BALTIMORE, October 7, 2008 — Healthcare leaders who believe that nothing much will change in the way we deliver and fund services should find a copy of the Sunday New York Times. In a two-page frontal assault on this nation’s fiscal mess, former Secretary of Commerce Peter G. Peterson and David M. Walker, former U.S. Comptroller General, highlight some economic realities that should send a chill down your back.
For healthcare CEOs and board members, if you are not worried about the future then you are not living up to your fiduciary duty.
The U.S. government is in a $53 trillion financial hole as of September 30, 2007. This equates to $455,000 per household. This is before the $700 billion credit market rescue/bank bailout plan.
Of this staggering total, $34,000,000,000,000 (trillion) is the unfunded commitments of the Medicare program. Mr. Walker believes that the real problem for our nation is not some terrorist living in a cave, but our deepening national debt. It is our “economic cancer.” What an appropriate description since healthcare costs, through the Medicare program, is one of our single biggest budget challenges.
Each household’s share of the $53 trillion financial hole — $455,000 – is almost 10 times the median household income, according to the Peterson/Walker advertisement. This is unfinanceable, Messrs. Peterson and Walker claim.
The advertisement cautions Americans “we cannot grow our way out of these problems. To do so, our economy would have to grow by double digits for decades. In the boom of the 1990s, the economy grew at average rate of (only) 3.2 percent.”
Even if we cut pork-barrel spending, eliminated all earmarks, cancelled the Bush tax cuts, and ended the wars in Iraq and Afghanistan, these actions, combined, would get us only 15 percent of the way to financial solvency.
Where are we getting the money to run our government?
Foreign lenders, for the most part. Nations like China and the oil-rich Muslim nations of the Middle East.
What if those foreign nations, like U.S. banks, decide to stop lending, or if they insist on tough new borrowing covenants? Vice President Cheney’s silly assertions to the contrary, deficits do matter. They matter for our household budgets, our hospitals, and our government.
Unless we get our financial house in order now, the United States will enter an irreversible fast-track slide to second-world debtor nation status.
This is the dirty little truth that everyone in Washington knows but no one wants to talk about.
Healthcare leaders must act now. Or, we can sit back, watch the crisis grow and do what we have been doing so well for the past 30 years: kick the can down the road to the next class of graduate students preparing to enter the healthcare field.
The time to act is now. Not in 2020 to 2040 when the nation will not be able to afford to pay entitlement benefits or fund much of a national defense.
Who better to craft a workable solution to overhaul healthcare finance and the way we deliver care than a coalition of physicians, healthcare executives and, yes, as much as it pains me to say this, representatives of the insurance industry?
Now is the time for healthcare leaders to say that enough is enough. Now is the time to build those tough coalitions that will yield real reform – reduce costs and improve quality.
Collectively, the American College of Healthcare Executives, the American Hospital Association and the American Medical Association –and others – have done a much better job of telling Congress what we don’t like rather than advocating a plan for real change.
It is time for the real healthcare leaders to stop this lame approach and be accountable for developing a real plan that will help save our economy and our nation.
We need to be accountable.
If you would like see Mr. Walker’s 2007 appearance on 60 Minutes, click the following link.
If Mr. Walker’s comments do not make you uncomfortable, your threshold for pain and anxiety is much greater than mine.