The Government Accountability Office and the Congressional Budget Office have labeled rising health care costs the government’s number 1 fiscal problem based on projected growth in Medicare and Medicaid expenditures. Rising health care costs also affect individual finances, as health insurance is at risk of becoming unaffordable for growing numbers of Americans and their employer-sponsors. Reforms to address the affordability of insurance often involve more government spending on health care, only compounding our number 1 fiscal problem. A related and somewhat contradictory concern is that our future health care workforce will be inadequate to meet the needs of our aging population.
It is clear that policies aimed at alleviating the anticipated health care workforce shortage need to be coordinated with policies aimed at managing health care cost increases. Altarum Institute’s health care macroeconomics and finance practice area and our Center for Sustainable Health Spending are focused on producing innovative, policy-relevant research on these and related issues.
The Altarum Health Sector Model (AHSM) plays a key role in much of our research. It is designed to produce forecasts of national health expenditures (as captured in the National Health Expenditure Accounts) based on the size and age of the population, the prevalence of medical conditions, prevailing patterns of treatment, insurance coverage, access to care, and payment rates by insurers and other payers. This structure makes AHSM a useful vehicle for integrating a broad array of research efforts related to the determinants of health expenditures.