Long-term care spending in the Organisation for Economic Co-operation and Development (OECD) countries is set to double, or even triple, by 2050, led by aging populations, according to a new OECD report.
The report, “Help Wanted? Providing and paying for long-term care,” says that half of all people in OECD countries who require long-term care are age 80 or older. It notes that nearly in 10 people in OECD countries will be in this demographic by 2050, up from one in 25 in 2010. Leading the way in this demographic shift will be Japan, with 17% of its population age 80-plus by 2050, and Germany, at 15%.
As the demographics shift older, spending on long-term care in OECD countries—which now accounts for 1.5% of GDP on average—will rise. Currently, Sweden and the Netherlands today spend the most on long-term care as a percentage of GDP, at 3.5% and 3.6%, respectively. Portugal (0.1%), the Czech Republic (0.2%) and the Slovak Republic (0.2%) spend the least.
In Canada, about 3.5% of the population was 80 or older in 2010, slightly below the OECD average of 4%. Spending on long-term care was equivalent to about 1.5% of GDP.
The report suggests that governments should begin working to improve their long-term care policies now in order to ensure it is affordable. The authors of the report contend that even those with above-average incomes could end up spending 60% of their disposable income on long-term care costs. Universal benefits for those most in need of care and public-private partnerships are two examples of solutions given for this.
The report also notes that private insurance could play a role in funding care but that this is likely to remain a niche market in most countries unless governments make such coverage compulsory.
Another key concern cited regarding the sustainability of long-term care is ensuring that the long-term care sector has a sufficient number of employees to meet the growing demand. The report suggests OECD countries focus on improving pay and working conditions.
In addition, it says governments will also need to attract more migrants, a demographic that already comprises a substantial percentage of long-term care workers in many OECD countries: from about one in four in Australia, the U.K. and the U.S., for example, to one in two in Austria, Greece, Israel and Italy.