According to experts, the health sector will soon collapse

According to industry analysts, the US health sector UU This could be the next major Lehman-type disaster that could turn the economy into a real recession.

Forget the collapse of mortgages at risk. Analysts say the health sector is taking care of its own toxic mess, with growing debt. "As a nation, we need to step up our game and put it in; it's a big problem," said Chris Oretis, a former Washington lobbyist who is currently executive vice president of secondary life insurance at GWG Holdings.

With industry spending and debt servicing uncontrollable, medical care is classified in the EE "systemic recession risk" number 1. UU The sums involved are huge: spending in the sector accounted for $ 3.3 trillion in 2015 and represents 18% of the US economy. UU Industry generates 16% of private sector jobs across the country, up from 10% in 1990.

It is expected that health care spending in the US UU According to the report from the Center for Medicare and Medicaid Services (CMS), it is expected to grow an average of 5.6% per year over the next decade, a projection based on the lack of change in Washington and affordable health care until 2025. At the same time, national spending on health care is expected to outpace growth in US gross domestic product. UU of 1.2 percent. CMS estimated that spending will account for 19.9% ​​of GDP by 2025, an increase of 17.8% in 2015.

"There is no doubt that rising health care costs are affecting our economy in general," said Michael Mondiello, financial advisor in New York. "With consumer spending accounting for about 70% of economic activity, the more we invest in health care, the less we need to buy other things, like vacation or retirement savings."

Critics have said that weak economic growth elsewhere has failed to cope with huge health care debt among individuals and governments.

Then come the mergers, the construction of facilities and the recruitment of labor which, according to the analysts, could be the sign of a speculative bubble likely to explode.

"The overall picture reflects the growing debt of the health sector and a government that lacks capital," Mondiello said. "It is likely that this [bailout] bill will be passed on to consumers, making us a more indebted country," said Mondiello, former CPA of the emerging business sector at Coopers & Lybrand.

The first murmurs of early problems may have been detected.

"Health care companies are starting to lay off employees," said John Burns, CEO of John Burns Real Estate Consulting, an independent research and advisory firm on major trends, such as the health and safety sectors. technology. , which lead to the United States UU real estate market.

"Health companies have borrowed too much money and increased their debt faster than their income, so they must suffer a setback."

Earlier this year, for example, MD Anderson Cancer, the second largest employer in Houston, announced the elimination of 1,000 jobs while losses exceeded $ 100 million in just one quarter. Employment growth generally in the health sector is slowing.

In a report released by Burns, medical care is identified as the highest systemic risk to the economy of the three sectors examined by Burns, which also included technology and the automobile.

Conventional wisdom highlights the demographic trends of the United States. UU And the aging of the population as a long-term force support, but the report shows that the growth of the industry has exceeded what is sustainable:

The debt of the health care company has increased by 308% since 2009.
The number of hospitals in health systems has increased by 26% since 1999.
The annual medical costs of a family of four have increased by 189% since 2002, from $ 9,000 to $ 26,000.
"It could look like a scenario at Lehman Brothers, where two or three major health care companies are demolishing the economy," Burns told The Post newspaper.


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