Pessimistic 2024 Predictions For The Economy, Public Health And Politics

Forbes Innovation Healthcare Pessimistic 2024 Predictions For The Economy, Public Health And Politics Joshua Cohen Senior Contributor Opinions expressed by Forbes Contributors are their own. I write about prescription drug value, market access, healthcare systems, and ethics of distribution of healthcare resources Following Click to save this article.

You'll be asked to sign into your Forbes account. Got it Jan 3, 2024, 09:38am EST Share to Facebook Share to Twitter Share to Linkedin Predictions for the new year. getty It’s time to offer several predictions for 2024. And unlike last year at this time or in January 2022 when I was optimistic and believed the U.S.

would have a fairly robust economy and avoid recession, I don’t envision the U.S. escaping a modest downturn towards stagnant growth in 2024. Furthermore, continued neglect of public health on multiple fronts will plague the country as will the minefield that encapsulates politics in the U.S. these days.

As a health economist writing on the Forbes platform, my so called swim lanes are healthcare and public health. But given the impact the economy has on the health sector I also closely follow developments in the U.S. and global economy. We’ll start there. Economy Falters in 2024 Miraculously perhaps the U.S.

fended off recession in 2023. Thus far, an apparent soft landing has been engineered by a combination of sound fiscal policy and increments of monetary tightening by the Federal Reserve—aimed at bringing down inflation—without causing the economy to tip into recession. But I believe the end of year global turbulence, most of which is beyond control of the central bank and the Biden Administration, may have negative repercussions on the U.S.

economy. In recent years, the biggest risks to the U.S. and world economy have been from external shocks. In 2020 and 2021 it was the Covid 19 pandemic. And now the culmination of geopolitical crises which initially occurred in 2022 and 2023 but are far from resolution, and heightened volatility throughout parts of the Middle East, Europe, Asia, Africa and South America, will be a drag on economies worldwide in 2024.

In previous outlooks posted in January 2022 and 2023 I also highlighted several of these threats. At present we’re in as combustible a situation globally as I’ve observed in 30 years. While the U.S. isn’t quite as dependent on international trade and markets as other countries like Germany, China and Japan, it is still very much exposed.

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To illustrate, a supply chain disruption is being caused by Red Sea attacks on cargo ships by Yemen’s Houthi rebels, which have forced the rerouting of container ships away from the Suez Canal. Three of the world’s largest shipping firms announced container surcharges in late December The shippers face immediate hazards in the region, in addition to increased costs caused by the much longer journey around Africa’s southern tip.

Higher costs will be “ passed on to consumers .” Inflation has been steadily dropping since 2022. But it won’t reach the 2% goal set by the Federal Reserve, instead hovering between 3% and 4% throughout 2024. Though the U.S. economy has been perhaps the most resilient among large developed markets, the lagged impact of interest rate hikes will dampen economic activity, including the issuance of credit and loans.

Housing inventory woes will persist, with very limited supply leading to prices that crowd out many potential buyers, especially when faced with comparatively high mortgage interest rates. While small cuts in interest rates could be implemented in 2024, they will remain elevated, reducing demand, particularly as consumer savings accrued during the pandemic run out .

Moreover, with credit card delinquencies at 12 year highs , the typical consumer may be reaching the point of being maxed out, figuratively speaking. Given the outsize importance in the U.S. economy of consumer demand, any slackening will lead to a softening of the labor market. Unemployment will begin to tick upward toward 5% by the end of the year.

The economy as a whole won’t technically be in recession, but it’s growth will be minimal, around 0.5%, by the 4th quarter. Decreases in Public Health Funding In recent years, the U.S. has failed to effectively address its major public health issues. These include ever rising numbers of deaths from fentanyl and other illicit drugs, worsening infant and maternal mortality and increasing numbers of traffic deaths, suicides and gun fatalities.

And while there’s been a sharp decline in Covid 19 deaths which has contributed to a slight improvement in life expectancy , the U.S. still lags far behind all of its peers. Although there have been exceptions to the rule, including Operation Warp Speed to develop Covid 19 vaccines and treatments, the trend of a continued whittling down of public health funding persists.

Overall, fewer resources are being allocated to disease prevention and preventive causes of premature deaths. Public health’s share of total health expenditures has been falling for two decades, from 3.18% in 2002 to a projected 2.40% in 2023. I don’t see any signs of a reversal on the horizon. In fact, particularly at the state level there’s often a palpable hostility towards public health as legislators pass laws to drastically curb the powers of public health authorities.

And during this election year we can’t expect much federal legislative action to combat the public health emergencies. There will be symbolic gestures that are indirectly related to public health, for example, directives aimed at lowering prescription drug prices, such as the march in rights proposal issued by the Biden Administration last month.

But these will mostly be inconsequential. Though not necessarily connected to public health, a possible bright spot will be novel drug approvals, which rose to 52 in 2023 and the number may increase further in 2024. However, this year the big story with prescription drugs will be their historically high launch prices which will make them inaccessible to some.

For well over a decade, there’s been a sharply upward trajectory in the launch prices of newly marketed brand name drugs. From 2008 to 2021, launch (list) prices for new drugs increased by 20% per year. For nearly 50% of new drug approvals in 2020 and 2021, the price of a year’s worth of medication is at or above $150,000.

This trend will continue unabated. And it is partly an unintended consequence of the Inflation Reduction Act’s drug pricing provisions . Specifically, in anticipation of the redesign of Medicare Part D (outpatient drug) benefit and price negotiations, firms will increase launch prices of newly approved drugs over and above what they would done in the absence of legislation.

High costs of healthcare accompanied by persistent problems of un and underinsurance will exacerbate inequities in the healthcare system. While it’s an aphorism it is largely true that the U.S. has great healthcare if you have good health insurance or can afford it out of pocket. But for many citizens affordability remains problematic.

Political Polarization To systematically tackle our health system’s perpetual crises there would have to be a consensus among legislators. But there hardly is any. Some lawmakers don’t even view the crises as matters of public health. Accordingly, other than perhaps a patchwork proposal here or there I don’t foresee any systematic approach being undertaken to resolve most of our pressing public health issues, with the lone exception being obesity.

With the advent of effective therapies there’s money to be made in this space, despite challenges from payers who’ve shown reluctance to cover obesity drugs. As a result of the confluence of pharmaceutical industry and public health goals, it’s possible the U.S. could begin to make a dent in mitigating the obesity crisis.

The November general election will result in a Republican returning to the White House in 2025. More than likely it will be Donald Trump. But I believe that Nikki Haley may make it a closer contest in the Republican primaries than polls currently project. Regardless, the Republican nominee will defeat President Biden.

A lack of (young) voter enthusiasm among Democrats coupled with poor approval ratings will be Biden’s undoing. He will lose practically all swing states, such as Wisconsin, Arizona, Virginia, Georgia and Pennsylvania. Going forward, a politically fractured country isn’t a recipe for positive change with respect to healthcare and public health.

No doubt, crystal ball gazing is invariably a perilous activity, especially in areas such as the economy, public health and politics that are so prone to confounding factors. Despite this, I find it a useful exercise and one in which it’s interesting to analyze from year to year what I predicted correctly and what I got wrong.

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