The Federal Reserve Chair Jerome Powell mentions that U.S. healthcare system contributes to a ballooning federal budget deficit

Healthcare system is improving with value based care solutions and patient engagement solutions. Yet healthcare is expensive in the U.S.

The Federal Reserve primarily deals with monetary policy and financial regulation of the country’s economy. But, Fed Chair Jerome Powell mentioned at a press conference that the U.S. healthcare system contributes considerably to quickly rising budget deficit.

He said that due to uniquely expensive U.S. healthcare delivery system and the aging population, the economy has been on an unsustainable fiscal path for a long time.

Federal spending on healthcare, especially Medicare and Medicaid have risen from 14.4% of all federal outlays in 1990 to about 31% in 2018. This is one of the main reasons behind the national debt of $21.5 trillion, which is growing further.

The amount of money that Americans spend on healthcare is likely to rise by about 5.5% for coming several years as per the government projections on health spending through 2026.

Such comments made by Powell are something that the Fed never takes lightly, as the agency has always been careful about avoiding crossing its boundaries. But, Powell prefaced his comments on healthcare by noting that the Fed will keep taking this approach and stay in its lane.