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Saving Our Future Tough Choices in Health Care & for the Budget

Saving Our Future Tough Choices in Health Care & for the Budget. Iowa Committee for Value in Healthcare Des Moines April 2, 2009 Eugene Steuerle Vice-President The Peter G. Peterson Foundation. More Beneficiaries, Less Workers.

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Saving Our Future Tough Choices in Health Care & for the Budget

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  1. Saving Our Future Tough Choices in Health Care & for the Budget Iowa Committee for Value in HealthcareDes MoinesApril 2, 2009 Eugene Steuerle Vice-President The Peter G. Peterson Foundation

  2. More Beneficiaries, Less Workers Source: The Social Security Administration The Future of Social Security (2008)

  3. Projected Real Health Care Costs Per Person 2008-2050 (2008 Dollars) Source: Congressional Budget Office, U.S. Census and PGPF calculations.

  4. Sources of Growth in Projected Federal Spending on Medicare and Medicaid Source: Congressional Budget Office 2008

  5. Major Fiscal Exposures($ trillions) Source: PGPF analysis of 2000 and 2008 Financial Report of the United States Government. Note: Estimates for Social Security and Medicare are at present value as of January 1 of each year and all other data are as of September 30.

  6. A Budget for a Declining Nation? • Less saving (long-run) • Less work • Reduced investment • Increased dependence upon foreign lenders • Reduced investment in our children

  7. Key National Indicators: Where the United States Ranks The United States may be the only superpower, but compared to most other OECD countries on selected key economic, social, and environmental indicators, on average, the U.S. ranks 17 OUT OF 28 Source: PGPF analysis of 2007 OECD Factbook

  8. SOON…VERY SOON • ANY spending on education, environment, welfare, community development and most domestic programs, as well as deficit reduction, must be paid for out of: • Rescinding of tax cuts or tax increases • Pared growth in health and retirement spending • A larger economy through additional work and saving • A very small international and defense presence

  9. Deficits as a % of GDP (1950-2019) Source: Office of Management and Budget FY09 Historical Tables and Congressional Budget Office Updated Budget and Economic Outlook (March-09)

  10. Projected Composition of the President’s Budget Source: Congressional Budget Office Updated Budget and Economic Outlook (March-09)

  11. Tomorrow’s Problems Are Now Today’s • Long-term budget unsustainable before crisis • Stimulus & financial fix necessary…but • Cause large increases in debt and interest • Threaten higher interest rates as well • Threaten recovery if U.S. bonds not AAAAA • Recovery Phase (hopefully) • Unwinding large increases in debt • Reducing ever-growing demographic and health costs pressures

  12. Trends in Health Care Costs vs. Wages Source: Congressional Budget Office, U.S. Census and PGPF calculations

  13. Source: Congressional Budget Office, U.S. Census and PGPF calculations

  14. International Context for U.S. Spending Levels Source: OECD 2008

  15. Some of the Trade-Offs • Health versus everything else • Negative cash wage growth in many firms • Health versus other forms of social spending • Education, environment, food, jobs subsidies • Health versus health • Acute care versus prevention • Chronic care versus cure • Insurance versus access & public health • Health care for old versus health care for young • Specialization versus primary care

  16. The Way Forward

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