Is Europe ready for its rapidly ageing population?

Across Europe, hospitals, care homes and primary care facilities are feeling the weight of demand for healthcare services. Increasing life expectancy and ageing populations are of course a measure of improving health and well-being, but the same factors are also driving rates of diseases such as cancer, heart disease and diabetes as well as chronic age-related illnesses. With this, developed countries are experiencing dramatic increases in healthcare costs at a time when healthcare budgets are being squeezed.

The situation looks more worrying when we look at OECD forecasts for the over 65 population, who are, to no surprise, the dominant users of healthcare services. As you can see from the chart, the number of people over the age of 65 is set to soar over the next three decades. In many countries, more than a quarter of the population will be over the age of 65.

The increase is not only being driven by the fact people are living longer. 2020 also signals the arrival of the post-war baby boom generation into retirement age and presently, many European countries look unprepared for this. Hospital bed blocking by the elderly is an issue in countries like Spain and Italy which have underdeveloped care home markets. Even the NHS, a system highly thought of across the globe, outsourced as much a £1.6 billion to private sector in 2017, in order to cope with demand for surgical procedures.

Some countries are better prepared than others and perhaps there are some lessons to be learned.

  • Scandinavian countries as well as the Netherlands already allocate between 3 and 4% of GDP to healthcare while in Spain and Italy this number is less than 1%.
  • Germany and Japan have introduced mandatory long-term care insurance funding models administered via employers, much like the UK’s system for auto-enrolment into pensions.
  • The UK and France are opening up the market to private sector medical and elderly care operators and easing the burden on state controlled healthcare services.