The Age Wave
by Claudio Alegre
August 20th, 2010
One way of putting it is that by 2011, next year, baby boomers will begin to turn 65 at the tune of 8,000 per day. At this rate our senior population will reach almost 72 million by 2025.
Several outcomes are imminent. We will need to acquire and retain an insanely high number of caregivers, our elderly population needs will become more versatile and Bingo will make the largest comeback as the most popular group game in the history of the planet.
So this is a challenge at several fronts, - Funding, Delivery, and Human Capital requirements.
In a few years we will be included as well, you can’t stop a wave, and it always keeps coming.
The Government is doing the best it can to cope. Right now Healthcare expenditure is roughly around 17% of GDP, but if not properly redesigned and implemented this percentage could easy climb to 25-30%, a catastrophic scenario.
According to the World Health Organization -WHO, globally we rank 37th just below Slovenia and after Costa Rica in Healthcare efficiency. That means that we are not getting much bang for our buck, but I don’t think that comes as a surprise to many. True, our demographics are not as homogeneous as those of other countries we usually look up to in terms of a perceived working healthcare system, i.e The UK, France and to some extent Canada.
Here’s a quick snapshot of our Health expenditures up to 2008, you can get the full report here under “Highlights”
Health Spending by Major Sources of Funds:
• Medicare: Medicare spending grew 8.6 percent in 2008 to $469.2 billion; this followed growth of 7.1 percent in 2007. Spending growth for fee-for-service (FFS) Medicare accelerated to 5.3 percent in 2008 compared with 3.8-percent growth in 2007 caused in part by accelerated spending for hospitals. Medicare Advantage (MA) spending increased 21.3 percent in 2008, similar to the 22.1-percent growth in 2007, the result of a continued shift in enrollment as beneficiaries switched from traditional FFS into MA plans. Total Part D (prescription drug benefit and administration) spending increased 10.0 percent to $51.5 billion in 2008.
• Medicaid: Total Medicaid spending grew 4.7 percent in 2008 to $344.3 billion, a deceleration from 6.1-percent growth in 2007. Slower Medicaid spending growth for hospital, other personal health care, and home health care services outweighed faster growth in all other Medicaid spending on goods and services. Federal Medicaid expenditures increased 8.4 percent, while state Medicaid expenditures declined 0.1 percent, the first decline in program history. This difference in growth is due to a significant increase in the Federal Medical Assistance Percentages (FMAP) used to determine the federal Medicaid payments to states. The American Recovery and Reinvestment Act of 2009 provided a temporary 27-month increase in the FMAP retroactive to the fourth calendar quarter of 2008.
• Private Health Insurance: Private health insurance premiums grew 3.1 percent in 2008, a deceleration from 4.4-percent growth in 2007. PHI benefit payment growth also slowed to 3.9 percent in 2008 from 4.8 percent in 2007. These trends were heavily influenced by the recession as enrollment in PHI plans declined and the ratio of the net cost of private health insurance (the difference between premiums and benefits) to total private health insurance premiums continued its recent decline to 11.7 percent in 2008, compared with 13.7 percent in 2003.
• Out-of-Pocket: Out-of-pocket spending grew 2.8 percent in 2008, a significant deceleration from the 6.0- percent growth in 2007 as out-of-pocket expenditures for retail prescription drugs declined and out-of-pocket spending growth for physician and clinical services decelerated.
Claudio Alegre is a frequent contributor to “The Daily Pill”. He’s the Communications Director at Angel Home Care Services, an independent advisor on Social Technology and also blogs at VenmarkMedia on Social Media and Healthcare topics, and how they influence society.
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