Building the Case
Hearing on the "Impact of the Nation's Investment in Medical Research: Economic Benefits and Emerging Scientific Opportunity." Washington, DC. May 10, 2001
I believe that the findings of Dr. Manton, now published in the Proceedings of the National Academy of Sciences and funded by the National Institute on Aging, will have an enormous impact on future health care policy.
Copies of the paper, "Changes in the prevalence of chronic disability….in the over 65 population from 1982 to 1999" are available on the back table, and I would ask the Chairman if it could be included in the permanent record of this hearing.
This is only the most recent round of surveys of a much larger project, The National Long-term Care Survey, a study of 35,000-40,000 people over the age of 65. This survey, conducted in 1982, 84, 89, 94, and 1999 (and scheduled for 2004), was designed to track the health status, and changes in the health status, of the U.S. population over 65 both longitudinally (by tracking individuals) and cross-sectionally (by recruiting new samples of people who turned 65 between surveys). The records are linked to both detailed Medicare records and to HCFA vital statistics records to determine exact dates of death.
The survey defines a person as chronically disabled if he or she requires help with one or more activities of daily living for more than 90 days.
The principal investigator, Dr. Ken Manton, is here today in case there are questions on the data I may not be able to answer.
The importance of this study is that it can provide policymakers with reliable data on medical outcomes for the last 17 years, and can serve as a tool to track the effectiveness of any health care policy changes.
The survey confirms that chronic disability among the elderly is falling at an increasing rate. From 1982 to 1989, the prevalence of chronic disability above age 65 declined at the rate of 1 percent per year, increasing to 1.6 percent over the next five years (to 1994), and increasing again in the five years ending in 1999 by 2.6 percent per year. This is a very significant rate of change.
There are also other studies, such as The National Health Interview Survey, and nursing home census surveys, which provide evidence of this disability decline.
What can we say about the reasons for this decline ?
Certainly in the early years of the survey one would expect that a portion of the decline came from general changes in lifestyle — smoking, exercise, diet, etc. But in the later years, it has come from the effects of specific, targeted medical interventions, which probably accounts for the increasing rate of decline.
For example, blindness as in indicator of disability has been dramatically reduced as a result of cheaper and easier outpatient cataract surgery. Stroke, heart disease, and crippling arthritis as events leading to chronic disability and dependency have also been sharply reduced, since their effects can now be much better controlled with medication.
Unexpectedly, the survey also shows a decline in severe dementia of almost 50 percent over the 17-year period, falling from a prevalence of 5.25 percent of the elderly population in 1982 to 2.5 percent of that population in 1999. This represents a decline of almost one million cases from what would have been previously projected.
Since there are no cures or therapies available for dementia, what's causing this drop? It is possibly a combination of several factors:
- First, higher levels of education people now have seems to correlate with lower levels of dementia.
- Second, better management of stroke, heart disease, vision and hearing deficits is bringing a decrease in "perceived" dementia.
- And third, treatments for other conditions may also have an effect on dementia, such as non-steroidal anti-inflammatory drugs for arthritis, hormone replacement therapy, and increased use of vitamin E. These causes are all being considered.
The decline in dementia is a total freebie for Medicare, coming as a residual effect of improved medical care. This data on dementia decline, by the way, is from a soon-to-be published paper by Dr. Manton and Dr. Elizabeth Corder.
So we find that individuals entering the over-65 population are retiring healthier as a result of both lifestyle changes and improved medicine, vitamins, vaccines, antibiotics, diagnostic imaging and a whole variety of new treatments and interventions.
What are the policy implications of this finding?
I see two areas in which it has tremendous importance: MEDICARE and ECONOMIC GROWTH.
In terms of Medicare:
In approximate terms, 11 percent of the Medicare population consumes 70 percent of the Medicare expenses, and most of that 11 percent are the chronically disabled. We know that the chronically disabled cost Medicare five to seven times more then the non-disabled.
Let's suppose that, by 2040, the over-65 population has doubled. If the disability rate declined at its average for the past 17 years — 1.7 percent — for each of the next 40 years, the prevalence of disability would be 50.4 percent of what it is in 2000. Disability would be cut in half — largely offsetting the doubling of the size of the 65+ population.
The critical ratio then, is not the ratio of the working population to the total over-65 population, but the ratio of the working population to the chronically disabled over-65 population. And we see that we are already reducing that population and will continue to reduce it further in the coming decades.
The concept of rationing health care to prevent Medicare bankruptcy was a perfectly understandable approach when we didn't have data like this to point the way, but given this extraordinary decline in costly chronic disability, it seems quite clear that the solution to maintaining Medicare solvency is (1) to continue our strong support for medical research and (2) to make whatever policy is necessary to deliver the products of that research to patients.
The second area of significance of this data is in the economy. What are the implications for the future of the U.S. economy and its potential for growth?
The data quantifies what we have all noticed — that being 70 or 80 ain't what it used to be. We are all a lot healthier, and in fact, as of 1999, 80.3 percent of people over 65 are healthy and functioning independently. And, by the way it's important to understand that if you are healthy at 70 and 80, you were also healthy at 40 and 50 and 60, while you were still in the workforce.
It is this fact that particularly interested Alan Greenspan when we met with him in December to go over this data, because increasing the health of our population translates into productivity, and productivity is the key to economic growth.
The money we've invested in medical research and the money we spend to deliver medical care to our population is creating real value. In economic terms, it is expanding and preserving human capital. If it had not produced these remarkable results, good health would only be considered an expensive luxury. But it is much more.
We all understand the idea of increasing productivity as it relates to mechanical technologies, where one worker can now produce as much as 20 workers once did — but we don't tend to think of human capital as a resource. In fact, we human beings are much more important to the economy alive and well — because not only do we do manual work, but we generate ideas and innovations. In this regard, the longer we live, the more we learn and can draw upon, and the more experienced we become, the more valuable we are in a knowledge-based economy. And of course this is the kind of economy we have now — one where knowledge accumulates and builds on itself exponentially, in contrast to an asset-based economy in which resources deteriorate and depreciate.
A knowledge-based economy is one that expands faster, as we saw with the unprecedented growth of information technology.
The economic slowdown we're seeing today is simply part of the normal cycle of any new technology, which at some point matures and saturates the market. The exciting prospect for our economy is that the next growth engine is a direct product of medical research: biotechnology, biomaterials, and all the countless spin-offs into non-medical industries such as cosmetics, energy, chemistry, fabrics, forensics — and almost every area that we can imagine — and some we cannot even begin to imagine.
Richard Oliver, at the Vanderbilt School of Management, has studied this area for many years. He sees an exploding economy with almost vertical growth, as our knowledge of molecular biology creates not only advances in medicine, but also in new so-called "smart" materials, in which materials like paint and airplane wing material begin to take on the properties of living organisms. Here in United States, we have an enormous opportunity. We are the world's leader in research, we have the best graduate science education in the world, and we have the most flexible capital market in the world. We just need to follow a course that makes maximum use of these assets and doesn't shrink or stifle them.
The policies that Congress and the Bush administration make for the future of Medicare, for research in medicine and all the other sciences, are going to be critical for the health of our economy.