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Cover Story

The Boomer Challenge

01.14.14 by Paul Barr

A generation that has dominated American life for a half-century will have an enormous impact on health care as it ages

Framing the issue

  • As members of the baby boom generation get older and reach retirement age, they present an increasing challenge and opportunity for health care.
  • The growth in the number of elderly patients from the boomer generation coupled with a loss of boomer-age providers will pressure an already-stressed health care system.
  • Boomers' willingness to adopt what's new and better may speed progress in patient-managed technology, such as mobile health. Chronic care system reform also will be important in getting the baby boomers properly cared for as they get older.
  • A big unknown is how well Medicare will digest the 75 million baby boomers amid the federal government's attempt to transform how care is provided and paid for in the program.

There they go again.

The roughly 75 million Americans who make up the baby boom generation are leading the country through yet another sweeping societal change. About 3 million baby boomers will hit retirement age every year for about the next 20, and will affect how caregivers and policymakers shape the health care system for decades to come.

"This is the most powerful force operating in our health system right now, this generational change," says Jeff Goldsmith, president of Health Futures Inc., Charlottesville, Va. So far, the growth in the number of senior citizen boomers has been incremental, and its impact on health care has been overshadowed by federal reform and budget battles. "People aren't paying much attention," Goldsmith says.

That will change. As it has so often in the past, the boomer generation through its sheer size is likely to dominate the conversation once again. For hospitals, that conversation will take two tacks: how to address the many challenges of caring for a burgeoning cohort of elderly patients and how an aging health care workforce will impact the delivery system.

The U.S. Census Bureau categorizes baby boomers as individuals born between 1946 and 1964. The effects of having to care for such a large group will be felt in many areas already undergoing transformation. At the same time, boomers will leave the workforce in growing numbers, creating voids in clinical care and health care management.

By 2029, when the last round of boomers reaches retirement age, the number of Americans 65 or older will climb to more than 71 million, up from about 41 million in 2011, a 73 percent increase, according to Census Bureau estimates. A huge proportion will switch from commercial plans to Medicare, and that could tilt the balance either way in the success or failure of new care and reimbursement models being tested by the Medicare program, such as patient-centered medical homes and capitated, quality-linked reimbursement.

These new approaches will be applied to a generation with a reputation for indulging itself more than its parents did, which may be why boomers apparently are sicker than their parents were. Research published last March in JAMA Internal Medicine compared the health of both generations and found that despite a longer life expectancy, boomers had higher rates of hypertension, high cholesterol, diabetes and obesity.

The findings "support an increased likelihood for continued rising health care costs and a need for increased numbers of health professionals as baby boomers age," the authors wrote. "Given the link between positive healthy lifestyles and subsequent health in this age group, the study demonstrates a clear need for policies that expand efforts at prevention and healthy lifestyle promotion in the baby boomer generation."

One of the biggest stress points is sure to be the care of the chronically ill, already a struggle for the Medicare program, particularly regarding patients with multiple chronic conditions.

"The reality is most elderly people do not have one disease on their death certificates," says Daniel Perry, president of the Alliance for Aging Research. Multiple conditions usually require care from more than one specialist in addition to a primary care physician, and the system currently is set up in a way that doesn't encourage coordination and collaboration. "We don't have a health care system that is well-designed to diagnose, assess, prevent, postpone and treat the multiple chronic conditions that accompany the aging process," Perry says.

Medicare and the pig in the python

With waves of boomers getting older and incurring multiple chronic conditions, hospitals will take on more of the financial burden. "They drive hospital costs," says Richard Birkel, senior vice president for the Center for Healthy Aging and director, Self-Management Alliance at the National Council on Aging, a nonprofit service and advocacy group. "People with multiple chronic conditions are much more likely to end up in the hospital, as a result of a fall, as a result of a cold, getting the flu. They are walking on a tightrope, and they are more vulnerable and, therefore, are much more expensive."

Those issues likely will worsen without major systemic changes, especially as they relate to Medicare. Census Bureau estimates indicate the number of boomers entering retirement age each year will continue to grow at double-digit rates through 2021. That will push the proportion of Medicare-eligible Americans to 20 percent in 2029, from an estimated 13 percent in 2011. Meanwhile, the percentage of people ages 18 to 65 — and in a position to pay into Medicare — will drop to an estimated 57 percent by 2029 from 63 percent in 2011.

"With that many new people enrolling in Medicare, there are definitely challenges out there," says the NCOA's Howard Bedlin, who is vice president, public policy and advocacy. However, he adds, "I don't think there's any great emergency in the short term."

Further down the line, the surge of boomer enrollees poses potential problems in funding Medicare. "With the demographic pig in the python, there are definitely long-term fiscal challenges," Bedlin says.

Ominously for providers, many members of Congress view Medicare as a place to cut spending. "Basically, Medicare is the federal deficit problem," says Ian Morrison, an author, consultant and futurist. "If you look at different projections, big chunks of the deficit going forward are [caused by] health care and the vast majority of that is Medicare."

Policymakers have bandied about different structural changes to the way Medicare is funded and paid for that would reduce costs, such as raising the eligibility age and requiring enrollees to contribute more.

Raising the retirement age would have given a short-term financial boost to the program, but in the long term may have less of an effect because of improvements in life expectancy.

The fastest growing part of the population is the group that is older than 85, Morrison says. "We are adding a lot of elderly each year, and they age one year at a time. But because of longevity increases, we're also increasing more rapidly the proportion of people older than 85," he says.

Putting more of the responsibility for Medicare into the hands of the boomers also may not be helpful. Experts note that boomers as a group have less money than believed, meaning they'll not be in a position to pay much toward Medicare as enrollees. Except for the wealthiest 10 percent of the generation, boomers' financial resources shriveled following the downturn in the economy. "It's middle- and lower-income baby boomers who got absolutely decimated in the last decade," Morrison says. "They lost their jobs, have been unemployed and spent down savings."

The Pew Charitable Trusts estimates that those boomers born between 1946 and 1955 lost 28 percent of median net worth during the Great Recession as of 2010, while boomers born after that lost 25 percent of median net worth. That put the two groups' median net worth at $173,000 and $111,000, respectively. At the same time, Fidelity Investments recently estimated that the total out-of-pocket, medical costs for a couple retiring in 2013 will be $220,000.

A dearth of clinicians

Then there's the question of health care staffing. Experts say the medical workforce is already too small to handle the aging baby boom population and the shortage will worsen with time. Not only will there be too few physicians to meet demand, the doctors now coming on board want more balance between work and personal time. The current generation of workaholic physicians is being replaced by Gen Xers and milliennials who demand a 35-hour work week, Goldsmith says.

Providers with the skills to care for aging patients already are scarce. "There are not a lot of geriatric physicians — that's something we're trying to change," says Lil Banchero, R.N., clinical director of patient access and director of the acute care for the elderly unit at Anne Arundel Medical Center in Annapolis, Md. Anne Arundel also is filling the gap with other clinicians, requiring its nurses and technicians to undergo basic geriatric training.

The Institute of Medicine forecasts a need for all types of caregivers, not just physicians and nurses, the NCOA's Bedlin says. "A big shortfall is [expected] in direct care workers, particularly among home health aides and personal care aides," he says. "We're going to need about 1.6 million new positions by 2020 and we're not on a path to meet that need by any stretch of the imagination."

The effects of baby boomers' retiring on management ranks has yet to be seen, says Deborah Bowen, president and CEO of the American College of Healthcare Executives. Bowen says the ACHE is trying to ensure that succession planning is taking place at an appropriate pace.

"I don't think that all of a sudden somebody will flip a switch and there will be a mass exodus," Bowen says.

These things should help

Despite much of the gloominess surrounding the aging of the boomer generation, there are reasons to be optimistic. The development of new care models combined with advances in technology could save the system billions even as baby boomers pour into Medicare and live longer. The Affordable Care Act is a major driver of innovation in improving care for older patients. The Medicare program is promoting and testing models that reward the value rather than volume of care delivered; if effective, they should make caring for the boomers more efficient and relieve stress on the system.

Projects backed by the Centers for Medicare & Medicaid Services through the ACA include efforts to test bundled payment for acute care and post-acute care stays, the use of community-based organizations to assist patients in the transition out of the hospital, the creation of accountable care organizations and the use of patient-centered medical homes.

An increasing number of providers also are implementing care models geared toward the health of the elderly. By the time boomers' hitting retirement age reaches its crescendo, they may have figured out a way to fund them.

A clinic in Oregon is finding success by providing team-based care — a model that could be effective with the relatively sicker baby boom generation — but it's struggling to finance the model under a fee-for-service model [see sidebar, Page 25]. The clinic created the approach several years ago through a grant that since has run out. Now it has a more effective care model but no way to efficiently pay for overhead, such as for on-call nurses or pharmacists, says Margaret Njonjo, M.D., interim director of the Senior Health & Wellness Center–Barger Clinic, part of Peace Health Sacred Heart Medical Center. "It's still all dependent on how many visits you can get the patients in for," she says.

But Njonjo says adoption of patient-centered medical homes could drive interest in using the team-based approach. "I'm encouraged that if everybody adopts [the medical home] model, we'll be able to show the value of the way we practice," she says.

Innovation in facility design and mobile health also holds promise for improving the quality and effectiveness of care.

And in what could be the most hopeful news of all, health care may be on the cusp of major advancements in how it treats older patients based on a theory that it is aging itself that causes chronic ailments. Researchers are studying the relationship between aging and the development of chronic illnesses and trying to figure out how to delay the aging process, says Jim Kirkland, M.D., a geriatrician and director of the Robert and Arlene Kogod Center on Aging at Mayo Clinic.

Researchers also are achieving early successes in trying to increase the time that people can live relatively healthy, known as health spans, rather than simply prolonging life.

More immediately, specialized acute care for the elderly units in hospitals, such as the one unveiled last year at Anne Arundel, and resident facilities that offer a spectrum of medical assistance are becoming more common.

And the boomers themselves have shown an inclination to adopt new technology, and may be asked to do so for in-home care. "A lot of people strongly believe that baby boomers in particular are going to receive a lot of their care in the future over the Internet, over the phone," Birkel says. "Health care is going to have a significant e-health component. It does already, but nothing like we're going to see in the next five to 10 years, and I think baby boomers are going to be leaders in that area."

Mobile health offers a way to replace or enhance office-based care, such as by monitoring medical status or telling patients to take a medication. Patients are getting more adept at such things as monitoring and checking their blood sugar levels.

In an ideal world, the new, more-efficient care models and the improvements in technology and care itself will increase health care's supply capacity enough to offset the extra demand created by the boomers.

The alternative is not attractive. "Unless we make quantum improvements in clinical productivity, we're not going to have anyone to take care of us," Goldsmith says. "We're going to have a tremendous crisis of access."


Executive Corner

The differing social and cultural values of the baby boom generation create challenges for health care that weren't present with the previous generation. Hospital executives can address many of the challenges through strategies that increase patient engagement, but others will require additional effort.

Diversity

The boomer population is more ethnically and racially diverse — about 20 percent are in minority groups — requiring increased sensitivity to cultural differences and the effect those differences have on care.

Education

Boomers have more education than the previous generatin did, and seek to be more involved with care decision-making. They also will be more receptive to mobile health interaction.

Finances

Having lost a lot of their retirement savings during the Great Recession, boomers are likely to be judicious purchasers of care as they enter retirement age.

Geography

Boomers are likely to retire in different regions than their parents' generation did, changing the demand profile for health care in the country. Popular states in which boomers are retiring include: Florida, Arizona, North Carolina, California and Texas.

Lifestyle

Active boomers will want to keep their mobility in old age, will rely more on complementary medicine and will be more familiar and demanding of palliative care.

Source: "When I'm 64: How Boomers Will Change Health Care," the American Hospital Association and First Consulting Group, 2007


Teaming up on eldercare

Peace Health system's Senior Health & Wellness Center–Barger Clinic in Eugene, Ore., uses an innovative, multidisciplinary approach to caring for seniors that could be adopted by others seeking to offset some of the challenges presented by the large number of baby boomers who will need geriatric care.

With elderly patients often seeing multiple specialists, aligning care can be difficult. The Barger Clinic's approach brings together different caregivers, boosting the ability to coordinate care and improve outcomes.

"It was clear that geriatric care needs to be multidisciplinary," says Margaret Njonjo, M.D., interim director of the clinic. Included in the model are caregivers qualified as geriatricians, nurse practitioners, social workers, pharmacists, dieticians and audiologists.

The approach, begun in 2001, has resulted in the use of fewer medications, lower inpatient charges and lower overall costs, according to a report on the effort published by Health & Human Services' Agency for Healthcare Research and Quality.

More recently, Peace Health added an acute care for elders unit at Sacred Heart Medical Center, University District in Eugene, further supplementing the clinic's work.

But with grant money gone, the clinic is hoping the movement to create medical homes in primary care environments will boost its similar effort with geriatric patients, Njonjo says. — Paul Barr


About the series

This is the first installment in Hospitals & Health Networks' yearlong series examining the many ways the nation's 75 million baby boomers will impact the U.S. health care system as they age into retirement and senior citizenhood. Caring for such a huge number of older patients is one issue; boomers also tend to be sicker than their parents' generation, more active and used to having things done their way. And it's not just patients — hospital leaders and staff will see a major exodus of boomers over the next decade or so. H&HN's "The Boomer Challenge" series will include articles in the magazine and in our e-newsletter, H&HN Daily. Here's what's coming up in the magazine:

February
Meeting the challenge of chronic conditions

April
The financial impact

June
New care models

October
Staffing and management

December
Innovations in facilities and care design

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The opinions expressed by authors do not necessarily reflect the policy of Health Forum Inc. or the American Hospital Association