Financial ratings agency Standard & Poor’s (S&P) warned this week that it may downgrade a number of nations – including the United States and Japan – if their governments fail to enact health care reforms to cut costs and prepare for aging populations. In their report, S&P said that many developed nations were poised to see the largest deterioration in public finances in the next four decades as resources are stretched to the limit to cope with the strain on elderly social safety nets.
The report states, “Steadily rising healthcare spending will pull heavily on public purse strings in the coming decades,” and continues, “if governments do not change their social protection systems, they will likely become unsustainable.”
An aging population isn’t the only factor driving healthcare costs. S&P cites new technologies and broader treatment coverage that could account for as much as two-thirds of increasing health care costs.
While S&P said that it wasn’t too late for countries to address the issue, health care reforms, coupled with efforts to balance national budgets, would be enough to offset rising healthcare costs.
