We are in the middle of a health awareness revolution.
Attitudes to fitness, health, diet, and social risk factors are changing more rapidly than at any time in history. This has fueled a massive increase in life expectancy, particularly in better-educated social groups. Actions by individuals taking responsibility for their own health have outstripped the benefits of modern medicine in driving recent mortality reduction.
It also appears that the appetite for health-risk information is outstripping the capability of medical science to provide it. This is problematic not only for the medical profession, but also for the financial services industry in funding our retirement provisions.
The recent furor in the American Heart Association and American College of Cardiology is about the accuracy of risk models in new guidelines published last week. Risk models are used to help individuals make decisions about actions to improve their health. In this case, models were used to produce guidelines for taking statin drugs to reduce blood cholesterol – a leading risk factor for heart disease.
Medical-risk models take volumes of historical statistical data and deconstruct the importance of a large number of variables to try to assess their relative importance. The human body is a very complex system – it is not a piece of engineering that can be easily subjected to analysis using the laws of physics. It has many interacting biological processes and interdependencies, and human bodies have wide variations in characteristics in any population.
Because risk models need large volumes of data to tease out all the different variables that apply to an individual person, the historical data needs to be collected over a long time period. The newly-released calculator is based on data from the 1990s when many of the social habits and medical practices were very different than present – for example the gap between male and female mortality has narrowed significantly in the past 20 years. Leading cardiologists argue that these new guidelines have failed to keep up with and anticipate all the recent changes in patterns of public health and life expectancy.
Past health patterns aren’t a great guide to the future.
Similar problems also underpin the life expectancy estimations made by annuity providers and life insurers, who use past mortality data to project life expectancy in future decades for their retirees and pensioners. The fact that most pension liabilities are under-funded is not new news, yet solutions to ensure the future financial health of our elderly population are only as effective as the reliability of the underlying life expectancy projections.
Projections that fail to properly consider how the future may differ from the past, whether due to lifestyle or biomedical advances, can lead to the wrong strategies. Medical risk models developed by organizations like the American Medical Association suggest that even without future biotech advances, mortality rates could almost halve again from present rates if more people adopted highly healthy lifestyles. Models, such as those developed by Risk Management Solutions, incorporate all the variation that future mortality trends might follow and suggest that there is a 1-in-100 likelihood of a future mortality trend that would cause a trillion-dollar increase in annuity liabilities for the global pensions industry.
Improving medical risk models to ensure that they incorporate the potential for changes in the patterns of public health and life expectancy is a high priority for modern society, feeding into future healthcare planning, the provision of accurate advice for individual decision making and for the future financial health of our elderly population.
