Cost Savings As We Age: Common Sense
By MICHAEL HODIN,
Posted: February 03, 2012
Coming out of the primary in Florida – home to so many seniors and ground zero for Medicare – Mitt Romney, not surprisingly, says he wants to be sure “that Medicare is fiscally solvent” and claimed, “I put a proposal out, which now Wyden and Ryan have taken on legislatively."
Good ideas do tend to attract lots of fathers.
But this one is further supported by the S&P report, “Mounting Medical Care Spending Could Be Harmful to the G-20's Credit Health,” released earlier this week. In sum, the report said: “Population aging will lead to profound changes in economic growth prospects for countries around the world … as governments work to build budgets to face ever greater age-related spending needs. Governments' main policy actions so far have consisted of decreasing pension outlays. We believe that getting a firmer grip on rising health care spending is at least equally important.”
To get a firmer grip, there must be a unique blend of politics and arithmetic. Reduce the number of people served by Medicare or its equivalents in the other G-20 countries – not by denying access but by enabling good health as we age. If we spend to prevent disease, trillions of dollars will be saved and millions of lives improved as the century progresses. (Think of Japan’s aging population as well as Europe’s.)
But for those policy changes that S&P says we must achieve, there are three necessary steps. The first two we hear about all the time: Delay the age at which people can draw benefits; and only allow those who really need help to qualify. And as for the third, if we took the billions of dollars that are wasted in America on non-essential Medicare expenses and reinvested that money in research programs and healthy aging initiatives, the payoff would be spectacular, both financially and personally. Our research has gotten so smart and so high tech, there are no limits on what we can do. Recent research on the effects of exercise, sleep, and even virtual reality on the aging process is opening new pathways to how we understand and think about strong aging.
Fiscal sustainability in a new century absolutely requires healthy aging. It is time to create policies that would rein in Medicare costs so that we can invest in healthy aging. No wonder Europe has dedicated the year to “healthy and active aging.” Or that the World Health Organization has declared that 2012’s World Health Day be dedicated to population aging.
Imagine if we could keep people across the globe from emasculating their governments’ health benefits and also become active economic contributors well into their 60s and 70s to make room for the support that would be needed into their 80s and 90s. While the Florida primary may now be history, how we manage our health budgets in an era of population aging is the seminal topic of our era – and one that all public officials in the G-20 countries will have to address.
Michael W. Hodin, Ph.D., is Adjunct Senior Fellow at The Council on Foreign Relations, and Executive Director of The Global Coalition on Aging.