At the same time that corporations are transforming themselves to deal with the threats and opportunities posed by the growing elder population, politicians and social planners are fretting over the problems they fear that this demographic tidal wave will create for pensions and for the healthcare system.

For many, the healthcare crisis is particularly frightening. This is underscored by the recent government forecast that the Medicare trust fund will be empty by 2019. However, the Trends editors don’t see this as a crisis, but rather an opportunity to revolutionize a 1960s entitlement program for the 21st century. That brings us to Trend #2: Medicare crisis spurs healthcare revolution. It’s important to understand that part of the perceived crisis is due to the bureaucratic use of outmoded assumptions that no longer hold true. This component will simply disappear as time passes. The other part of the perceived crisis is created by a system that is built around obsolete practices and technologies rather than an optimal mix.

Let’s start by examining the flawed assumptions:

First, the fear of a Medicare crisis is based on an assumption that the elderly will be in poor health, and therefore in need of costly medical care.

However, today’s generation of people in their 60s, 70s, and 80s is in much better shape than earlier generations were at these ages. Better nutrition, more effective medical treatments, and a greater awareness of the importance of exercise have all contributed to the fittest generation of senior citizens in history.

Therefore, the anxiety that society will be burdened with huge numbers of sick and disabled people of advanced age is probably based on irrelevant data from decades ago.

In fact, in a January 2004 article, the Financial Times quotes Raymond Tallis, professor of geriatric medicine at Manchester University as explaining, “New data demolish such concerns. There is a lot of evidence that disability among old people is declining rapidly.”

Some experts interpret this evidence to mean that we are experiencing a “compression of morbidity.” In other words, breakthroughs in both the prevention and the treatment of disabling illnesses are expanding the number of years that people will live in good...