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New Study: Aging Baby Boomers Could Overwhelm U.S. Health Care System by 2017, Unless Decisive Action Is Taken

Thursday, March 6, 2008 General News
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NEW YORK, March 5 The approaching onslaught of over 70million aging baby boomers could overwhelm the U.S. health care system andengulf the nation's tenuous economy, according to a new study, "Will the BoomBust Health Care?," by management consulting firm Tefen USA.
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A recent report from the Centers for Medicare and Medicaid Services (CMS)predicts that unless decisive action is taken, total U.S. health care spendingwill double to just over $4.3 trillion by 2017 - or nearly 20 percent of thenation's gross domestic product. Tefen USA estimates that this figure couldbe considerably higher, based on its assessment of data that people over theage of 65 experience nearly three times as many hospital days per thousand asthe general population, and that sixty-two percent of 50-64 year-olds reporthaving at least one of six chronic health conditions: arthritis, highcholesterol, cancer, diabetes, heart disease and hypertension.
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Declining Hospital Capacity

Compounding the problem, according to Tefen, is a sharp decline inhospital capacity. The number of community hospitals decreased from 5,384 to4,915 between 1990 and 2000. During the same time period, the number of bedsper 1,000 of population decreased from 4.2 to 3.0. This reduction incapacity, Tefen points out, has been accompanied by a sharp increase inhospital staffing. Between 1995 and 2000, full-time equivalent personnelincreased from about 3,420,000 to about 3,911,400. At the same time,hospitals have spent almost $100 billion in facility and infrastructureimprovements.

"There is an immense, growing disconnect within the U.S. health caresector," said Barry Calogero, president, Tefen USA, and author of the study."Capacity is shrinking, costs are skyrocketing, and the patient population isabout to explode. Our nation must bring these disparate factors intoalignment in order to preserve the foundation of U.S. health care whileadapting to the economic, medical and political conditions of today andtomorrow.

Severe Consequences Projected

As baby boomer-induced health care costs grow, these severe consequencesare likely to occur, according to the Tefen study:

"Despite what many people think, the solution is not a single-payersystem," said Calogero. "While socialized medicine provides some advantagesfrom an access standpoint, it does not address the underlying cost and qualityissues that threaten the functional integrity of health care in the U.S. Thereal solution to America's health care challenges requires three components:implementing tort reforms, mandating the use of best practices and drivingsystemic process improvement." The Tefen study provides insights and detailson each of these three solution elements.

Implement Tort Reforms

The study's author suggests that the threat of lawsuits causes providersto hide problems and engage in unnecessary procedures to avoid potentialnegative occurrences. "If caregivers document mistakes, they are immediatelyexposed to litigation," observes Calogero. "Consequently, obfuscation andsecrecy become the standard practice when confronted with errors. Qualityissues are concealed and knowledge is suppressed, leading to the highlikelihood that mistakes will be replicated."

The solution, according to Tefen, is a system of health courts similar inpractice to the arbitration system utilized to address other complex issuesrequiring dispute resolution, such as workers' compensation, tax and patentdisputes and vaccine liability, where claims against institutions areadjudicated. Health courts would administer peer reviews and independentanalysis of procedural errors - differentiating between human error andnegligence - and determining damages proportionate to the mistakes.

Mandate the Use of Best Practices

The current system of medical reimbursement actually rewards providers fordeliverin
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