Will the aging population bankrupt our health care system?
Many politicians, doctors and the public believe that aging of the population is the main cause of increased health care costs.
If this is true, this paints an exceptionally worrying picture about the sustainability of health care in the future.
However, somewhat surprisingly, the majority of researchers don’t believe that aging plays a major role in increasing health care costs. What’s the story?
Tsunami or glacier?
You’ve heard the terms: gray tsunami and the demographic time bomb. Many are convinced that the growing population of elderly will bankrupt our health care system. However, evidence shows that population aging has little impact on rising health care costs.
Make no mistake, health care costs have risen dramatically in the past decade. Health spending in Canada rose from $75 billion dollars per year in 1996, to about $190 billion in 2010. Much of this increase in costs has been driven by more intensive treatment (especially during the last few years of life) and the growing unit costs of some aspects of health care such as drugs and technologies.
Researchers have argued that the gray tsunami is better described as a glacier. The population as a whole ages slowly. Today, about 14% of Canadians are 65 or older. In 2036, about one quarter of Canada’s population will senior citizens. In spite of the growing number of seniors, the share of health care money spent on seniors hasn’t changed significantly in the past 10 years.
A recent study found that time to death, rather than age, is the major driver of health care costs. What does this mean? That health care spending is much more closely related to the number of people who die each year than it is to the number of people who are senior citizens. With today’s elderly population healthier than ever, the number of deaths each year is not increasing very rapidly at all.
New approaches to caring for seniors
Studies have shown that the aging population will have a modest impact on health care costs. Nevertheless, with health care costs nearing $200 billion per year in Canada, it is important to ensure that the elderly are being treated effectively and efficiently.
Stephen Duckett, a health economist at the University of Alberta argues that because the impact of the aging population will be felt gradually, “we have time to do something” before the demands of this growing population become a major threat to the sustainability of the health care system.
Many organizations and health care providers are developing new models of care to keep seniors out of hospitals and long-term care facilities, and in their own homes. If this is possible, this will be a win-win situation – most elderly people want to stay at home, and the evidence suggests that supporting people at home is a cost-effective substitute for hospital or long-term care. These models are in their infancy though, and much more work is needed to evaluate the models that do exist and replicate successes.
Ontario also requires a more effective end-of-life care strategy. Despite a desire to die at home, most people end up dying in hospital. Proper supports in the community may reduce the burden of death in hospital. There is wide variation within this province and within this country on the number of patients dying in hospital. In fact Canada ranks 9th on a Quality of Death Index among comparator nations.
Informed opinions: hear from a doctor and an economist
We asked a doctor who specializes in the care of the elderly and an economist who studies demographics and the health care system to share their opinions about whether the aging population will bankrupt the health care system, and what new approaches to caring for the elderly hold the most promise for controlling costs and improving quality of care.
Stephen Duckett, an economist who was previously CEO of Alberta Health Services, believes that the seniors will not bankrupt our health system because the impact of population aging on costs is small and is occurring gradually. Samir Sinha, the Chief of Geriatrics at Mt. Sinai Hospital and University Health Network, believes that the aging population could bankrupt the health care system if our health care system doesn’t change, and that our health care system is currently not designed to effectively and efficiently meet the needs of the seniors.