Three Little-Known Trends in Aging that Augur Well for the Future

1. Decline in Nursing Home Use by Older Persons
According to data from the Medicare Current Beneficiary Survey, or MCBS, the elderly nursing home population has declined over the past 10 years. More older persons live in residential care facilities and other types of care facilities, in community-based housing with supportive services, and in houses in a regular community with no supportive services. That trend is especially pronounced for people 85 or older.
Why? Writing for Forbes magazine, Howard Gleckman, a Research Fellow at the Urban Institute, offers four explanations:
1. Shift from nursing home care to home-and community-based services care
2. Shift from fee-for-service Medicaid to Medicaid managed care
3. Shift from extended nursing home care to post-acute and rehab skilled nursing care (primarily paid for by Medicare and Medicare supplemental insurance) and
4. Rebalancing of public financing and private payments, including donated care

Long-term services and supports are provided and paid for both privately and publicly. The Congressional Budget Office (CBO) examined trends in the provision of donated or informal care of older persons.

More than half of that care is donated—as informal care—by family members and friends, most commonly by spouses and adult daughters. Providing care imposes costs on informal caregivers in the form of time, effort, forgone wages, and other economic costs. Assuming that informal caregivers provide care similar in value to that provided by home health aides, CBO estimates that the value of that care totaled approximately $234 billion in 2011. Because many informal caregivers must sacrifice time that might otherwise be spent earning a wage, the value of that care in terms of forgone wages could be even higher.

2. Compression of Morbidity
Originally set forth in 1980 by Dr. James F. Fries, now a Professor of Medicine at Stanford University, in an article in the New England Journal of Medicine, the Compression of Morbidity hypothesis was proposed as a counterpart to the "expansion of morbidity" hypothesis, which argued that as life expectancy during the 20th century increased, so would the duration of disability at end-of-life.

The Compression of Morbidity hypothesis envisions a potential reduction of overall morbidity, and of health care costs, now heavily concentrated in the senior years, by compression of morbidity between an increasing age of onset of disability and the age of death, increasing perhaps more slowly.

Research over the past 30 years seems to support Fries' hypothesis. Not only are people living longer, older people are reporting less disabling conditions ("morbidity") well into their late 80s (the cohort usually referred to as the "oldest old.")

3. Dynamic Equilibrium
By 2050, one-fifth of the total U.S. population will be elderly (that is, 65 or older), up from 12 percent in 2000 and 8 percent in 1950. The number of people age 85 or older will grow the fastest over the next few decades, constituting 4 percent of the population by 2050, or 10 times its share in 1950.

That growth in the elderly population will bring a corresponding surge in the number of elderly people with functional and cognitive limitations. Functional limitations are physical problems that limit a person’s ability to perform routine daily activities, such as eating, bathing, dressing, paying bills, and preparing meals. Cognitive limitations are losses in mental acuity that may also restrict a person’s ability to perform such activities.

On average, says CBO, about one-third of people age 65 or older report functional limitations of one kind or another; among people age 85 or older, about two-thirds report functional limitations.

One study estimates that more than two-thirds of 65-year-olds will need assistance to deal with a loss in functioning at some point during their remaining years of life. If those rates of prevalence continue, the number of elderly people with functional or cognitive limitations, and thus the need for assistance, will increase sharply in coming decades.

However, according to a recent study of aging and health in France, trends among persons age 65 and older prolonged the dynamic equilibrium of the previous decades: increasing life expectancy with functional limitations but not with activity restrictions.

Although an aging population is likely to lead to an increase in demand for disability support services, the fiscal impact of this increase may be partially offset by a shift from major to moderate limitations, with a consequential reduction in the average levels of support required.

A potential dark cloud on the horizon: the study of aging in France found that for some cohorts in the under age 65 population, disability had expanded.

For more information on these trends, see
Don Redfoot, "The Good News About Medicaid Cost and an Aging Population," AARP Blog (June 28, 2013), http://blog.aarp.org/2013/06/28/the-good-news-about-medicaid-costs-and-an-aging-population/
Howard Gleckman, "Nursing Home Use by Medicaid Seniors is Plunging," Forbes (July 7, 2013), http://www.forbes.com/sites/howardgleckman/2013/07/03/nursing-home-use-by-medicaid-seniors-is-plunging/
"Rising Demand for Long-Term Services and Supports for Elderly People," U.S. Congressional Budget Office (June 26, 2013), http://www.cbo.gov/publication/44363
 

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