You may have heard me quote one of my mentors, famous heart transplant surgeon Norman Shumway, who said, “the bleeding always stops.” A corollary to his oft-repeated aphorism applies to all facets of life. It is this: linear extrapolations are ultimately flawed. Sooner or later, the energy pushing some phenomenon—whether it is the economy, the stock market, housing prices or government funding for research—diminishes, and nonlinear changes appear.
Four years ago, NIH Director Elias Zerhouni assembled his 27 institute and center directors and asked them to consider several funding scenarios for the NIH budget. One included annual increases dropping from more than 6 percent to about 2 percent, the “worst case.” His directors objected to this projection, arguing that such low increases were unimaginable. After all, the NIH budget was just about to complete a period in which it doubled, the U.S. economy was rebounding, and public (and therefore Congressional) support for medical research was strong.
What happened? The Iraq war, tax cuts, doubts about the utility of the doubling of NIH funding, and other impediments resulted in annual budgets much lower than the worst-case scenario. When times are good, people tend to extrapolate higher growth than actually occurs; in bad times, people’s predictions are overly pessimistic.
As we hope for more optimistic grant-funding scenarios, let me leave you with some sobering news. We know that the Iraq war, accounting for about $100 billion a year in government spending, is a drag on our federal budget. Lest anyone think that we’ll turn things around by simply getting out of Iraq, consider another quietly looming crisis about which no voice in Congress, in the administration or on the presidential campaign trail is speaking: Medicare.
Every year, growth in Medicare spending, fueled by more seniors “coming of age” and by inflation in medical expenditures, increases at about double the rate of inflation. Between 2006 and 2016, the cost of Medicare is expected to grow by $445 billion. No wonder David Walker, the U.S. comptroller general, told CBS News that “the Medicare problem is five times greater than the Social Security problem.”
We’ve heard about that projected deficit—last year the system’s trustees estimated that the Social Security trust fund will be exhausted in 2040. But there are known fixes to this problem, such as reducing inflation-adjusted benefits increases and upping the age for eligibility.
Medicare, however, will run out of money on or before 2018, and there are no agreed-upon fixes. Rationing, higher taxes and/or cutting benefits seem to be the only possible levers to pull, each with serious political, social and economic ramifications. Unless of course—and here is my challenge to all of us in the medical industry—we can come up with some new paradigm for the delivery of health care that’s much more efficient and cost effective, and we do it very, very quickly!
