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Aging Americans: Challenges and Innovations for Foreign Policy and the Private Sector

Speakers: Michael W. Hodin, Adjunct Senior Fellow, Council on Foreign Relations, Executive Director, Global Coalition on Aging, Robert D. Hormats, Undersecretary of State for Economic Growth, Energy, and the Environment, and Jane E. Shaw, Chairman, Board of Directors, Intel Corporation
Presider: Susan Dentzer, Editor-in-Chief, Health Affairs
March 30, 2012, Washington, DC
Council on Foreign Relations


SUSAN DENTZER: Good afternoon. I'm Susan Dentzer, editor-in-chief of health affairs, and I want to welcome you to today's Council on Foreign Relations meeting, cosponsored by the Washington Meetings Program and the Program on Aging Populations.

As always, I'll ask you, first of all, to completely turn off, not just put on vibrate, but absolutely disable your cell phones, your BlackBerrys, your wireless devices, your iPhones, everything else, to avoid interference with the sound system.

As a reminder also, this meeting is on the record.

With that, I have the great pleasure today of introducing our topic, which is, of course, global aging and the challenges and innovations for foreign policy in the private sector, primarily starting, of course, our conversation today with aging in America, but bridging out to the challenges of aging internationally.

We all remember Robert Browning's famous poem with the lines, "Grow old along with me; the best is yet to be." And perhaps if we were on a talk show, I'd then ask you, "True or false: Grow old along with me; the best is yet to be," to get the conversation going.

We're going to be exploring various dimensions of the answer to that question today. And we have three terrific panelists, two of whom are with us at the moment, and one will be joining us shortly to discuss that.

We're going to be hearing first from Michael Hodin, who's an adjunct senior fellow at the council. He's also executive director of the Global Coalition on Aging. We'll be joined shortly, we hope, by Robert Hormats, who, of course, was undersecretary -- or is, I should say, undersecretary for economic growth, energy and the environment at the U.S. Department of State, having served in other capacities as undersecretary of state previously. And also Jane Shaw we're delighted to have with us, chairman of the board of directors of the Intel Corporation.

So with that, Michael, we'll turn things over to you to start us off.

MICHAEL HODIN: Well, thank you. And we're delighted to have this. We're going to go a little bit slow, hoping that the undersecretary will join us any moment.

But, you know, I just perhaps will open up with a few general suggestions and be very careful, because as I look out in the audience, I know many of you and know many of you who are quite expert in this arena.

And perhaps we can just focus on how much of a culture shift we are engaged in with respect to this population aging topic and that it's a culture shift which is global. And it is a global phenomenon which is happening not just in the developed world, where we're currently facing a great deal of these challenges -- our European colleagues, the Japanese, South Koreans, Singapore, others -- but in the developing world as well.

And the issue, as many of us well know, surely, is that it's not so much about living longer, although that's part of it -- 30 years that we've added to life during the course of the last century -- but it's the truly stunning lowering of birth rates. And it's that lowering of birth rates which then causes this dependency ratio shift, which profoundly makes this as much an economic-fiscal issue as anything else. And it's around that that I think the biggest discussions need to take place.

The things that we've been really focused on is how do you move with respect to the applications of technology. And we'll hear about that in a few minutes. Health policy is clear. And, you know, there are a couple of really big ones, now that the U.N. has stepped up the NCDs. This is good. Many of us will certainly appreciate that Alzheimer's will be a game changer if we can literally do something about that. The numbers are just stunning -- the $604 billion, 1 percent of GDP today, which is utterly exploding because of its association with the risk factor of aging.

But then there's also shifts in education policy, where we live, work and, in the old terminology, retire in a different way in the 21st century in order to make this economically feasible.

So these are just some of the openers, and perhaps we can move along and have others open up.

DENTZER: Terrific. Thank you.

Bob, welcome.

ROBERT HORMATS: Thank you. Sorry to be late.

DENTZER: Not at all. We understand.

So give us your sense --

HORMATS: Why don't I wait till -- let -- since I'm late, why doesn't -- have you spoken yet, Jane?

JANE SHAW: No, I haven't.

HORMATS: Why don't we let Jane go first, and then I'll --

DENTZER: All right. We'll switch gears a bit.

HORMATS: That'll give me a little time to --

DENTZER: Jane, please go ahead.

HORMATS: -- collect my thoughts. (Laughter.)

SHAW: I'm sure you don't need to do it.

Well, first, let me say it's a real privilege to be here in part of this conversation.

I think the opportunities associated with the aging tsunami, which is something that it's often called, is -- it's something that's happening globally. I think it's an opportunity for developing innovative approaches towards dealing with the situation.

I think we need forward-thinking governmental bodies to design some of the solutions to these problems. We are particularly involved with where technology may play a role in health care. But obviously it affects sort of every aspect of our society, almost -- housing, transportation, you know, how a community acts.

We firmly believe that you need to get the individual, the aging individual, at the center of whatever treatment is provided. And it needs to be a personal approach to handling that individual. But we are very involved with what is the continuum of technology that we can put around the individual and connect to the problem, and then how do we reach out to the communities and get them involved.

So if you think of it radiating out from the individual, out to everybody who needs to participate in caring for that individual, whether it's the family, whether it's the health care provider, the physicians, and then meeting further out into the community for support.

So we can talk more about that as appropriate.

DENTZER: Great. Terrific.


HORMATS: OK, thanks.

Well, first of all, sorry to be late.

I think this is a terrific subject. We've had conversations before in various venues about this. And let me just make a few introductory points. One, on the economics of this, what I think is increasingly clear, if one looks at the demographics, which are more or less baked into the cake for most countries around the world -- industrialized countries and developing countries, to an increasing degree -- is that those countries that utilize their aging populations most productively and effectively are likely to be those that are the most competitive internationally over the course of the next 20 or 25 years, because not to do so or to fail to do so would be to fail to utilize a key input into the economic process, and that is an aging population.

If you don't use that population productively and effectively and maximize their ability to contribute to the economy, you're forgoing an opportunity to utilize experienced, talented people who can contribute to economic activity and productivity for a very long time. To cut them short, either by forced retirement or to cut them short by inhibiting their ability otherwise to participate in the economy, or through failure to deal with their health requirements in order to keep them healthy so that they can be productive, it has an economic cost. It's not so easy to measure that economic cost, but it's certain to be enormous if one doesn't ensure that they can be in the productive aspect to the economy, productive sector of the economy, for a long time.

It's also very important because our biggest costs down the road are going to be Social Security costs and Medicare costs. And to the extent people are productive and healthy, that reduces the outflow of money through Medicare and Social Security payments, which will help to deal with our long-term fiscal situation, plus they'll be on the productive side of the economy so they'll be contributing to those things. They'll be paying payroll taxes and other taxes, so they'll be actually helping on the fiscal side through the reduced output and higher input.

But even more importantly than that -- and the economics obviously are important -- is the social component, the fact that they will -- one of the thing that Intel talks about a lot is connectivity. And the workplace is an excellent place for connectivity -- it doesn't need to be physical workplace; it can be a virtual workplace -- but keeps people connected with one another and with society, which is a health factor, certainly beneficial to health, but also socially reinforces people in their older years to feel part of the system.

And the third element goes to the specific questions of health itself. And when I go around the world, there are a lot of very complicated issues. Mike talked about dealing with Alzheimer's, which is certainly a growing problem associated with old age, or other types of dementia, and dealing with that issue.

And there are a lot of new drugs that are beginning to emerge in that area now; not cures, but certainly a lot of really good work is going on in advanced laboratories all around the world.

But then there are some very simple things. There's someone I know who has a project in Africa where he makes very cheap glasses for people, for older people. And we take this for granted, but in many parts of the world either they're not available or they are available but they're expensive. He has a program. It's a women's focus program where women will make glasses and they are sold at essentially a dollar or two dollars for a set of glasses. And they're measured for the individual. I mean, they're like drugstore glasses, but they're in various categories. But they're very inexpensive.

The productivity of people when they have glasses is enormous, as opposed to when they don't. Hearing aids -- you know, low-cost hearing aids improve lives. These are relatively simple, low-cost solutions if they're done the right way.

Another one that I think is very important -- I was in India. In India, a large portion of the blindness comes from cataracts. In the United States, almost no blindness comes from cataracts because cataract surgery is so easily available for people. In India, it's not available for people. It's available in big cities, but even then it's very complicated and difficult.

What's interesting about it is that in India they have these very clean, efficient, movable clinics. And they take two trailers around to villages. They connect them, and the surgeons do cataract surgery. It enables people to see who have not been able to see in years. I've watched it happen; very clean. And the infection rate -- you say, well, a clinic out in the villages -- the infection rate is actually lower than in industrialized countries on the average.

As people know, we have a very high infection rate in the United States in hospitals, which, in my judgment, is really absurd and shouldn't happen. It's a national disgrace that we have so many hospital infections, which is something we ought to deal with here. But in India, they place a lot of attention on this.

So my point in all this is that there are a lot of things that can be done to enable -- in the health area to enable people to lead more productive lives in their old age economically, be more engaged socially, and live better lives. And I think there are many opportunities for doing this.

And it's not just an industrialized country thing. If you look at the demographics of emerging economies, they are China -- Russia has very poor demographics. China will, over a period of time, because of the one-baby policy. But other countries will as well. So it really is an international problem that has to be addressed.

DENTZER: Bob, you mentioned those countries that use their aging populations most productively will be the most competitive.


DENTZER: Can you mention any of those countries that are using their populations -- their aging populations effectively?

HORMATS: Yeah, sure. Western Europe uses its population -- its aging population much more effectively. It's not that the retirement age is higher than in the United States. In most cases it --

DENTZER: In fact, it's lower.

HORMATS: It's lower. But they find ways of bringing them into things, engaging them to a greater degree than we do. There are volunteer programs. In France they have programs where older people help out in the schools. That's a wonderful area for older people to be substitute teachers or be sort of -- be teachers, participate in the education of younger people. They can do that. If you're a retired teacher, you can work part-time. They have flex hours much more than we do in --

DENTZER: Is that your sense also, Michael --


DENTZER: -- that we're behind on that score as well?

HODIN: Well, I would say two things about that. One is, Bob is absolutely right. The -- I guess the main point is this is all very new. You know, we've never lived in a world in the history of mankind where we've had aging populations. And it's going to get even more so over the next couple of decades, where we have more people over 60 than under 15. So this is new. And we're just beginning to understand and learn how to address this and realign and reframe our policies in the marketplace.

On a very specific, an interesting one that I was recently looking at is in Singapore -- a small country, but very interesting, and a place where a lot of investment has been going. Their dependency ratio is huge. It's close to 40 percent, which is among the highest in the world, including the Europeans.

DENTZER: Which, to put in real terms, means for every four younger people, there are 10 older people, in effect.

HODIN: Exactly.


HODIN: Thank you.

DENTZER: (Laughs.) OK.

HODIN: And so, out of good old-fashioned self-interest, they've now put in place an incentive system where they're bringing people, quote-unquote, "retirees," back into the workforce and provide incentives for that; very interesting.

And again, taking Bob's point about economic driver, it will be economic self-interest and national self-interest that will drive us to these kind of solutions, I'm suggesting.


DENTZER: And Michael, as you mentioned, the aging is driven by two forces in most countries, not so much here in the U.S., but in most countries it's a combination of the declining birth rate plus the longer life span. Now, we have been freed up from part of that because our birth rate has held up here. Other countries have looked at the birth rate issue with very mixed success or no success at all; for example, Japan.

Do you think that globally there will be more emphasis on, in the industrialized countries, pushing up the birth rate? Should there be, as we look to deal with this issue of dependency in particular? I'd love to hear your thoughts on that, and perhaps the others of you as well.

HODIN: Well, we, again, as many here will know, we're at roughly 2.1.

DENTZER: Which is the replacement rate.

HODIN: Which is just at replacement. You know, the Italians, the Spanish, the South Koreans, the Japanese, are under 1.5. They range from, like, 1.3 to 1.5. I saw an analysis at a -- we actually had an event about a year ago at the Vatican, and there was an economist from the Institute for Economic Affairs, Philip Booth, who did an analysis that if the Italians and the Japanese continue on their current trends, over the next few hundred years there will be 17 Japanese or 17 Italians.


HODIN: Now, that can be changed over 300 or 400 years, but just to make a point about the trends. And, of course, our replacement rate is because of basically our immigrant population, in particular Hispanics and others. When you look at the birth rates of, frankly, white Americans, it's basically the same as the Europeans.

You know, the French have tried to provide incentives to have babies and it doesn't seem to be working, I'm told. It seems to be -- this plummeting of birth rates seems to be almost perfectly correlated with urbanization, modernization, the women's movement; you know, all positive and good things. But I see nothing but this trend continuing. So I would say we take that as a given and then figure out how to -- that we're going to have a century of an aging population century, and then what do we do accordingly.

DENTZER: Jane, would you agree with that assessment?

SHAW: Yes, I would. And I really don't have anything to add to that. I think that was well said.

DENTZER: So if we take that as an assumption that we'll just have more and more of aging folk and fewer and fewer young folk, as you mentioned, Intel is looking at this very broadly, not just in the health care sector, but what does this mean for transportation; what does this mean for housing.

What are some of the products, product lines, areas of innovation (that things ?) are most necessary, if not almost most promising at this point?

SHAW: Well, you know, people tend to think of Intel as a computing company. It makes microprocessors, and those microprocessors are probably in every home, office, at every bedside through the medical device, all the way up through the continuum through your smart phone to data processing.

But Intel has had over the last decade a really, really intensive effort looking at the aging population and trying to understand it from the user perspective. So we've been, over the last decade, in as many as a thousand homes. We've had associations with 250 different institutions, whether they're academic, research, government bodies, and in 20 different countries.

So looking at the problem globally, not just in the United States, but looking to say what is -- as a population ages, what does the user need, and then secondly saying, and how can technology help to bridge that gap? And I think we need a lot more of that research.

I think one of the things I would advocate is, yes, we can come up with solutions. We know well the value of correcting blindness or adding hearing -- hearing being probably the most isolating factor of loss of any of the senses. But Intel's focused on what can we do in terms of our ability to form alliances, forming blueprints for how work should flow for development of something like an accountable care organization as we're looking to help, as the ACA gets enacted.

I think, from an individual's point of view, if you look at an aging person, the worst thing in the world is -- and I think Joe Coughlin of the age labs at MIT said this -- is the social isolation that happens as you age. You know, you lose your spouse. Every time you pick up the phone, it's another friend that's either seriously ill or died and becomes unavailable to you for interaction.

And building on that kind of experience -- Intel has a fascinating project. We call it Building Bridges. And we've got prototypes available, and they're working so well. And what it involves is a very, very simple touch-screen computer with a telephone. So an isolated person, living on their own -- and that is the goal for most people; they would rather stay in their home setting -- but they're probably isolated from family and, as I say, become increasingly isolated from friends.

They can make a telephone call, and the graphics are (flung ?). They are like little speech bubbles. And it comes up and it says who's on the other end on the phone. And they can set up little conference calls. Maybe they've set up that they're going to listen to the same news program, and then this little group is going to get together afterwards to discuss what did they hear. Did they agree? Did they disagree? You know, get the brain cells moving, feel like they're making a contribution. And those who might be timid, there's a little bubble with a hands-up sign, and they press the button like "I'd like to speak next." And it works. It's quite amazing.

Another little icon is the teacups. You know, if you wanted to rattle teacups with someone, just press the button and somebody will be there 24/7. It has an amazing impact. I mean, the cost of dealing with this, just the isolation piece, the depression that can come with it, is said to affect some 6 million people today in the United States alone over the age of 65. And only 10 percent are treated. And caring for them in the treatment can be two to three times what it is caring for a normal person.

So that's the kind of place where user research has identified an opportunity that we can address with technology. We've got many examples like that of where the user research has led to interesting products.

DENTZER: Very exciting.

Bob, before we open this up to questions and further discussion with the audience, I want to ask you about the political imperative to deal with some of these issues. As we know, it has been clear for an extremely long time that these phenomena were taking place, that they were going to undermine the bases of some of our social entitlement programs if we didn't take steps to address the reality of the dependence ratio shifting, the life span, et cetera.

How uniquely or not uniquely situated are we as a country in that respect? We seem unwilling to come to grips with this cultural shift that Michael talked about that is an economic shift as much as anything and necessitates the kind of policy shift to adapt to this new reality.

HORMATS: Yeah, that's a really challenging question, particularly for the United States, with this current set of debates as to how we deal with entitlements and how we deal with budget issues. All these things are related, directly or indirectly, to this phenomenon of aging populations and populations who, as they age, need more health care.

Let me make one point, following up Jane's very interesting discussion of connectivity and what Intel is doing, because I think she's put her finger on something that's very important. The ability to connect, the ability to engage, is really -- it's a social issue. It's a health issue. It's making people feel part of a community, as opposed to disassociated or segregated from the community.

Several years -- a long time ago, actually, I was in the northern part of Pakistan, where these people lived to be 100 years. There were whole villages of people 80, 90, 100. A hundred is nothing. There are, like, 30 or 40 people in these little villages who are 100. Now, part of it's their diet. They eat fruits and nuts and good food. That's part of it.

But I noticed one other thing when I was up there, and that is, the older people connect every day. They have a place where they go and sit around and talk and interact with one another. Either it's at the market or a little place where they sort of sit there and eat or have tea. But the -- and so I was talking about, you know -- a lot of scientists have studied them, and they've mostly studied their diets.

But what -- when you talk to these people, the thing that really keeps them going is that they want to get up the next day and see their friends at this little group. And they're all very old and they have animated conversations. They laugh and they tell stories and they talk about their kids and their grandchildren all these things.

So the enthusiasm for the engagement is really one of the things that's so compelling about this society. And if you can duplicate the same thing through technology, since we don't have little villages around here anymore, technology can perhaps play that role. So I think it's a very critical part of this. It gives them something to live for that is important.

The political side, that's really, I think, one of the very challenging elements in the United States today, and that is really at the center of or at least very close to the center of the debate we're having over how we address our long-term fiscal situation, since a big portion of it is Medicare, Medicaid too, which is not an aging problem primarily, but Medicare to a large degree is, and certainly Social Security is.

As people get older, they get Social Security. And, say, if you work longer and remain healthier longer, it will affect the fiscal outlook for the United States. But the other -- and for other industrialized countries, too, that have similar types of programs.

But the other is that what worries me -- and I'm trying to read up a little bit about this -- what worries me is that there is increasing concern about a generational divide; that in the United States, if a lot of money does go to these programs, Social Security and Medicare, but the workforce of the United States is going to be younger people. A larger and larger portion of the workforce will be what are called -- the term (is) minority groups -- that are essentially -- many of them are simply not getting the kind of education they need to be productive workers.

And you can -- if you live in New York, you can see this. You've got Stuyvesant, Bronx Science and great schools like that. But in a lot of minority neighborhoods, poor neighborhoods, these kids are not getting a really good education. They're simply not. Joel Klein has written a good piece on this in The New Yorker. But it's not just New York. It's elsewhere in this country.

And one of the things that really troubles me about our society is that we look at it as young versus old. And if you give money to old people, young people don't get enough. And if you give more money to younger people, older people don't have enough. It's really part of the same hole, and it has to be looked at that way, because who is going to pay the payroll taxes to support Social Security 30 years from now to support older people 30 years from now? It's these younger people who, in many cases, are not getting the education they need to be productive workers.

Who's going to be the backbone of the workforce? It's going to be these younger people. And a larger and larger portion of the graying part of the population is non-minority, Caucasian. A large portion of the new entrant to the workforce are not. They're African-Americans, Hispanics, children of immigrants from other parts of the world. And I think it's very important to make sure that older people recognize that their future lies not just in keeping Social Security and Medicare, it also depends very heavily on making sure that this country has productive young people who are going to enable this economy to grow very rapidly so we can afford these programs so that they're well trained.

So that -- a lot of dealing with the politics and the economics of aging in this country is for us to invest a lot more in the future. And the future is education of younger people, particularly disadvantaged -- people in disadvantaged communities.

DENTZER: And we see this playing out now, in state budgets. Medicaid is taking the place of education spending.

HORMATS: And it is a terrible -- it is a terrible, lethal tradeoff. It is a bad tradeoff for older people, it's a bad tradeoff for younger people. Not investing in infrastructure -- where is the growth going to come from 20 years from now if you don't have good roads and highways today? How are we going to be competing?

So we've got to begin to look at this as a whole, and we're not doing this. And if we start getting into a sort of generational debate and look at it either/or, it will be bad for older people, bad for younger people, terrible for the country. And yet, without proper leadership to recognize this linkage -- which I'm afraid you don't see in the debates today -- we're going to suffer.

DENTZER: All right. Well, a good note for us to turn to all of you and open this up to discussion. I'd like to ask you to wait for the microphone, if you would, and speak directly into it. And if you would stand and give us your name and affiliation as well, that would be super. And finally, if you could keep your questions and comments as concise as poosible, we'll be able to get through as many questions as we can.

SHAW: Kathy, could I just say one moment -- one comment in response to Rob?

One thing governments could do for us -- us as the technology industry, which wouldn't cost you any money, is establish the mandate that we have to have interoperable standards because, otherwise, you've got a lot of people contributing technology. The technologies don't talk to one another. So you end up with all these silos of information. And there's no way that we can create the continuum and coordinate, whether it's an individual scare, whether it's, you know -- any aspect of our society, moving forward, will --

(Cross talk.)

HORMATS: And I totally agree.

DENTZER: And we will -- we will devote a discussion to that. Let's see. Let's -- we had a question right here in the front. If you would, again, stand up and introduce yourself, that would be terrific.

QUESTIONER: I'm Mitzi Wertheim with the Naval Postgraduate School. We had a session here I guess two weeks ago with Condi Rice and the education and national security issue. What I found that was missing from that that they didn't talk about the complexity of the society and the systems, thinking we need to have -- to address these problems. That's missing from top to bottom.

I just want to -- since I'm a holistic thinker, I want to add a few things to your mix. One is, the resources on the planet. The way we all want to live with this expanding population, we're really going to need three or four more planets. There was an article in the paper this morning about how the increase of autism seems to be going on all around the world. I assume that's related to climate change.

And then my third question is about jobs. We don't seem to -- how are we going to, quote, "employ these people" when we have such an enormous number of people who are, age-wise, able to work and we can't find jobs for them.

DENTZER: Well --

HODIN: Well, I can --

DENTZER: Michael.

HODIN: Taking off on that, and leaving a couple of your points on the table. You know, this approach, looking at aging through a prism of it's about a shift-in-life course -- which then also goes to Bob's intergenerational point -- is probably not a bad place to emphasize.

And not least, as many will know, this year, the World Health Organization has designated World Health Day, which is next week -- dedicated to population aging. And one of the absolute themes is around this intergenerational collaboration and a life course approach. So on your -- on your point, you know, it is recognized.

Now, this is the -- again, I go back to the point that this is all new, and we're making this up as we go. And the social contract that you asked Bob about, around which the politics are struggling, was as we all know invented by Bismarck at the end of the 19th century, refined during the 20th century. And we're living in a whole different demographic era. So the application of the social contract in the 21st century is something we have to, I believe re-invent. And that's something that this World Health Day will at least theoretically start to address from a strategic point of view.

DENTZER: And as we know, the Bismarckian social contract was a pretty bad deal because every -- almost everybody was almost dead by 65, which was the eligibility age for the Prussian pension system.

Adapting to this reality is not just a cultural issue, it's obviously a political issue, as we mentioned before.

HORMATS: And the jobs -- there's two points to follow up. One, the jobs issue is really critically important, I think. Where do we -- we need -- we need to keep older people who want to work and are capable of working healthy enough to work and giving them opportunities to work. But we also need to employ young people. And if you look around the world, you need no look no further than the United States, where a lot of young kids simply can't get their first job. And then -- I've been spending a lot of time on North Africa and the Middle East -- there, multiply our problem by 10 and you have their problem. This is a huge social issue.

The question of disease and climate change -- it's probably -- there's inot as clear a link as that, but there is certainly, increasingly, concern that environmental problems do have an effect on various kinds of diseases. And that -- and that's another linkage. I mean, as you get older, you absorb more and more chemicals, pollutants in the air.

And that's one of the reasons -- you know, China has a really complicated problem that this -- what you said brings to mind. And that is they have a one-child policy. Those kids are breathing foul air. You walk into a Chinese city -- any city, choose any one -- and they have one kid. The kid has -- they have huge numbers of bronchial problems, pulmonary problems in China. Why? Because of the air they breathe, the water they drink. These kids are going to have to be very productive when they get older because they're going to have two sets of grandparents and one set of parents to care for. And yet, the health problems are building up in China. And the Chinese know this.

So they're having to deal with this carbon-emissions problem. And if you go to -- one of the interesting thing is -- things is that the demonstrations in China that you see and you read about, they're largely about either land grabs by senior politicians who are taking land away from peasants or low-income people, or bad environmental practices, because -- not so much for the parents, but because they know their children are vulnerable.

So this links into the environmental issue and the climate change -- and the climate issue, as you point out.

DENTZER: Let's take another question back at the rear, from Richard Suzman there.

QUESTIONER: Richard Suzman, National Institute on Aging at NIH. I have a question for Mr. Hormats, but first let me just respond to the last set of issues on older workers having to retire for -- to make way for younger workers.

There's a strain of -- train of research that we've funded at the National Bureau of Economic Research, with David Wise, Jon Gruber and many others, that first showed that the primary determinant in Europe and Japan, of how long older workers worked was public pensions. The second step in that set of findings was that they exploded the lump of labor as a fallacy; there's no relationship between -- in high-income countries -- between older workers having to retire and younger workers getting jobs. They are totally separate.

The question I had for Mr. Hormats was really about State and USAID. USAID seems to be very focused still on children and infectious and communicable diseases. And there's obviously enormous amounts to be done in those areas. But they've resisted any focus on population aging -- there's something one could argue there partially responsible for in terms of bringing -- helping bring down the birth rate.

DENTZER: Not to put you on the spot, Bob, but to put you on the spot. (Laughter.)

HORMATS: I'm not quite sure of the logic of the second point. They're responsible for it not so much by bringing down the birth rates. I would say the fact there's an aging population in a way is a success because they've helped to cure a lot or prevent a lot of these childhood diseases. So I think you turned it around in the wrong way. The people live longer, in part, because they've done things -- you know, PEPFAR, the anti-AIDS initiative enables avoidance of transmission of AIDS from the mother to the -- to the fetus.

They've done a lot of work on these early childhood -- the eradication of polio.

All these things have enabled people to live longer. I would say that's a healthy thing. And --

DENTZER: So take the second part of the question: Is USAID focused sufficiently on the AIDS --

HORMATS: Well, it does tend to focus a lot more on younger people; that's certainly true. It can only do so much. I'm not sure what kinds of -- I'd be interested in getting any suggestions on what it might do for older people.

Let me just comment on the lump of labor theory. I think you're exactly right. The point I was making was not that making older people retire early would open new opportunities for younger people. I think you can do both. You can have people be in the workforce longer and still hire younger people. It's not a one-for-one tradeoff.

Nor, might I add, that the notion that people have that if you have more immigrants coming in, it displaces workers, either. In fact, you can make the argument that it creates jobs. So I think there's a mutual benefit by having people work longer and have high-quality people coming in from around the world.

DENTZER: Older people can create GDP also. (Laughter.)

QUESTIONER: And very productively, very productively.

DENTZER: Michael, you want to --

HODIN: Well, you know -- on that point, I think -- and again, there are a lot of people in this room where I posed the following challenge to us. Because we use the term aging, or population-aging; so, automatically, this is about old people.

Yes, because of the way the analysis takes one. But what I would suggest this topic is really about is a profound transformation in 21st century social and political structures to deal with this new demographic reality. Now, the new demographic reality comes about as a result of these two components we've talked about -- about living longer and lower birth rates. One can only see that continuing throughout the 21st century. We have a particular moment of the age wave -- the age boom right now; the 450 million worldwide.

But this is a new and very profound shift, and I think the core question is not old versus young, the core question is, what are the social and economic set of institutions?

For example, we were talking earlier, before the session. If one thinks about living into your 90s, 100 and beyond, and one thinks about an aging population as a part of economic growth and maintaining fiscal sustainability, one thinks about a different kind of education model, and which institutions are responsible for that education model. Is it just a school or is it the marketplace?

DENTZER: The workplace.

HODIN: The workplace over the course of one's life.

So there are a lot of really profound changes, and looking, as Laura Carstensen at the Longevity Center at Stanford says, it's really a prism through which to understand how we organize ourselves in the 21st century.

DENTZER: Let's see. We'll take a question here, and then we'll move our way back this way.

QUESTIONER: Thank you. I'm Dan Perry, with the Alliance for Aging Research. And the insight that Mr. Hormats has expressed -- and I've heard it from all of you -- is that our key goal is to keep people, older people healthier longer so they can contribute to the productive economy.

Keeping them healthy goes to how we organize medical research. The National Institutes of Health is organized disease-by-disease, organ-by-organ, largely in silos. And yet the biggest challenge are all of the chronic diseases of aging, which share a common biological pathway. It's the same mechanisms that set us up for Type II diabetes, as Alzheimer's, as cancer. And yet the National Institute on Aging is one of the smaller of those silos -- the one that Richard works for -- and the research that's going into the biology of aging so we can find the clues to keep people healthier and lower their risk factors to all those diseases, is a fraction of one of the smaller institutes.

How do we tackle that 20th-century problem in the 21st century? It all grew out of politicians hearing from constituents that they were worried about individual diseases; that's the way we've organized medical research. It's not going to get us where we need to go in the 21st.

DENTZER: And further compounded by an environment where there will be potentially flat funding for the institutes overall, as far the eye can see, given the fiscal situation.

Bob, once again, not to put you on the spot on all of our --

(Cross talk.)

SHAW: I know change is going to be very difficult, and the usual way you go about it is you add on another, right? Maybe it's a boost in the Institute of Aging's resources as required, but then I'm sure it's going to come at the expense of cutting back from NCI or -- and then, it's just a hot political potato, too.

DENTZER: I think it is fair to say, is it not -- and Richard, it would be interesting to have your perspective. Recent directors have made an effort to try to facilitate conversation across the silos and focus more on the issues Dan described. But perhaps you'd like to speak to those.

HORMATS: There have been several cross-cutting initiatives based on something called the Common Fund. So one that we helped organize that I think is very relevant to chronic disease is a sign -- the basic signs of behavior change. How do you change people's -- how do you get to change people's lifestyles? And those common risk factors -- smoking, alcohol, food, inactivity -- are key and probably count for something like 30 percent of premature mortality and disability.

So, yes, I'd say that the Institutes are functioning much more as an integrated whole.

HODIN: There may be another way to look at that. Dan, your question, it just -- one thinks of models and other places one can look for.

I mean, if one looks at this topic of population aging as a -- as a theme, as a -- I'm not sure I would call it an issue, quite, but, you know, as a broad theme that has impact on our, literally, everything in the 21st century. Who -- if one goes back roughly, what, 30 or 40 years ago, and you think of the environment, the environment as a topic, as an issue, as a theme, as a driver of, you know, for better or worse --

And there are a lot of people who would agree or disagree, but, I mean, we have new agencies, we have new ways of spending, we have new ways of thinking about it.

I mean, I think that this topic of population aging is sort of a parallel to the topic of environment. And the kind of -- it's not going to happen tomorrow, but the kind of changes that one observes having taken place in that arena were driven by the challenges and opportunities in that arena, might be a similar path that sort of public policy takes with respect to this arena.

SHAW: Let's look at what happened in AIDS, actually, and just what the consumers themselves managed to do in driving change and the whole approach to diagnosis and treatment of AIDS. It made a big difference. So --

DENTZER: Let's take a question here in the front, if we could.

QUESTIONER: Thank you. My name is Bashir (sp) from Embassy of Chad. Thank you for, madame chair of the discussion, for raising an important issue for us, as a developing country from Africa.

The issue of a political dimension of aging population. The whole objective of the discussion, I think, concludes to the point that the governments of the United States with many Asian countries aims for the future to lower the fertility and mortality rates to let the senior people live longer with less fertility, to be positively impact in their economic life.

But I think this assumption in a developing country -- particularly, like African states -- the reverse is the truth. We don't have low-low, we have high-high. High mortality rate and high fertility rates. And I got -- if you are a senior -- (chuckles) -- from Africa, I got you bad news because the level of death in a senior in Africa is very high. And the propsensity to -- you know, to bearing more children in Africa is also high.

So in the near future, we have very serious implication that the youth are going to be the absolute majority in the African population. And unfortunately, there are no clear policies -- strategic policies from our governments for such demographic change plan.

And the most important part of the three dimensions you discussed, which is social, economic and political impact of aging population in Africa -- the poltical part is the most dangerous one, because the youth in Africa in the near future, they're going to be an increasing number, and they are most troublemaking in political life.


DENTZER: So we -- let's ask Bob to comment on that, if you would. Thank you very much for that question.

HORMATS: Well, I think -- I wouldn't make a blanket statement that they are -- I think if they don't have productive avenues for participating in the economy and society, they -- as we've seen in North Africa clearly are, as you've said.

One of the things that is important to do is to give them a sense of hope and participation that they can play a constructive role in their politics and in the economic outcomes of their country. And this is the challenge. If you look at -- you're absolutely -- if you look at Tunisia, you look at Egypt in particular, what you say is right. And it's true in a lot of the sub-Saharan countries; you're absolutely right.

So part of the goal of addressing this aspect is to find ways of helping countries to address economic development issues to give people a greater opportunity to participate in the jobs market, to participate in the political system, so they don't feel either politically or economically disenfranchised. Then they do become very challenging parts of the political system.

And it's certainly true, also, that the crime rate tends to be somewhat higher in countries with -- that have a relatively large portion of kids in the 15-to 25-year range. New York City, that's what happened; as the age -- population grew older, the crime rate went down.

Now I wouldn't say that's true everywhere, but there's certainly some correlation in some places along these lines. But giving them a productive avenue for participating in society is at least one way of -- one way of addressing that issue.

DENTZER: Well, I think we have time for one more question, unfortunately. So let's take this one here.

QUESTIONER: Bethany Brown, from HelpAge International. We work in 97 developing countries around the world with older people, and we can say for sure that development is -- has led to the triumph of the aging population in these developing countries. And their productivity is something that, as you said, is something we can really look to for and -- for a new economic driver for these populations.

The idea of extending or expanding or shifting our view of the life course and what it means to grow old and to continue working is something that can be transformative for developing and developed countries alike. But what I would challenge is the idea of what the dependcy ratio means, because if you're thinking about older people compared to younger people and not really thinking about what they're still contributing, you're missing part of -- part of the point.

So if we stop the age dependency ratio at age 60, say, and older people are continuing to work or continuing to contribute to their families, I think that that's something that's worth looking at, as we shift the life course view.

DENTZER: Michael, do you want to comment on that, or --

HODIN: I would -- thank you, Bethany. And congratulations to HelpAge for the Hilton Award, which is, really, one of the great awards for helping aging populations in the developing world, and particularly women. So it's really a great result that you have.

You know, I think -- I would see success -- as Jane and I were talking about it earlier -- I would see success as a redefinition of old. So I completely agree that, you know, we have this -- not only are our social and economic institutions of the 19th or 20th century, our definition of what is middle-age and old age is of the 20th century, you know. So I arbitrarily said let's call middle age 55 to 75. Maybe it's 55 to 80. Now, of course, I benefit from that personally, so, you know, there is that. (Laughter.)

But seriously, I want to get to the place where there's a redefinition of the dependency ratio, precisely because the numbers are --


HODIN: And even with that, we are living in a, you know, prior era. So, again, I point out that the World Health Organization's celebration of aging populations on World Health Day next week is a way to have us re-think many of the premises and assumptions around aging. And I welcome that.

DENTZER: So the dominant theme I think you have heard today is, as Michael just articulated again, this notion of looking at a different life span, a different life course, through a new prism. And as he said, success would be redefining what it means to be old.

Jane you used the phrase "forward-thinking governmental body." So I'd just like to close with a final question to you -- and again, we'll need answers to be brief. But if one were to have a forward-thinking governmental body that looked at this new prism -- re-defined the notion of old, looked at life span in a new way -- what would be the single most important for that governmental body to do as a first step going forward? So Jane, actually, since that was your wonderful phrase, I'll toss that to you first.

SHAW: I would say, hands down, it's having interoperable standards for technology to operate, because technology is going to be key to many of the solutions that we talked about today. So I would --

DENTZER: And you're not just talking about health information technology here, you're talking about all manner --

SHAW: No, no, no. No. Technology standards, absolutely. The -- you know, we have examples of where they were used very briefly in Japan after the tsunami through the Continua Health Alliance, how companies came together and set up remote patient monitoring systems that replaced the needs for hospitals and clinics for people to be taken care of in the aftermath of the earthquake. All related to open standards, plug-and-play. It's really important for technology to be able to support what is happening.


HORMATS: I would say that if you're looking for a sort of overriding concept, it is mobiliizing the capabilities of older people and taking -- and seeing them as an opportunity to strengthen our economy and strengthen our society. That, to me, is important because the -- and then you look at all the various things that inhibit that.

You know, health care, you look at the disincentives for people to continue being in the workplace -- look at a whole range of things. Connect -- lack of connectivity. Try to see this as a competitive resource in the future and identify systematically all of the various things that are built into our system, and our mindset that inhibit that process. And I think if you looked at it that way, through that prism, you'll see opportunity rather than negativism. And all the challenges that we've talked about and many more will fit into that paradigm.

DENTZER: Michael, last word to you. Forward-thinking governmental bodies would do X.

HODIN: Find the funding support to find the prevention and cure for Alzheimer's. I -- you know, I totally agree on the frailty issue and sight and vision and -- absolutely, with respect to aging. But when I look at the numbers, and the 100-percent perfect alignment with aging. If we don't solve this Alzheimer's thing, which we're more or less in the Dark Ages on -- with respect to the science. That will be the one thing that I would say we need to do.

DENTZER: Well, we are fortunately making some progress, and perhaps that's the next discussion for the Council on Foreign Relations. Join me in thanking this panel for a terrific and provocative discussion. Thank you very much. (Applause.)

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