National health plan unlikely, suicide rate will rise, Dow won't repeat 1987 decline, says actuarial group
SCHAUMBURG, Ill., Aug. 25, 1999 - As the millennium approaches, what do experts in evaluating future possibilities see in the years ahead?
More than 140 members of the Society of Actuaries' Futurism Section revealed their educated beliefs on 25 questions about the future in a recent study. The special project, a Delphi study, was conducted in conjunction with the Society's 50th anniversary in 1999 and the approaching Year 2000. The study will be discussed in detail in a session at the Society of Actuaries' 50th anniversary meeting in San Francisco, Oct. 17-20.
Actuaries are professionals who use mathematical and statistical modeling to project future possibilities and the financial resources needed to meet them. Members of the Society of Actuaries' Futurism Section have a continuing interest in the discipline of futurism. Many Futurism Section actuaries are senior company executives, corporate futurists and academics.
What did the 144 actuaries responding see for the years 2010 and 2050?
- There's less than a one in three chance that the United States will institute a national health plan or other mechanism as an alternative to employer-based health insurance.
- The U.S. suicide rate will rise.
- In the next 10 years, the Dow Jones Industrial Average won't see a one-day drop as dramatic as the 22.6 percent decline on Oct. 18, 1987.
- Americans born in the year 2050 can be expected to live beyond an average age of 80, but few think the average will be as high for those born in 2010.
- By 2010, health expenses will represent a larger percentage of the gross domestic product (GDP) than they have in the past.
- A majority of respondents also saw a slowdown in prescription drug costs, a rising percentage of the labor force being comprised of women, fewer workers per retiree, declining death rates from heart disease and cancer, and inflation remaining under control. A significant minority, 35 percent, foresaw a cure for AIDS by 2050, but only 4 percent expected one by 2010.
"The Society's 50th anniversary pays tribute to actuarial abilities and the value actuaries bring to business, government and society as a whole," said Howard J. Bolnick, Society president and a member of the Futurism Section.
"This study shows actuaries are considering issues that touch people's lives." Noted Al Easton, chair of the Futurism Section Council and the study's director, "The Delphi format gave us a perfect opportunity to give educated opinions about topics we deal with intellectually and technically every day."
A Delphi study assembles a group of experts and asks the same questions in up to four rounds of surveying. The responses of the previous rounds are reported, allowing individuals to consider their next responses in light of the expert consensus. The Society's Futurism Section sponsored two rounds, "and the answers were considerably more focused in the second round," Easton noted.
The Futurism Section's Delphi study asked 25 questions about events occurring in the late 1990s. Actuaries were asked to give forecasts for 2010 and 2050. About 16 percent of the Section's 900 members participated.
Question-by-question interpretations were offered by Easton, chair of the Futurism Section Council, with input from the council and others involved in the study.
National health plan: The question asked for the probability that employer-based health insurance will be replaced by another mechanism (presumably a broad government program). Respondents thought the probability will be low over 10 years, and even over 50 years, less than a third of the respondents thought the probability would exceed 60 percent. Clearly, most didn't think enough political pressure would develop to make this happen, even over 50 years.
Suicide rate: In 1995, suicide accounted for 11 deaths per 100,000 people. That will rise to 13 or higher by 2010, said 42 percent, and 53 percent said it would rise to 13 or higher by 2050. While there can be no "cure" for suicide, wider use of psychoactive drugs might help reduce one of its causes, depression. However, if science can't combat the disabilities of old age (even while reducing mortality) suicide may seem the only alternative. Respondents may have felt suicide would become more accepted as other causes of death are reduced or eliminated.
Loss in the Dow: Sixty-two percent of actuaries responding didn't see a greater single-day loss between now and 2010 than the 22.6 percent drop on Oct. 18, 1987. However, a large minority - 34 percent - foresaw a one-day drop of 25 percent or more by 2050. Even though circuit breakers are now in place intended to forestall rapid decreases, 76 percent of respondents expected at least a 15 percent decease in one day by 2010. Also, 60 percent expected a one-day drop of at least 20 percent by 2050. This may have in part reflected nervousness over the market's currently high level.
Life expectancy: Americans born in 1997 could be expected to live 76.5 years. By the year 2050, that will rise to age 80 and older, said 96 percent of the actuaries responding. Fifty percent said average life expectancy would be 82 years or older in 2050. The answers to this question clearly reflected optimism about a decline in the two major causes of death - heart disease and cancer - indicated in two other Delphi study questions.
Health expenditures: Between 1993 and 1996, health expenses took up 13.6 percent of the gross domestic product. By 2010, this will rise to 15 percent or more of the GDP, said 97 percent of the actuaries responding. But only 73 percent expected that level to continue by 2050. Respondents probably believed there would be changes in the types of treatment, and they may have considered the aging of the baby boomers. The answers probably also reflected the cost cutbacks resulting from managed care over the past few years and questioned whether these can continue. Also, one respondent noted that once a product has been successful for a while, it becomes a commodity as its price declines in response to market pressures.
The complete report is posted on the Society's Web site ( www.soa.org , Resources, Newsroom) and is available free of charge from the Society of Actuaries, Delphi Study, 475 N. Martingale Road, Suite 800, Schaumburg, IL 60173.
The Society of Actuaries, with 16,500 members primarily in the United States and Canada, is the largest actuarial organization in the world. The Society provides basic and continuing education to actuaries and conducts actuarial research. Society members practice primarily in the fields of life and health insurance, pensions, employee benefits and investments.
EDITOR'S NOTE: For a complete report, journalists should contact Jackie Bitowt, Society of Actuaries public relations manager, at 847/706-3566, jbitowt@soa.org .