An ageing population doesn’t have to mean expensive healthcare

News & Analysis

24th March 2016

In Porgy and Bess, Gershwin quipped about the problems with enjoying life in older age: ‘Methuselah lived 900 years, but who’d call that livin’, if no girl would give in, to a guy who was 900 years.’

We may be some way from the world’s first ‘millenarian’, but Britain’s population is certainly ageing fast — adding an extra five hours to our life expectancy every day for the last 30 years.

The UK already has more people over 65 than under 16, and the number of older citizens will increase by a further 25 per cent over the next decade.

It goes without saying that these immense demographic shifts should be a cause for celebration, reflecting progress in healthcare, nutrition, housing, sanitation and safety. Combined, these changes have created a society in which one in three children born today will see their 100th birthday, compared to one in 100 a century ago.

But an ageing population creates challenges too, driving new demand for health and social care and — as people live longer and chronic diseases set in earlier — increasing the number of people with multiple conditions. These can be particularly expensive to treat. You only need look at the stories last year about the woman of 112 who received a hip replacement to see these trends are only going to increase.

Older people already account for 60 per cent of hospital admissions, despite making up 17 per cent of the population. This, combined with the ever-greater array of tests and treatments available and the growing proportion of highly skilled (and highly paid) staff delivering care, means that healthcare spending in the UK tends to rise at twice the rate of inflation in the rest of the economy.

It may surprise some to hear that the NHS is in fact remarkably effective at containing the rising cost of healthcare, relative to other countries. Our single payer system, with institutions like NICE keeping a ceiling on drug costs, has given us a distinct edge over countries like Germany, the Netherlands, France and Switzerland in terms of the rate at which healthcare spending has risen.

Still, from when I joined the NHS in 1989 to today, the share of our economy that goes towards healthcare has doubled, from 4.5 per cent of every pound spent to nine per cent. Such increases cannot continue forever.

Technology is often hailed as the answer, but one of the strange quirks of healthcare is that while most other industries use technology to lower costs, in the NHS it often seems to only add to them. This is partly because we fear giving patients control or reducing services elsewhere. Online banking was funded by closing branches, self-checkouts by fewer staff at the tills. The whole foundation of the digital economy can be seen as a trade-off, with consumers enjoying greater convenience and control in exchange for doing some of the work that staff were once paid for. The same thinking needs to be applied to healthcare — but how?

One hard-learned lesson around the world is that it’s not about short-term, marginal drives to get staff to work ever harder and produce ever more. More often than not these efforts undermine efficiency in the long term, demoralising staff and compromising quality. Instead, we need to step back from the manager’s microscope and look at the bigger picture of individual’s care, from why they get sick in the first place, to how we can prevent a revolving door of appointments, tests, admissions and discharges.

In practical terms this could mean using the massive vaults of data held on patients by the NHS to predict the people who are going to need additional support. In Israel, for example, doctors have access to a list of all their patients that have been discharged from any hospital in the country ranked according to their risk of being readmitted. They are then able — through the electronic records system — to phone those at the top of the list at key intervals and check they have the support they need. This has led to significant falls in people having to return to hospital.

We must utilise the opportunities of ageing too. Millions more retired citizens creates an enormous resource of people power, from volunteering to self-managing our own health. The so-called ‘silver economy’ will have nearly doubled by 2020, from $8 trillion in 2010 to $15 trillion in 2020. Technologically literate and far less deferential than their parents, the next generation of patients will not accept poorly co-ordinated, inefficient care. And they will have the financial means and political might to challenge it.

We must also advance our understanding of death. Too much of healthcare at the end of life offers no benefit or is actively harmful to patients. As health professionals and as patients we must become more comfortable discussing death — to be realistic about the likely success and side effects of treatments, and to more thoughtfully balance the quantity of life with its quality.

Every developed country faces the challenges of how to pay for the rising costs of care as people live longer and treatments advance. It is a wonderful problem to have, but one that few societies are taking sufficient action on.

Mark Britnell is chairman of KPMG’s Global Health Practice and author of In Search of the Perfect Health System, published by Palgrave Macmillan.