Monday, May 11, 2015

NEXT 20 YEARS DIFFICULT TO BEAR HEALTH COST BURDEN

We are all aware about the health cost factor and its economic cost. But are we vigilant enough about the upcoming Tsunami of Aging population across the globe over the next 20 years from now. Precisely the answerer would be No.   In my research its well clear that economic cost will increase only and governments across the globe would be in bad shapes and would be in deep fiscal deficits. We are already in fix about the health cost burden on the economies but we have not included that there will be many more financial crises and recessionary phase since dealing in toxic products leads to heft bonuses for the global capital market. Rising adding population and the burden of social cost will be unbearable in the next decade. Wealth managers and financial advisor across the globe should play stupendous role to save them from drying out of the government support over the next decade from here.This research is not to criticize any government policy but its an warning signal to the  global economy in today financial crisis situations over the next 20 years from here.

Aging Population growth and its burden…
The biggest question is that how long the government of the developed economies will carry the health cost keeping the next 20 to 30 years in mind. The UN also projects that, for the first time in history, the 0-4 age group will decline between 2015 and 2020, having peaked at around 650 million. The 65+ population is projected to exceed the 0-4 population during that same five-year period, rising from 601 million in 2015 to 714 million in 2020, although precisely when that happens will depend on how fast birth rates in developing countries decline.  We are pointing figures to the more people living longer my area of research is concerned about the significant drop of the infant birth rate. China and India China’s older population – those over age 65 –will likely swell to 330 million by 2050 from 110 million today. India’s current older population of 60 million is projected to exceed 227 million in 2050, an increase of nearly 280 percent from today. By the middle of this century, there could be 100 million Chinese over the age of 80. This is an amazing achievement considering that there were fewer than 14 million people this age on the entire planet just a century ago. Since slow growth of infant would create significant soci-economic problems for the economies across the globe.

The Deadly Disease and its Impact…
We are not discussing anything political interference behind the policy frame work. We must understand that when this policy of health care system was adopted the world aging population was not so high. According to the World Population Prospects of the United Nations, proportion of population aged 60 and over in industrial countries is expected to increase by more than 50% over the next 2 decades. Now currently its being seen that one of the most common diseases coming up from the type of lifestyle being adopted across the globe is cardio- and cerebrovascular diseases, which are the leading causes of death and disability in adults of industrialized countries.  66% of deaths today are due to cardio-vascular disease. Hypertension and diabetes leads to cronic renal failures and other health related problems. The impact is not restricted to the medical cost but also to the long term cost associated with cardio-vascular disease.  The economies are slowing getting into the grip of slow growth since a patient cannot work full time and this drags the social architecture of the family and creates multiple problems in the long term which often leads to significant growth of crimes. The WHO analysis focused on a subset of leading chronic diseases: heart disease, stroke, and diabetes. In 2006, this subset of diseases incurred estimated economic losses ranging from US$20 million to US$30 million in Vietnam and Ethiopia, and up to nearly US$1 billion in China and India. This number is just going to triple in next 10 years only.


The problem is not only country specific but its global. Demographic slowdown in one economy becomes burden for the other economies as global trade is interconnected. In one of the research it has been found that the annual socio-economic burden of stroke is considerable and has been estimated at € 21.9 billion (US$ 32.4 billion) in Europe and at US$ 68.9 billion (€ 46.6 billion) in the USA. Unemployment, minimum wage hikes and strong depression are going to create more havoc problems for the global health care systems. The most astonishing part of the research is that we did not cover about the low or negligible penetration of health care facilities. If we take that part into account then world GDP would be facing significant slow down as consumption will dry out from angles of the economy and socio-economic cost would be impossible to calculate. Paying medical bills and doing treatments would reduce the quality of  living standards and also would create long term unemployment as skill and education cost would be cut down to pay the bills. That’s why I said it would be difficult to calculate the losses in the long term. The problem would begin when under the current circumstances the government are cutting down social cost and implementing austerity measures hence negligible growth under the current circumstances. Now high health care cost financing would be question as no growth leads to negligible revenue then how one can expect the government to continue these programes.

Low Infant Policy Problems
Government based medical facilities would be difficult to provide over the long term since infant rate is low which leads to less income for the government (consumption taxes-revenue) and also low manpower which leads to significant drop for (income tax for the government). We need private segment to come up followed with governments cutting down the health care cost factor. This will create short term hiccups but over the long-term the economies would survive. People will plan their savings and lifestyle accordingly. Now the biggest problem over here is that political system across the globe uses health care treatment cost as tool to win the elections. This creates the economic burden despite of having ways to reduce it. Its high time that the society should figure out the level to which the health care facility needs to be extended. Don’t think that what has been followed over the last 50 years would run for another century.

Role of Wealth Mangers

The government will not be able in the long term to pay the bills as recession and slowdown phase would eradicate the revenues of the government and would run them into fiscal deficits. It high time that thinking over the next 20 years in mind governments look into efficient utilization of resources rather than going for political drove ball game. Now on the other hand I find that Wealth managers and financial advisor across the globe aha s high responsibility to protect the people of the globe from these socio-economic disaster. They need to include health insurance in their investments portfolio before they go head for any investments. The ones who are in their 30+ or 40+ should get into health insurance and should protect themselves as government will not in a position in the long term to carry on the healthcare cost. Countries like emerging economies are going to be the worst effected since the government support for healthcare is negligible and also penetration level is low. In my research I have found the the cost of low penetration of health care cost is also high since low awareness levels creates long term damage to the society and economic growth. We need to plan for the health cost burden and that is possible through high infant birth which leads to consumption and also to balance the workforce over the next 20 years. Further stop using this as a political tool. Sustainable economic growth does not come from political driven cost burden.

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