the forefront of genetic breakthroughs to understand and combat diseases that have plagued mankind since we first learned to walk upright.
But there is also the reality that these blessings come with their curses. Healthcare in America has been the focal point of continuous political turmoil for decades between Democratic and Republican ideologies over how best to pay for care.
Millions of people still do not have health insurance coverage or have limited access to care. An aging population is living longer and their care is costing more. The system is still inundated by waste, fraud and abuse.
The costs of drugs, medical devices and treatments are the highest in the world, and there are concerns that many of the breakthroughs in genetics, electronic records and communication systems open the doors to privacy and ethical abuses no one ever contemplated.
In fact, there is no better example of the paradox of America’s healthcare system than the astronomical costs that went into caring for the longest hospitalized coronavirus victim in the United States.
Michael Flor, 70, of Seattle, Washington, was hospitalized for 62 days at a total billable cost of $1,122,901.04. Upon discharge, he received a 181-page bill detailing expenses such as room charges of $9,736 per day and a ventilator at $2,835 per day, among 3,000 other itemized charges.
But he will be spared paying this bill because of COVID-19 relief funds covered by taxpayers to help insurance companies and the uninsured defray costs.
Herein lies the paradox: Mr. Flor received the best possible care in the world and was saved from death — but at an astronomical price which ultimately will be covered by the taxpayers of this country.
With the coronavirus pandemic bringing into sharp focus the strengths and weaknesses of our system, here are 10 predictions for the Future of Healthcare in America:
Entitlements are a scapegoat for ballooning budget deficits and the national debt: The U.S. federal budget deficit was $439 billion in 2015 and has increased to $984 billion in 2020. The national debt stands at $25.7 trillion, which now surpasses the nation’s entire economic output. Primary drivers of this growing financial imbalance have been massive tax cuts for the rich and corporations, increasing military budgets, and recent coronavirus relief measures. The distraction from this reality has been to try to place the blame on Social Security, Medicare and Medicaid. Every federal budget proposal since 2016 has started with promises to cut spending to these entitlement programs and make wholesale changes to these critical safety-nets for seniors, children, the poor and disabled. The programs face solvency concerns, with Medicare at risk by 2029 and Social Security at risk by 2034.
Prediction: The realities of what has been driving budget deficits and the debt will be confronted, but entitlement programs do have solvency issues that will be addressed with systemic changes. Increases to taxes and eligibility age, reduced benefits, more out-of-pocket cost responsibility to individuals, and tax incentives for private pay coverage of long-term care are all options that will have to be on the table to extend the programs as the aging population increases and lives longer.
Is healthcare a right or privilege: Healthcare in the U.S. is an odd mix of private-market-based care and government/taxpayer subsidized entitlements. The central debate about our system since the 1960s has been: Is healthcare a right or a privilege? Much of this is driven by the idea that health insurance is more affordable if everyone buys it because the risk is spread, and people should have the “right” to healthcare. Opponents to this concept say healthcare is a “choice” and no one should be forced to pay for coverage for themselves, or for others. Proponents of coverage mandates and exclusion protections say that for the good of everyone we need as many people as possible covered by insurance. Opponents say it is unconstitutional to mandate anyone purchase insurance against their will. But car insurance is a perfect example of mandating people buy insurance coverage for their own good, and the good of everyone else on the road, too. In essence the arguments boil down to which side of one fundamental question you are on: Do the needs of the many outweigh the rights of the individual, or do the rights of the individual outweigh the needs of the many?
Prediction: Total spending on healthcare in the U.S. will pass $4 trillion annually and will consume at least 20 percent of GDP within five years. Decades of attempts at healthcare reform will create parallel healthcare environments in the U.S. where people choose a government funded “Medicare for All” model or a Concierge healthcare system for the wealthy accessing private, membership “country club” care provided by doctors, hospitals and services. Within a decade the U.S. will enter its “Healthcare Hunger Games” era where the rich can access the very best, and the masses are served by a government run Medicare/Medicaid hybrid program.
An aging population grows and Baby Boomers all retire: Baby Boomers started turning 65 at a pace of 10,000 every day 10 years ago, and that pace will continue for another decade. By 2030, every Baby Boomer will be older than 65, and by 2034 the population of people 65 or older will outnumber the people 18 or younger for the first time in American history. Life expectancy has continued to increase now to almost 79 years, and the gender gap has narrowed between men and women — with men now living only five years less than women. An aging workforce is creating interesting dynamics between aging workers staying on longer for much needed income and health benefits, bumping into younger workers entering and trying to move up in the workforce.
Prediction: Life expectancy will remain on its upward trajectory. The percentage of people who remain working past 65 will keep increasing, meaning seniors can continue to receive employer-based health insurance, accumulate more savings, and delay collecting Social Security until they are closer to age 70 to receive their maximum possible benefit. Older workers will continue to increase as a percentage of the workforce as the idea of retirement at 65 becomes a relic of the past.
Pressure on LTC resources: 75 percent of Americans over 65 live with multiple chronic health conditions requiring professional long-term care support and services. About 14 million people receive some form of long-term care every year. There are 15,600 licensed nursing homes caring for 1.4 million residents, 28,000 assisted living communities with over 1 million residents, and 13,000 home health agencies serving more than 12 million people at home in the United States. Almost half of all people living in nursing homes are 85 or older, and 72 percent are women. The national average cost for nursing home care is $100,000 annually. Over $230 billion is spent annually on long-term care in the U.S., with almost 60 percent covered by Medicaid, 23 percent paid by individuals “out-of-pocket,” and less than 5 percent covered by private long-term care insurance.
Prediction: At least 70 percent of Baby Boomers will require some form of long-term care in their remaining lifetime. The increased pressure on long-term care service providers and Medicaid to meet this huge influx of demand from an aging population will force more family members to become care providers, and for individuals to dig deeper into their pockets. The high mortality rate of seniors in nursing homes from coronavirus outbreaks will keep more people at home to receive care, and will have a long-lasting impact on people making decisions about admitting a loved one in the future. Ongoing efforts to cut costs will drive Medicaid to increase eligibility requirements and cost-sharing measures, such as co-pays and deductibles, for recipients of support and services.
Rural care in danger: Between 2010 and 2020 over 80 hospitals were forced to close in rural areas across the United States. Contributing factors are the numerous differences between healthcare delivered in urban vs rural environments, such as a 2-to-1 disparity in the ratio of doctors to residents; travel distance and transportation challenges; economic and educational differences; more uninsured people and increased unemployment; and higher incidences of mortality caused by heart disease, obesity, tobacco use, drug (particularly opioid) and alcohol abuse, and accidents caused by vehicles and work related incidents.
Prediction: The NRHA has identified 673 vulnerable rural hospitals across the United States “at risk of closure.” The disparity between urban and rural care will not abate, and the prevailing health and socioeconomic factors stressing the rural hospital system will only increase in severity. Compounding the problem is the impact of the coronavirus outbreak will push many of these “at risk” hospitals past the brink. More hospitals will close, and the government will be forced to deal with a growing healthcare crisis across rural America.
Universal healthcare/Medicare-for-All: A political firestorm was sparked during the Obama Administration that has continued to burn through today – providing health coverage to as many Americans as possible through the Affordable Care Act (ACA or “Obamacare”). Despite covering over 20 million previously uninsured Americans, opposition to this approach has remained stiff from Republicans and the Trump Administration. Over the last four years, President Trump has tried to dismantle the ACA through executive, legislative and judicial action. Most of these attempts have been diluted or outright thwarted. During the Democratic Presidential primary, candidates offered proposals based on a “Medicare-for-All” approach that was not popular with the majority of voters polled at the time.
Prediction: The outcome of the 2020 presidential election is the fork in the road for this debate. “Universal” healthcare as currently configured under ACA will either perish under a second Trump administration or evolve and grow in its expansiveness under a new Biden administration. Also, the current coronavirus situation driven by racial and economic inequities impacting the health and mortality outcomes for certain populations will be a further catalyst to find solutions to cover more Americans. One interesting question to watch: Will people who tested positive for coronavirus be considered to have a pre-existing condition?
Employer–based health coverage only works when people are employed: The vast majority of people receive their health insurance through their employer. About 158 million people (more than half of all Americans under the age of 65) had employment-based (group) health insurance at the beginning of 2020. But a major challenge emerged by the midpoint of the year as 40 million people suddenly found themselves unemployed due to the pandemic. These people have unexpectedly joined almost 30 million already uninsured Americans. Some will be able to maintain coverage through COBRA and some will apply for individual health insurance plans, but these are expensive options. Others will turn to Medicaid or other government safety net coverage options. As the U.S. economy settles into a protracted recession, millions will lose unemployment benefits and their healthcare benefits. We are entering a period where uninsured levels will be among the highest in history.
Prediction: Coronavirus is quickly changing the nature of work and employment in the United States. As the workforce has shifted to working from home, and millions have lost their jobs; the question now is what will employment look like going forward? Employment-based health insurance will shrink as mass unemployment, business losses, bankruptcies, and shifts to employees working from home or as independent contractors grow. An employment-based health care system only works when people are employed. It will take time for America to recover from the fallout of the pandemic and re-employ millions of workers. It will be years before the economy returns to pre-coronavirus levels – if ever. Group coverage won’t go away, but the vulnerability of receiving health coverage based on employment will need to be re-evaluated as the backbone of America’s healthcare system.
Medical staff and supplies stretch thin quickly during a crisis: During the best of times, healthcare in the United States can seem chaotic and inefficient. There can be long waits for appointments, wildly different pricing formulations based on regions of the country, and oversupply of doctors in urban settings compared to undersupply in rural areas. Anyone who has had to wait to be seen in an emergency room understands all too vividly these and other shortcomings. But now that the coronavirus is stressing the system to its limits, we can see how fragile and undersupplied the system becomes when pushed by a global pandemic manifesting as a national crisis. Caregivers and other workers are physically and emotionally pushed to their limits as hospitals in hot spot states such as New York, Florida, Texas, California and Arizona have hit 100 percent capacity and been forced to use overflow space such as stadiums to care for patients and freezer trucks to stockpile the dead. As of today, the insurance industry estimates the cost of coronavirus treatments could push $1 trillion.
Prediction: The impact of coronavirus on healthcare delivery and payment will be wide-ranging and long-lasting. The inequities of healthcare across economic and racial lines has been made clear and will need to be addressed. The debate over how healthcare is paid for will only get more intense. The need for more medical professionals and also overall support staffing will need to be addressed as many will question if this is a field they want to be in. The shortages of supplies forcing hospitals to crowdsource for things such as homemade masks have shown the importance of preparedness and the need to stockpile materials. Telemedicine will become more prevalent as the effectiveness of remote care is put in the spotlight. The percentage of fatalities in nursing homes and assisted living communities will drive more people to age in place as home-based long-term care will continue to grow at an even more accelerated pace.
The rise of private pay and tax-incentives: Most long-term care and healthcare for seniors is paid by Medicaid and Medicare. As Baby Boomers age and the senior population swells, stress on taxpayer funded entitlements are becoming overwhelming and a growing threat to their longevity. The government is pushing back with proposals to make significant changes to how Medicaid is funded and administered in the states, and on Medicare eligibility and coverage rules. As an offset to these inevitabilities, private pay options have been on the rise. Moves to encourage the use of private pay funding in the form of tax-incentives, mandates and consumer disclosures have been introduced in state capitols and Washington, D.C., for over a decade. Providers of health and long-term care services have been emphasizing private pay through incentives, discounts, and preferential access for concierge level services and treatment.
Prediction: Sales of financial instruments to help people address their care needs in the future, such as annuities and hybrid Life-LTC-Critical Illness insurance policies, will continue to grow. Alternative funding options that favor the unique factors of aging and declining health for seniors will continue to become more mainstream. The use of reverse mortgages for people who want to age in place will increase from $7 billion to $10 billion measured in loan-revenue by 2025. Life settlements to sell an unneeded life insurance policy for a tax-advantaged lump sum payment will continue to grow as this market increases from $4.4 billion in 2019 to $9 billion by 2025. Legislation introduced in Congress (H.R. 5958) will pass, creating a tax-free “Senior Health Planning Account” (SHPA) funded by the tax-exempt proceeds from a life settlement. Other options such as the Veterans Aid & Attendance Benefit and senior-living bridge loans will increase in awareness and use as well.
Technology: Advancements in medical science and technology have driven improved healthcare, quality of life and longevity for centuries. The pace of advancements over the last decade have been breathtaking in mapping the human genome, uses for artificial intelligence (AI), medical devices and orthotics, telemedicine, pharmacology and the digitization of medical records. These advancements are not only improving health outcomes, but are opening healthcare access to more people, reducing waste, and creating efficiencies and cost savings.
Prediction: Moore’s Law theorizes that computing power doubles every two years—and advancements in healthcare will continue at an accelerating pace. AI will increase the ability to analyze data around disease conditions, diagnosis and help improve treatment. Genetic testing will continue to unlock the secrets of DNA and inherited health conditions and Epigenetic testing will help people understand what lifestyle changes they need to make for improved health and to live longer. 95 percent of the population is in possession of a smartphone, making telemedicine and health apps on phones the bridge to close the gap for populations who find access to care to be challenging, such as seniors and rural dwellers. Drug treatments for many diseases and conditions will continue to advance, but an even greater emphasis will be placed on developing and administering vaccines in the aftermath of the pandemic. Ongoing digitization of health records will produce numerous benefits, including instant access to records for the doctor and patient, reduced medical errors, and cost savings and efficiencies.
The paradoxical nature of America’s healthcare system is in a constant state of evolution – and sometimes revolution. Demand for healthcare, and the associated costs of caring for an aging population, will both drive innovation and challenge our ability to pay for it.
The pandemic’s impact will be long lasting, and a measurable factor in the future of our system for years to come. America will continue to be a leading force in the world, pushing the development of healthcare forward and raising the quality of life for billions of people.
Yet here at home our system will continue to be a wealth of both opportunities and challenges.