Sustainable Financing with an Ageing Population: Will population ageing lead to uncontrolled health expenditure growth?

Key messages

• Per person health expenditures are generally higher among older people than younger people – particularly in developed health systems. As such, policy-makers often assume that population ageing will result in unconstrained growth in health spending.

• However, by applying data on public health expenditure patterns by age from European Union (EU) countries to population projections for both the EU and Japan, we find that health spending growth attributable to population ageing will be marginal through 2060, adding less than 1 percentage point per year to per person annual growth.

• Applying the same public health expenditure by age data to population projections for Indonesia, we estimate the costs of "scaling-up" a health system to meet the care needs of an ageing population. We find that this too can be modest, especially if investments are made before a large share of the population is at older ages, and if scaling-up is spread out over time.

• In recognition that future expenditure patterns may vary due to a number of other factors that relate to changes in the age-mix, we develop a series of hypothetical scenarios where per person health expenditures are even higher for older people compared with their younger counterparts than the most recent EU health expenditure data suggest.

• However, even in the most "extreme" hypothetical scenario presented here, designed to be consistent with an increase in the volume, price, intensity and coverage of services for older people under the public health budget, population ageing only increases the overall EU health spending share of GDP in 2060 by 0.85 more percentage points than it would according to projections based on current expenditure by age patterns; 1.00 more percentage point for Japan; and 1.67 percentage points more for Indonesia, assuming that health spending is scaled-up to reach the EU average over 15 years.

 

Sustainable health financing with an ageing population: implications of different revenue raising mechanisms and policy options

Key messages-

  • Population aging affects a country’s ability to generate revenues for health.

  •  We simulate the effects of population ageing on the ability to raise revenues for health from income taxes, goods and services taxes, property taxes, and social contributions. We find that:

    • For countries with a relatively younger population currently undergoing a rapid population age-structure transition, all revenue sources have the potential to grow considerably over the medium to long-term. The challenge is to improve tax collection and the priority given to health to take advantage of this potential

    • For countries with a large share of the population at older ages, revenues from social contributions linked primarily to the labour market are expected to decline substantially as a result of population ageing.

  • Three general policy options could address declining labour market-related social contributions due to population ageing. They include

    • expanding the revenue base by increasing the number of contributors, such as by increasing migration rates or raising pension ages

    • increasing the rate of taxation on social contributions, and

    • diversifying the mix of financing sources.

  • Simulations suggest that these strategies in isolation are unlikely to fully compensate for the shortfall in revenues in countries that depend heavily on the labour market to finance health care.

  • Health and long-term care financing systems that are heavily reliant on labour market-related contributions may need to be redesigned if they are to continue to generate sufficient, stable revenues in the context of population ageing. This will require political commitment and a willingness to prioritise health.

  • This research underscores the importance of moving away from financing health through labour-related contributions and premiums, and as a result de-linking entitlement to care from the payment of contributions. Taxation policies can ensure health financing is both sustainable and equitable.

 

Advancing universal health coverage through knowledge translation for healthy ageing

A model of knowledge translation from Japan

Knowledge translation (KT) involves interpreting research evidence and applying it to practice. In the context of population ageing, KT is fundamental to ensuring that health system responses to population ageing are evidence-based and appropriate. The Japan Gerontological Evaluation Study (JAGES) stands as a model of KT in Japan, a high-income country at an advanced stage of health development and population ageing. JAGES collects longitudinal, social epidemiological data on representative samples of community-dwelling, independent older people aged 65 years and older through a self-administered mail survey. Data have been collected every three to four years since 1999. The latest survey conducted in 2016–17 yielded responses from about 200 000 older people from 41 municipalities across the country. The research has highlighted the importance of addressing the social determinants of health through a population-based approach in order to address health inequalities and the risk of becoming dependent on long-term care among older populations. This evidence has contributed to the reform of national policies on the provision of long-term care. The researchers also conduct implementation research, which is the scientific inquiry into questions concerning the implementation of policies and practices, working closely with municipal officials to use the data and research evidence for priority-setting processes and for developing and evaluating programmes.

What drives the KT activities of JAGES?

This publication highlights seven key facilitating factors that underlie JAGES’ KT:

  • mutually beneficial relationships that are established among the various stakeholders;
  • multisectoral collaborations that enrich both research and practice;
  • the production of quality evidence based on large-scale survey data that can be linked to relevant administrative data;
  • a community-based participatory research approach to co-produce locally relevant knowledge and solutions with stakeholders;
  • the creation of data visualization and management tools to facilitate the uptake of evidence by stakeholders;
  • advocacy achieved through diverse media channels to reach different stakeholder groups; and
  • strategic financing to obtain the resources necessary to sustain this initiative.

How does this example inform other countries?

This publication also includes several lessons learned about promoting KT on ageing and health that are transferrable to other countries:

  • Create a climate and context that is favourable towards KT on ageing and health: Take advantage of the global momentum towards improving the lives of older people.
  • Build relationships between knowledge producers and users: Start small, identify mutual interests and be persistent.
  • Produce quality, longitudinal data: Adapt survey methods to the local context but keep them consistent within the country and across time.
  • Produce actionable knowledge: Aim the research towards identifying modifiable problems and potential intervention points.
  • Get the knowledge into the hands of users: Use data visualization tools and disseminate research strategically.
  • Have a long-term vision and commitment to strengthen research and KT on ageing and health.

The bottom line

Implementing KT cannot be done with a short-term focus. Continuous and ongoing financial investment has sustained KT as an integral part of JAGES. Long-term investment in creating quality health information systems, building local research capacity, sensitizing policy-makers to the use of research evidence, advocating the adaptation of health systems to population ageing, and nurturing relationships between researchers, policy-makers and community members, will be critical to addressing healthy ageing and achieving UHC worldwide.

Policy brief 

 Advancing universal health coverage through knowledge translation for healthy ageing: lessons learnt from the Japan Gerontological Evaluation Study

 政策概要(日本語):研究を通じた健康な高齢化とユニバーサル・ヘルス・カバレッジの推進

Link to project page

Knowledge Translation for Healthy Ageing: the Japan Gerontological Evaluation Study (JAGES)

Related link

Japan Agency for Gerontological Evaluation Study website: WHO collaboration research (in Japanese only)

Price setting and price regulation in health care

The WHO Centre for Health Development in Kobe (WKC) and the Organisation for Economic Co-operation and Development (OECD) have released a novel study on price setting and price regulation in health care to support countries to accelerate progress towards universal health coverage (UHC).

Researchers completed case studies from nine settingsto generate lessons learned in prices setting and regulation, particularly for low and middle-income countries, and to identify areas for future research

This study was carried out to support countries in meeting international commitments towards Universal Health Coverage. It aims to gather experiences in price setting and regulation, generate best practices, and identify areas for future research. There is a special focus on the implications for middle-income settings, which represent more than 70% of the world’s population.

 

Second WHO Global Forum on Innovations for Ageing Populations Report of the forum, 7-9 October 2015, Kobe, Japan

The report of the Second WHO Global Forum on Innovation for Ageing Populations is now available. The World Health Organization Centre for Health Development (WHO Kobe Centre, WKC) convened the Forum to build upon the platform WKC created in 2013 to share information, debate and drive new thinking about the current and emerging health and social challenges surrounding ageing populations and innovations. The Forum, with its theme “IMAGINE TOMORROW,” explored ideas for transforming communities, systems, and technologies for ageing populations worldwide – developments that are timely and key to attaining universal health coverage (UHC) and the new Sustainable Development Goals.

Background

Two years after convening the first one, the World Health Organization (WHO) held its second WHO Global Forum on Innovation for Ageing Populations on 7-9 October 2015 that successfully gathered 212 participants from 24 countries in Kobe, Japan, in exploring visions of transformation in communities, systems, and technologies for ageing populations worldwide. Organized by the WHO Centre for Health Development, also known as the WHO Kobe Centre, the 3-day forum brought together diverse stakeholders - policy-makers and government representatives, members of the academia and the research community, funders, public health professionals, innovators from civil society and the private sector and older people’s voices - to highlight and accelerate social as well as technological innovations for older adults globally. With the theme “Imagine Tomorrow”, the forum connected innovators with practical knowledge, the latest WHO data and framework and a diverse stakeholder network that shares in common an interest in the physical, mental and social well-being of older people towards innovation for healthy ageing.

Results

The report of the Second WHO Global Forum on Innovation for Ageing Populations entitled “Imagine Tomorrow”, based on its theme, showcases - in both static and interactive versions - the ideas, suggestions, experiences and tensions expressed during the forum on the journey from today’s realities to realizing tomorrow’s envisioned person-centred, integrated care and support systems that would enable older people to age in their communities and continue functioning and engaging in society at large. In the spirit of innovation, the Global Forum provided several platforms for participants to be able to connect, engage in conversations and share solutions in improving the lives of older people in different settings being a global imperative. The report captured overcoming the stereotypes about older people that limit their opportunities; narrated a personal story on ageing in place; detailed “the 5Ps” that would enable ageing in place; and reiterated the need for ensuring that health services and care are accessible to everyone everywhere. In synthesizing documented inputs and discussions, the report upheld the Global Forum’s innovative and participative format by mirroring its interactive, conversational approach, thus, the contents were delineated as a series of conversations among older adults.

Moving forward

The Second WHO Global Forum on Innovation for Ageing Populations, convened shortly after the launch of the Sustainable Development Goals 2016-2030 and the release of the first WHO World Report on Ageing and Health (WHO, 2015), has set the stage and momentum for continuing efforts on how health systems, the health sector and other sectors of society can be imagined to be transformed to provide coordinated health and care services, as close as possible to older people in the community. It, therefore, urges all participants and readers to go beyond just having the conversations, towards concrete actions for older people. WHO and the WHO Kobe Centre invite all in moving forward together to share the inputs, lessons, research, insights and questions embodied in the report to advance social and technological innovations for ageing populations in order to “create tomorrow” that has been imagined at the forum.

Related links

Report of the Second WHO Global Forum on Innovation for Ageing Populations, 7-9 October 2015, Kobe, Japan

Summary Report of the Consultation on Advancing Technological Innovation for Older Persons in Asia 20-21 February 2013, Kobe, Japan

The global population, particularly in the Asia Pacific region, is rapidly ageing with implications for swiftly rising health care and social costs, and maximizing the potential of this population’s contributions to society. In the next 20 to 30 years, the greatest growth in ageing populations will be in low and middle income countries. A WHO priority is to enable ageing populations to remain healthy, active and independent for as long as possible. Achieving the aforementioned goals requires early diagnosis, prevention and treatment of prevalent diseases (e.g., non-communicable diseases), reduction of their risk factors, ensuring rehabilitation services and managing disability, and delay, management, and prevention of functional and cognitive decline. Advancing the availability and affordability of medical and assistive devices, and their integration into community-based health and social service systems, requires innovation that addresses the needs and contexts of older populations, particularly in low income and emerging economy countries.

The Consultation convened experts from government, industry, academia, non-governmental organizations representing the perspective of those using technologies, and from WHO. In addition, with support from the Japanese Ministry of Health, Labour and Welfare, WHO commissioned two systematic reviews/studies of the availability and status of medical and assistive devices (respectively) in eight Asian countries, preliminary findings of which were presented during the Consultation.

The Consultation highlighted the need to address many inter-twined spheres of action to ultimately increase the availability of affordable, acceptable, safe and effective health technologies. Underlying discussions was a recognition of an end-to-end process for innovation that recognized the link between needs articulation, design, development, production, assessment, regulatory oversight, financing, procurement, use, maintenance, and continued post-marketing surveillance.

Older Persons in Emergency Situations: A Case Study of the Great Hanshin-Awaji Earthquake

As society continues to age, considerations for action and policies to cope with the needs and capacities of older people, people with disabilities, and others who need support in a disaster are critical. In the case of the Great Hanshin-Awaji Earthquake (1995), statistics showed that there were 6,433 deaths, 43,792 injured and 510,000 homes damaged. Older people were found to have higher mortality rates: among immediate casualties, 53% in Kobe City and 56.6% in Hyogo Prefecture overall were aged 60 and above. Among later earthquake related deaths: 90% were aged 60 and above.

Considered as the “first aged society earthquake” in the world, this case study report reflected on the situation of elderly victims and survivors of the Great Hanshin-Awaji Earthquake through the perspective of the disaster cycle and synthesized measures perceived to be necessary for the future in terms of general health emergency preparedness, response and recovery; and specific concerns for older people during evacuation, temporary sheltering and permanent relocation. Storytelling groups since the earthquake struck were created to meet students to relay experiences about the disaster and provide lessons for the future. Narrations from older people of their experience, resilience and lessons learned are preserved at the Great Hanshin-Awaji Earthquake Memorial - Disaster Reduction and Human Renovation Institution.

WHO Global Forum on Innovations for Ageing Populations Report of the forum, 10-12 December 2013, Kobe, Japan

In 2013, the World Health Organization (WHO) established the Global Forum on Innovation for Ageing Populations as an information exchange platform for diverse stakeholders to address the challenge of meeting the needs of older people in low resource settings with frugal innovations. The Global Forum brought together more than 170 expert participants from 21 countries for 3 days of rich discussion and debate, in order to meet the following objectives:

Assistive technologies for ageing populations in six low-income and middle-income countries: a systematic review

A publication prepared by the WHO Kobe Centre, “Assistive technologies (AT) for ageing populations in six low-income and middle-income countries: a systematic review”, was published by the British Medical Journal Innovations (BMJ) on 11 September 2015. WKC conducted a systematic literature review of the current availability of AT, and existing legislation for provision of AT, for older adults in six low- and middle-income countries (LMIC), which are among countries with the highest estimated 65 and over population in the coming decades: Brazil, Cambodia, Egypt, India, Turkey and Zimbabwe.

The review was based on research using multiple databases retrieving an initial total of 538 relevant records, which were screened using specified criteria to yield 17 relevant studies. In summary, AT for ageing populations have received some attention in LMIC, and the limited set of studies reflects the emerging nature of this field. Key findings were that the six LMIC have some degree of available AT designed for older adults with an impairment or disability, but limited AT to prevent such impairment or disability; 2) production of AT in LMIC is currently low, 3) those LMIC with AT initiatives generally for disabled populations (e.g, Brazil, Cambodia, Egypt and India) have started production of low-cost AT, and all of the study countries had ratified the UN Convention on the Rights of Persons with Disabilities. Analysis of review findings indicated the need for a comprehensive, integrated health and social system health system approach in order to increase the current availability of AT for ageing populations in LMIC. These would entail, yet not be limited to, work on: 1) promoting initiatives for low-cost AT; 2) awareness raising and capacity building on AT; 3) bridging the gap between AT policy and practice (including relevant legislation and incentives); and 4) fostering targeted research on AT.

Medical and Assistive Health Technology: Meeting the Needs of Ageing Populations The Gerontologist

The Global report on urban health: equitable, healthier cities for sustainable development, 2016 presents new data on the health of urban residents from nearly 100 countries, updating the first joint WHO-UN Habitat global report on urban health titled Hidden cities: unmasking and overcoming health inequities in urban settings. The new Global Report deconstructs the complex challenges of health and health inequity in cities everywhere. It presents a special analysis on the impact of persistent urban health inequities on achievement of the Millennium Development Goals. It sets a baseline for the new global health and development agenda in the Sustainable Development Goals and Universal Health Coverage. It also presents evidence that in cities, progress in health depends not only on the strength of health systems, but also on shaping healthier urban environments. This Global Report presents practical, proven solutions for working across sectors to tackle these 21st century health challenges. It presents examples of effective actions by cities and nations around the world and the successes that have been achieved.

For more information