Will an ageing population bankrupt us?

As part of the Global Risks 2013 report, the World Economic Forum’s Risk Response Network has identified five “X Factor” risks in partnership with Nature. These look beyond mainstream risks to five emerging potential game-changers.

We are getting better at keeping people alive for longer. Are we setting up a future society that must struggle to cope with a mass of arthritic, demented and, above all, expensive elderly who are in need of long-term care and palliative solutions?

The blessings of 20th-century medicine appear ready to explode with the deciphering of the genome and attendant advances. It is hoped that big inroads against common banes such as heart disease, cancer and stroke may be in the offing. But these advancements may also enhance risks. Consider the impact on society of a growing number of elderly infirm who are protected from the most common causes of death today, but with an ever deteriorating quality of life, as other ailments that do not kill, but seriously disable, start to dominate.

Current trends are already setting the stage for such a future scenario in the West. The demographics of the Baby Boom are such that, according to conservative estimates, the number of Americans afflicted with Alzheimer’s disease will at least double, to 11 million, by mid-century. Similar rises are projected for many countries, with the global population of the demented expected to double every 20 years until it exceeds 115 million in 2050.A key driver will be increasing elderly populations and potentially declining fertility rates in low- and middle-income countries.

The looming expense of caring for these masses is huge, especially in high-income countries. The United Kingdom, for instance, spends nearly as much each year caring for the demented (£23 billion) as it does on strokes (£5 billion), heart disease (£8 billion) and cancer (£12 billion) combined.And the numbers afflicted with all of these maladies are only going to grow.

Consider Medicare, the US health programme for the elderly. Assuming no policy changes – for instance, no increase in the age of eligibility – the programme’s outlays are expected to exceed its taxpayer-funded income by more than US$ 24 trillion over the next 75 years.The spending trend is not limited to government support, either. In the United States, the cumulative total of public and private consumption by the elderly has ballooned in the last half-century. The burden is accentuated in rapidly ageing countries such as Germany, where the ratio of effective producers per consumer is projected to decline nearly 25% by 2030.

Life expectancy has increased steadily in every decade since 1840, but these gains do not necessarily portend better health in later life.Thus, a new wave of disabled seniors may be on the way. The proportion of Americans aged 50 to 64 who reported needing help with personal care activities – such as getting into and out of bed and climbing 10 steps – increased significantly in the decade ending in 2007. Arthritis was the top cause and diabetes played a prominent and growing role.

Are there fixes that can avert the coming storm? There are well-known but difficult-to-implement preventive measures that could help us live longer and to have better quality of lives: paramount among them is exercise, with its near-universal benefits for our physiologies and for warding off pathology.Obvious ways to mitigate cost implications would include raising the eligibility ages for the programmes that support the elderly from the public purse – retirement income, social support services or reduced-cost health care – and raising the retirement age, requiring older adults to be productive economically for longer. One recent analysis, using a “delayed ageing” model, found that hundreds of billions of dollars in increased costs to the US Medicare and Social Security programmes could be entirely offset by raising the eligibility ages for Medicare and Social Security by a few years (from 65 to 68, and from 67 to 68).

However, increasing eligibility ages for public services is not a panacea, in part because financial costs are not the only challenge. The impacts of ageing populations will be felt throughout society, from changing best practices in urban planning to impacting social norms on care-giving. More research is needed to turn chronic conditions to acute conditions (i.e. by developing curative treatments), and to find solutions that increase the capacity of all citizens to manage chronic conditions and to create wealth at the same time.

Image: A woman looks at a window display on Oxford Street in central London. REUTERS/Olivia Harris