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Comparing
Aging Experiences in U.S. and Denmark AARP,
October 11, 2002 Good morning. I'm honored to be here today. It's a real privilege to be
invited to this prestigious, broad-based international conference — to
meet new people, learn new things and get new ideas. Also, as a native of
Omaha, I'm proud to come back home to where my parents settled when they
immigrated to America — on their honeymoon in 1924. But the reason I'm
especially pleased is because, as a Danish American, I harbor a deep
affection for Denmark and my many relatives live. We have two great
countries to be very proud of. Johanne and Marie Both my education and career have been in the healthcare industry. And, like most people, as I've grown older, I've become even more interested in health care, especially with the quality, access and delivery of health care services to older people. What's available out there, what does it cost, and what's the quality of the aging experience in the United States as compared to Denmark? Both my mother and aunt lived well into their 90s. Both lived hale and hardy lives, but began having health problems the last decade of their lives. As I watched this transition, I often wondered how their respective country's systems helped them through this later, more difficult, time in their lies. My parents planned well for the future and were fortunate enough to have the financial resources to avail my mother of the best in both geriatric medicine and long-term care. On the other hand, financial assets were far less important for my aunt, who received her health care through one of the most advanced public welfare and health care systems; at the time, it was the envy of most of the world. Aging Populations Now, developed countries all over the globe are in the midst of a demographic revolution, with people living longer than ever. Indeed, the oldest person on earth just recently died in Japan — at age 115. For the first time in history, older populations have begun to outnumber younger populations. We owe this to a number of factors: [Overhead 1:] Causes of Aging Demographics:
In 2001, Denmark's population past age 60 was slightly over 600,000. By 2025 it's projected to be 1.5 million. This growth is spectacular in terms of percentages since the overall population figures are declining. In 2001, the United States people over 65 totaled nearly 33 million. In 2025, according to the Census Bureau, the population 65+ is projected to be 62.6 million. The percentage of Americans 65+ has more than tripled since 1900: 4.1 percent in 1900 to 12.4 percent in 2000, and the number has increased eleven times, growing from 3.1 million to its current 33 million. [Possible overhead] Compare that to 1900, when the average life lifespan in this country was only 46 years old. Now it's 79 for men and 84 for women. And the older population itself is getting older — the fastest growing age segment of our population is 85+, and the second fastest, those 100+. That's a lot of gray hair. Overhead 2:] Centenarians: Capitalistic vs. Social Welfare Systems In contrast, Denmark has a social welfare system: simply stated, government provides. Citizens have free and equal access to health care, and the government furnishes services, financed almost entirely through tax revenues. At least, that's how the system should work. But many of those core values are coming under pressure. With an aging population, healthcare costs are simply too high for government to sustain. Even when Marie was alive, a shift away from full nursing home care was beginning. And by the way, this is happening all over Europe. A few years ago, most European Union countries had socialist governments. But people have been expressing themselves through the ballot box, and since 2000, the constellation has been changing. That's because many in Europe believe that too much has been done to support egalitarian policies. While government cares for you and provides you with virtually free medical care, the country may pay for it in terms of little industrial growth and high unemployment. In fact, it's probable that most Danes can survive quite well on the benefits of the welfare system. It appears that there's little incentive to find employment: perhaps that's why the students grow older and the retirees grow younger. The irony is that today the gap between the US and Danish approach to care for the aging has narrowed considerably. The Danes have moved a bit to the center, away from a strictly socialistic cum welfare system and the United States continues its subtle trend toward more direct government involvement. Cases in point: in Denmark the government has declared a moratorium on building new nursing homes (only 3.3% of those over 65 are currently in nursing homes compared to 23% who are receiving home health care); in this country, there are big efforts underway to get Medicare, a government program available to virtually all people 65 and older, to provide a prescription drug benefit. Adding prescription drug coverage to Medicare is AARP's number one legislative priority. So many of our members complain about the high costs of medications — a healthy share of it out-of-pocket. And this isn't just a problem for those with low incomes: as we say, it's not how rich or how old you are, it's how many pills you take. Until now, partisan politics have prevented Congress from reaching consensus on the amount that should be allocated for this benefit, as well as on whether drugs should be provided by private or public (Medicare) plans, or a combination of both. This benefit would cost billions of dollars. We're talking about at least an additional 400 billion dollars over the next ten years. Denmark [Overhead 3:] Danish Government Health
Spending Public and private health spending as a share of the total economy also dropped during this period.
When care for the elderly is added to make spending figures comparable, Danish health spending as a percentage of GNP in 1996 ranked eighth out of nineteen developed countries. Countries with higher spending included Iceland, Portugal, Sweden, and the Netherlands. Germany and France spent significantly more at close to 10 per cent of GNP. And here's the real shocker: though exact comparisons are difficult, the U.S. spent more than any other developed country. Thus, the capitalist state actually spent more than the social welfare state! [Overhead 5: PIE CHART] 1996 Health
Spending as Percentage of GNP Still, among the range of public sector responsibilities in Denmark, the health care system remains one of the best supported. A 1997 Euro-barometer survey comparing all European Union countries indicated that 90 percent of Danes were very satisfied or reasonably satisfied with their health care services, higher than in any other country in Europe. Moreover, the survey reports high levels of satisfaction whether for emergency care, primary care and hospital treatment. But despite what these surveys imply, all is not well in the state of Denmark. Today, there's increasing focus on access and quality in the health care sector. From 1980 to 1995, longer waiting times for surgeries in Danish hospitals attracted attention because the increase in productivity in this area failed to keep up with an increase in need for treatment. Patient groups, in particular, highlighted areas where the wait for treatment and the mortality rates for certain diseases compare unfavorably to other European countries, and the Danish average life expectancy, while growing, has fallen behind most developed countries in recent years.
And then there's cost. In Denmark, the shift from non-profit to for-profit health care providers and the growth of for-profit hospital chains, contributes to increasing costs. By 1994, research shows that administrative costs in for-profit hospitals had increased to 34 percent. In addition, as expensive new technologies and treatments became available, there are new demands for even more government spending. Yet health care expenditures in Denmark actually decreased in real terms in the late 1980s and early 1990s. Even though more recently expenditures began again to grow by 1 to 3 per cent per year, these figures are still slightly behind Danish GDP growth. United States Overhead 6: GRAPH] 1998 Health Spending
Per Capita [Overhead 7: GRAPH]: 1998 Health Spending
as Percentage of GNP There are many reasons for the especially high cost of health care in the U.S., ranging from the rising costs of medical technology and prescription drugs to the high administrative costs resulting from the complex multiple payer system. For example, somewhere between 19.3 and 24.1 percent of the total dollars spent on health care in the U.S. is spent on administrative costs, whereas in Canada, those costs amount to only 8.4 to 11.1 percent of health-care spending. The costs are especially high here because of tracking patients, the need for additional personnel, advertising and market analysis. In a stunning example demonstrating how for-profit health care contributes to high costs, Physicians for a National Health Plan report that "When U.S. Healthcare merged with Aetna in 1996, the $967 million received by the CEO could have provided health insurance to every uninsured child in the state of Massachusetts until he or she they reached puberty." The high proportion of people uninsured in the U.S., which according to the most recent figures amounts to 42.6 million people, adds to health care costs because conditions that could be either prevented or treated inexpensively in the early stages often develop into health crises and the need for more expensive emergency room or ICU care. We remain the only country in the developed world, except for South Africa, that does not provide universal coverage for all of its citizens. Instead, we have a confusing hodge-podge of public and private services: private insurance coverage based primarily on employment, along with public insurance coverage for the elderly under the rubric of Medicare, the military, veterans, and Medicaid, which varies widely from state to state, for the poor and the disabled. As the American College of Physicians-American Society of Internal Medicine has pointed out, "People without health insurance tend to live sicker and die younger than people with health insurance." To make matters worse, medical inflation has again reared its ugly head. And as insurance rates rise, more and more employers will eventually be forced to either drop their insurance benefits altogether, or to raise premiums and deductibles. As for Denmark, questions are being raised about the future viability and course of Denmark's entire welfare and health care system. The debate over policy actually began to heat up in the early 1990s. The heretofore-unassailable welfare and health care system played a pivotal role in bringing about a major political shift in Danish government in last year's elections. In November 2001, Denmark's center-right opposition won its biggest victory in 80 years. They succeeded in ousting the government of the Social Democrats by conducting a campaign that conjoined perceived problems with health care delivery with a lax policy on immigration. With the election, the conservative right defeated the European Union's longest serving Prime Minister, in power since 1993. With all the votes counted, right wing parties had won 98 seats in parliament - their strongest showing since the 1920's. Home Health Care Overhead 8:] Danish Spectrum of Care
[Overhead 9:] U.S. Spectrum of Care
According to Danish law, no new nursing homes can be built. But home help is encouraged, recognizing that not everyone needs 24 hour or even daily care, allowing home health aides and nurses to tend to the needs of more people. Counties in Denmark run most of the services through public hospitals and contracts with primary care doctors, and have flexibility to set priorities and allocate resources to be responsive to local demands within the overall national framework. Municipalities are responsible for home health assistance, nursing home care, dental care and some preventive services. But according to the Dane Age Association, many local governments have cut back home care support, forcing the residents and their families to find other accommodations. And although the government, as a social welfare state, is responsible for financing individual healthcare needs, retirement funding and other sources of income play an increasingly significant role in a person's comfort and quality of life. In the U.S, attempts at home-based care are still in its infancy, although there are pilot programs in a few states. And the Older Americans Act does provide for some home-based services such as meals on wheels. But people requiring home care pay a hefty portion out of pocket: [Overhead 10: PIE CHART] 1998 Home Care
Costs But for most people here, reliable, quality home care remains a goal to aspire to. In both countries, the numbers of aides and nurses have not kept pace with demand, and, with more people living longer, the number needing assistance strains both systems. Nursing Homes In the United States, the entire nursing home system is under fire. There's a laundry list of problems: [Overhead 11: Nursing Home Problems Demands for reform and national guidelines are both loud and persistent, especially in states like Florida and Texas, where there are large populations of older citizens. While there are certainly many excellent nursing homes in the United States, far too often, residents and their families experience confusion and poor services and care. Moreover, the average cost for a one-year stay in a US nursing home is roughly $56,000. That's a lot of money considering the average stay is about 2 years and 5 months. Medicare and Medicaid cover more than half of nursing home costs. Private insurance accounts for about seven percent of these costs. Out-of-pocket (including Social Security, support from relatives or other loved ones, personal savings or other assets) make up the balance. Some Americans have liquidated all of their wealth, great or small, to afford the expense of nursing home living. This staggering financial commentary has led to formidable criticism regarding nursing home arrangements in the US and has prompted calls for reforms and greater spending on home and community based care, so that more men and women who need varying levels of support can remain in their own homes or smaller community settings. Already, a large number of informal, unpaid volunteers, including family members, friends and neighbors, provide needed long-term care to the aging US populace. Adult children often find themselves caring for older parents, in-laws, and even grandparents, along with their own dependent children. Many of these caregivers move their loved ones into their own homes or provide care in the individual's home. Some caregivers even provide long-distance care. They may manage their loved ones' finances, maintain payments to on-site care providers, and personally visit as often as possible. Given the level of stress this activity engenders has led one critic to say that in this kind of patchwork system, caregivers might need their own caregivers. And many family caregivers work full time, either because they have to, or want to. Global Aging with Dignity and Purpose Aging is a global phenomenon, and clearly, something needs to be done to break what seems to be a never-ending cycle of escalating health care costs. We at AARP recognize the interconnectedness of aging societies and their economies. Our activities are no longer confined to America. They now span the globe and will more so in the coming years. We've made this a strategic priority. Let's face it: neither the U.S. nor Danish system is perfect. We have a lot to learn from each other. Personally, as an AARP Board member, I feel most fortunate that I will have an opportunity to participate in this important and ongoing debate. The time is ripe for the U.S., Denmark and the other developed countries to come up with innovative and creative ways to make aging with dignity and purpose a reality. Aging with dignity and purpose: that's what all of us want both for ourselves and our loved ones, and surely aging with dignity and purpose is a legacy we want to leave for future generations.
Copyright
© 2002 Global Action on Aging
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