The topic here is not ageing, but the evolution towards a long life society.
Admittedly, life expectancy is increasing, but the age at which someone can be considered to be old is rising in parallel. Since 1945, life expectancy in France has lengthened by 17 years for men and by 19 years for women. The figures for Japan are even more striking: 32 years for women and 28 years for men. To be aged 72, as I am, is not the same thing as it was in 1945 or in 1900. In France, 70% of those aged over 70 live without health worries. In 2040 the number of people aged over 75 will be the same as the number aged over 60 in 1940.
Ageing depends on where one puts the cursor. For me, someone who still has the capacity and the will to remain active is not old. Being active is not synonymous with having paid employment, but means living a social life and an intellectual life and contributing in one’s own fashion to the development of society. Disregarding statistics, at individual level inactivity is the enemy of life expectancy.
The evolution towards a long life society demands a far-reaching modification in our conception of age. This is partly something for action by the authorities, in other words, our governments. But it also requires action by private insurers, since for them the evolution towards a long life society is a challenge and a formidable development opportunity.
2. Action by the Authorities
In what follows I shall be referring particularly to the experience of Japan — recently analysed by the Institut Montaigne — where the burden of old age is being transformed into a driving force for innovation and consumption.
By making the demand emanating from seniors a lever for growth and job creation, Japan is on the road to finding a solution to the two problems induced by the long life society: labour market pressures and deficits in the Social Security accounts. How is this being done?
• By counting on the labour factor, by giving precedence to greater participation in employment: 450,000 seniors have returned to work or have opted for ageing while remaining active.
• By encouraging ‘Womenomics’, calling on the female workforce that constitutes an unexploited reserve of labour.
• By counting on the capital factor to maintain a high level of wealth creation, for example through tax measures encouraging ‘business angels’ and attracting direct investment to Japan.
• By counting on innovation, with the State providing support for R&D efforts but maximising all forms of innovation. Five of the 10 firms making the largest number of patent applications in the United States are Japanese. Japan makes twice as many patent applications per head as the United States or Europe. Through its innovations Japan dominates the automobile, electronics, solar energy, humanoid robotics and neurotechnology sectors.
• By developing the ‘Silver Market’, Japanese firms are positioning themselves as pioneers in their approach to the seniors.
In short, longer life requires that our governments pursue pro-active policies to make demand from seniors a lever for growth and employment.
3. Long Life Society: A Challenge and an Opportunity for Private Insurance
Private insurance has taken up the challenge of retirement pensions through the ‘four pillars’ strategy. The health spending caused by the lengthening of the life cycle and living longer in better health might double as a percentage of GNP in some countries within the next 20 or 30 years. Health spending is a good thing and no bubble! Health expenditure provides income for entire sections of our economies, contributing a substantial part of the investment and research budgets of the companies and industries involved.
The seniors in developed countries are better educated and more informed. They know how to gain direct access to medical information over the internet (e-health) and they are increasingly aware of medical malpractice, which in many countries claims more victims than road accidents. They will constantly be demanding better quality healthcare, seeking more relevant guidance through what they perceive as a medical labyrinth.
In this context of long life society, both public and private health insurance will move from offering traditional health insurance products to more global health services. These services include: health information and advice; orientation toward hospital services offering every guarantee of quality; opting for a second opinion ahead of risky operations; the chance to benefit anywhere in the world from consultation with some of the world’s top specialists; plus the advantages of telemedicine, telesurgery, home care and sensor devices, all these services being managed ideally in conjunction with a medical network providing expert guidance and a high level of quality and professionalism. Health insurance must have an annuity element, in other words be capable of taking in hand the long-term care and assistance needed for Alzheimer’s disease, a highly symbolic pathology that calls on the whole of the healthcare system while at the same time its everyday treatment is closely linked to the sociocultural context. More generally, taking in charge old dependent people in this context will certainly require the constitution of financial provisions throughout the period of a contract in order to mutualise this risk (long term care).
Conditions are currently right for making these developments possible. Health information systems, electronic medical records, electronic prescription and e-health are all evolving. These advances open the way to a personalised service to patients that is able to keep track of their case histories, follow them through the health system and implement reliable procedures to assess the quality of the care they receive. The massive contribution from information technologies should help bring about a comprehensive re-engineering of traditional health systems, adding productivity gains comparable to those observed in the other service industries.
Within its existing paradigms, neither public nor private health insurance is up to meeting the challenge of these changes. In countries whose health insurance financing is mostly public with the practice of medicine left in private hands, governments face serious difficulties in controlling growth in public health spending. In countries with national health services, a tight rein is kept on tax-funded health spending at the cost of long waiting lists for referrals to specialists as well as for hospitals and surgical care. This is the case not only in the UK but also in Spain and Italy. It is noteworthy that in these countries a small fraction of the population takes out private insurance separately from the national health service in order to be able to benefit from quality hospital care when needed.
The question is, how can we evolve toward a comprehensive health service?
One way is to start from a very simple paradigm. Health should be viewed as an item of household consumption on a par with food, housing or transportation. Personalised family health insurance would cover a household’s health risks and provide the services the family deems necessary in the light of its requirements and life style. But in any democracy the community as a whole must see to it that none of its members is excluded from essential health care. It must finance this care in the name of national solidarity. This universal health care must be based on clearly defined public health priorities and guarantee an adequate level of quality and it must be managed by private operators competing with insurance institutions. These operators could group together both universal and family coverage to offer a genuine comprehensive health service, through contracts with partners who would play a much broader role in this new service offering than that of the existing managed care organisations — notably for seniors.
As for the ethical dimension, this lies at the heart of the long life society. In a democracy, all that is necessary is to ensure observance of the universal declaration of human rights. Any person who is a member of society — and seniors nearing the end of their lives are such members — is entitled to Social Security and cover in the event of illness.
The other dimension is that of medical ethics, including the debates regarding the funding of scarce healthcare resources and, obviously, regarding so-called ‘relentless treatment’. But this is another subject, and one that is widely discussed elsewhere…
I personally see three essential points that, going beyond medical ethics, give rise to debate and involve society as a whole, and therefore the insurers.
• ‘Relentless therapy’, consisting in prolonging life virtually artificially, in other words providing treatment that is inappropriate in view of the state of the patient, sometimes described as ‘condemnation to live’, inflicted on certain patients. Most deaths in developed countries today occure in medicalised environments and drawing the line between appropriate treatment and ‘relentless therapy’ is a tricky exercise.
• ‘Medically assisted’ death, in other words the possibility for doctors to help people to die, is authorised in some countries and under discussion in others.
• The appropriateness in the case of the very old of certain costly treatments such as transplants, given the risks involved and the virtually inevitable complications that reduce the quality of life.
In conclusion, one entirely safe forecast: “The new Welfare: the counter-ageing society. A longer life: Yes, but how and at what cost? Ethical issues” will remain topical for a long time to come.
Claude Bébéar: Chairman of the Supervisory Board, AXA Group.
Tags: ethical issues, health changes, old age innovation, private insurance