The Trillion Dollar “Death Economy”: You Will Definitely Participate
Whether you’re a consumer or an investor, here are the top 5 reasons why you should be paying attention.
The death economy is taking on a life of its own, and massive growth in the next few years is guaranteed. After all, it’s 100% certain that you (and everyone) will need end-of-life products and services at some point in your life, and probably at multiple points while helping those you love.
It is the nature of nature.
The death economy is already huge, and ripe for innovation.
American consumers currently spend $20 billion/year on funerals, $195 billion/year on trusts and estates, $294 billion/year on elder care, and $616 billion/year on life/health insurance premiums — that’s over a trillion dollars in the US total. (For scale comparison, the much-hyped “sharing economy” is projected to reach $335 billion globally by 2025.)
Yet until recently, the death economy has been stagnant and resistant to innovation. This can largely be blamed on sociocultural inertia: death and dying can feel scary or taboo, so we put it off (sometimes indefinitely). Even though everyone needs it, for a while there was not enough “demand” in the traditional economic sense of the word because we didn’t like to think about it.
Now, for a variety of reasons, change is coming in a big way.
What has been invisible for decades is suddenly becoming visible, and the death economy is poised to grow fast. Some of the top drivers of this evolution:
1) Traditional & Social Media
Celebrities tweet about loss. Our friends memorialize their loved ones on Facebook. Atul Gawande’s book Being Mortal has been a huge bestseller. As these conversations percolate through the social consciousness, repeated exposure normalizes the topic and helps us realize that we are not alone in being affected by death, and in fact, nothing is more universal.
2) Healthcare is Broken at End-of-Life
Current end-of-life care practices are unsustainable: one quarter of your lifetime healthcare expenditure — $125B of Medicare dollars — occurs in the last year of life, yet the care delivered is not necessarily what you would want. The “death panel” controversy of 6 years ago has been squashed by the vital need for people to communicate what care they’d like to receive. A recent Kaiser study shows that 89% of people want to talk to their doctor about end of life issues but only 17% have. Medicare just started reimbursing end of life consultations on January 1, 2016, and private payers are sure to follow (e.g., BCBS of MA).
3) Secularization of Society
For millennia, religion dictated what you’re “supposed” to do when someone passes away. Today, that roadmap is nonexistent for many: 23% of Americans are religiously unaffiliated, a dramatic increase from 16% in 2007. In the absence of spiritual guidance, people chart their own paths. Even religious Americans may also desire personalization, and, as a result, seek a better understanding of their universe of options on how to memorialize a life.
4) Changing Demographics
The “Silver Tsunami” is undeniable: in the next 25 years, the number of people over the age of 65 will double. Baby boomers have shaped industries in every life stage they’ve experienced, and end-of-life services are no different. All 76 million of them are thinking (or actively avoiding thinking) about their end of life plans. Additionally, nearly 1 in 5 women never have children, and that percentage is rising: being child-free creates more of a burden on them and their partners to work out their end-of-life affairs.
5) Everyone wants their life to be as awesome as possible, all the way to the last moment
Elder care and services are also exploding: just because you’re older doesn’t mean you don’t have the right to live well. Aging does not just affect elder generations, it also affects younger ones who serve as caregivers: in the last 12 months, 34.2 million Americans have provided unpaid care to an adult age 50 or older. A large part of end-of-life planning is getting a sense for what you’d want your last years to look like, both for yourself and for your loved ones.
This transformation is already happening in other global markets.
Norway has a reality TV show about celebrities planning their funerals. South Korea has mock funerals. The UK has a strong hospice and palliative care community and is currently ranked the best place in the world to die (US is 9th).
It’s starting to happen in our country now, too.
Grassroots organizations like Death Cafés, Death over Dinner, and Order of the Good Death have emerged, and green funerals and home funerals are growing fast. Death Doulas are a thing! Facebook now has a legacy contact option, and it’s only a matter of time before other social media platforms offer something similar.
New and innovative companies are being created all the time. Zen Hospice worked with IDEO to transform how to make dying more human-centered. Willing helps you do your will online, for free. My company, Cake, makes it easy for you to discover, store, and share your end-of-life wishes. It is certain that whole new industries will emerge from the opening up of the death economy.
The good news is: we will all benefit.
More people will have their end-of-life wishes respected, and fewer people will have to deal with the conflict, suffering, and financial burdens that can arise when planning is inadequate or nonexistent. Remember, the death economy doesn’t have to be all doom and gloom. Preparing for end-of-life can be empowering and life affirming, and remind us all to focus on what’s most important, let the little things go, and be grateful for every moment that we do have.