Kevin Schulman, BAHM President & HMPI Editor-in-Chief; Professor of Medicine, Stanford University: The U.S. Congressional Budget Office released its 10-year budget forecast this month, and their assessment is sobering: “Increases in spending for Social Security and Medicare and rising net interest costs push outlays to $11.4 trillion, or 24.4% of GDP, in 2036.”[1] All federal outlays this year are projected to be 23.3% of GDP, highlighting the twin fiscal realities of caring for an aging population at a time of long-term fiscal deficits. This financial reality, where essentially all federal funding will be targeted to an ageing population and the debt they sanctioned rather than investment in infrastructure and resources for future generations, or our military to provide for our security, will spark unprecedented challenges to our political system and to our economy. But changes now can head off a dire future, if we act.
In this issue, we work to tackle these challenges.
Scheinker et. al. address productivity of healthcare systems with new models of integrating optimization into operational models. They suggest aviation has seen strong gains in productivity, while hospital labor productivity has actually declined from 1995-2019.
Bilbo et. al. continues to build on work to reduce administrative costs by describing the development of a computable contract for payer-provider contracting. This work follows directly from work by Istvan et. al. in the December 2024 issue of HMPI.[2] This is an exciting step on a pathway to computable contracts as the basis for a true digital translation platform in healthcare.
Brecher et. al. discuss the framework Germany adopted in 2019 for authorization and reimbursement processes for digital health applications. The authors suggest that lessons learned from this approach can be a model for other markets to follow as we further develop AI solutions in healthcare.
Parente et. al. describe an innovation assessment process used at the University of Minnesota to predict commercial success of early-stage innovation. They report on a database of 500 projected evaluated since 2008 providing significant power to their assessment model.
Pulice et. al. examines the pricing for a new class of oncology products, CAR-T therapies. This descriptive analysis reports how market price is related to market entry, with subsequent entrants generally increasing their market price over incumbents.
Mortensen et. al., review the highlights of the University of Miami’s annual healthcare conference, featuring excerpts of panel discussions by leaders from across the health sector.
Our faculty profile this month focuses on Christopher Johnson, PhD, Professor of Health Administration, Joe Taylor Chair in Health Administration, Director Institute of Health Administration. He is a researcher best known for work that seeks to understand how health care organizations impact health care outcomes for veterans, underserved populations, and the elderly.
[1] https://www.cbo.gov/system/files/2026-02/61882-Outlook-2026.pdf
[2] https://hmpi.org/2024/11/19/applying-precedents-thinking-to-the-intractable-problem-of-transaction-costs-in-healthcare/