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Villar, Camila Jayz A.

SOC 140- S
I. Introduction

Rationale

Shrestha (2000) states that population aging is defined by demographers as “an increasing
median age of a population or an alteration in the age structure of a population, so that elderly
persons are increasingly represented within a country’s overall age structure”. However, population
aging is also about people living longer lives than they did in the past, as life expectancies,
particularly at older ages, have improved.

The world’s population is ageing: nearly every country in the world is experiencing growth
in the number and proportion of older persons in their population. Serious concerns have been
expressed about the challenges to current economic and social preparations associated with an ever
more elderly population. Population ageing is poised to become one of the most significant social
transformations of the twenty-first century, with implications for nearly all sectors of society,
including labour and financial markets, the demand for goods and services, such as housing,
transportation and social protection, as well as family structures and intergenerational ties.

For the first time in history, and probably for the rest of human history, people age 65 and
over will outnumber children under age 5. Life expectancy is increasing, as well. Most countries,
including developing countries, show a steady increase in longevity over time, which raises the
question of how much further life expectancy will increase. With this, the number of oldest old is
rising. People age 85 and over are now the fastest growing portion of many national populations.
In connection, Noncommunicable diseases are becoming a growing burden. Chronic
noncommunicable diseases are now the major cause of death among older people in both more
developed and less developed countries.

Background of the Study

In recent years, population aging has been recognized as an emerging social challenge in
many parts of the world. Some clear evidence of population aging is observed; for example, the
share of the aged 60-plus population in the world increased from eight percent in 1950 to 12 percent
in 2014, and it is predicted to be 21 percent by 2050. The global life expectancy also increased
from 47 years in 1950 to 70 years in 2014, and a further increase to 75 years is expected by 2050.
Only a few decades ago, the major concern regarding world demography was its rapid growth and
increasing pressure on the ecosystem and food security. While population growth will continue in
some fast-growing countries in Sub-Saharan Africa and South Asia, the population aging
phenomenon will have profound impacts on various dimensions of society, and this aging trend
will be intensified in the coming decades.

An important feature of population aging is the progressive aging of the older population
itself. Over time, more older people survive to even more advanced ages. For research and policy
purposes, it is useful to distinguish between the old and the oldest old, often defined as people age
85 and over. Because of chronic disease, the oldest old have the highest population levels of
disability that require long-term care. They consume public resources disproportionately as well.

A survey done by United Nations says that in 2017, there are an estimated 962 million
people aged 60 or over in the world, comprising 13 per cent of the global population. The
population aged 60 or above is growing at a rate of about 3 per cent per year. Currently, Europe
has the greatest percentage of population aged 60 or over (25 per cent). Rapid ageing will occur in
other parts of the world as well, so that by 2050 all regions of the world except Africa will have
nearly a quarter or more of their populations at ages 60 and above. The number of older persons in
the world is projected to be 1.4 billion in 2030 and 2.1 billion in 2050, and could rise to 3.1 billion
in 2100.

All regions have experienced substantial increases in life expectancy since 1950. As the
life expectancy at birth increases, improvements in survival at older ages account for a growing
proportion of the overall improvement in longevity. While declining fertility and increasing
longevity are the key drivers of population ageing globally, international migration has also
contributed to changing population age structures in some countries and regions. In countries that
are experiencing large immigration flows, international migration can slow the ageing process, at
least temporarily, since migrants tend to be in the young working ages. However, migrants who
remain in the country eventually will age into the older population.

On a smaller scale, latest projections from the Commission on Population (POPCOM)

show that by year-end 2018 there will be 8,013,059 Filipinos over 60, constituting 8.2% of
Filipinos. Of this group, 5,082,049 will be 65 and older. Most countries are considered aging if
they have at least 7% of the population over 65 years old.

An aging population puts a heavy burden on the country's workforce, a problem that has plagued
developed countries such as Japan, Italy, and Germany. Many predictions in previous years had
said that the Philippines is far from having an aging population as the country is expected to get a
boost from a "young population."

At the individual level, regardless of the differences between developed and developing
countries, older people tend to be at higher risk on various occasions in their day-to-day lives.
Earlier studies suggest that older people have higher health risks and a greater possibility of being
victims of severe climate events, such as heat waves and hurricanes especially those with chronic
diseases are more vulnerable to these events. In addition, older people are also exposed to greater
risks by being trapped in a state of social exclusion or relative poverty. These risks comprise of
health risks that might also greatly affect the demography of aging people in a population.

On top of all of these, it leads to a question: what are the implications of the aging
population on health care? Every year health care expenditures rise appreciably due to the growth
and aging of the population. Although policymakers can do practically nothing to affect these
factors, it is important that they understand and anticipate the fiscal impact of such demographic
changes. According to the Office of Disease Prevention and Health Promotion, the first Baby
Boomers (those born between 1946 and 1964) turned 65 in 2011. By 2030, it is projected that more
than 60% of this generation will be managing more than 1 chronic condition. Managing these
chronic conditions, along with a patient’s level of disability, will increase the financial demands on
our health care system. The cost increases with the number of chronic conditions being treated,
taking into account the expected twice as many hospital admissions and physician visits for Baby
Boomers by 2030.

After 2037, declining numbers of Baby Boomers will stabilize the age distribution, while
health care costs are projected to continue growing faster than the economy. Over the longer term,
then, excess cost growth in health care will eventually account for the majority of spending growth
for Social Security and federal health care spending.

According to the WHO report, some believe that as life expectancy increases, the
prevalence of disability will decrease because the progress we make in medicine will slow disease
progression from chronic disease to disability. As a result, there will be a decrease in severe
disability, but there will be increases in milder chronic diseases.7 Other researchers, however,
believe that as life expectancy increases, the prevalence of disability will increase. There are certain
health conditions that are expected to be a challenge to our health care system with the increasing
aging population. These conditions include cancer, dementia, increase in the number of falls,
 obesity, and diabetes. Furthermore, it also includes hearing loss, cataracts and refractive errors,
back and neck pain and osteoarthritis, chronic obstructive pulmonary disease, diabetes, depression,
and dementia. But as people age, they are more likely to experience several conditions at the same
time.

Objectives

With the increase of life expectancies and the actual size of the older population defining an
era of aging societies and growth in health expenditures, what kinds of challenges should we
expect? Given the expected impacts of population aging in the coming decades, this paper aims to:
(i) describe population aging trends in the world and the regional demography; (ii) provide a
structural review of population aging challenges at three levels, namely the national, the communal
and the individual levels; and (iii) enumerate the affects of population aging to health care
expenditures.

For the third objective, this study briefly introduces the current state of Philippines, as well as
its health care expenditures. This study is presented to illustrate the emerging population aging
challenges in the country where the aging phenomenon is happening rapidly.

II. Review of Related Literature

A study done by Ageing (2013) reviews the consequences of population aging for health
expenditure growth in Western countries by combining insights from epidemiological and health
economics research. Based on a conceptual model of health care use, evidences on the relationship
between age and health expenditures were analyzed to provide insight into the direct effect of aging
on health expenditure growth. Second, discussion of the interaction between aging and the main
societal drivers of health expenditures was done. Aging most likely influences growth in health
expenditures indirectly, through its influence on these societal factors. The literature shows that the
direct effect of aging depends strongly on underlying health and disability. Commonly used
estimates of health, like age or mortality, insufficiently capture complex dynamics in health.
Population aging moderately increases expenditures on acute care and strongly increases
expenditures on long-term care. The evidence further shows that the most important driver of health
expenditure growth, medical technology, interacts strongly with age and health, i.e., population
aging reinforces the influence of medical technology on health expenditure growth and vice versa.
The study arrived at a conclusion that population aging will remain in the centre of policy debate.
Further research should focus on the changes in health that explain the effect of longevity gains on
health expenditures, and on the interactions between aging and other societal factors driving
expenditure growth.

Health expenditures will continue to rise in the coming decades. Although the direct effect of
population aging is uncertain, age and aging remain important factors in the debate on health
expenditure growth. Many drivers of this growth interact with population aging, particularly health,
national income growth, technological progress, wages and prices. Future health expenditure is
likely to be targeted more toward the older population. If increases in health expenditure reflect an
increasing willingness to pay for health and solidarity, its growth may not necessarily be a problem.
However, the larger extents to which health expenditure will be used by older people, in
combination with a financing system that distributes costs over the entire population, can strain
inter-generational solidarity.

Another study that was done by Mendelson and Schwartz (1993) indicates that aging and
population growth both contribute importantly to the rise in health care costs. Levels of health
spending by age group over the long term could be influenced by factors such as technologic
change, reimbursement mechanisms, and changes in age-specific mortality. But if one assumes that
there is no change in relative levels of spending by age group, there will be an acceleration in the
rise in costs due to aging between 2010 and 2030. The reason is, of course, that the “baby boomer”
generation will reach and exceed age sixty-five during this time. Unless expensive care is shifted
away from the elderly before this period, the likely decrease of the rise in costs due to population
growth and aging will probably be short lived. The relative costs of treating patients age sixty-five
and over grew more rapidly than did the costs of treating other patients. Sensitivity analyses
indicate that regardless of whether these trends persist, the percentage contribution of aging and
demography is likely to decline all throughout. Nevertheless, if the current trends persist, aging
will cause a major acceleration in the rise in costs.

The fact that aging and health care play such a central role in the growth of Social Security and
the health care programs -- which would actually decline in their absence -- suggests that these
factors need to be taken seriously. This is especially true given that both factors will also reduce
federal revenue -- by reducing the proportion of the population in the labor force and by increasing
the amount of tax-exempt compensation received in the form of health insurance -- and could slow
economic growth.
Literatures Cited:

Ageing, E.J. (2013). NCBI. The effect of population aging on health expenditure growth: a critical review.
Retrieved from https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5549212/

Garza, A. (2016). Pharmacy Times. The Aging Population: The Increasing Effects on Health Care.
Retrieved from https://www.pharmacytimes.com/publications/issue/2016/january2016/the-aging-
population-the-increasing-effects-on-health-care

Kudo S., Mutisya K., and Nagao, M. (2015). MDPI. Population Aging: An Emerging Research Agenda
for Sustainable Development. Retrieved from: https://www.mdpi.com/2076-0760/4/4/940/html

Shreshta, L.B. (2000). Health Affairs. Population Aging In Developing Countries. Retrieved from
https://www.healthaffairs.org/doi/full/10.1377/hlthaff.19.3.204

UNITED NATIONS. Ageing. Retrieved from https://www.un.org/en/sections/issues-depth/ageing/

(2018). ABS CBN News. Philippines moving toward aging population: POPCOM. Retrieved from
https://news.abs-cbn.com/news/01/03/18/philippines-moving-toward-aging-population-popcom

(2018). World Health Organization. Ageing and Health. Retrieved from https://www.who.int/news-
room/fact-sheets/detail/ageing-and-health