Medical Device Daily National Editor
CHICAGO — If the keynote presentation by Alan Greenspan at this year's annual meeting of the Healthcare Information and Management Systems Society (HIMSS; Chicago) proved anything, it was to demonstrate that economic analysis is, indeed, the "dismal science."
Featuring a dismal demeanor – and sometimes reading, head bowed toward notes apparently difficult to decipher – Greenspan repeatedly predicted that, well, hopefully, things are going to get better for U.S. and world economies.
But he then followed these prognostications with the dismal acknowledgment that, while the decline in various economic metrics seems to be slowing somewhat, he couldn't predict when this decline would stop and then become an upturn.
And he was rather pessimistic both about the future of U.S. healthcare and the future for a renewed, and robust, U.S. economy.
The problem (and no particular big headline-making news for the medical sector): the tidal wave of aging Americans that will require medical care, and – what medical technology providers are probably less willing to acknowledge – what he said would be healthcare's lack of "capacity" to fulfill this need.
And while attendees – packing the cavernous Skyline Ballroom of McCormick Place – were obviously hoping for "Big Wisdom" concerning healthcare from the biggest figure in world economics over the past 20 years, they received only a couple of tidbits:
• That health information technology will be one of the methods for reducing medical costs.
• That the Obama administration may have to increase co-pay charges on the country's affluent in order to pay for increased healthcare costs.
Besides tossing off these fairly undetailed specifics, Greenspan did little more than provide academic-level discussion of the current economic decline – far beyond the "turbulence" that he had presided over in his various capacities as economic guru, and he offered no mea culpas concerning his general belief in the beneficent dynamics of unregulated market forces or his failure to have seen the decline coming.
Early on in the presentation, as a matter of background, Greenspan compared the healthcare of his childhood with modern offerings.
"Take two aspirin and call me in the morning," he said, was the extent of the "high-tech" medicine that could be offered by physicians when he was growing up, because there "wasn't much that the profession could deliver." And he contrasted this with the blossoming of product offerings, products and services of today, and the growth in healthcare spending to 16% of total GDP.
He said the rate of expansion in healthcare's offerings – so that steel companies, he said, are spending more "on healthcare than on steel" – "occurred without any evidence of pressures on the economy." And this lack of pressure he put as the result of the overall economy providing "enough resources for the non-medical requirements of the society."
He said it was "difficult to get a sense here of what the limits [of this supply] will be or here it will eventually end up," and he expressed certainly that the U.S. economy "is not going to grow as fast in the years immediately ahead, as it has in years past."
Complicating this is the "baby boom generation ... [and] moving a very large part of the most productive part of our population from work to retirement over a relatively short timeframe." The result, he said: "a clash, invariably, in the marketplace because resources are not going to be as ample as they have been."
What he proposed as the necessary – but unlikely – antidote to averting this clash would be a "surprising acceleration in productivity" to meet the "propensity of newer technologies to enhance the supply of various types of medical products" – a comment hardly pleasant music to high-technology, which often must fend of criticism that it is the source of ballooning healthcare costs.
"The crisis we're going through now only makes the issue more difficult," he said.
"I'd like to say we will get out of it relatively quickly, but we're not about to."
Suggesting a sort of economic parallel to 9/11 for America, Greenspan cited 9/15/08, "the day Lehman Brothers defaulted and the world collapsed; economic activity fell off a cliff in a very literal sense."
The result, he said, was a freezing up of credit markets and a heavy brake on global trade. "[W]hen you shut down the markets as quickly and dramatically as we did, there is a huge backing up of inventory, and you have the sharp fall-off in industrial activity going on today.
"One thing that is really startling about Sept. 15 and going forward is that it demonstrated unequivocally that we are all in a global economy; all economies are behaving in a similar manner, all interacting. Unless the global economy picks up, it's going to be very difficult for us to maintain a stable system – but I must admit some signs that things are getting a little bit better."
After the note-read, academic-style lecture on the impact of stock prices that go far beyond "paper values," Greenspan turned psychological.
He said that the current crisis is not "economics in the usual sense of the word" but rather "evidence of a lack of learning curve with respect to human nature, built into our psyche ..."
The result of this is "innumerable bubbles," which are difficult to avoid unless you put extreme clamps on the economy and extreme clamps on the ability [of humans] to express euphoria that they feel after a long period of prosperity. It induces them to start to invest, and reach ever more into areas of risk, and eventually the bubble breaks."
As to current administration actions, he said that the effort is to serve as aggressive guarantor between lenders and borrowers – where guarantees have otherwise broken down – and he judged that the dollar amounts offered to do this should have been doubled in order to produce greater effect.
Turning again to healthcare, he cited a clear difference between Social Security and Medicare, noting that 20 years ago he had headed a commission to offer solutions for fixing both.
"At the very first meeting we decided that we were not going to try to handle Medicare. We said the demographics are going to be okay for 20 years or more, so we have time.
We knew back then precisely what the timing would be, when the baby boom generation retired, forecastable like other things are not forecastable.
"But we've done virtually nothing about it, nobody ants to touch an issue. If you've read the  trustees' report, you find that we are funding – even before the current crisis – less than half of what the entitlement is."
And he said that growth in health spending, about 2% faster than GDP, will inevitably force hard choices and cut-backs.
"I haven't the slightest idea what the true current services cost of Medicare .... I hope that one of the avenues by which we will seriously confront and improve the issue is in healthcare information technology – but there are so many avenues here."
Greenspan, even with this list of fairly indefinite affirmations, was rewarded with rousing attendee applause – though not the standing ovation that a movie star earlier in the week had received, perhaps more indication of attendee priorities than the value of wisdom offered.