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PARC Retreat Explores How Aging, Workforce Strains, and Federal Debt Are Reshaping U.S. Health Care

Penn Gathering of Experts Examines the Growing Pressures Facing Older Americans

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At the Penn Population Aging Research Center (PARC) 2026 Annual Retreat are Norma Coe, PhD, Co-Director of PARC; keynote speaker Bianca K. Frogner, PhD, Professor at the University of Washington School of Medicine; keynote speaker Kent Smetters, PhD, Professor at the Wharton School; and Hans-Peter Kohler, PhD, Co-Director of PARC. Coe, Smetters, and Kohler are LDI Senior Fellows. (Photo: Hoag Levins). SEE MORE PHOTOS BELOW

In predicting the future of U.S. health care, it is important to recognize that the long-term health of the population depends not just on medical policy, innovation, or care delivery, but on whether the federal government can sustainably finance the systems that pay for that care, Penn Wharton School Professor and national budget expert Kent Smetters, PhD, told the May 1, 2026 Penn Population Aging Research Center Annual Retreat.

LDI Senior Fellow Smetters previously served as a Deputy Assistant Director of the Congressional Budget Office and Deputy Assistant Secretary of the U.S. Department of the Treasury before coming to Penn in 1998. He is currently Faculty Director of the Penn Wharton Budget Model, a nonpartisan research initiative that analyzes the economic and budgetary effects of major federal proposals involving taxes, spending, and entitlement programs.

Kent Smetters, PhD, of the Wharton School

“Doom and Gloom”

In his PARC keynote address to an audience of health services researchers, Smetters — who noted he is sometimes accused of being “Doctor Doom and Gloom” — argued that the solvency of the U.S. health care system is inseparable from the nation’s overall fiscal trajectory. He warned that rising debt, driven in large part by aging and health spending, will increasingly shape what care the country can afford and who receives it. He emphasized to the gathered scientists that they are studying one of the primary drivers of the long-term national budget crisis.

Smetters’ presentation came as the United States continued to grapple with a troubling fiscal milestone: the national debt has grown to roughly the size of the nation’s Gross Domestic Product, or total annual economic output. The debt-to-GDP ratio is one key measure of a nation’s long-term fiscal health. Economists note that federal debt levels this large have previously been seen only during World War II and the economic upheaval caused by the COVID-19 pandemic.

Using a series of charts and graphs, he argued that the country faces a serious long-term fiscal imbalance that neither economic growth nor taxing wealthy Americans alone can fix, leaving major policy changes as the only realistic solution.

Smetters said rising federal debt is already beginning to crowd out private investment, putting upward pressure on interest rates and ultimately lowering wages and living standards. He warned that the United States will meet its debt obligations either through policy changes or, absent action, through inflation that erodes purchasing power. More concerning, he said, is the risk that financial markets could abruptly lose confidence in the nation’s fiscal trajectory, triggering a rapid increase in borrowing costs before projected debt limits are reached.

Understating the Problem

He emphasized that official debt figures significantly understate the problem because they exclude large future obligations such as Social Security and Medicare, which function economically like debt by shifting resources from younger to older generations as the population ages. Taken together, he said, these forces point to a structural imbalance that cannot be resolved through economic growth, including gains from artificial intelligence, or by taxing high-income households alone, but instead will require broader tax changes and adjustments to major spending programs.

Despite these warnings, Smetters predicted the government still has time to address the problem and that a solution is technically possible, but only if political leaders are willing to act.

Photos From the Event

The Penn Population Aging Research Center (PARC) was established in 1994 with a grant from the National Institute on Aging to study the economic, demographic, social, and health consequences of aging populations. The interdisciplinary research center brings together scholars from Penn’s School of Arts & Sciences, Perelman School of Medicine, Wharton, Nursing, and other schools. In 2022, PARC launched its annual Aging Retreat in response to the COVID-19 pandemic and the cascading failures it exposed across nursing homes, hospitals, staffing systems, and long-term care networks already strained by chronic workforce shortages and fragile financing. Since then, the retreat’s focus has broadened to include a wide range of aging-related health policy research. Co-Director Norma Coe, PhD, noted that it is now common for former research mentees to bring their own mentees to the annual gathering, which continues to grow in size.

PARC Co-Director Hans-Peter Kohler, PhD, welcomed attendees to the day of panels, presentations and networking at a time when older adults and the health care systems that serve them face profound challenges as federal funding cuts are expected to affect Medicaid, long-term care, food assistance, housing, rural health infrastructure, and the caregiving workforce that supports frail seniors.
In her keynote, Bianca Frogner, PhD, Director of the Center for Health Workforce Studies at the University of Washington School of Medicine, said the nation’s aging population is driving soaring demand for home health aides, nursing assistants, and other long-term care workers, even as those jobs remain plagued by low wages, high turnover, and limited support systems. She called on policymakers to strengthen child care, career pathways, and financial support for caregivers.
Jiyeon Kim, PhD, a Postdoctoral Fellow at PARC, presents on a study examining the paradox for health aides, nursing assistants and personal care aides who take a second job to escape poverty — but then face lower long-term wage growth and diminished professional stability. The second job creates a mobility trap that hinders their ability to transition into higher-paying primary roles.
Penn neuroradiologist Colby Freeman, MD, presented research showing that older hospital patients with suspected dementia or cognitive impairment rarely receive recommended outpatient follow-up after discharge. He argued that poor coordination among hospitals, primary care providers, and caregivers leaves many older adults without needed dementia diagnoses, support services, or long-term care planning.
On a panel with Jiyeon Kim and Sarah Henderson, Fordham University Economist David Rosenkranz, PhD, presented early research suggesting that Medicare hospice recertification rules may reduce spending by shortening lengthy hospice stays without immediately increasing hospital costs. He found that some long-stay hospice patients—especially dementia patients in nursing homes—were discharged alive with little short-term rise in inpatient or outpatient spending, raising complex policy questions about cost control, patient care, and hospice quality.
An LDI Senior Fellow and Practice Professor of Sociology at Penn’s School of Arts and Sciences, Iliana Kohler, PhD, is also Associate Director of Penn’s Population Studies Center. Here she is in lively back-and-forth discussions with a panel speaker.
Sarah Henderson, PhD student at Johns Hopkins University discussed how the post-pandemic Medicaid “unwinding” affected low-income older adults and adults with disabilities after states resumed eligibility checks paused during COVID-19. Researchers found fewer disruptions in coverage and access to care than expected. The findings suggest that state mitigation efforts and continued engagement with health care providers may have helped reduce large-scale disenrollment among vulnerable populations facing renewed administrative burdens.
On a panel discussing ADRD and Cognition are Yutong Zhang, a PhD student at Johns Hopkins University; Spencer Perry, PhD, a University of Alaska Anchorage economist; and Colby Freeman, MD, of the Penn Perelman School of Medicine. Zhang’s research focuses on how state Medicaid design influences older adults’ access to home- and community-based services. Perry’s work found people at high-risk for dementia are willing to buy insurance against investment losses that may be caused by their ultimate cognitive decline.
Penn Research Intern Madhav Manikandan explains his poster study that examined if integrating AI with passive sensing data and interactive visualization tools had the potential to enhance fall-risk assessment beyond traditional clinical testing practices.
At her poster, Penn Graduate Student Nikita Patel details how subsidized housing is a social determinant of health and presents an opportunity for interventions supporting lifestyle changes related to physical activity and cognition at the retirement stage for Latino older adults.
The poster of Penn PhD student Emma Fischer describes a study that looked at how the environments in which people age — including neighborhood poverty, stress, and access to resources — may affect how the brain ages long before obvious dementia symptoms appear. It suggests that cognitive decline may not begin as a single uniform process. Instead, different people may show different early patterns of decline depending partly on social and environmental exposures.
Penn Research Assistant Minqi Xu’s poster study focused on how the level of knowledge about Alzheimer’s disease (AD) differs across groups by age, education, and ethno-racial categories. It found that women have greater AD knowledge than men and that white non-Hispanics tend to have more AD knowledge than White Hispanics, Black Hispanic or non Hispanic groups.
Penn undergraduate student Abraham Medina’s poster was about discrepancies between subjective and objective sleep and their association with cognitive function in older Latino adults with mild cognitive impairment. It concluded that integrating culturally tailored, objective sleep screening into community and clinical settings can enhance early detection and prevention of cognitive decline.
As they close out another successful PARC Retreat, Co-Directors Hans-Peter Kohler and Norma Coe look forward to the 2027 edition that will undoubtedly focus on many of the issues arising from the federal government’s funding cutbacks that are currently getting underway for elder care programs.

Author

Hoag Levins

Editor, Digital Publications

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