Health systems across the nation must adapt to a relentlessly changing financial environment given the dominance of the federal government as the leading healthcare payer, Kaufman Hall Managing Director Eric Jordahl wrote June 10.
While the recent agreement on the debt ceiling offered temporary relief, the increasing amount of debt in congressional budgets is not sustainable, he argued.
The numbers are stark as, given current funding patterns, federal spending is on pace to reach $9.8 trillion (25 percent of forecasted GDP) by 2033 and debt held by the public is on pace to exceed $45 billion (118 percent of forecasted GDP) over the same period, according to the commentary. In the shorter-term, the fiscal year 2022 budget generated a $1.4 trillion deficit.
"All this confirms that the greatest threat to healthcare's financial and credit foundation remains the federal government's role as lead payer," Mr. Jordahl wrote.
The reality of the federal budget is likely to define healthcare's experience for the "foreseeable future," he adds.
Constrained resources will therefore be the norm for health systems, which must get their operational house in order to both generate sufficient cash flow and gain access to external capital, Mr. Jordahl concluded.