Duke–BYU study sees path to boosting economy, sustaining Medicare
A new report recommends tripling the federal government’s funding of health research to extend the productivity of an aging workforce.
The study found that the gains from a greater investment in biotechnology and medicine will offset the rising costs of programs like Medicare that must expand to meet the needs of baby boomers in their later years. Brigham Young University statistician Dennis Tolley crunched the numbers for the report published Tuesday in the Proceedings of the National Academy of Sciences. Tolley’s collaborators on the study include researchers at Duke University and the National Council of Spinal Cord Injury Association.
“Many people feel that the rapid increase in technology is one of the main reasons health care costs have increased,” Tolley said. “Although none of us would like to return to the level of medicine practiced even 20 years ago, we are frustrated with the high cost of health care. This research shows that medical technology is also increasing the wealth of the nation.”
The baby boomer generation is driving up the average age in the U.S., but the workforce is aging at an even faster rate as young people enter the workforce later in life. To maintain growth in a more competitive global economy, U.S. workers will need to remain productive well beyond the age of 65.
“One of the key deterrents to working past retirement age has been the health of the individual,” Tolley said. “Technological advances are reducing this problem. As a result, seasoned, skilled, and technical individuals can now remain in the work force longer, producing great wealth for their immediate families and for society in general.”
Tolley, who is an actuary, fed economic and demographic data from prior national surveys and studies into a mathematical model to predict the state of the future U.S. economy. They found that the optimal level of research investment is 12.8 percent of gross domestic product, equal to $1.6 trillion yearly. Current funding for organizations such as the National Institutes of Health is about one-third of the optimum.
According to the authors, additional investments in research would yield discoveries that increase both life expectancy and the length of time workers remain active. The resulting economic boost would generate new tax revenue and savings in rate of increase in Medicare payments that will more than cover a doubling of the biomedical research at the National Institutes of Health and the National Science Foundation from 2009 to 2014.