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Tenfold rise forecast in annual healthcare costs of elderly in Singapore by 2030
TOTAL healthcare costs of the elderly in Singapore are projected to rise tenfold over the next 15 years to US$49 billion annually, a report by Marsh & McLennan Companies' (MMC) new Asia Pacific Risk Center said.
Assuming the current medical cost inflation remains constant, Singapore is expected to spend an average of US$37,427 on healthcare for every elderly person - defined as someone aged 65 and above - by 2030. This makes Singapore's spending the highest in the region, ahead of Australia at US$30,827.
The report, "Advancing into the Golden Years - Cost of Healthcare for Asia Pacific's Elderly", covers 14 markets in the region and uses data from the United Nations' population division, World Bank, as well as Oxford Economics, among others.
It estimates that elderly healthcare across the Asia-Pacific will cost more than US$20 trillion between 2015 and 2030. This means that on an annual basis, elderly healthcare expenditure in the region is projected to hit US$2.5 trillion by 2030, five times more than that in 2015.
Wolfram Hedrich, executive director of the centre, noted that the Asia-Pacific is ageing at a faster rate than any other region in the world, but key stakeholders including governments, insurers and individuals are not fully prepared from the financing, infrastructure and workforce perspectives, for escalating costs for more than an additional 200 million elderly citizens in the region.
"What we want to achieve with this report is to act as a broad call of action for governments, individuals, insurers, healthcare professionals and organisations to start acting now," he said.
By 2030, there will be a 71 per cent rise in the number of people aged 65 and above in the Asia-Pacific, said the report.
In Singapore, the number of the elderly will go up from 11 per cent to 20 per cent of the country's population over the next 15 years. By 2030, Japan will be the world's first ultra-aged economy - with the elderly accounting for more than 28 per cent of the population, while Hong Kong, South Korea and Taiwan will be considered super-aged, with the elderly making up 21 per cent of the population.
Healthcare financing aside, manpower is another pressing issue. The report said the region will face a shortage of 18.2 million professional long-term caregivers, and massive investments in both infrastructure and human capital will be needed to meet future demand.
The new centre, launched on Wednesday, will conduct research on infrastructure financing and energy, and will also zoom in on key risks industries and governments in the region face.
Jeremy Lim, partner at Oliver Wyman, said in Singapore that the centre is looking into healthcare financing issues including reverse mortgages and the upcoming ElderShield reform, among other topics.
The centre, supported by the Singapore Economic Development Board (EDB), is MMC's inaugural risk research institute in the Asia-Pacific and draws expertise from its four operating firms - Marsh, Guy Carpenter, Mercer, and Oliver Wyman.
Kelvin Wong, assistant managing director at the EDB, said the centre will beef up Singapore's business-research ecosystem and help develop innovative insights for businesses in the region.