| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

   
Home 
 
 News
 Irish
 European
 International
 
 Analysis/Comment

RSS FEED


How to use our RSS feed

 
Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.

Welcome

Finfacts is Ireland's leading business information site and you are in its business news section.

We provide access to live business television and business related videos from: Bloomberg TV; The Wall Street Journal; CNBC and the Financial Times. Click image:

Links

Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Irish Economy

Global Income Per Capita

Global Cost of Living

Irish Tax 2008

Climate Change Reports

Global News

Bloomberg News

CNN Money

Cnet Tech News

Newspapers

Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News

 

Feedback

 

Content Management by interactivetools.com.

News : International Last Updated: Nov 26, 2009 - 5:19:24 AM


Demographic change in industrial countries; Less impact on health spending than widely believed
By Finfacts Team
Nov 26, 2009 - 4:50:05 AM

Email this article
 Printer friendly page

DE: Germany; CH: Switzerland; JP: Japan; Source: Deutsche Bank Research
Facts do not cease to exist because they are ignored." (Aldous Huxley, 1927)

One of the most profound structural problems confronting industrial countries is demographic change. The resulting shortage of labour and especially of skilled workers is reducing the competitiveness of industrial nations and is presenting social security systems in particular with daunting challenges, according to Deutsche Bank Research economist Jochen Möbert. Meanwhile, a report from the Economist Intelligence Unit says demographic change has had less of an impact on health spending than is widely believed.

The situation is acute in Japan and many Western European countries. in Japan at present the ratio of pensioners (over-65 cohort) to members of the workforce is one to three. In 2020 this ratio is expected to increase to 1:2. Switzerland has to expect the ratio to deteriorate from 1:4 to nearly 1:3 by 2020. In Germany the ratio of pensioners to members of the workforce is already 1:3. In Germany, as in many other European countries, the full force of demographic change will not be felt until after 2020.

Jochen Möbert says the impact on the care sector will be particularly pronounced. Societal ageing and in particular the fast-growing 80+ age group have led to a dramatic increase in the demand for care. The resulting demand overhang jeopardises the quality of life of people requiring care. In Japan and Switzerland, for example, the skill shortages are already so acute that the talk there is of a crisis in care.

Despite the promises made in advertisements there is no cure for ageing; but what are the options open to policymakers in tackling the problem? 1) Increase the supply of care staff by boosting immigration in particular, 2) Reduce the demand for care services or 3) Boost the productivity of the existing care staff?

  1. The primary focus of attention at present is on increasing the supply of care staff. A selective migration policy is one important factor in reducing the skill shortage. In Switzerland the shortfall in care personnel is projected to reach at least 120,000 by 2030, while Japan is already contending with this problem. That is why the Japanese government has signed bilateral labour migration agreements for care personnel with the Philippines, for example. Möbert  says this is an astonishing step given Japan’s otherwise lukewarm support for migration strategies. In the long term, however, migration can only be one part of the solution, because worldwide there are already too many countries affected by demographic change. Tackling skill shortages at the expense of less developed countries is also a disturbing approach as these nations would have to provide the majority of care personnel. The competition between countries has intensified so much in the meantime that the World Health Organization (WHO) is pushing for a code of conduct and bilateral agreements to protect weaker countries.

  2. The phenomenon of increasingly “healthy” ageing is an important damper on the demographically driven rise in demand for care services. We are not only getting older, we are also remaining healthy for longer, which means that the age from which care services are required is trending upwards. Technological innovations like tele-health, tele-care and ambient intelligence could foster the independence from care services and preventive measures could bring about a further increase in the healthy years of life. Furthermore, technological aids and prosthetics enable individuals to remain independent for longer in their own homes. These developments will enable inpatient care to be cut back in favour of outpatient care.

  3. Another important means of reducing demand is by boosting social capital, via mutual aid, for example. The combination of mutual aid and technology could for example lighten the load on caregivers and at the same time allay ethical concerns regarding the use of technology, such as it making users feel isolated.
  4. Boosting the productivity of the existing skilled personnel is particularly dependent on technical equipment. Every activity that care staff can be relieved of frees up capacity. Productivity gains in this case are not, however, synonymous with a lower standard of care or even less face time. On the contrary many technological innovations have the potential to boost these quality criteria, for example by reducing time-consuming ancillary and administrative tasks.

Jochen Möbert says technophile Japan leads the way. There, robots are already being used that can lift and carry patients interactively and as the situation demands. They operate while the carer is present and therefore do not disrupt contact with the patient. Developments in the therapy for dementia sufferers go much further. The first robots for this application are in the form of cuddly toys that enable interactive communication via sensor technology. This application is not a substitute for personal care either, but it does perform time-consuming care tasks that cannot otherwise be performed due to the capacity limitations. This area undoubtedly requires a high degree of sensitivity.

The economist says how to weight the three options open to the politicians of the countries concerned is dependent both on the respective immigration and innovation potential as well as the decisions made by other countries that are competitors for skilled personnel and market share in the technology segment. Countries like Japan, with a heavily technophile population and a high per-capita income, will presumably choose strategies that rely more heavily on technology than countries with comparatively large migration potential. Certainly none of the approaches described above can be dismissed. As such, governments need to ensure early implementation of measures, not only in research and migration policy but also in the areas of communication and education. Möbert  says the efficacy of the solutions presented is conditional on their acceptability to the population. This acceptability can by no means be taken for granted as far as the use of foreign care staff and novel care technologies are concerned. The ground must be prepared in a timely fashion and an active communication policy is necessary.

See also: E-Health: New medical and nursing options help doctors, health insurers and patients

Healthcare systems will fail the elderly unless new thinking emerges, says Economist Intelligence Unit

Falling fertility rates and longer life spans mean that the worlds population is ageing rapidly, and many countries-especially in the developed world-are bracing themselves to manage the economic and social impact. A greying population will, among other things, place added pressure on healthcare delivery systems. But although there will be challenges in adjusting, the overall picture is far from bleak provided policymakers enact sensible change, according to a new report published this week: Healthcare strategies for an ageing society, written by the Economist Intelligence Unit and commissioned by Philips.

The report says that while many of those living longer have long-term medical conditions, they are also showing a heartening ability to manage them-and data suggest that the onset of the most severe disabilities may be coming later in life. In other words, old age is not itself a disease. While the baby boomers will live longer than any generation before them, they are not necessarily happy to retire at 65 and count the days until they have to enter a nursing home.

Welcome news for governments is that demographic change has had less of an impact on health spending than is widely believed. Birth and death account for the majority of an individuals lifetime healthcare costs, with death consuming about one-quarter, no matter the age at which it comes. These costs rise more in the over-65s mainly because more people die in this age bracket. However, the proportion of the elderly that faces severe disability is also falling sharply, and while there is a stronger susceptibility to chronic conditions among the elderly, the impact of this is not as great as is often assumed. According to a recent study, the average growth in healthcare costs related to ageing within OECD countries between 1970 and 2002 was 0.5% per year, and just 0.3% in the US. In contrast, real growth in GDP per head accounted for 2%. The EIU says although medical provision will doubtless take place in the context of fiscal constraint, the real financial impact related to ageing is a decrease in the proportion of people in the workforce.

"This study counters the notion that societies will be unable to cope with the impact of an ageing population," say Iain Scott, the editor of the report. "But addressing the specific healthcare needs of the elderly will nonetheless require major adjustments."

Among the report's recommendations are the following:

  • Make geriatric care a bigger part of medical training: Not enough talent will gravitate toward this field until it is given the attention it warrants within medical training. Remuneration for geriatric specialists will also need to be improved to make careers more attractive.
  • Consider alternative options to nursing-home care: Local governments in some countries are turning to community or home-based care as an economically attractive alternative to the costly provision of beds in nursing homes.
  • Make treatments more appropriate to older populations: There is widespread ignorance about the effectiveness of drug treatments in people aged 65 and over. Pressure will rise on policymakers, pharmaceutical firms and other medical providers for more research into drugs that meet the unique needs of older bodies.

Related Articles


© Copyright 2007 by Finfacts.com

Top of Page

International
Latest Headlines
US Leading Economic Index increased 0.1% in February indicating slow economic recovery
Markets News Thursday: Former Anglo Irish Bank chief Seán FitzPatrick under arrest; China carrying out yuan stress tests on 12 industries
US current-account deficit fell to $419.9 billion in 2009 - - the smallest deficit since 2001 and down from $706.1 billion in 2008
Thursday Newspaper Review - Irish Business News and International Stories - - March 18, 2010
World Bank says China’s growth momentum has continued in the first months of 2010
Fund managers shifting their equity focus away from Europe to US and Japan; European equity markets seen as “cheap” by one-third of polled managers
US housing starts and permits fell in February because of severe weather
Markets News Tuesday: Shares rise in Europe and Asia; Investors in Japan expect central bank to extend lending support
Lehman ousted whistleblower in 2008 who had raised red flags with Big 4 accounting firm Ernst & Young on $50bn scam; Box-ticking auditors in frame
Tuesday Newspaper Review - Irish Business News and International Stories - - March 16, 2010
Real price of Amsterdam house only doubled in more than 350 years
Markets News Afternoon: US industrial production was flat in February; China held $889bn in Treasury securities in January - - Ireland held $$39bn
Moody's says US and the UK are moving closer to losing their AAA credit ratings as the cost of servicing their debt rises
Markets News Monday: China calls pressure on currency appreciation "protectionism"; Shares fall in Europe and Asia; Aryzta reports flat half-year profits
Global economic recovery remains strong in 2010 but the risks are mounting for 2011
Monday Newspaper Review - Irish Business News and International Stories - - March 15, 2010
London and New York lead in Global Financial Centres report followed by Hong Kong and Singapore; Dublin gets ranking of 31 in 75-city sample
Markets News Friday: Dukes to become Anglo chairman; HSBC confirms theft of Swiss CD with names of 24,000 French clients
Friday Newspaper Review - Irish Business News and International Stories - - March 12, 2010
Without reform, annual per employee health care costs for American companies will triple to nearly $29,000 by 2019