Health, retirement needs challenge an aging America
Top researchers present new approaches to healthcare and "wealthcare"
NEW YORK—The National Institute on Aging (NIA) gathered eminent researchers September 28 to discuss with journalists, “How can we prepare to meet the challenges of an aging population?” The answers, at least according to this NIA-supported group of leading social, behavioral, and economic scientists, will come from creative thinking and new approaches to some of today’s most difficult questions, such as the rise in health expenditures and major gaps in personal savings for retirement. The NIA is part of the National Institutes of Health at the U.S. Department of Health and Human Services.
In just 7 years, the leading edge of the Baby Boom will reach its milestone 65th year. This “birthday” signals the rapid aging of the U.S. population, a time which will pose both challenges and opportunities for the nation’s health care system and the American economy. Today’s day-long media briefing, “Health and Wealth in an Aging America,” offered the latest findings and trends in important areas of research funded by the NIA. The wide-ranging session focused on health issues such as gender differences in health and the value of and variations in medical technologies. It also examined the relationship between health and wealth, the psychology of retirement savings, and ways to measure national well-being.
The press briefing revealed:
Dr. David Cutler, Harvard University -- Returns from rising health costs related to the latest medical technologies are worth it. When measured against quality of life and productivity, health care technology, “often thought to be wasteful,” he says, “actually ranks on the high end of the productivity scale.” Health technologies on average return $4 in approximate life value for every medical dollar spent, finds Dr. Cutler.
Dr. Anne Case, Princeton University – For much of the 20th century, men have been dying at greater rates than women and women have consistently reported considerable pain and worse health. But now the dynamics of gender differences in health may be changing, according to Dr. Case, and not in women’s favor, as increased smoking sneaks up on modern American women.
Dr. Jonathan Skinner, Dartmouth College – How much you spend on health care appears to be linked to where you may live, but those expenditures may not actually be buying better health. “Medical expenditures are higher in Miami than in any other major American city, yet its residents don’t live longer or healthier than other Americans,” Dr. Skinner says.
Dr. Dana Goldman, RAND – Research by Drs. Goldman, Cutler, and others finds that new medical technologies cost a lot, but have yielded commensurate benefits. In the 21st century, Dr. Goldman asks, will that continue to hold true? Or will we get more bang for the buck with greater investments in prevention and lifestyle changes?
Dr. James P. Smith, RAND - The impact of health on wealth, and of wealth on health, is not simply a matter of money. Health can have a large impact on family finances, including income and wealth. But it is the level of education and not the money one has during adult years that most significantly influences the ability of people to withstand "health shocks" as they age. Dr. Smith's study finds that such early life factors, including both finances and education, are strong predictors of health and wealth later in life.
Dr. David Laibson, Harvard University – With 401(k) and other employee contribution retirement accounts comprising the major opportunity at work to build retirement savings, why aren’t more people signing up? Dr. Laibson explores the psychology of savings decisions, and he finds that changing the way 401(k) choices are offered helps workers save the amounts they know they should.
Dr. Daniel Kahneman, Princeton University – Measures of wealth or health do not tell the whole story of how individuals and society are faring. Dr. Kahneman offers the “Day Reconstruction Method,” incorporating important psychological and social components, to measure well-being. Ultimately, he suggests, a “National Well-Being Account,” akin to Gross Domestic Product (GDP) of the economy’s output, could provide a non-economic measure of well-being of people at all ages. Dr. Kahneman was awarded the Nobel Prize in Economic Sciences in 2002 for his work integrating psychological research into the economic sciences.
Several of the presenters’ findings challenge some current thinking on health, wealth, and aging. Dr. Cutler’s research, for example, suggests that benefits can far outweigh the costs as certain new medical technologies are put into practice. Dr. Laibson suggests that the traditional way many companies offer retirement savings accounts to employees, by asking them to “opt in” to such accounts, may actually have the unintended consequence of reducing participation.
One common theme among the speakers was the focus on personal behavior and lifestyle choices as critical in making a difference in health and well-being in later life, in addition to the policy decisions regarding the purchase of health care or the structure of pensions and retirement.
“These are cutting edge investigations of the interrelationships between health and economics in people’s lives,” says Dr. Richard Suzman, Associate Director of the NIA for Behavioral and Social Research. “The innovative research presented here has begun to provide the understanding needed to face the demographic and economic impact of the Baby Boom’s aging.”
The NIA leads the Federal effort supporting and conducting biomedical, clinical, social, and behavioral research on aging. Press releases, fact sheets, and other materials about aging and aging research can be viewed at the NIA’s general information Web site, www.nia.nih.gov, and additional health information may be obtained by calling the National Institute on Aging Information Center at 1-800-222-2225.