Costs and Demographics…
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I recently attended a presentation by Paul Harrington, who does labor market studies for Northeastern University. Not surprisingly, he was presenting on labor force trends in Massachusetts, New England and nationally over the next ten years. The punch line? Over the next ten years, the 55+ population in MA will grow by 25%, while the 18-55 population in MA will decline by 2%. In New England overall, the news is not much better. The 55+ group is expected to grow by 27%, while the 18-55 group will grow by 1.5%. The Boston Foundation and the New England Healthcare Institute released a study in June that also highlighted this problem.
So - for the next decade or so, unless something really, really odd happens, MA and New England are both going to get appreciably older. Our high cost of living, high cost of housing, and relatively stagnant job creation capabilities are driving young people to other parts of the country once they’re done with school. But those of us who are already in the housing market and settled in our careers tend to stay.
Demographically, it’s not a pretty picture, and it does not bode well for the cost of health care in this region over time - unless we make some pretty significant changes in the way we organize, finance and deliver health care services in the meantime.
Right, Charlie. I can’t tell you how many of my 55+ friends have said to me that their recent or pending visit to our hospital is the first on their adult life (other than childbirth). And they are not coming in for some elective sports injury repair, but rather for a serious tertiary care problem. Meanwhile, their parents are living longer and come in for repeat visits as well. When we look at that trend, we find we need to add bed capacity and staff to handle the increased volumes. Even with full fledged programs to improve quality and increase efficiency, the cost trend is definitely up.
Charlie - Should the last person out of Massachusetts turn the lights off? I understand your point about the aging population and increased healthcare costs but I would say this is much more of a Medicare issue at the federal level (as opposed to the state or region). My experience with commercial and Medicare utilization is that the 55-65 year old age group does show an increase in costs but the HUGE jump comes with the 65 and older group who have mostly aged into a Medicare product. Take a look at a daily hospital inpatient census (maybe Paul Levy can verify this at his facility) and you will see 80% of the med/surg admissions are people born prior to 1942 (making them 65 or older and likely on Medicare). As the first wave of baby boomers hit Medicare the costs are going to explode and result in either huge payroll tax increases or huge cuts in provider reimbursement (a big threat to providers) if they have any hope of keeping it solvent. The 55+ group will impact us here in Massachusetts (and healthcare costs will continue to rise) but the real disaster looming ahead will be the growth in the 65+ Medicare group at the federal level. It amazes me that there is not more panic at the federal level regarding this looming crisis because the Medicare problem is so huge and so expensive it is going to make everything else look insignificant.
That problem could be attacked on two different levels, though: A great deal of it comes simply from the fact that other states do not force young people to have insurance, nor provide for the 55 and over population. As the first state, Massachusetts bears this consequence. However, if other states follow it’s path, the demographics will be most likely evened out. Also, there are many ways to create incentives for young people to move to Massachusetts, it just takes a bit of public policy creativity.
Cheers,
Alijor
alijor.blogspot.com
The Japanese approach to the problems of an aging population is interesting. In particular, there’s their idea of making better use of an underutilized resource, older people.
How is this good economics concept applied in a health care system? Well, one way would involve more public education about medicine. As with the science of high triglycerides and their effect on LDL/HDL. (Which I mention because I just looked at the NCEP-ATPIII data. Startling. Among men aged 45 to 65, at least 25% have TGs in the high range, over 200 mg/dl. It’s 1988-94 data, of course, and it might be better now. Might be worse, with more obesity.)
Another good use of older people would involve more training of nurse practitioners. Especially, I would hope,
of specialized NPs.