An ageing population – the good, the bad and the silver lining

This week will see the topic of the ageing population and its impact on health systems and societies tackled from two different perspectives, one largely negative and one refreshingly positive.
Let’s start with the negative perspective. The Council of the EU will this week decide on the European Semester “Country Specific Recommendations” to Member States. The European Semester – the EU’s annual cycle of economic policy coordination - is primarily concerned with the long-term fiscal sustainability of public finances in the EU, and analyses Member States’ budgets through that lens. In that perspective, the ageing population is seen as one of the primary threats to the sustainability of public finances, creating increasing pressures on healthcare and long-term care and pension systems. This year, the Commission proposed recommendations relating to healthcare and long-term care to 17 countries, in most cases urging them to make their health systems more sustainable and cost-effective, for example by shifting patients from hospitals to outpatient care and strengthen prevention and primary care services.
So what is at stake if this threat becomes reality? The EU’s 2018 ageing report calculated the consequences of a number of different scenarios. The “demographic scenario” assumes that Eurostat’s projections on future longevity of the EU population are correct, but that all extra life years will be spent in ill health. In other words, our health starts deteriorating at the same age as today, but we will live longer. The result is of course more years being dependent on healthcare and long-term care services, and in this scenario healthcare expenditure as percentage of GDP will on average for EU27 increase with 14% between 2015 and 2070 (but for some countries much more, such as 21% for the UK and an alarming 26% for Ireland and Spain).
How to make healthcare more efficient and sustainable is a topic that has received more and more attention from healthcare managers and policymakers during the last few years. Most are aware of the OECD report assessing that around 20% of healthcare expenditure is wasted or could have been spent better. Still, talking about efficiency is not always popular. A common misconception is that measures to increase efficiency equals cost-cutting. To the contrary, the recent report from the EU expert group on Health Systems performance Assessment points out that in absence of good tools to analyse inefficiencies in specific areas of care, decision makers might be forced to implement untargeted horizontal budget cuts, almost certainly harming patient health in the process.
Indeed, this was exactly what happened in many European countries in the wake of the financial crisis 2008, when most cuts to healthcare budgets occurred based on what was easiest from an administrative or political perspective, rather than based on an analysis looking at the impact on health outcomes for patients and citizens. Thus prevention was one of the areas which was cut most in many Member States, and you don’t have to be a professor in health economics to realize that this is exactly the wrong thing to do when the real concern is tomorrow’s healthcare costs rather than today’s.
Thankfully, the ageing population can also be seen in a more positive light. The Finnish EU Presidency is holding its Forum on the Silver Economy this week in Helsinki, to explore the many opportunities that an ageing society can bring. The elderly population are not only the patients and long-term care residents from the dismal fiscal policy forecasts, but also consumers and active members of society, many wanting to continue working or otherwise contribute to society long after the normal pension age. And they will create demand for new innovative solutions that will allow them to combine a normal lifestyle with the various health and social care needs of a high age, creating new business opportunities for entrepreneurs in wellbeing, home-care and assisted living.
Our health systems must also shift focus from treating the already ill to promoting health and preventing disease, laying the ground for a healthy ageing instead of a sickly ageing. Also in this area will innovative products and services provide many of the tools that are needed. Disease prevention is rapidly becoming more and more advanced with the advent of big data, genomics, predictive analytics and precision medicine. And new digital health services will allow patients to be cared for in their homes, rather than in the hospital, both saving costs for the health systems and increasing quality of life for the patients and their families.
Many of these new solutions will be developed by new partnerships consisting of both old and new players in the healthcare sector, and by public and private actors. This is why EFPIA is proposing to widen the very successful Innovative Medicines Initiative public-private partnership to the medtech and digital tech sectors. Health systems also need to adapt to enable these new models of health and care provision, including by ensuring a governance framework for health data that both provides data security for patients and enables access to anonymised data for research and health system governance. But also by shifting payment and reimbursement models from volume to outcomes which would create new incentives to invest in prevention and smart health.
This would entail a huge shift for our health systems, which often are likened to oil tankers – they are not easy to turn around and you don’t want to be at the helm if something goes wrong. But just as the challenge of climate change and the need to make our economies environmentally sustainable has provided new opportunities for renewable energy and green technology, so can the “silver economy” create a boom for new products and services that will not only keep European citizens and patients healthier for a longer time, but also create highly skilled jobs and growth to the European economy. This is where the need for a comprehensive strategy for healthy ageing comes together with the need for a new European industrial strategy focusing on health, wellness and life sciences. Our biggest challenge could be Europe’s biggest opportunity. Let’s take it!

Thomas Allvin

Thomas Allvin is Executive Director for Strategy and Healthcare Systems at EFPIA. Before joining EFPIA, Thomas...
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