EUROPEAN PAPERS ON THE NEW WELFARE

The Challenge of Increasing Life Spans for Employment and Pension Schemes: An Open Letter to All Those Who Are, or Will Be, 65

Freedom to be conquered

All very well, I hear you say, but after 30 or 40 years of working, you have had enough and want a bit of peace and quiet, time for yourself! Fair enough; but let us be clear about the terms we are using. To set our minds at rest, then, we need a four pillars strategy to insure ourselves against economic risk and the hazards of living, unless, of course, we are very well off, in which case we can settle for a good financial adviser. And even then…
As to having time for yourself, I have seen all too many friends enter retirement with a shout of ‘freedom at last!’ They have looked forward to savouring every moment of a problem-free existence, only, in most cases, to find themselves on a fast track to decline, unless they happen to be committed to some sort of activity, albeit entirely voluntary. It is also a matter of individual choice. I personally find that life’s problems and accidents occur whether we like it or not and, more often than not, unexpectedly. I prefer to take the initiative and to settle for some problems that in any case are bound to occur: at least they will be occurring in the domain of one’s choosing and that way one enjoys a slight advantage when it comes to solving them.
This being said, from a social point of view and for the vast majority of workers even in rich, industrialized countries, there remains the major challenge of preparing for being 60 or 65 but in circumstances that leave us as individuals with some room for manoeuvre. Automatic marginalization, even though accompanied by fine words, must at all costs be avoided. There is a real issue of substance here which has to do with continuing training, training which must have as a priority preparation for an active life after 65.
I am someone who has always, at least since 1959, worked full time. But I have always had a second, and even a third, part-time activity alongside my main one. And it is these parallel activities that have enabled me to make deliberate choices about what I do. True, I have been blessed so far with good health that has made it possible for me to make the choices I have made. And in saying this, I am not suggesting that everybody should do as I have done. Nevertheless, as of the age of 50, it is, or should be, within our power to update our skills and to develop the professional knowledge and training we have acquired in new, and if possible complementary, directions. Over time, we should be able to recognize where in terms of knowledge and experience our strengths lie, and what the shortcomings are which affect our lives and work negatively.
Ultimately, recognizing where we have gone wrong and where the gaps in our knowledge lie provides opportunities for improving that knowledge and for learning from our mistakes. And this is something we have in common with even the greatest geniuses, for all human knowledge is both incomplete and partial. The task, even so, of sifting our knowledge, of rooting out out-of-date ideas or those that are downright detrimental to what we do is indeed a difficult one. And we should not expect to be able to change all that much, especially with advancing age, but the more we are able to recognize our mistakes and to pinpoint our areas of ignorance, the more we shall be able to breathe new air into the system and new ideas into our thinking. The point of all of this is, of course, to be able to live better.
Modern technology, and the purposes it is made to serve, will help all of us enormously with the adjustments that will make a fourth pillar possible. Even Einstein, who was not reckoned to have been a particularly good pupil at school, when he developed the theory that was to earn him a Nobel Prize for physics and a unique reputation, had conducted most of his research as a minor employee in the Patents Office in Berne. His is a good example of someone pursuing an activity which was initially secondary, parallel to his main job. Admittedly, few of us can expect to become 21st-century Einsteins, but I do believe that most of us are capable of making a success of the decade and a half or so until we are 80 and of benefiting fully thereby. God speed and good luck.

Managing the cost of better health

The last point I want to make has to do with the good health we all require between the ages of 60–65 and 80 years to be able to lead active and satisfying lives. Almost all studies on people of our age show that the best way of maintaining one’s health is to remain sensibly active. Then there are the recommendations about a wholesome, balanced diet, a modicum of physical exercise, about not smoking, and you can take consolation from the fact that a glass or two of a reasonably good wine is not only permitted but positively desirable.
That being said, with advancing age, the human machine begins to need repair and a number of spare parts already exist (indeed have existed for almost a century now and in an epoch of mounting efficiency) for replacement purposes. The textbooks on the history of medicine all concur that up to the end of the 19th century doctors were not able to achieve much in terms of changing things, their ministrations being practically without effect. Ours, by contrast, is a blessed age even if accidents still occur, diagnoses are not always correct and treatment is at times ineffective. But in spite of everything, we nowadays manage to treat successfully one cancer in two.
Take, for example, hip replacement. There comes a time when your thigh bone or femur can no longer turn within the pelvis because the cartilage (which is like the lubricating oil that makes a door turn easily on its hinges) has disappeared. After the age of 60, one in ten persons begins to suffer from a problem of this sort and is in considerable pain. If the average age of the population remains 60 years or less, then very few people are affected. In the past, up to the middle of the last century, when the hip joint seized up all one could do was to insert a pin to block leg movement and reduce the pain. But moving about was pretty well out of the question and part-timework not really an option. Last year, 1,100,000 hip replacement operations were performed worldwide and the average age for a first replacement was 63 years. The total bill for these operations (pre- and post-operative costs included) amounted to around 7 20 billion or $ 20 billion.
There are, of course, various other types of prosthesis. As a result, health costs are rising and on average you and I are feeling better. One day, within say a few decades, it will perhaps be possible to replace the cartilage or grow a new one; possible, and also very necessary, given the lengthening lifecycle of our planet’s population. Over time, new treatments could both cost less and be more easily borne by the patient who at present must wait several weeks, sometimes even months, while not only bone and prosthesis, but also muscles which were sectioned to provide access, weld back together.
But the results are there in the number of replacement beneficiaries some of whom are even able to ski or climb mountains. Our generation is thus able to enjoy a whole new lease of life.
Another example is the screening and treatment of colonic cancer both of which can be performed at a relatively low cost thanks to optic fibres.
We live, then, right at the heart of a period when vast amounts of biological and chemical research are going to make possible the increasingly high levels of health and well-being that we shall need to build our lives after 65.
We also need to be thinking carefully about the economic implications of health costs. If they are rising, it is largely because we are increasingly able to benefit from advances in medicine. There are, of course, other kinds of problems — the efficacy of treatment, over prescription, and so forth — but the heart of the matter is the fact that we spend more on health to be able to live longer and better. And if in this sector there are crises, breakdowns and even major incidents, then medicine is no exception since such things occur in every domain of human endeavour.
One is, however, struck by the fact that medical ‘costs’ are often presented as ‘negative’ costs. I personally can see no difference between buying a car to be fully mobile (except in city centres) and paying for the sort of treatments described above which do no more than enable us to use our own bodies for the purpose of moving about. In both instances, car and health treatment, we are paying for efficiencies that enable us to live better. This is an idea, which may seem at first glance to be innocent and obvious enough, but which opens up a whole new vision of the economy and economics which I have had the occasion to develop further in other writings.
There is one further point we need to bear in mind: health costs are not evenly distributed across the lifecycle. Early childhood excepted, they increase on average with age and their increase also reflects new therapeutic discoveries and procedures. The problem, therefore, remains of how to finance such costs with advancing age.
In many countries, health is essentially part of a state-run social security system. In others, there are private systems often involving public participation and subsidies. However, in the health sector, there remains the question as to whether the system should be run wholly or in part on a pay-as-you-go basis, or whether reserves should be constituted during the healthier relatively disease-free years so as to meet the higher costs that inevitably begin to occur after 60. The private insurance people assure us that reserves are accumulated during the low-cost years in order to offset the higher costs that occur with advancing age. But, frankly, the situation is far from satisfactory. In the first place, the reserves in question only very partially offset the rise in costs (and in premiums) as people grow older. Secondly, especially in a free-market system, year on year, companies are in competition with one another leaving very little surplus for the accumulation of decent reserve funds. It seems to me that we, as consumers, would be well advised to combine a properly managed universal pay-as-you-go system with something akin to the second-pillar pension schemes based on a capacity to generate reserves which can be used whenever they are needed. One might even think in terms of combining both second pillars — pensions and health — into a single scheme or system.
The issue is indeed a complex one and we can do no more here than point to one or two fundamental aspects, for example, the very simple but highly significant fact that unavoidably health is something that must be managed throughout the lifecycle. There is also the matter of
being able to take immediate action when treatment is required: for example, hip arthritis triggering appalling pain may occur very suddenly practically without warning. Suffering for sometimes months on a waiting list is simply not good enough. How, then, can the private and
public systems best complement each other? If the interests of the patient were seriously taken
into account, would it really be so difficult to find an answer? The situation varies considerably
from one country to the next, but one is frankly baffled by British Prime Minister, Tony Blair’s
statement last year that things were improving because the patient waiting list had dropped by
100,000 to 1.3 million.
I think you will agree with me on one point: the health system must be capable of improving our quality of life not only between the ages of 65 and 80 years, but hopefully also beyond that age.
In any case, let us be convinced: society is not ‘ageing’. We are essentially facing an incredible new event: a longer lifecycle, full of opportunities.


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