Medical Care and the Economy
A major public policy concern in the long-term care field is the potential burden an aging society will place on the care-giving system and public finances. The “2030 problem” involves the challenge of assuring that sufficient resources and an effective service system are available in thirty years, when the elderly population is twice what it is today. Much of this growth will be prompted by the aging of the Baby Boomers, who in 2030 will be aged 66 to 84—the “young old”—and will number 61 million people. In addition to the Baby Boomers, those born prior to 1946—the “oldest old”—will number 9million people in 2030.
This paper assesses the economic dimensions of the 2030 problem. The first half of the paper reviews the literature and logic that suggest that aging in general, and long-term care services in particular, will represent an overwhelming economic burden on society by 2030. Then, a new analysis of burden is presented to suggest that aggregate resources should not be a major issue for the midcentury economy. Finally, the paper presents four key challenges that represent the real economic burden of long-term care in the twenty-first century. These challenges are significant but different from macro cost issues.
What type of economic burden might be considered overwhelming? Existing literature never explicitly defines this but the sense is that the burden might be considered overwhelming if: (a) tax rates need to be raised dramatically, (b) economic growth is retarded due to high service costs that preclude other social investments, or (c) the general well-being of future generations of workers is worse than that of current workers due to service costs and income transfers.
The discussion has significant implications for public policy and for private actors focused on developing an effective care system for the mid–twenty-first century. Public policy goals related to an aging society must balance the need to provide adequate services and transfers with an interest in maintaining the economic and social well-being of the nonelderly. The economic challengesdiscussed are such that public and private progress that begins in the near future will make the future burden substantially easier to handle.