Avalanche or Glacier?: Health Care and the Demographic Rhetoric

Abstract

ABSTRACTClaims that the health care system is about to be engulfed in a “wave of grey” have become commonplace. Recent cost escalation is commonly attributed to the aging of the population, and there is no shortage of dire warnings about the cost implications of the even more dramatic aging, and costs, still to come. These claims have been largely unsubstantiated. Yet they persist for a number of reasons. First, over long periods of time, the effects of demographic trends can be (and probably will be) quite substantial. But these effects move like glaciers, not avalanches. Second, the effects of aging populations on some types of services which cater differentially to seniors will be much more dramatic; observers of those sub-sectors (such as long-term care) tend to extrapolate that sector-specific experience to health care generally. Third, at the “coal-face,” health care providers are seeing their practices become ever more dominated by seniors. They mistake this increased “presence” of patients aged 65 and over in their practices as evidence of the effects of demographic changes. In this paper we discuss each of these sources of error about the effects of aging population on health care costs. We focus primarily on the confusion between changes in patterns of care for particular age groups, and changes in overall levels of care. Quite extensive empirical evidence has been collected over the past decade from analyses of British Columbia data bases, and these findings are not unique, in Canada, or beyond. The common finding of this body of research is that population aging has accounted for very little of the increase in health care costs over the past three decades, in Canada or elsewhere. Health care utilization has increased dramatically among seniors. But this has had less to do with the fact that there are more of them, than with the fact that the health care system is doing much more to (and for) them than was the case even a decade ago. This suggests that the appropriate care of elderly people should be a central issue for health care policy and management, but that demographic issues are, in the short run at least, largely a red herring.