People today can generally expect to live longer and, in some parts of the world, healthier lives. The substantial increases in life expectancy underlying these global demographic shifts represent a human triumph over disease, hunger, and deprivation, but also pose difficult challenges across multiple sectors. Population aging will have dramatic effects on labor supply, patterns of work and retirement, family and social structures, healthcare services, savings, and, of course, pension systems and other social support programs used by older adults. Individuals, communities, and nations around the world must adapt quickly to the demographic reality facing us and design new approaches to financing the many needs that come with longer lives.

This imperative is the focus of a newly published special issue of The Journal of the Economics of Ageing, entitled Financing Longevity: The Economics of Pensions, Health and Long-term Care. The special issue collects articles originally written for and discussed at a conference that was dedicated to the same topic and held at Stanford in April 2017 to mark the tenth anniversary of APARC’s Asia Health Policy Program (AHPP). The conference convened top experts in health economics and policy to examine empirical and theoretical research on a range of problems pertinent to the economics of aging from the perspective of sustainable financing for long lives. The economics of the demographic transition is one of the research areas that Karen Eggleston, APARC’s deputy director and AHPP director, studies. She co-edited the special issue with Anita Mukherjee, a Stanford graduate now assistant professor in the Department of Risk and Insurance at the Wisconsin School of Business, University of Wisconsin-Madison.

The Financing Longevity conference was organized by The Next World Program, a Consortium composed of partners from Harvard University, Fudan University, Stanford University, and the World Demographic and Aging Forum, and was cosponsored by AHPP, the Stanford Institute for Economic Policy Research, and the Stanford Center on the Demography and Economics of Aging.

The contributions that originated from the conference and are collected in the Journal’s special issue cover comparative research on more than 30 European countries and 17 Latin American countries, as well as studies on Australia, the United States, India, China, and Japan. They analyze a variety of questions pertinent to financing longevity, including how pension structures may exacerbate existing social inequalities; how formal and informal insurance interact in securing long-term care needs; the ways in which the elderly cope with caregiving and cognitive decline; and what new approaches might help extend old-age financial security to those working outside the formal sector, which is a major concern in low-income countries.

Another challenge of utmost importance is the global pension crisis, caused due to committed payments that far exceed the saved resources. It is a problem that Eggleston and Mukherjee highlight in their introduction to the special issue. By 2050, they note, the pension gap facing the world’s eight largest pension systems is expected to reach nearly US $400 trillion. The problem cannot be ignored, as “the financial security of people leading longer lives is in serious jeopardy.” Indeed four of the eight research papers in the special issue shed light on pensions and inequality in income support for older adults. The other four research papers focus on health and its interaction with labor force participation, savings, and long-term care.

The issue also features two special contributions. The first is an interview with Olivia S. Mitchell, a professor at the University of Pennsylvania’s Wharton School and worldwide expert on pensions and ageing. Mitchell explains the areas offering the most promise and excitement in her field; discusses ways to encourage delayed retirement and spur more saving; and suggests several priority areas for future research. The latter include applying behavioral insights to questions about retirement planning, improving financial literacy, and advancing innovations to help people imagine themselves at older ages and save more for their future selves.

The second unique contribution is a perspective on the challenges of financing longevity in Japan, based on the keynote address delivered at the 2017 Stanford conference by Mr. Hirotaka Unami, then senior Director for policy planning and research of the Minister’s secretariat of the Japan Ministry of Finance and currently deputy director general with the Ministry’s Budget Bureau.

In Japan, decades of improving life expectancy and falling birth rates have produced a rapidly aging and now shrinking population. Data released by Japan’s Statistics Bureau ahead of Children's Day on May 5, 2019 reveal that Japan’s child population (those younger than 15) ranks lowest among countries with a total population exceeding 40 million. In his piece, Unami focuses on the difficult tradeoffs Japan faces in responding to the increase in oldest-old population (people aged 75 and over) and the overall population decline. Japan aspires to do so through policies that are designed to restore financial sustainability for the country’s social security system, including the medical care and long-term care insurance systems.

Unami argues that Japan must simultaneously pursue a combination of increased tax revenues, reduced benefit growth, and accelerated economic growth. He notes that these three-pronged efforts require action in five areas: review Japan’s pension policies; reduce the scope of insurance coverage in low-risk areas; increase the effectiveness of health service providers; increase a beneficiary’s burden according to their means; and enhance policies for preventive health care for the elderly.

The aging of our world’s population is a defining issue of our time and there is pressing need for research to inform policies intended to improve the financial well-being of present and future generations. The articles collected in the Financing Longevity special issue and the ongoing work by APARC’s Asia Health Policy Program point to multiple areas ripe for such future research.

View the complete special issue >>

Learn more about Dr. Karen Eggleston’s work in the area of innovation for healthy aging >>

Sarita Panday’s personal and professional journey from a childhood in a small village in Nepal to an academic career that has taken her across the globe to Australia, Europe, and now Stanford is a story that speaks to the power of education as a life-transforming and world-changing force. Sarita is our 2018-19 postdoctoral fellow in Asia health policy and her research focuses on improving maternal health service provision in Nepal.

The Asia Health Policy Postdoctoral Fellowship is offered annually by APARC’s Asia Health Policy Program (AHPP). On May 1, Sarita will present her research at a seminar cosponsored by AHPP and the Center for South Asia. We caught up with Sarita to learn about her work, the state of maternal health and education in Nepal, and what’s next for her career.

Q: Your research interests include health service delivery and human resources for global health, and your PhD project explored the role of female community health volunteers in maternal health service provision in Nepal. What is the state of maternal health in Nepal? How does it compare to other areas in South Asia?

While substantial progress in maternal health has been achieved over the last two decades, Nepal still has high rates of maternal deaths compared to its neighbouring countries. According to UN estimates, maternal mortality ratio (number of deaths due to pregnancy-related causes per 100,000 live births) is one of the highest in Nepal (258) compared to India (174), Bangladesh (176), Pakistan (176) or Sri Lanka (30).  Maternal deaths in Nepal’s rural areas are three times likely to be higher than in urban areas. Therefore, my research focuses on improving maternal health status in rural area.

Q: Tell us about your current research: What questions/problems you're exploring? What are some of the findings your work has revealed?

As the 2018-19 Asia Health Policy Postdoctoral Fellow at APARC, I am currently working on publications based on my PhD, which focused on improving healthcare for marginalized women in rural Nepal. My next paper, forthcoming in PLOS One, explores the underuse of healthcare services among Nepal’s marginalized communities. In this paper, I analyze the factors that hinder use of healthcare by certain ethnic groups such as Dalits (the lowest group within the Hindu caste system), Madhesi (people living in the southern plains of Nepal, close to the border with India), Muslim, and Chepang and Tamang (indigenous groups in hill villages). These ethnic groups face barriers to health service use that include lack of knowledge, lack of trust in volunteers, traditional beliefs and healthcare practices, low decision-making power among women, and perceived indignities experienced when using health centers. Therefore, community health programs aimed to improve healthcare use among such populations should consider these specific contextual elements along with health system factors.

My next manuscript (in preparation) focuses on the importance of paying community health workers, which is also one of the key findings of my PhD. I found that women volunteers appeared to be highly dissatisfied by the lack of financial incentives for their services and wanted remuneration. This finding contradicts previous claims that reported community health volunteers were happy with their status. I have just finished a first draft of the manuscript and will soon send it for review.

Apart from my fellowship at Stanford, I am volunteering to form a team of interdisciplinary researchers to improve maternal and child health among marginalized communities in Nepal. I am doing this as part of my role as an honorary research fellow in the Department of Politics at the University of Sheffield, where I also earned a PhD in public health. I recently organized a workshop in the UK to leverage partnerships across universities and the local NGO PHASE Nepal. During the workshop, I shared my experience of using participatory approaches (such as participatory video methods and policy workshops) to connect communities with policymakers, and I plan to use similar participatory approaches in my future research. The workshop successfully generated support from colleagues and the local partner.

Q: Your personal and professional journey has taken you from growing up in rural Nepal to pursuing a doctorate in Britain and now a postdoctoral fellowship at Stanford. How would you describe the situation of Nepal’s higher education system, and the demand for foreign education in the country? What are some of the lessons you have learned throughout your own years of international education?

Although Nepal has a long history of education, the current formal education system was formed only in 1951, after the establishment of democracy. In the short period since then, Nepal has made substantial progress in adult literacy rate (from 20.6 % in 1981 to 64.7 % in 2015), but the quality of the public education system remains questionable, with low opportunities for employment. There has been some improvement since the beginning of technical education as a formal sector in 1980: the Ministry of Education, Science and Technology is responsible for education in Nepal and there are currently a total of nine constituent universities with 90 affiliated universities and 1012 campuses. However, the quality of education in Nepalese universities is often controversial due to their being a playground for major political parties. And despite the government’s promises to increase its spending on public education the education budget appears to be cut each year.

As for my own experience, I graduated with a BSc Nursing degree in Nepal without realizing that I wouldn’t get a placement within the public sector. The government hasn’t yet created a position for graduates like me, which forced me to seek a job in the private sector. While I managed to find a well-paying if strenuous job in remote Nepal, I saw many colleagues who struggled to find jobs that matched their qualifications. Some of them worked voluntarily or in low-paying positions. While the Nepalese government continues to produce graduate nurses there’s no system to retain them, despite a severe scarcity of human resources for health.

Q: What's next for your career? What issues are you going to focus on in your upcoming research project?

I have recently been appointed as a Global Challenge Fellow at the University of Sheffield to work on a two-year research project in Nepal. Starting this July, I will work with rural women in two Nepalese districts (Dhading and Sindhupalchok), conducting participatory co-designed research aimed to raise awareness and understanding of the social, cultural, economic, and political factors that hamper women’s access to healthcare services. I plan to use participatory approaches, such as participatory video methods and policy workshops, to connect communities with policymakers, and to partner with PHASE Nepal to improve utilization of healthcare among the country’s marginalized populations.

I’m excited to share my work with the Stanford community in an upcoming seminar on May 1, and hope to see many friends and colleagues there.

Register to attend Sarita's seminar >>

In Beijing’s bustling Chaoyang District stands a multi-story building known as the Gonghe Senior Apartments: a 400-bed nursing home for middle-income seniors who are disabled or suffer from dementia. Why is Gonghe unique and why is it worth considering? Because Gonghe is a public-private partnership (PPP), a collaborative organizational structure supported by the District Civil Affairs Bureau Welfare Division that donated the land and building and the nonprofit Yuecheng Senior Living that operates the facility. And because PPPs like Gonghe might just be the right model to address the challenges surrounding elderly care in China as well as in other nations that face a looming burden of population aging.

This was a core message shared by Alan Trager, founder and president of the PPP Initiative Ltd., who spoke at a special workshop organized by Shorenstein APARC’s Asia Health Policy Program (AHPP). Focused on PPPs in health and long-term care in China, the workshop was part of a two-day convening related to the Innovation for Healthy Aging project, a collaborative research project led by APARC Deputy Director and AHPP Director Karen Eggleston that identifies and analyzes productive public-private partnerships advancing healthy aging solutions in East Asia and other regions.

The Innovation for Healthy Aging project is driven by the imperative to respond to a world that is aging rapidly. This demographic transition, reminded Trager at the opening of his talk, is a defining issue of our time, as aging is a multisectoral issue that increases the demand for health care, long-term care, and a large number of other social services. The aging challenge is exacerbated by its convergence with the rising prevalence of non-communicable diseases (NCDs), also known as chronic diseases. For while NCDs affect all age groups, they account for the highest burden among the elderly.

China: Ground Zero for Global Aging

Alan Trager discusses health and long-term care in China in the GSB's Highly Immersive Classroom

The need to advance healthy aging and NCD prevention is a matter of grave concern in China, whose older population is larger than in any other country. Moreover, the aging challenge in China is interwoven with unique social trends. In particular, filial piety—which, for thousands of years, has been a fundamental family value and a mainstay of health and elder care—is under pressure, as young people strive to balance the demands of careers, fewer children per family, and migrating to cities for school and work, without affordable housing or long-term care financing support for their parents and other elderly relatives, who often stay in rural areas.

China’s health system is yet to adapt to the shift in the disease burden and health care needs driven by the aging population. Its existing health insurance programs are insufficient for outpatient management and care of chronic conditions, and as Trager emphasized, there is a lack of investment in training geriatric medicine professionals and incorporating geriatric principles into clinical practice.

How can China meet the high demand for elder care, increase workforce capacity, and promote healthy aging?

The answer, claims Trager, lies in developing multisector, integrated solutions to the challenges posed by population aging. While system-level efforts, such as building the social protection system and sustaining universal health coverage, continue to be led by the government, PPPs can play a major role in capacity building to ensure the sustainability of such systems through the advancement of technology, human resources, and innovation. Trager shared PPP Initiative Ltd.’s recent efforts to develop PPP solutions for aging populations in China and elsewhere. The workshop was held on October 10 at the Stanford GSB’s Highly Immersive Classroom, which is equipped with advanced video conferencing technology that allows participants in Palo Alto and at the Stanford Center at Peking University to collaborate in real-time. Experts from Beijing joined the discussion and followed Trager’s presentation with comments on how to move from awareness to action.

Private Efforts, Public Value

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Public-private collaborations—or rather collaborative governance–in China as well as in the United States is the subject of an upcoming volume co-authored by Eggleston with Harvard scholars Richard Zeckhauser and John Donahue. Both Zeckhauser and Donahue joined Eggleston the following day, October 11, at an AHPP-hosted seminar to discuss this upcoming publication, titled Private Roles for Public Goals in China and the United States: Contracting, Collaboration, and Delegation.

Eggleston, Donahue, and Zeckhauser define collaborative governance as private engagement in public tasks on terms of shared discretion, where each partner bears responsibilities for certain areas. Their upcoming book explores public-private collaborations in China and the United States, two countries where public needs require solutions that far outstrip the capacities of their governments alone. Beyond considering merely health and elderly care, the book features research into public and private roles in the governance of multiple other sectors, including education, transport infrastructure, affordable housing, social services, and civil society.

At the seminar, the three scholars reviewed different models of private efforts providing public value, outlined the justifications for collaborative governance, and explained some of the conditions that make such collaborative partnerships productive and valuable. They emphasized the need to account for the unique contexts in China and the United States and to steer clear of one-size-fits-all solutions.

Imperative for the Young Generation

One thing, they all agree, applies to both countries: government collaboration with private entities is inevitable if China and the United States are to achieve their articulated goals and meet rapidly increasing demand for high-end public services.

This sentiment echoed a claim Trager made the preceding day: a tidal wave of noncommunicable diseases in an aging world is approaching us quickly and governments cannot handle it alone. Young people must care about advancing creative solutions to this pressing problem because they will be the ones who will pay for the consequences if we get it wrong.

In this recent lecture at Cornell University’s Contemporary China Initiative, Karen Eggleston, Shorenstein APARC deputy director and the Asia Health Policy Program director, talks about China’s health system reforms, including progress to date in achieving effective universal coverage, priorities set in the national health meetings, Healthy China 2030 goals, and local experiments in strengthening patient-centered integrated care.