Aspen Ideas: Bill Gates outlines how U.S. can remain world leader

ASPEN – Microsoft Chairman Bill Gates said Thursday that the U.S. must get medical costs under control and re-examine its funding priorities to prevent its education system from further erosion.

Gates spoke at a packed house at the Benedict Music Tent in an Aspen Ideas Festival event.

He said medical costs are dominating state and federal budgets in the form of Medicare and other payments. Fewer funds are available for education. Tuition is soaring at many public universities, pricing out many would-be students.

“The access that used to be available for the middle class is just rapidly going away,” Gates said. “That’s a trade-off that society is making because of very, very high medical costs.”

The country has demonstrated an unwillingness to question if “spending $1 million on the last three months” of a person’s life is a cost-effective direction, especially considering the same amount of money can keep 10 teachers employed. Gates called for the nation to do a better job of examining the benefits of costly end-of-life medical care.

“That’s called the death panel and you’re not supposed to have that discussion,” Gates said, taking a jab at critics of the health care bill that Congress considered earlier this year.

Education is also being undermined by a system that dedicates so much of its available funds to pensions for retired teachers, according to Gates. The combination of high medical costs and “pension generosity” means that more than 100,000 teachers will be laid off as states slash budgets to deal with the recession, he said. “I’m very much against that.”

In a fast-moving and broad-ranging interview with Aspen Institute President and CEO Walter Isaacson, Gates criticized the medical system for having three times as many specialists as general practitioners. That is uniquely American, he said. Germany has a one-to-one ratio of specialists to general doctors and has created one of the highest-quality and lowest-cost health care systems in the developed world, according to Gates.

In America, numerous specialists take care of “little pieces of things” and there is no incentive to keep a person healthy with preventative care. “There’s now some artificial thing where the sicker the patient is, the more money you make,” Gates said.

He advocated more participation in HMOs such as Kaiser Permanente, but acknowledged that would be difficult to dictate. “Forcing people into HMOs, I’m told, is politically difficult,” he said.

Gates also lamented that we have a society that awards its best and brightest minds with high-paying jobs at hedge fund firms on Wall Street rather than in education.

Although he is concerned, Gates said he is confident the United States will maintain a strong position in the world. It’s been a leader and innovator in areas like bio-technology, information technology and software development for so long that even if “we don’t do things right, it will take a long time for that to erode away,” he said.

Maintaining strength depends on providing basic education, maintaining the university system, conducting basic research and importing brain power, which the United States has reduced as part of the immigration debate.

Despite the heavy topics, Gates was loose and often raised a chuckle from the audience, especially with his analysis of the U.S. place in the world. He made it clear that he expects China and India to play a greater role in innovation, and he believes that international flavor will benefit all humankind.

“If your goal is the U.S. relative to everyone else and you don’t care about people dying of Alzheimer’s or anything, then 1946 is your year. Everything has been downhill since then,” Gates said.

In 1946, war-torn Europe was struggling to recover and China was suffering through an incredible famine. The United States dominated everything. But a country with just 5 percent of the world’s population cannot continue to dominate in innovation like it has, Gates said. If the Chinese discover a pill to cure Alzheimer’s, he said, “I’ll take it. We should use that technology even if it was done on an international basis.”

Gates clearly wants the United States to change its course in areas like education to maintain its position as world leader, but he is also certain China’s role will continue to grow.

“They represent 20 percent of the global population and they are on their way to using 20 percent of the world’s energy and having 20 percent of the ideas and having 20 percent of the military budget. I mean, it’s outrageous they should do this,” he said, tongue in cheek.

“Their innovation is full speed ahead,” Gates concluded, “and so much the better as long as we’re also renewing things that kept us so far ahead.”

scondon@aspentimes.com