Hospitals & Asylums
Throughout 99 percent of all the years that humans have walked the planet the average life expectancy at birth was 18 years. Infectious diseases, accidents, violence and many other hazards often brought life to an early close. Although some people lived to 50, 60 or even 80, they were very few and fare between. During the past 1,000 years, our life expectancy has climbed from an average of 25 to 47 at the turn of the 20th century that skyrocketed to 76 in the USA today. When the first US census was taken in 1790, half the population was under the age of 16 and less than 2 percent of the 4 million people who responded were over the age of 65. Few American in that year could expect to live longer than 35 to 45 years. The elderly were too few to matter at that time. Thanks to advances in sanitation, public health, food science, pharmacy, surgery, medicine and more recently wellness oriented lifestyles, most of us will age. During the 20th Century, the number of American whoa re 65+ has increase eleven fold, from 3 million to 33 million. According to the US Census Bureau by 2035 some 70 million people will be age 65 or over.
All modernized nations of the world are evolving from youthful to mature societies and the developing nations will follow suit in the 21st century. For example in 1950 the average life expectancy for Japanese women was 61.4 years and for men 58. Since then, it has risen to 83 for women and 76 for men. In one generation the life expectancy of Japanese has increased by more than 30 percent. The United Nations predicts that by the years 2050, there will be nearly two billion people in the world 60 years and older. According to the UN Population Division 1 out of every 10 persons living is age 60 or older, but by the years 2050 that ration will double to 1 of 5.
In the US the fertility rate is hovering around 2.1, poised just on the edge of the minimum replacement level and down from 3.8 during the 1950s and 1960s. If it weren’t for the steady inflow of immigrant families the US population would be shrinking. In Europe the fertility decline started around 1965 in almost every country. Italian fertility rate is the lowest with fewer than 1.2 children per woman. Italy also became the first country in history, followed shortly thereafter by Germany, Greece and Spain to have more people over the age of 60 than under the age of 20. In the city of Bologna fertility rate fell to .8 in 1997. During the same year the fertility rate in Japan, the nation with the world’s highest longevity, dropped to 1.39, the lowest it has ever been. Even in less developed countries fertility rates have dropped by 50% during the past several decades. Some countries are trying to reverse this trend and a few years ago local officials concerned about future economic and workforce implications aired a commercial with a little boy playing alone with a puppy and a caption, “why not one more?”. In Sweden when birth rates in young families declined the government began to provide cash payment for each family and a generous tax deduction, the Swedish program worked and the rate rose to 2.1 in 1990-the highest in Europe at the time-before it fell back to 1.6 in 1995 and even further to 1.42 in 1997.
During colonial times it was thought men and women who lived to a great age were the beneficiaries of divine will. Increase Mather, and early president Harvard College preached in 1716, “if a man is favored with long life…it is God that has lengthened his days.” People at the time lived slightly longer, on average, in the colonies than in Europe. In colonial America, social control lay in the ownership of land, which was almost always retained by elder parents or grandparents. People didn’t work for “money” that could be spent as they like, instead, they worked to complete chores, which were primarily agriculture-related and family based. The crops and items were traded for other products and services within the local community.
In the late 19th century the germ theory of disease was developed and medicine has a useful and compelling new hypothesis for understanding and combating the ailments that formerly had killed so many people. The physician cam to be viewed as nearly omnipotent in his power to “fix” what had gone wrong. Dr. Nathan Allen commented in his paper the Physiological Laws of Human Increase to the American Medical Association “True to education, all genuine civilization and pure Christianity, in order to have a permanent basis and progress, must have their foundation and support in the laws of the physical system…and who are to be the interpreters, the expounders of these laws, unless the members of the medical profession. As physician authority became entrenched, home remedies and elder wisdom were dismissed as “old wives’ tales”. “New scientific theories and economic realities convinced Americans that individuals declined in old age as human existence marched on. With the increase in numbers of old people there came a growing disregard the elderly and the status of the elderly plummeted. No longer were the best seats in public meetings reserved for them. Men desisted in wearing wigs in favor of hair pieces and older women ceased to wear the latest fashions of the early 20th century that were for younger women.
By 1930 approximately 30 percent of the nation’s elderly were living in poverty. At that time fewer than 15 percent of American workers were covered by any sort of pension plan. President Franklin D. Roosevelt and his New Deal created the Social Security Program in August 14, 1935. The financial safety net that was created would protect America’s elderly from a poverty ridden old age. In addition to the immediate boost in economic stability that Social Security provided there was additional infusion from the growth in pension coverage. The GI Bill was also a great source of support and between 1944 and 1956 more than half of the 8 million returning veterans took advantage of it, receiving some $14.5 billion in educational support. In 1947 nearly half of college students were veterans. In the 1960s the elderly also became the recipients of a windfall of support from Medicare. In 1965 the average senior receiving $1 per year in healthcare-related government support. Thanks to Medicare that number has vaulted to $7,000 today.
The Average 65+ couple today receives approximately $22,000 each year from Social Security and another $12,000 of yearly value from Medicare-for life. Average lifetime Social Security old age pension earnings have increased from $100,000 for a person retiring in 1960 to $500,000 in roughly equivalent amounts of Social Security and Medicare benefits. Today’s 50+ mend and women now control 80% of all the money in US savings and loan institutions and represent $66 of every $100 invested in the stock market. Robust government entitlements, home ownership, a lifetime of savings and investment and generous discounts for the elderly have contributed to drive the official poverty rate for those age 65 and over from about 35 percent in the 1960s to an all time low of 10.5% today. The power of age in the United States is reflected in the statistics that depict the 50+ men and women with earnings of almost $2 trillion; own more than 70% of the financial assets in the America and represent 50% of all discretionary spending power. In fact their per capita discretionary spending is 2.5 times the average of younger households. Representing 27% of the total population and 36% of all adults today’s new mature consumers;
-control more than $7 trillion wealth-70% of total
-own 77% of all financial assets
-comprise 66% of all stockholders
-own 40% of all mutual funds ($1 trillion)
-own almost 60% of all annuities
-represent 50% of IRA and Keogh account holders
-79% own their own homes the highest ration of any age group
-own 46% of home equity loans
-transact more than 5 million auto loans each year
-purchase 42% of all homeowner’s insurance (50 million policyholders)
-own 38% of all life insurance a $90 billion industry
-purchase more than 90% of long term care insurance representing $800 million annual premiums (a figure that grow at 23% every year)
-comprise 35% of the author insurance market (50 million consumers)
-represent 40 million credit card users, owning almost half of the credit cards in the US
-purchase 41% of all new cars and 48% of all luxury cars totaling more than $60 billion
-represent more than $610 billion per year in direct health spending
-account for 51% of all over the counter drug purchases
-consume 74% of all prescription drugs, a $103 billion market
-represent 65% of all hospital bed days, 42% of all physician office visits, 1.5 million residents in nursing homes and 1.5 million residents in continuing care retirement and assisted living residences
-nearly 70% of of American 65 and over voted in 1996 compared with only 33% between the ages of 18 and 24
-the elderly voted 60% democratic and 40% republican in 1996 and tend to vote as bloc
The American Association of Retired People (AARP) is headquartered in Washington DC and describes its mission as the improvement of every aspect of living for older people. The AARP has 32 million members, a staff of 1,700, a 32 scholar think tank, 19 staff lobbyists, and annual budget of approximately $550 million and tens of thousands of enthusiastic volunteers in communities across the country. AARP is the worlds second largest nonprofit organization after the Catholic Church. The AARP was created in 1958 by Ethel Percy a 72 year old retired high school principal from Los Angeles who was chagrined because she and other retired schoolteachers could not find health insurance because of their age and Leonard Davis a 32 year old New York based insurance broker who offered to help her if she accepted $50,000 to start an organization initially called the National Retired Teachers Association and had the exclusive right to sell insurance to its membership. As first Davis did his insurance deals through Continental Casualty of Chicago but as the group’s membership grew to 750,000 in 1963, he founded his own insurance company, Colonial Penn, to maximize his profits through this NRTA-AARP connection. By the early 1970 Andrus’s dream had attracted 10 million members while Davis had netted himself more than $160 million. The group’s business performance is astounding. In 1997 AARP collected $139 million from membership dues, another $107 million in commissions, interest on premiums and another $77 million in exclusive deals with insurance companies. AARP is also a publisher and is magazine Modern Maturity charges advertisers the highest page rate of any publication in the country, $248,00 and generated $63 million in revenues. In 1998 Fortune magazine ranked AARP as the most powerful and largest lobbying organization with 33 million members. Rebounding from a temporary period of poverty, powerlessness and social isolation, today’s elders have grown in numbers, have become powerful and influential, and have managed to become more financially secure than any group in our nation’s history. They are extraordinarily well connected, vote in higher concentrations than any other age group, and have AARP- the country’s largest special interest group-to lobby for their interests – America is becoming a gerontocracy.
The rapidly developing patent medicine industry indicates that we live on the brink of inventions that have the potential to dramatically alter both the quality and length of our lives. While might not find the “Fountain of Youth” we will definitely tap long, cool drinks of extended life. For as long as humans have sought to control their environment and their lives they have searched for ways to postpone death. The pioneers in the ancient quest for immortality were the Chinese Taoists Lao-tzu, Chuang-tzu and Lieh-tzu from about 600 BC to 250 BC whose ultimate goal was to prolong life and achieve immortality. They promoted longevity inducing foods, special gymnastic techniques to facilitate proper use of the breath. Italian nobleman Luigi Cornaro promoted hygiene after becoming desperately run down and ill because of decadent habits and doctors warned him that he would survive only a few more months yet he converted to a very old age dying in 1565 at the age of 98. In his later years Cornaro composed a series of discourses spelling out his plan for temperance and he wrote that the key to healthy aging were simple: control the diet, reduce the amount of food eaten, avoiding food that is hard on digestion, and clean living. His goals were doest, he didn’t think it was possible to achieve rejuvenation or radical life extension and rather sought mainly to avoid disease. Until the 20th century the dream of extending human life remained largely a dram. Thanks to dramatic improvements in sanitation, public health, nutrition, fitness, pharmacy and modern medicine, the average life expectancy has risen more in the past 100 years than in the previous 1,000.
After dropping for centuries from nearly 7 births per woman in the late 1700s to 2.1 in the 1930s. The birth rate rose to 3.8 in a postwar fertility boom that produced 76 million children nearly one third the US population- between 1946 and 1964. Similar baby booms occurred in Canada, Europe, Asia, Australia and New Zealand, although some were a few years shorter in duration. The force of this demographic quake has been reverberating through society’s institutions ever since. With the end of the Depression and World War II a hopeful new social era had begun, in this period of newfound prosperity, the reuniting of America’s victorious soldiers and the young women who were waiting for them led to a fantastic boom in births. At first hospital space was not enough to accommodate the influx of people. In a time of peace the baby boomer parent’s “believed that a lifetime of commitment was required to accomplish their goals. Duty came before pleasure.” The parents of this postwar generation hoped to give their own children a new level stability and comfort- even luxury “gone, for the first time history,” declared Time in 1955, “is the worry over whether a society can produce enough goods to take care of its people.” Between 1948 and 1952 the number of television sets in US households vaulted from several thousand to 15 million. By the time the first boomers were 6, each of them had watched roughly 5,000 hours of television- more than their parents had watched in their entire lifetimes. By the time the average child of the baby boom reached the age of 18, he or she would have been under television’s hypnotic influence an average of 4 hours a day for 16 years. The time they began entering college between 1965 and 1975 showed a tripling of the number of college students. As the youngest baby boomers turn 65+ in the coming years the number of elderly people is expected to jump from approximately 40 million to 70 million by 2030 giving rise to concern for the solvency of the Social Security Trust.
Compared with the beginning of the 20th century when 90% of older men who were capable of working did so, less than 20% do so today. The social security system and employers give incentives to retire before their 65th birthday. More than 50% of newly retired workers currently receive benefits at the age of 62 and more than two-thirds retire before age 65. By retiring at age 62, a worker can collect monthly benefits equal to 80% of what he or she would have receive by waiting until 65. This approach has become increasingly criticized and the people have discovered that many people wish to continue working long after the age when retirement is acceptable. Phased retirement plans have become devised is the “boomerang job” in which an employees retires for a few months or even a few years, than bounces back to the company-usually with limited hourse and lighter responsibilities. For example Monsanto’s Retiree Resource Corps was launched in 1991 with 60 retireees at the company’s St. Louis headquarters. It has now grown to 800 people in a wide range of positions at 24 locations. Participants have no set schedule but are called as needed, with a central database tracking their skills and hours. Boomerangers cost 12 to 15 percent less than temp workers because of the savings on training costs and agency fees, “they know that needs to be done”.
The fixed maker of old age is increasingly encouraged to be abandoned. Harvard educated Jose Pinera who became Chile’s minister of labor and social security in 1978 at the age of 30 was eager to construct a new model of work and retirement in which every worker can determine his desired pension and retirement age in the same way one can order a tailor made suit. In Chile there is no particular emphasis on the age 65. Each individual can decide at what age to retire and how much his or her pension will be, based on how much the person has contributed and accumulated over the years. Some people wanted to work forever others cannot wait to cease working so as to indulge in their true vocations others see as hobbies, like writing or fishing. The old pay as you go system did not permit the satisfaction of such preferences. The Swedish government recently instituted a program allowing workers to retire up to four years before or three years after the normal pensionable age of 67, with an actuarial adjustment of 0.6 percent more or less pension money for each month of deviation from the normal retirement age. Similarly Canada now lets older workers determine their own retirement age by providing an adjustment of 0.5% per month of deviation up or down from their usual pension able age of 65. US legal reform has loosened up the retirement age to provide incentives to work longer. The Age discrimination in Employment Act of 1967 prohibited age discrimination in hiring, firing and compensation of persons over 40 to 65. In 1978 it was extended to 70 then in 1986 the upper limit was removed altogether, virtually eliminating mandatory retirement in all but a few select professions. More than 15,000 claims of age discrimination have been filed in the past five years.
The proportion of people’s lives that is spent working has plummeted over the centuries and the balance may need to be adjusted. A typical male born in the US or Europe 150 years ago, with a life expectancy of just over 40 years, would have started work in his early teens and would, in all likelihood, have worked around 60 hours per week for all but on or two weeks of the year. A boy born 100 years later would expect to start working at around 17, live approximately 64 years, and work around 50 hours a week. Today the average young man doesn’t start working until his 20th birthday, can expect to live 75 years ,and retires around 61. In addition the average workweek has dropped to 40 hours and the number of weeks off annually has grown to six. When people lives an average of 50 or 60 years, life was “linear” you grew up, went to school, worked hard while marrying and rearing a family, then died. Everything had its place and life was too short for second chances. Increase longevity totally transforms this paradigm. All around us, the traditional “linear life plan” is being replaced by a more flexible “cyclic life plan” . We will cycle in and out of several different careers throughout adulthood, each interspersed with periods of rest, retraining and personal reflection. In addition, rather than saving all of our leisure and retirement for the end of our lives, regular breaks throughout adulthood re-creation will become commonplace. For example today 22% of all college students are over the age of 35.
In an ancient Greek fable, Eos the beautiful goddess fo the dawn, falls deeply in love with the warrior Tithonus. Distraught over his mortality, she goes to Zeus’s chamber to request a special favor: She want to love Tithonus until the end of time and begs Zeus to grant her lover immortality. “Are you certain that is what you want for him? Zeus challenges, “Yes” Eos responds. As Eos leaves Zeus’s chamber, she realizes in shock that she forgot to ask that Tithonus also remain eternally young and health. With each passing year, she looks on with horror as he grows older and sicker. His skin withers and becomes cancerous. His organs rot and his brain grows feeble. As the decades pass Tithonus’ aging body becomes increasingly frail, yet he cannot die. Ultimately the once proud warrior is reduced to a collection of pained, foul and broken bones but he continues to live forever. Titunous’ story is a fitting allegory for what is occurring in our healthcare system today.
Until recently, most people died relatively young of infectious diseases, accidents, or in childbirth. During the past century, however, healthcare breakthroughs have eliminated many of those threats. Smallpox and cholera are almost nonexistent. The death rate from tuberculosis, one of the leading causes of premature death a century ago has been reduced by ore than 99 percent. Measles and streptococcal infections have been transformed from killers into childhood annoyances. Whooping cough and syphilis once major epidemic diseases, now kill fewer than 1 in 200,000 people. Typhoid and diptheria no longer kill Americans at all. At the beginning of the 20th century the overwhelming majority of deaths were due to infectious diseases, by the end, these caused fewer than 4 percent. As a result of these advances, we are creating for the first time in history a mass population of long lived men and women. But what kind of long life have we created? Although we’ve managed to prolong life, we have done far too little to promote healthy aging. Once century ago, the average adult spent only 1 percent of his or her life in a morbid or ill state; today’s average adult will spend more than 10 percent of his or her life sick. While in this century we have added 29 years to the average life expectancy, for many older adult the later years are a time of illness, pain, disability, and suffering.
According to the US Census Bureau’s International Data Base 35 count4rie can boast a higher life expectancy than the US ranging from Andorra to Japan. Our relatively mediocre rating is not because of inadequate funding. Each year, the US devotes an increasing percentage of its resources to healthcare. According to the Health Care Financing Administration 80% of the 65+ population have one or more chronic diseases, 50% have two or more and 24% have problems so severe as to limit their ability to perform one or more activities of daily living. Geriatric medicine has evolved in the past century to encompass the complex needs of older patients and today there is a strong emphasis on maintaining functional independence, even in the presence of chronic diseases. Because of limited geriatric training, every week physicians make millions of mistakes: misdiagnosis, inappropriate surgeries, incorrect pharmacy prescriptions and complications due to mismanaged poly pharmacy. The Alliance for Aging Research stated, “if access to geriatrics-oriented physicians and healthcare personnel were more widely available, more older people would benefit from improved health status, enhanced independence and a substantially lower rate of institutionalization resulting in a much healthier population of older Americans, dramatically lowered medical, social service, and long-term care costs and as a result more vita, financially secure 21st century. With the coming age wave we should be preparing armies of aging ready healthcare professionals. We are not. From a pool of more than 500,000 physicians fewer than 9,000 have been trained and certified as geriatricians, less than 2%.
The Centers for Disease Control states that more than 50% of our potential for lifelong health is determined by our personal behaviors. It is not just a matter of playing the genetic cards you’re dealt. We have the power to shape our own lives. The reality is a much more optimistic scenario than if it were just a matter of picking the right parents. No drug in current or prospective use holds as much promise for sustained health as a lifetime program of physical exercise and proper nutrition. Regular exercise, proper nutrition, stress management, injury prevention, proper use of medication, quitting smoking, and the appropriate use of healthcare services can definitely help keep your body youthful and disease free longer. In ancient China doctors got paid when people were well. It was the healer’s job to keep the citizenry healthy, if people injured themselves or became ill the doctor’s responsibility was to help cover the costs from his own pocket. The goal was healthy, productive population and the system was financially aligned to promote it. In contrast throughout American history the financial incentives of our healthcare system have been oriented toward disease rather than health. The sicker people have been the more tests, procedures, technology and hospital bed days they needed the more money was exchanged. This approach provides no motivation to produce health and wellness. The accelerated pace with which our nation has been aging has led to criticism of fee for service system that has increasingly been replaced with the HMO plan which brings us closer to the ancient Chinese model to (1) better manage the costs of healthcare through careful control and distribution of resources and (2) provide doctors and medical institutions with incentives to keep their patients healthy and disease free. Medicare has also experimented in managed care. The future of health organizations is to promote preventative health screening and check-ups to ensure that patients live healthy lives and are treated quickly before illnesses cause more damage than could have been prevented.
The cost of elder care is estimated at $11.4 billion to $29 billion annually. Decades ago nearly all long term care was provided in hospitals. This is still the case in Japan where the average hospital stay is 45 days compared with 5 ½ in the US. Of the more than 700,000 elderly Japanese hospitalized today, nearly half have been in wards fro more than six months, most for lack of a better place to go. By contrast socialized countries like Denmark and Sweden already have an effective and well supported home and community based cared system. In these countries, social care services enable many elderly people, even those with disabilities, to live independently. It is not uncommon for Scandinavian home helpers to visit the elderly several times a day. The primary focus in the US has not been on community or home based care but on hospital based services and nursing home care. The past 30 years have however taught us, however, that nursing homes are not the solution most consumers are seeking. Expert believe that one fifth to one third of institutionalized elders shouldn’t be there in the first place. Their needs are better served within the community by adult daycare programs and whenever possible in their own homes supported by home care nurses, physical therapists and specially trained homecare aides. The large portion of elder care is paid for out of pocket.
Between 2010 and 2030 the size of the 65+ population will grow by more than 75% while the population paying payroll taxes will rise less than 5%. In the year 2013, just two years after the first baby boomers begin turning 65, the annual surplus of Social Security tax revenues over outlays will turn negative. For FDR’s social insurance to work it initially needed to provide instant benefits for those already over the age of 65, only 6% of the population at the time. Realizing that it would be impossible to tax those already old enough to receive benefits, the Roosevelt administration taxed those who were still working, the younger generations. With the average life expectancy of only 63 and with 40 workers paying in per each recipient it seemed a sensible thing at the time. American workers are duty bound to fulfill their side of this contract between generations. For the first 12 years after payouts began in 1937, the top contribution to Social Security was about 2% of the maximum taxable individual income, $3,000, or $60. Each employee contributed just $30 per year, with another $30 matched by his or her employer. By 1940 the average annual benefit payment was a modest $157.66 a year. Social Security was intended as a financial safety net that would complement individual financial planning. FDR himself stated, “we have tried to frame a law which will give some measure of protection to the average citizen and to his family against the loss of a job and against poverty ridden old age. In 1999 the average annual benefit was $9,360. The initial ration of 40 productive workers to each retiree has steadily shrink from 16 in 1950 to only 3.3 today. By 2040 it is projected that there will only be 2 workers and perhaps as few as 1.6 to support each boomer retiree, who could be living as many 20 to 40 years into retirement.
To bolster the Social Security system private pension plans are encouraged. 40% of all workers are offered 401(k) type retirement plans and 75% participate. Accounts are often not even used or are liquidated prematurely. The pension plan worked better when workers stayed with one employer their entire lives. It may become necessary to mandate such programs. Australia has made employee funded pensions mandatory increasing coverage from less than 40% to nearly 90% of the workforce that is required to set aside 9% of their income annually in the retirement plan of their choice. Private savings have accordingly increased from Au$40 billion in 1985 to Au$304 billion in June of 1997. In the USA the percentage of elders living in poverty is at an all time low, while the percentage who are rich has reached an all time high. Somewhere between 750,000 and 1 million seniors are now estimated to be millionaires, yet continue to receive government entitlements and senior discounts. In 1997 an estimated $48.1 billion in social Security benefits went to households with incomes between $50,000 and $100,000. Another $15.5 billion almost exactly what the government spends on income support for all families on welfare will be sent to households with incomes of more than $100,000. Older Americans 65 to 74 years old have a poverty level of only 9.2% less than half that of America’s children. The key to age proofing your finances is to (1) pay down high interest bearing debt as soon as possible (2) start saving at least 10% of your monthly income (3) maximize all allowable tax protected savings programs such as 401(k) to take advantage of compounding growth (4) plan ahead for the day when you must simultaneously support your children’s education and your parents’ eldercare, in addition to funding your own retirement.
In the decades ahead, the boomers will complete America’s transformation into a gerontocracy as they take control of the nation’s social and economic power. From a politically dominant position they will have the potential to realize their full intellectual, social and political influence, not as baby boomers but as elders. In youth boomers were self indulgent in their priorities. In their late teens and twenties. Many shared an idealistic commitment to society. During the past several decades of career building and childrearing many of their early ideals have been submerged. As boomers shed the skin of youth, however, they could be migrating into the most powerful years of their lives. If they step outside their generational tendency toward self-centeredness and wield this power with wisdom and generativity, they could rise to their greatest height and make a remarkable success of history’s first multiethnic, multiracial, and multigenerational melting pot. Or if, like silver haired velociraptors, they use their size and influence to bully younger generations and gobble up all of the available resources, we will find ourselves in a Gerassic Park of our own making. If this generation evolves to a deepened appreciation of the effect it has on others, and can learn to exemplify a new king of wise, mature leadership, when the boomers’ time on earth is over, perhaps they will be remembered not just as the largest generation in history, but the finest. The choice is ours.
Ken Dychtwald Kdychtwald@agewave.com