A reasonable assumption, it believes, is that the rate of growth in per beneficiary spending will equal the rate of growth in per capita GDP plus one percent. This works out to half the historical rate. The Panel's explanation is that whatever else happens in health care, technological advances will continue, and over the postwar era these have accounted for roughly half of the rise in real per capita health-care spending. The Panel does not quantify the effect of its recommendation on projected Medicare costs. Even this projection is conservative.
Many observers believe that the pace of technological innovation in medicine is now accelerating.
As technology and expectations interact, they are transforming the practice of medicine. While once health care meant an occasional visit to the doctor or hospital, it is fast becoming a lifelong process of diagnostics and fine tuning in which any extra dollar spent is likely to confer some perceived benefit. We cannot dismiss the possibility that per-beneficiary spending will continue to grow at its historical rate. They should also publish alternative projections that reflect the real possibility of a worse outcome, including a historical trend projection and a projection based on SSA's high-cost economic and demographic scenario. As things stand, the official numbers obscure the full magnitude of the long-term Medicare challenge.