The nation’s fiscal vital signs are failing, and following the footprints of healthcare costs reveals why we are facing such a difficult prognosis.
Washington’s insatiable appetite for spending on major health programs is a principal cause of our ever-expanding waistline of red ink. Focusing more on preventive health is a way to start exercising a better federal budgetary diet.
For example, outlays for Medicare, the federal health program focused on seniors, show the program is set to more than double in spending over the next decade from about $1 trillion in 2023 to more than $2 trillion in 2033. Medicaid, the principal health program for low-income Americans, is likewise projected to grow by 48% over the next decade. Spending on subsidies for Obamacare is not far behind at about 38% during the same decade. Spending on all federal health programs combined is expected to rise by a massive 82% over the next 10 years, according to the Congressional Budget Office.
As bleak as this trajectory may seem, we are confident that some preventive measures and innovations will go a long way toward restoring the nation’s fiscal health. This was the promise of the 21st Century Cures Act in 2016.
However, our efforts to recognize and account for “prevention” as a money-saving instrument are minimized by the way the Congressional Budget Office, the legislative branch’s principal scorekeeper, measures the costs.
Right now, CBO analyzes the impact of preventive health legislation over the first decade of a government program and only tallies the costs, but it does not take any longer-term savings into account. This is akin to counting the short-term costs of investing part of your paycheck into a retirement account while ignoring the future benefits of financial security.
We know, for example, that chronic conditions such as diabetes or heart disease account for about 70% of all healthcare spending in the United States. Government investments to address these illnesses might cost money in the short run but will save massive amounts in the future.
But right now, people aren’t given a clear picture of how smarter decisions today will help them, and our government, down the road. We need to change CBO’s outdated approach, which masks the full picture, to realize the full advantages of prevention programs and incentives.
Again, consider major chronic diseases such as diabetes or heart conditions. Today, when we commit federal resources to initiatives that promote healthy lifestyles to reduce risk factors, invest in early detection and screening programs, or even expand support for researching and developing treatments for these costly conditions, these initiatives all get scored as piling on more short-run costs, with no credit for long-term benefits. This model also doesn’t take into account new technology, such as cell and gene therapies, that have shown promise in reducing future healthcare costs.
Getting better information for Congress and the public about these long-term savings and benefits is why the House Budget Committee, on which I serve, is advancing the Preventive Health Savings Act this week. It directs the CBO to reflect the transformative cost-saving potential of preventive healthcare initiatives accurately. It instructs the CBO to extend its analysis beyond the existing 10-year budget window to two additional 10-year periods, providing a fuller and more continual analysis of the possible generational impact of these measures.
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The Preventive Health Savings Act is also an example of how Congress can overcome the culture of polarization and gridlock and find bipartisan common ground. I am joined in this effort by my original co-sponsor, Rep. Diana DeGette (D-CO), as well as my Budget Committee Democratic colleagues Reps. Dan Kildee (D-MI) and David Trone (D-MD), and several other Republican and Democratic House members have signed on as co-sponsors of the measure. Failure to come together and work on this is a choice.
Our current fiscal path is unsustainable but not unsolvable. We should not let old, rigid accounting rules stand in the way of innovation. Considering the long-term benefits of investments in prevention and recognizing their possible dividends offers a fresh perspective on bending the healthcare cost curve and getting our fiscal house in order. The Preventive Health Savings Act is the right prescription to help unlock new solutions to improve our fiscal fitness.
Michael Burgess is a U.S. representative for Texas and serves as the chairman of the House Budget Committee’s Healthcare Task Force and is on the House Energy and Commerce Committee and the House Rules Committee.
