Select your language: EN JP

The Graying Population

Kevin Pang, Vice President, Technology Innovation and Strategy
August 19, 2021

The below figure from the United Nations 2019 population report contains a number of interesting aspects:

  1. The projected global population at 2050 is tightly collared at just under 10 billion. In fact, the report settles on 9.745 billion, up from 2019’s 7.71 billion people.
  2. By 2100, the collar of possibilities (at 95% prediction interval confidence) expands to just under 10 billion up to 13 billion.
  3. In all aggregated scenarios, such population growth is attributed to what the UN terms “population momentum,” viz., there is little policy that governments can enact that will significantly change outcomes in the next 20 years, and those outcomes are due to increasing longevity even in the face of drastically declining growth due to new births.

Chart showing progressive population numbers over time, according to the UN

Source: https://population.un.org/wpp/Download/Standard/Fertility/ 

Though not shown in the graph, further cementing the point, a multidecade decline in crude birth rate (CBR), or births per 1,000 people, is observed, from a global average of 36.9 in the 1950 to 1955 period to 18.5 between 2015 and 2020 and a projected 7.7 in the UN’s “low variant” birth rate scenario. Further, although also not shown in the graph, elsewhere in the analysis, the distribution of that increased population growth is unbalanced; the overall population growth in the least developed countries’ populations will remain 2.5× faster than that in the developed world over the forecasted period.                       

The implications of these tectonic movements, should they come to pass, are tremendous. They represent a huge graying of the world population, a massively ever-increasing transfer of time, energy, and wealth into the needs and wants of this population, and even further, this shifting of wants and needs from today’s definition of developed countries into underdeveloped ones, resulting in significant market change.

Take, for example, adult diapers.                                                    

According to estimates from Zion Research, 2020 global sales of adult diapers already totaled $13.3 billion, in contrast to the baby diaper market, which was worth $61.5 billion. Based on Zion’s data, we estimate the CAGR for adult diapers to be 7.5% for adults (2× to 3× U.S. GDP) vs. the current trajectory of baby diapers at 4.5%.  

However, the growth trajectory of baby diapers is decelerating. A look at Zion’s estimates between 2022 and 2027 implies a curve flattening to 1.05%, a figure that agrees with the UN curve for population growth of 1% circa 2020. Extrapolation of the UN curve beyond 2050 predicts further declines tending toward no net new growth (directional, not tenable), simply shifting in geographic growth areas (see the CBR estimates in the UN report above) from North America and Europe to Africa, followed by Latin America and Asia.

Assuming constant pricing and extensibility of projected growth rates to 7.5% for adults and a slowing to 1% for babies, the market for adult diapers is expected to surpass the baby market by 2050 for a combined market size of $186 billion, a more than doubling of the current market, assuming current usage rates and rationale.

That’s a big market and somewhat of a big problem, given current consumer recyclability concerns. The 2018 EPA estimate pegs U.S. annual disposable diaper landfill mass to be 4.1 million tons, or 1.5% of total municipal waste. Assuming simplistically that the U.S. constitutes one-third of the world usage of disposable diapers, there is a current annual 12 million tons of global diaper waste, increasing to 30 million tons by 2050.

Another indicator of the graying population is the growth in those requiring long-term care at home. See the below OECD graph.

Chart showing proportion of older adults receiving long-term care at home in OECD countries, data from Nature.com

Source: https://www.nature.com/articles/s43587-020-00018-y 

This amazing graphic demonstrates the sheer percentage of the older population across the globe that requires long-term at-home care. While the reasons differ on an individual basis, the rationale for why this is happening is clear. According to the CDC:

Data source: https://www.cdc.gov/nchs/health_policy/adult_chronic_conditions.htm

At least in the U.S. (which I use as a proxy for the Western world)], as of 2008, the percentage of people with at least one chronic disease at age 55 to 64 is almost 70% and increases to 86% by age 65, a 23% increase in prevalence. By 65, 56% of individuals are living with two or more diseases and 23% with three or more, increases of 51% and 60%, respectively. So how fast is the 65+ demographic growing? Assuming non-widely varying genetics and impact of lifestyles on aging by geography (a bit of an assumption but not wildly so in terms of geriatrics), the UN 2019 report shows us the following:

Chart showing number of persons aged 65 or over by geographic region in 2019, projections for 2050, and the difference

Source: https://www.un.org/en/development/desa/population/publications/pdf/ageing/WorldPopulationAgeing2019-Report.pdf 

As we can see, there is no place on the planet that is immune to aging. The reason Europe and North America will “only” increase by 48% is that we are already on the leading edge of the graying wave, and the rest of the world will “catch up” by 2050 with doubling or tripling of the current population due to increasing longevity. Some of the biggest increases are expected to occur in Southern and Western Asia.

The world in toto is expected to have more than 1.5 billion people over 65 by 2050, more than doubling from 2019. The burden of disease can be expected to be much higher than that. Europe is at the forefront of having to deal with this graying crisis. According to the European Chronic Disease Alliance, 9 out of 10 Europeans die from chronic disease, with 70% to 80% of all healthcare euros spent on chronic disease management to the tune of €700 billion per annum and expected to rise dramatically. The Alliance further notes that only 3% of those euros are spent on prevention today, with 97% spent on reactive treatment.

So what are these chronic conditions? They will vary by geography and culture, but by and large, again, the common outweigh the unique. U.S. data will serve to illustrate. According to the U.S. National Council on Aging, the top 10 most prevalent chronic conditions that become chronic diseases are as follows:

Chart showing the 10 most prevalent chronic conditions that become chronic diseases

Source: https://www.ncoa.org/article/the-top-10-most-common-chronic-conditions-in-older-adults

This represents the “at-large” population. But according to the U.S. CDC, the top 10 chronic conditions requiring treatment among long-term care facility residents are as follows:

Chart showing the top 10 chronic conditions requiring treatment among long-term care facility residents

Source: https://www.cdc.gov/mmwr/preview/mmwrhtml/mm6131a6.htm

A comparison of the two sets of data yields the following:

 

NCOA (2021 data)

CDC (2012 data)

Rank

Disease

%

Disease

%

1

Hypertension

58

Hypertension

57

2

High cholesterol

47

Alzheimer's

42

3

Arthritis

31

Heart disease

34

4

Ischemic heart disease

29

Depression

28

5

Diabetes

27

Arthritis

27

6

Kidney disease

18

Osteoporosis

21

7

Heart failure

14

Diabetes

17

8

Depression

15

Respiratory

15

9

Alzheimer's

11

Cancer

11

10

Respiratory

11

Stroke

11

 

Seven out of 10 chronic conditions that occur when ambulatory issues follow the consumer-patient into long-term care facilities, i.e., they get progressively worse and more debilitating with age. On the right, the CDC side of the ledger, those in long-term care facilities – having cancer, a stroke, and/or an osteoporotic event – would be able to qualify for long-term care needs; on the left, the NCOA side of the ledger, these conditions are not found. What is found there that is unique is hypercholesterolemia and kidney disease. Interestingly, in 2014, the National Kidney Foundation reported that a 14-year longitudinal study of 4,500 men demonstrated a link between high cholesterol and kidney disease.

The upshot of all this is that the burden of chronic disease management is high and getting higher. As it is almost purely demographic-driven and the consequence of better public health, nutrition, and improving health technologies, it is a problem born out of a solution, namely increasing healthcare for all. But the cost of maintaining and extending this public good is growing. See below:

Personal health care expenditures, by source of funds and type of expenditure: United States, 2008–2018

Source: https://www.cdc.gov/nchs/hus/contents2019.htm?search=Nursing_homes, 

In the 10 years between 2008 and 2018, expenditures increased by $1 billion, a 50% increase (right graph). On the left, though, note the out-of-pocket costs that the patients themselves directly bear for healthcare. In 2018, in addition to more than $1 trillion spent by private health insurance, patients still spent close to $400 billion more in out-of-pocket costs, something rarely publicly discussed.

Moreover, and disturbingly, this does not capture all that the private citizenry, the patient-as-consumer, bears in providing for their own healthcare and that of immediate family members. According to studies cited by the American Action Forum (AAF), Americans (and by extension all others around the globe) further subsidize the healthcare system with unpaid labor in the form of family members providing care for loved ones.

According to the AAF, in a long-running longitudinal study since 1968 that followed 5,000 families in the U.S., the University of Michigan found that in 2017, 26 million family caregivers provided an average 18 hours per week of unpaid care. Noting that 70% of such caregivers are between the ages of 50 and 64 and that the U.S. Bureau of Labor Statistics estimates average salary rates at $28 per hour, the estimate of free labor, 24 billion hours, has subsidized the U.S. healthcare system to the tune of $680 billion. This number is on par with all that Medicare paid out in the same year (see graph above). Taken together with the $400 billion in direct out-of-pocket payments consumer-patients make, close to $1.1 trillion in value is paid into the healthcare system annually by consumer-patients. This is just in the U.S. – the global loss of productivity and opportunity might be 2× to 3× this number.

Further, the $680 billion is likely an underestimate of lost productivity. While all is not lost, as the desired end result of the activity is an ever-so-slightly more functional human, and it targets quality of life and the slowing of further debilitation, this number does not take into account lost job opportunities, increased emotional duress, or lost promotional prospects. The U.S.-based Family Caregiver Alliance estimated in 2015 that caregivers can, on average, expect to give up a lifetime $300,000 in lost income and benefits.

So what might be a technology and system fix?

One approach is “sensorizing” the patient and environment to enable remote monitoring and more real-time response to changes and needs. Here at Lux, we see this new market as a major opportunity for embedded sensors. This will start out slow and grow rapidly as the simple biomarkers – e.g., blood pressure, heart rate, glucose, and electrolytes – that can be measured develop through form factor design and scaling, learning curve cost economics, and sophisticated embedment and use case development. For just five types of the envisioned measurements, two of which are on the above-mentioned top 10 list of chronic conditions, namely diabetes and cardiovascular, we see a robust $25 billion market developing by 2030 (see below).

Forecasted market size of biosensor devices for leading five health conditions

Source: https://members.luxresearchinc.com/research/report/38763 

This $25 billion market we see developing is for just five envisioned use cases for diabetes, cardiovascular disease, stress and sleep disorders (the two of which taken together might eventually lead to a proxy for depression), and electrolyte imbalance, the last one driven primarily by high-end athletics.  

Driving these markets are our core assumptions of condition incidence (new cases per year) increases (with the exception of hydration perhaps) as the population ages and prevalence (degree of persistence of a chronic, noncured condition) remains static, even in the face of the decreasing price of sensors due to the learning curve and scaling dynamics. The table below describes the types of wearable technologies we believe displace incumbent approaches, e.g., Holter monitors for cardiovascular disease and blood testing for diabetes, in our framework and average 2021 pricing assumptions.

Primary condition application(s)

Primary technology/ mechanism

Average hardware pricing assumption 2021

Estimated # of devices, global 2030

Cardiovascular

Electrocardiography (ECG)

$150

80 million

Diabetes

Photoplethysmography (PPG)

$200

800,000

Sleep disturbance

Electroencephalography (EEG) sensors

$400

40 million

Stress management

Biochemical chromogenic

$25

10 million

Hydration

Electrochemical

$50

4 million

 

What follows are examples of some of the cutting-edge technologies and companies being actively followed by our analysts in this space.

Network map of companies utilizing continuous biosensing

Source: https://members.luxresearchinc.com/research/insight/40750

Note that this is not a comprehensive map of all entities and is illustrative of the growing ecosystem. Note the proliferation of more use cases and applications here than detailed in the text above and that, increasingly, companies are beginning to view biosensing as more platform than product and simultaneously attacking multiple application markets.

The race is on to find the right compact form factor, multifunction platform capability and flexibility, and the right mindshare message for mass-market success for the new and emerging consumer-as-patient marketplace. Interestingly, perhaps catalyzed or accelerated by COVID-19, a number of mental health monitoring entities are pursuing a dual strategy: FDA approval as a medical device for a severe or medically treatable condition as well as a lighter, consumer-based version for cognitive health monitoring marketed to both individuals and employers. We’ll follow up further in an upcoming post on what has changed and what matters in a post-COVID world.

In the meantime, see below for a Lux Innovation Grid assessment of companies in the continuous monitoring space taken from our interview with the co-founder and CEO of Blumio.

The Lux Innovation Grid (LIG) evaluates companies based on primary research done by Lux Research analysts. The LIG chart's x-axis scores for business execution, the LIG chart's y-axis scores each company's technology

Source: https://members.luxresearchinc.com/research/profile/blumio

Note that we are withholding our Strong Positive take for any of the current, interviewed players in the above grid as we await evidence of the viability of the strategy and commercial platform concept. However, a number are ranked Positive, and relative to other technology cohorts we cover, this group as a whole is viewed as having high technology potential given the potential of the overall consumer wellness and fitness market we see developing.

Identifying Adjacencies to Catapult Innovation Strategy

Identifying Adjacencies to Catapult Innovation Strategy

Read More
The Hidden Power of Know-How

The Hidden Power of Know-How

Read More
Digital Transformation in a Post-COVID World

Digital Transformation in a Post-COVID World

Read More
More Lux News
Schedule Your Demo