by John F. Hood, MCH President

As reported in the Kansas City Star on June 28, 2009, the Congressional Budget Office made this prediction for 2082 based on current trends. At 16% now and expected to be over 20% of GDP in 2018, the growth of healthcare spending is nothing short of spectacular. If you have been following employment trends this past year, you already know that the healthcare sector has been adding jobs all through the current recession.

The growth of healthcare spending is central to the growing share that B2i takes of GDP. Other B2i segments like government and education are growing too, just not quite so fast. But healthcare is attracting more government attention in the current healthcare reform debate. One of the other striking aspects of the B2i markets is that government spending is one of the main sources of funding. When the government makes changes, the B2i institutions follow. An example is the vast and unprecedented stimulus funding now reaching the institutions that will spend it.

What’s going to happen when healthcare reform actually happens? Will it slow the growth of healthcare spending? I don’t know. In the short term, probably not. It will cost more, not less, to insure 40 million people more. I do feel that one thing is sure to happen. The conduits through which the funding for healthcare flows will change. As with all B2i markets, government-funding changes cause dramatic shifts in the marketplace. There will be new strings. There will be some losers along with some winners (institutions and companies that benefit from the changes and those that don’t). If you participate in the healthcare system anywhere, you have to pay attention to this debate and prepare your company for what comes next. Do a good job and you’ll continue to thrive. But ignore these changes at your peril.