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Population ageing and health care expenditure: a school of ‘red herrings’?

✍ Scribed by Andreas Werblow; Stefan Felder; Peter Zweifel

Publisher
John Wiley and Sons
Year
2007
Tongue
English
Weight
224 KB
Volume
16
Category
Article
ISSN
1057-9230

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✦ Synopsis

Abstract

This paper revisits the debate on the ‘red herring’, viz. the claim that population ageing will not have a significant impact on health care expenditure (HCE). It decomposes HCE into seven components, includes both survivors and deceased individuals, and estimates a two‐part model of the demand for health care services, using a large Swiss data set for 1999. It finds no or weak age effects on HCE for the components of HCE when proximity to death is controlled for, and points to differences between users and non‐users of long‐term care (LTC). For deceased non‐users of LTC services, a falling age curve for all components of HCE except for inpatient care is observed, while survivors show a weak age effect in ambulatory and inpatient care once proximity to death is controlled for. As to surviving users of LTC services, their probability of incurring LTC expenses markedly increases in old age, while most of the components of their conditional HCE show a decreasing age profile. Thus, a ‘school of red herrings’ can be claimed to exist–with the possible exception of LTC, where ageing might matter regardless of proximity to death. Copyright © 2007 John Wiley & Sons, Ltd.

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