WASHINGTON, Feb. 24 (UPI) -- Healthcare spending projections released this week, showing a greater reliance on public funds for Medicare and Medicaid as the baby boomers retire, keep the burgeoning discussion of the future of U.S. entitlement programs moving, albeit without any particular solutions rising to the top.
The numbers, which project healthcare spending at $1.8 trillion, show public funding could soon be paying half of U.S. healthcare costs, which are expected to double to $3.6 trillion by 2014, as the leading edge of the 76 million boomers retires.
Marilyn Moon, vice president and director of the Health Program at the American Institutes for Research, as well as a former Medicare trustee, told a news conference Wednesday, "In the long run, the only way to save (Medicare) is to put a crowbar into your wallets as taxpayers and pay more."
Moon, a baby boomer herself, said the time to raise taxes is now, when the boomers are at the height of their earning power and can better afford it, not when they retire and have less income. Otherwise, suggestions now in Congress -- such as legalizing drug reimportation and allowing Medicare to negotiate with pharmaceutical companies on the price of drugs -- will not be nearly enough to save the entitlement.
Another option is to raise the minimum entry age for Medicare, which Moon said works only if the entire private insurance industry is revamped to ensure access to good coverage for people nearing retirement age.
Some near-seniors, who find themselves downsized out of a job, find it very difficult to obtain private insurance coverage they can afford.
"I think it would be nice if people would step up to the plate and be realistic about this discussion," Moon said.
The insurance industry has a role to play in all this, analysts at the news conference said, because how employers and health plans deal with employee coverage will affect how many people are uninsured and end up on Medicaid.
The U.S. Census Bureau estimates that in 2003 some 5 million people lost their health insurance -- many because employers either dropped coverage or raised premiums and co-pays to the point where workers could not afford them.
Richard Foster, chief actuary for the Centers for Medicare and Medicaid Services, said if premiums and out-of-pocket payments continue to grow faster than income, "those costs will become somewhat overwhelming," taking up too much of disposable income and forcing people to forego some healthcare services, which raises healthcare spending in the long-run.
Stephen Heffler, director of the CMS National Health Services Statistics Group, said his projections show there will be "positive growth in the number of people with insurance but that growth will be less fast than the overall population," so the net is an increase in the number of uninsured.
Moon said whether employers continue to offer family coverage -- and some companies have dropped the option or increased premiums for it significantly -- will affect Medicaid and the State Children's Health Insurance Program enrollment.
"I've think we've see the Golden Age of insurance by employers in many ways and we don't know what's going to happen in the future with that," Moon said.
Gene Steuerle, a senior fellow at the Urban Institute, said even though solutions are not yet defined, he applauds President Bush for at least putting the entitlement programs on the table for discussion. The dilemma is unless charges to the financing system are made, by 2014 Medicare, Medicaid, Social Security and Defense together will eat up the entire federal budget.
"Given that, it's inevitable that we're going to have to have reform of these systems," Steuerle said.
He said the problem is entitlement programs are designed so they automatically grow as needed, while other programs have to fight each year for federal budget dollars.
"That's the dilemma -- we haven't faced up to it," he said. "The spending spree is over and now we're going to have to face up to the cost of government one way or another."
PHARMA R&D IN EUROPE DECLINING
A decline in the productivity of pharmaceutical research and development in Europe and what to do about it were on the table this week at the Innogen Conference in Edinburgh, Scotland.
Innogen is part of the Economic and Social Research Council's Center for Social and Economic Research on Innovation in Genomics.
The ESRC report on the conference, noted Robin Fears, a former R&D director at GlaxoSmithKline, found pharmaceutical research and development accounts for 39 percent of all industry spending in the United Kingdom, which has meant great strides in reducing deaths from many diseases.
"But there is industry concern that pharmaceutical R&D productivity is declining, particularly in Europe," Fears said.
Dr. Ruth March of AstraZeneca said pharmaceutical drug development is a process that is "lengthy and inefficient," which keeps new drugs from making it to the marketplace.
Christopher Paul-Milne of Tufts University's Center for the Study of Drug Development, said R&D costs can be reduced by improving drug development times and success rates, as well as by bailing out early on projects that are not going to succeed.
"A common goal should be to foster management and regulatory practices that shorten drug development times and facilitate better decision-making," he said.
Another problem faced by the industry is that millions of dollars are spent on drugs that end up only working well for a portion of the population. This has given rise to the idea of personalized medicines, which target drugs to people who are likely to respond well to them.
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