FORECASTING THE DEMAND FOR HEALTH CARE IN OECD NATIONS AND CHINA

I. INTRODUCTION A specter is haunting the Organisation for Economic Co-operation and Development (OECD) nations. It is not the specter of poverty or class warfare, as was the case a century or so ago, when leisure was the privilege of the very rich and workers toiled from sunrise to sunset to earn enough to purchase meager amounts of food, clothing, and shelter and when expenditures on health were a miniscule share of gross domestic product (GDP). In 1890, retirement was a rare phenomenon. Virtually all workers died while still in the labor force. Today, half of those in the labor force, supported by generous pensions, retire in their 50s, and national expenditures on their health care run as high as $1 trillion a year. To many of today's political leaders, this situation--the realization of the dreams of reformers a century ago--is a potential disaster. With the Baby Boom generation of 1945-65 now approaching both retirement and the onset of expensive chronic conditions, they are confronted with such choices as defaulting on commitments to pensions and health care, reducing benefits, or increasing the taxes borne by young workers. The specter that now haunts OECD nations is not class warfare but intergenerational conflicts. II. TECHNOPHYSIO EVOLUTION How did this crisis arise? The brief answer is technophysio evolution. Over the past century, technophysio evolution has permitted the average length of retirement to increase fivefold, the proportion of a cohort that lives to retire to increase sevenfold, and the amount of leisure time available to those still in the labor force to increase nearly fourfold. But these boons are associated with sharply rising expenditures on health care. Technophysio evolution is the result of a synergism between technological and physiological improvements that has produced a form of human evolution that is biological but not genetic and rapid, culturally transmitted, and not necessarily stable. This process is still ongoing in both rich and developing countries. Unlike the genetic theory of evolution through natural selection, which applies to the whole history of life on earth, technophysio evolution applies only to the last 300 years of human history, particularly to the past century. Human beings have gained an unprecedented degree of control over their environment--a degree of control so great that it sets them apart not only from all other species but also from all previous generations of Homo sapiens. This new degree of control has enabled H. sapiens to increase its average body size by over 50%, increase its average longevity by more than 100%, and improve greatly the robustness and capacity of vital organ systems. Figure 1 helps point out how dramatic the change in the control of environment after 1700 has been. During its first 200,000 or so years, H. sapiens increased at an exceedingly slow rate. The discovery of agriculture about 11,000 years ago broke the tight constraint on the food supply imposed by hunting and gathering, making it possible to release between 10% and 20% of the labor force from the direct production of food and also giving rise to the first cities. The new technology of food production was so superior to the old one that it was possible to support a much higher rate of population increase than had existed prior to circa 9000 B.C.E. Yet as Figure 1 shows, the advances in the technology of food production after the second agricultural revolution (which began about C.E. 1700) were far more dramatic than the earlier breakthrough, because they permitted population to increase at so great a rate that the line of population appears to explode, rising almost vertically. The most important aspect of technophysio evolution is the continuing conquest of chronic malnutrition due mainly to a severe deficiency in dietary energy, which was virtually universal three centuries ago. In rich countries today some 1,800-2,000 kcal of energy are available for work by a typical adult male aged 20-39. …