The Problem of Rising Health Care Costs:

People are living longer and driving costs up

• 2010 marked the first time that more old people populated the earth than young ones.
• They have better Nutrition, and Technology innovations help extend their lives.
• 1.9 million Americans are now 90+, up from 600,000 30-years ago and 100,000 100-years ago.
• 8.7M Americans will be 90+ and 1M 100+ by 2050, or ~2% of U.S. population. (US Census)
• People 90+ had a median income of just $14,760 in 2010, about half of it from Social Security.
• Some 37.3% of people 90+ lived alone, 37.1% lived in households with family or others, 23% stayed in nursing homes, and about 3% lived in assisted living or other informal care facilities. (US Census)
• 2/3 of all people who ever lived to age 65 are still alive today.
• There are already 40M seniors 65+ today, with 10,000 more reaching age 65 every day.

• U.S. health care spending is already out of control vs. rest of developed world:
  • Our costs exceeded $2.3 trillion in 2008 and are the highest in the developed world. (Consumer Healthcare Products Association)
  • That’s 17.4% of GDP – next highest is Netherlands (12.0%), UK (9.8%) and Canada (11.4%)
  • Per capita spending is $7,960 – next highest is Norway ($5,352), Canada ($4,363) and UK ($3,487). Japan is $2,878.
  • Costs could reach $13 trillion by 2030 and bankrupt the nation because of Obesity and the 70M Baby Boomers who will soon reach 65, retire, take Social Security.
  • A dramatic new approach is needed, and its urgency is near critical.

• With all we spend, our Performance pales by objective metrics:
• 47th in world ranking for infant mortality (2nd lowest in developed world and even ranked below Cuba!)
• 25th in world for life expectancy (below Chile & Greece – Japan leads)
• Healthcare costs have escalated, yet productivity losses are 5 times greater than the cost of care.

• Health insurance premiums are rising 4-5 times faster than wages and inflation.
• 23% of Medicaid recipients are elderly or disabled, but they account for 64% of spending.
• 70% of nursing home residents are on Medicaid because high expenses deplete their assets.
• Uninsured Americans leave hospitals with unpaid tabs of nearly $50B/year.
• Medical errors are the #6 leading cause of death, killing or seriously injuring ~98,000/year at a cost of $29 B.

• Sleeping just 6 hours a night increases obesity risk 27%. At 5 hours it’s 73%.
• Driving drowsy causes 20% of car accidents.
  That’s 500,000 injuries & 8,000 deaths per year.

As Baby Boomers approach Retirement Age, they’ll transform Aging in America

• America wasn’t prepared for the 76 million Americans born between 1946 and 1964. Neither were other nations.
• There weren’t enough hospitals or pediatricians, or schoolteachers, textbooks or playgrounds, or even bedrooms in our homes.
• The “baby boomer” generation is a huge demographic that has strained institutions every step of the way.
• Boomers are politically active and represent a substantial voting bloc. They had no voice as infants and children, but now they do.
• In 1940, the average longevity from birth was 63.5 years with some 9M Americans receiving Social Security.
• The ratio of workers to beneficiaries was 159 to 1.
• By 2010, longevity was 78.3 years, and nearly 39M people received Social Security benefits.
• The ratio of workers to retirees was 2.9 to 1, but that was BEFORE the first boomer turned 65.

Seniors and those with unhealthy lifestyles consume more resources

• 90% of all health care spending goes towards treating chronic conditions. (HHS)
• Over 100M Americans suffer from one or more chronic illnesses.
• 77% of people over age 65 live with two or more chronic diseases. (HHS)
• About one-fourth of people with chronic conditions have one or more daily activity limitations that require help. (CDC)
• Nearly 70% of deaths result from non-communicable diseases today, and it will grow to 75% by 2025. (CDC)
• Heart disease, cancer and stroke account for more than 50% of all deaths each year. (CDC)
• Global cancer rates are expected to increase 50% to 15 million by 2020.
• 40% of cancers can be preventable.
• Seniors have more disabilities and thus need more care.
• 14.3M seniors 65+ have a disability (36.7% of the 39M senior population).
• 82% of people age 90-94 report have trouble doing errands, visiting a doctor’s office, climbing stairs or bathing versus 69% for ages 85-89 and 91% for age 95+.
• 5.3M Americans have Alzheimer’s today (12.5% of 65+, 43% of 85+), growing to 16M by 2050.
• We spend $172 billion/yr treating Alzheimer’s today, likely growing to $1.08 trillion/yr by 2050 with increased longevity and the number of cases.
• Alzheimer’s care can average 47hrs/wk/patient.
• But it’s not just seniors. 37M Americans have a disability (11.9% of the 304M total US population).
• Arthritis is the most common cause of disability, with nearly 19M Americans reporting activity limitations from Arthritis.
• It costs significantly less to Prevent medical conditions than to Fix them. (need statistic)
• Insurers are working to better coordinate care so seniors stay healthy longer.
• Many employers now provide wellness programs to keep workers healthy and productive.

Obese and Overweight People have Less Fun, More Pain, Die Earlier, and Cost More

Much of this data if from the infographic, America’s Obesity Epidemic.

• Obesity has become the LARGEST threat to the health, welfare and future of this country.  (excuse the pun)
• From BMI chart, 20 years+:
  CDC’s body mass index estimates your body fat as a ratio of weight & height. (calculator)
• Underweight (less than 18.5)
• Healthy weight (18.5 – 24.9)
• Overweight (25 – 29.9)
• Obese (30 and above)
• Morbidly Obese (40 and above)
• About 26M adults & children have diabetes, and every 10 seconds a person dies from diabetes related causes.
• Some 60M Americans have asthma and/or allergies.
• 2 out of 3 adults (69%) are obese.
• $190 billion, or 21% of our annual medical spending, goes to obesity-related illness, because weighing too much increases your risk for chronic diseases such as hypertension, type 2 diabetes, high blood pressure, coronary heart disease, asthma, sleep apnea, and other serious illnesses.
• Businesses lose another $4.3 billion due to obesity-related job absenteeism.
• 1 of 3 children are overweight or obese (18% are obese).
• Kids obese by age 10 will die 19 years earlier with diminished quality of life.
• Obese adolescents aged 12-19 years increased from 5% in 1980 to 18% in 2008.
• Up to 34% of adolescents skip breakfast every day.
• In 2008, just 18% of children in grades 9-12 got an hour of physical activity daily.
• Just 4% of US elementary schools, 8% of middle schools, and 2% of high schools provide daily physical activity or education.
• Only 19% of Americans get the recommended amount of physical activity.
• Adults walk to work less (4.1% in 1977; 2.8% in 2008)
• Kids walk to school less (20.2% in 1977; 12.5% in 2001)
• High school kids spend less time in phys-ed classes (41.6% in 1991; 33.3% in 2009)
• Moderate behavior changes could Prevent more than 90% of type 2 diabetes, 80% of coronary artery disease, 70% of stroke, and 70% of colon cancer. (Harvard epidemiologist Walter C. Willett)
• Disadvantaged communities are at higher risk for many preventable health conditions, including obesity, diabetes, heart disease, asthma, HIV/AIDS, viral hepatitis B and C, and infant mortality.

Health Care places a Heavy Burden on 65M unpaid family caregivers

• Many Boomers spend more years caring for aging parents than a child.
• They spend an average of 20hrs/wk caring for a loved one and often feel overwhelmed.
• The 2009 annual cost was $480B/year in unpaid family caregivers’ lost worker productivity, reduced earning capacity & retirement income, as well as increases in caregiver’s own physical & emotional health and related costs. That’s about 3.2% of the U.S. GDP ($14.1 trillion in 2009), more than the $361B in Medicaid spending, and nearly as much as the $509B in Medicare spending.

MORE STATISTICS FOLLOW THE CHART BELOW

The Home Health Care Opportunity:

“We can save Trillions by moving at least 50% of healthcare services from institutions to homes.” (Eric Dishman, Intel)

• Boomers have a “fierce” desire to remain independent, which will lead to an expansion of organizations offering home- and community-based care. >90% of people 65+ want to age at home if safe as long as possible. (AARP)
• Avg. Nursing Home private room = $83,000 a year in 2010. Assisted Living rent = $39,000 a year. (MetLife)
• Avg. Independent Living Community = $32,000/yr (Long Term Living Magazine)
• Avg. In-Home Care = $18,000/yr (health aid, meals on wheels, maid, etc.)
• The Texas Money Follows the Person program saved $116B already by moving 2029 out of nursing homes.
• They research their own conditions and want more control over their health care in partnership with care providers.
• They seek customized insurance and care plans tailored to their needs. They comparison shop, check with their peers, and will change plans if they find something better.
• Their increased demands will drive more competition and accelerate innovation.
• 75% of all Americans are online, and half of those 65+ search for health info online.
• Senior use of Internet has grown rapidly, from 19% in 2008 to 40% in 2010.
• Seniors are also social. 2/3 of those 65+ with PCs communicate with Family & Friends by email, and they represent the fastest growth in social media adoption, growing from 25% to 47% between April’09 and May’10. (Pew Research)
• Baby Boomers represent over half of online adults and are divided into 4 segments.
• Although awareness of Assistive technology is low (other than security systems), 78% of US consumers expressed interest in mobile health solutions.
• Global Home Healthcare market = $40.5B  in 2009, growing to $67B by 2016 (GBI Research)
• US Digital Health market = $5.7B by 2015 with 55% CAGR (Parks Associates)
• US Home Remote Monitoring = $295M by 2015 (Frost & Sullivan)
• US Remote Patient Monitoring = $7.1B in 2010, with 25.4% ACGR and 2015 estimate of $22.2 billion (Kalorama Information)
• Health & Fitness Apps market = >$400 million in 2016 (ABI Research)
• Global mHealth market = $10B by 2016 (mHealth Networking Group on LinkedIn)
• With over 72% of the globe connected via mobile technology and over 60% of US physicians owning tablet devices, the promise of mobile health to profoundly impact, on the delivery of healthcare cannot be understated.
• Most of these physicians are using iPads and about half of all tablet-toting physicians use the devices at the point of care.
• What’s the Future of Mobile (slide deck): Is it Android? Microsoft? HTML5? Or does Apple take over the world?
• Asia Pacific mHealth market = $7B by 2017 (GSMA)
• >20,000 medical/health apps = 3rd fastest-growing, with 60% aimed at consumers vs. health professionals
• AARP recommends Medication Management devices and devices to regulate the home environment for Safety.
• Devices that let family/friends know you’re OK or need help = 46% of 65+, 18.5M people, $925 oppy.
• Electronic Pill Box Reminder = 29% of 65+, 11.7M people, $583M oppy.
• Electronic Pill Box w/ Alert = 20% of 65+, 8M people, $402M oppy.
• Device to send vitals to medical staff = 25% of 65+, 10M people, $502M oppy.
• HA devices to control Lights, Stoves, Thermostats = 48% of 65+ population, 19.3M people, $950M oppy.
• >20% of 65+ population uses home safety technologies.
• Home TeleHealth market = 60.3 million US households by 2015 (IDC)
• Available monthly budget varies: 40% <$50/mo, 25% $50-$99/mo, 10% $100-199/mo, few > $200/mo.
• Remote Patient Monitoring provides Undeniable Benefits (Philips Healthcare):
• 89% of agencies reported an increase in quality outcomes
• 76.6% cited reduction in unplanned hospitalizations
• 77.2% cited reduction in ER visits
• 76% reported patients improving self care by proactive disease management
• U.S. Health Care Fraud is conservatively estimated at over $80 billion per year. (CNBC’s Health Care Hustle series)

Tech savvy boomers are sophisticated shoppers and purchasers of health care.

• They research their own conditions and want more control over their health care in partnership with care providers.
• They seek customized insurance and care plans tailored to their needs. They comparison shop, check with their peers, and will change plans if they find something better.
• Their increased demands will drive more competition and accelerate innovation.
• 75% of all Americans are online, and half of those 65+ search for health info online.
• Senior use of Internet has grown rapidly, from 19% in 2008 to 40% in 2010.
• Seniors are also social. 2/3 of those 65+ with PCs communicate with Family & Friends by email, and they represent the fastest growth in social media adoption.
• Baby Boomers represent over half of online adults and are divided into 4 segments.
• Although awareness of Assistive technology is low (other than security systems), 78% of US consumers expressed interest in mobile health solutions.

Use the comments below to let us know of updates, errors, new stats, or to share your insights.

Wikipedia: Year 80 was a leap year starting on Saturday of the Julian calendar. →