As an economist working on estimating how much it will cost to look after older people with care needs and dementia in the near future, I often have the role of reminding people that longevity, which is a wonderful human achievement, does come at a cost, and it is a cost that we are not quite prepared for.
Most of us would agree that living longer is a good thing and that the increases in longevity that almost all countries in the world are experiencing are a cause for celebration. And most of us will also recognise that older people make enormous contributions to society, especially when they are in good health.
To make the most of the opportunities of increased longevity, our societies need to prepare. Welfare states, which were designed when the population pyramid really did have a pyramid-like shape, need to adapt to this new context.
So what needs to change? A couple of thoughts:
A longevity-friendly health care system
First of all, for the increase in longevity to really be an opportunity, we need to ensure that as many as possible of these extra years of life are spent in good health. Health systems and improved living and working conditions have been very successful at reducing premature mortality, both in childhood and adulthood. The challenge now is that, as so many more people reach advanced ages, more of them have the perverse “opportunity” to develop the chronic long-term conditions that affect disproportionally those at older ages, and many of them will develop more than one of those conditions.
Health care systems and medical research and training have traditionally focused on life-threatening acute conditions that affect people at younger ages. For example, it is estimated that research expenditure on dementia is five times below that on cancer, despite dementia having much higher costs to society. We do know that much can be done to prevent (or at least delay) many of the chronic conditions associated with old age, and also to make their consequences less disabling. A recent study has shown, for example, that at least a third of Alzheimer’s cases around the world can be attributed to risk factors that can be modified through prevention.
As the health needs of the population change, health care systems should be able to respond. A longevity-friendly health system would put far more emphasis on ensuring that people arrive at old age in the best possible health, and that if and when they develop those chronic conditions, on ensuring that there are enough well-trained professionals who understand how to manage them, how different conditions and treatments interact with each other, and, crucially, how to minimise as much as possible the disabling consequences.
Age proofing public finances
We know that, as a result of increased longevity, as a society we will need to spend more on pensions, long-term care and health care (see the European Commission’s Ageing Report of 2012 for projections of “age-related” public expenditure). We also know that states are finding it increasingly difficult to maintain their current levels of public expenditure. As discussed in a previous post in the context of long-term care, it is important to understand that if public funding is no longer able to keep up with the growth in population needs, individuals will increasingly find themselves exposed to the life risks that the welfare states were designed to protect them from.
There needs to be a transparent debate about the challenges that ageing and other social and economic changes pose to the levels of social protection that individuals can expect when they reach old age. This is the only way in which individuals can assess their levels of personal risk and have the opportunity to prepare and respond to them.
There is a very strong rational for sharing the risks of longevity, health and care across the population, which is why the welfare states were created in the first place, to provide a public insurance against those risks. If the state is struggling as a provider of such insurance, perhaps because the population do not perceive that public funding is well spent and therefore are reluctant to increase their contributions to a level that would maintain the system’s sustainability, then it surely has a responsibility to encourage and enable other tools to ensure that other institutions can provide such insurance and that citizens have the opportunity to protect themselves.
In the same way that we need to make sure people reach old age in as good health as possible, and that everyone understands what they can do to achieve this throughout their lives, people should have, as much as possible, an understanding of how to reach old age in a financial situation that will enable them to enjoy a long retirement free of financial worry and that, if they require long-term care for a long period of time, its financial implications are not a shock to them and their families. They should understand the real extent of protection they can expect from the state so they can plan accordingly.
In the UK, at the age of 40, everyone is entitled to a health check to understand their chances of having heart disease. Perhaps we should have a “financial health” check too.
Disclaimer: this post reflects my personal opinion and not that of my colleagues or employers.
One thought on “Longevity: opportunities, honesty and planning”
Very thoughtful piece Adelina, really enjoyed reading, thank you. Is just hard , I think ,to get people to plan and budget for futures they would prefer not to contemplate . That will be the hard message to get across but it should begin .It will be of course the wealthy and healthy who are well insured for such eventualities.