The European Commission recently released its first study on demographic change in Europe, saying that the responses to the challenges that demographic change brings will be decisive for promoting economic development and getting out of this crisis. The same crisis that, according to Banco de Portugal's latest projections, could reduce our GDP by 9,5%, with almost a 100-year-old going back to find such a negative record.
Demographic pressure, and in particular aging, had already received increasing attention from policy makers, the academic and business community. Its impact on the real economy, on the labor market, on the capacity for innovation or on sustaining the social state as we know it today was becoming clearer. The impact of the current pandemic gives urgency to a renewed reflection on aging, which clarifies and supports even more informed decision-making.
Our pre-pandemic situation was no longer favorable. Our country has one of the oldest populations in Europe (a situation that will become more pronounced) and is associated with the prevalence of chronic diseases, multimorbidity, low income and a low level of savings.
We reacted well to the initial clash with a quick confinement that guaranteed the National Health Service time to prepare and thereby protect lives. The exit with natural surprises from this confinement continues, however, to bring uncertainty that affects investment, reduces employment and income. We know that the coming months will be particularly difficult, with an increased demand for health care expected by those who, due to fear, postponed them.
This will be particularly evident in older, weaker and more dependent on health care. Late diagnoses or therapies will imply a deterioration of the health situation with an increased and demanded effort to our already under pressure health system that continues to resist thanks to a group of professionals who dedicated themselves to a dedicated fight.
How can we overcome this enormous challenge and create conditions for a faster and more sustained recovery of our economy and well-being?
The first step should be to complete the picture that the European Commission's study presents focusing on our particular reality. The study characterizes the underlying demographic picture very well, marked by aging and greater isolation, but it is necessary to include other perspectives and impacts - increased total health care costs, growing needs for social support or financial support.
This information is critical to raise awareness of the topic, discuss it in a shared and in-depth way and thereby allow planning the future by prioritizing efforts, clarifying the role of economic agents and scheduling concrete actions.
Strengthening the health system is the most visible and critical area. The months of waiting on lists for external consultations or the unnecessary and unwanted extension of hospital stays for pure social reason, are phenomena that we live with daily and accept with resignation, despite their high economic and social impact. The lack of quality assurance offers that are accessible to the older population is and will be increasingly felt if there are no effective and articulate responses.
Promoting an adequate response to the senior population, controlling the costs of the health system, requires an effective coordination between public and private entities, effective use of installed capacity, which is not the one that we would all want, and cannot be wasted. The incentive to process innovation and the incorporation of new technologies will be the key that will allow: 1) control costs; 2) improve the care provided and 3) promote project development and entrepreneurship.
Attacking loneliness and thus the perception of abandonment and despair is another key element. The increasing weight of smaller and smaller households and greater mobility of the active population means that today we have an elderly population that lives more and more alone and who has been ironically asked for “social distance”.
The struggle for inclusion and the use of the accumulated talent and experience of those who have created wealth over many years of active life is fundamental. Active aging must be a fundamental axis of action with the promotion of continuous training aimed at strengthening skills or acquiring new ones, social volunteering and / or local projects that seek to bring people and generations together.
Finally, I would like to highlight the financial capacity to individually deal with aging. It means knowing, in a first stage, preparing our future in a planned and sustained way (saving) so that, later on, we also know how to manage the accumulated heritage maximizing well-being. We started this crisis with low levels of savings that give little room for maneuver to resist this pandemic without pain.
An increase in household savings is already evident, certainly due to the fear and uncertainty that have taken hold. The same thing happened in previous crises and it is normal that now it also happens. But this is not the healthiest savings and, at this moment, by postponing consumption, it may even condition the economic recovery.
We must create conditions for positive and sustained savings by promoting financial literacy, improving supply and reviewing the respective incentive framework. But also for those who saved and have a balanced financial situation today, it is necessary to find new solutions to manage this patrimony in a context of more years of life and a greater probability of health problems that require additional financial costs.