Approaches To Alternative Care Delivery - 12/10/20

Ideas and thoughts on how care delivery can be transformed…

For at least a decade, I’ve been arguing that the trajectory of the current health care system financial structure is unsustainable. In essence, my argument has been that with: 1) the growing number of elderly who use services at a much higher rate than the general population, 2) population growth in general, 3) the seemingly unmitigated cost increases of care delivery driven by infrastructure and lack of real competition, 4) the looming health workforce shortage; and, 5) most importantly, a payment system focus on doing things (i.e. fee-for-service) rather than results (i.e. keeping people healthy). Then, the pandemic struck! It accelerated the American health care Armageddon from the late 2030’s or early 2040’s to sometime in the 2020’s or, “hey folks, it’s just around the corner”…

The Bipartisan Policy Center recently released Brief 2020-1022 that outlines in a very clear and concise way the argument that the COVID-19 pandemic has created an unsustainable structure for the nation’s Social Security’s financial capacity. It’s not a surprise that Social Security was facing financial troubles especially due to the demographic and economic trends which have consistently raised costs for the program. But, the problem has been so far off that kicking the can down the road has become the operative model for most of the Administrations over the last couple of decades. The problem is that we can now see the looming crisis on the horizon AND the pandemic has accelerated the problem. Why?

In essence, the BPC brief argues that the structure of the Social Security program across the board is based on funds being deposited into the respective trust funds. Payments into the trust funds are derived from payroll taxes. Laid-off workers do not pay payroll taxes and employers do not pay their share into the fund either. Over the last year, the US economy has lost nearly 11 million jobs which equates to that many folks NOT paying into Social Security.

As I’ve argued for some time, we are on the road to insolvency. In fact, Social Security’s Trustees have previously projected the combined reserves of the retirement (SSI) and disability (OASDI) trust funds would be depleted by 2041 if nothing was done. But, as the BPC Brief outlines, the Trustees updated their projections in 2012 following the severe economic recession of the last decade. The new projection? 2033! So, what’s the worry? That’s at least a decade away, right? But, the economic impact of the pandemic has not yet been considered… Therefore, it seems to me that the full impact of Social Security financial insolvency will be coming to the forefront in the last half of the upcoming Biden Administration or, in about 2 years!!!

So, the real question we need to be asking ourselves is whether political leaders – of all stripes and colors – will step up to deal with the unsustainable path of one of the most important benefits of American society – the Social Security and Disability Insurance programs on a sustainable path for generations to come. I must be honest and say that when one turns 70, one becomes much more cognizant of these kinds of issues. So, for my Millennial and GenX colleagues – we need you to step up and help everyone by forcing (yes, I mean forcing) the politicians to deal with these issues. Biden is putting in place a team that appears to have the resolve for addressing these concerns. Let’s hope so…otherwise, I will be exceedingly disappointed!!  Remember, I was a Biden fan before there were any Biden fans…

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