Baby boomers have been taking the rap for everything from the stress on the Social Security system to the shortage of affordable housing. And with the debate over health care reform heating up, a lot of people are trying to blame the overall rise in health care costs on aging baby boomers and other seniors.
They need to take a closer look.
The aging of the baby boomer generation actually contributes very little to rapidly rising health care costs for people under age 65, according to a study by the Center for Studying Health System Change (HSC).
“The aging of the population is always a factor in health care costs, but aging is a minor factor not a major cost driver,” said Paul B. Ginsburg, co-author of the study and president of HSC, in a statement about the study’s health care cost findings.
How Does Our Aging Population Affect Health Care Costs?
The numbers also show that our aging population has not been a driving force in rising health care costs.
- In 2001, for example, the aging of the U.S. population contributed only about 0.7 percent (less than 10 percent) to the total increase in per capita health spending for people under 65.
- Between 1990 and 1995, the figure was even lower, ranging from 0.1 percent to 0.3 percent, because most baby boomers were not yet 50, the age at which aging begins to have a slightly larger impact on health care costs.
- In 2010, aging is projected to account for only 0.6 percent of health spending increases, and that figure may average no more than 0.4 percent in future years.
What Happens to Health Care Costs As Boomers Age?
While it’s true that aging baby boomers are bound to drive up Medicare spending during the next few decades—beginning in 2011, when the first baby boomers start turning 65 and shifting the cost of their health coverage from the private to the public sector—most of the increase will result from the larger number of people joining the program rather than more spending per person due to age-related illnesses.
Who Is To Blame for Rising Health Care Costs?
So if baby boomers and seniors aren’t to blame for high health care costs, what is driving up health care costs for people under 65?
There appears to be no absolutely right or wrong answer to that question, at least not one that everyone can agree on. Observers on various sides of the health care costs issue blame everything from the chronic shortage of qualified nurses to insurance companies that are more committed to company profits than patient care.
The one thing almost everyone can agree on is that overtreatment is one of the primary causes of increasing health care costs—and many factors contribute to overtreatment:
- Quantity over Quality —America’s fee-for-service payment system rewards doctors for the number of patients they see and the number of treatments they prescribe, rather than the quality of care they provide.
- Medical Malpractice—Doctors fearful of malpractice lawsuits and burdened by the staggering cost of malpractice insurance try to protect themselves by ordering expensive tests their patients don’t actually need.
- Consumer Choice—Too many people see doctors when they’re not ill and insist on tests or treatments they don’t need. Experts say as many as 25 percent of all doctor visits are nothing more than social calls and nearly half of all emergency room visits are for medical care that could have been received during a regular doctor appointment.
Overtreatment: Bad for Health Care Costs, Bad for Our Health
Overtreatment could easily be one of the most significant reason that Americans are struggling to keep up with rising health care costs.
Of the $2.3 trillion that Americans spent on health care in 2007, somewhere between $500 billion and $700 billion was spent on tests, treatments and hospital stays that did nothing to improve our health.
Worse, new research suggests that excess health care may be killing us. According to Elliott Fisher, M.D., a noted medical researcher from Dartmouth University, unnecessary care causes the deaths of as many as 30,000 Medicare recipients annually.
Preventable Illnesses Increase Health Care Costs
Another big factor in soaring medical expenses is the cost of caring for patients who are chronically ill.
Roughly 20 percent of patients in the United States have serious chronic illnesses such as diabetes, heart disease, and high blood pressure—conditions that in many people can be prevented or controlled with proper nutrition and exercise—and that 20 percent accounts for 80 percent of health care spending.