Panel Detail:

Monday, April 24, 2006
11:45 AM - 1:45 PM

Introduction By:

Michael Klowden, President and CEO, Milken Institute

Moderator:

Michael Milken, Chairman, Milken Institute; Chairman, FasterCures / The Center for Accelerating Medical Solutions

The panelists in the lunch plenary discussed current global challenges, played off each other and the moderator, and engaged in a lively debate about the future of climate change and health care. It was interesting to note that despite their considerable collective expertise, they all confessed to uncertainty over the outcome of these global challenges.

They acknowledged, for example, that climate change is a problem but expressed uncertainty over the exact nature of that problem and its solution. It was noted that worldwide temperature changes have actually not been that dramatic, and that larger changes have actually been recorded at different times in the past. What is unique to the current situation, however, is the sharp increase in the level of CO2 in the atmosphere. Reversing this increase, they agreed, is perhaps the primary challenge the world faces if it hopes to prevent irreversible and potentially hazardous climate change.

The Kyoto Agreement is ultimately flawed, said Gary Becker, because it does not reduce CO2 emissions from the United States, China, India or any other developing countries. As an alternative to attempting CO2 emission reductions, the panelists were enthusiastic about the prospects for technological breakthroughs that might provide a method for reducing CO2 from the atmosphere, where the emissions tend to remain for a long time before breaking down. There is currently a great deal of government and private-sector research in this area.

Becker also proposed increased nuclear energy use In order to avoid fossil-fuel emissions entirely, Becker was a strong proponent for increased nuclear energy use in the United States. Mr. Becker noted that nuclear is a relatively clean and inexpensive energy source, and that many nations are already relying on it to a much greater extent than is the US.

A second significant problem is soaring health-care costs. As a society’s population ages, those costs increase significantly. In fact, the average annual expenditure for U.S. citizens over age 85 is more than $20,000. Additionally, there are fewer active workers to support each retiree, which results in slower economic growth. As a consequence, health-care costs consume an increasingly large proportion of economic output; they currently constitute 16 percent of U.S. GDP and 10 percent of world GDP, and these percentages are forecast to grow rapidly in the future.

One source of hope is that while medicine has high fixed costs, its variable costs are not that great. Therefore, the economic solution to caring for an aging population may involve greater reliance on medication, as opposed to doctor visits or hospital stays.

Not only are global populations aging rapidly, they are also becoming increasingly obese. Since 1980, the percentage of young people in the United States considered obese has soared. In the United States, one panelist noted, many people eat while engaged in some other activity, while in a country like France, eating is considered a primary activity. Plus, in America, portions tend to be 35 percent larger than in France.

In a study discussed at length by the panelists, more than a hundred variables were considered as possible causes for increasing obesity of America’s children. When all other factors were accounted for, it was determined that the principal reason for the increase since 1980 is a seismic shift in leisure activities from sports and other athletic pursuits to video games or Internet chat rooms.

There are no simple solutions, the panel concluded. Instead, a complex mix of government policies, business initiatives and individual choices will be necessary if we are to meet the challenges of the 21st century.

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