Skewed, Persistent and High before Death: Medical Spending in Germany

Abstract

We use claims panel data from a big German private health insurer to provide detailed individual‐level evidence on medical spending between 2005 and 2011. This includes evidence on the distribution of medical spending, the dependence of medical spending on age and other demographic characteristics, its persistence, and how medical spending evolves in the years before death. Our main findings are that health care spending more than doubles between ages 50 and 80 and that spending is very concentrated: the top 10 per cent of all spenders are responsible for 53 per cent of all medical spending in a given year. There is a 50 per cent probability that individual expenditures lie in the same quintile of the distribution after five years, for both very‐high‐ and very‐low‐cost individuals. Medical spending in the year of death is six times higher for the deceased than for everybody else in that year and accounts for 7.9 per cent of lifetime spending. Females use more office‐based care and have higher spending at younger ages, whereas males have higher spending at older ages, particularly for hospital care, and die younger. The presentation of these empirical facts is framed by an institutional discussion of the German health care system, a comparison between publicly‐ and privately‐insured individuals, and a discussion of medical spending trends in aggregate‐level data.

Medical Spending of the U.S. Elderly

“…This paper is part of a series of studies examining the properties of individual-level medical spending both across several data sets for a given country and across countries. More specifically, Fahle, McGarry andSkinner (2015), Calonico, et al (2015), Pashchenko and Porapakkarm (2015), and Evans and Humpherys (2015) focus on U.S. data sets, while Christensen et al (2015) study Denmark, Geoffard et al (2015) study France, Karlsson et al (2015) study Germany, Ibuka and Chen (2015) study Japan, Bakx et al (2015) study the Netherlands, Aragón et al (2015), Cookkson and Propper (2015), and Kelley, Stoye and Vera-Hernandez (2015) study England, Côté-Sergent et al (2015), study the province of Quebec in Canada, and Chen and Chen (2015) study Taiwan. Finally, Banks, Keynes, and Smith (2015) analyze differences in health between the U.S. and the U.K.…”

Hospital Expenditure at the End-of-Life: A Time-to-Death Approach

“…In return, studies that considered long-term care expenditures concluded moderate end-of-life expenditures. 22,24 One concern about the findings of our study was that the focus of the study data on HIE due to lack of access to outpatient and medicine expenditures, so that these expenditures could not be taken into account in analysis and assessing the effects of TTD and age on health expenditures. Despite the fact that the disability index is a more representative indicator of individuals' health status and their expenditures, considering of such indicators in our study model was not provided due to the lack of available individual's information.…”

Long-Term Health Insurance: Theory Meets Evidence

“…In the private market, individuals can choose among thousands of individual long-term plans. Karlsson et al (2016) provide more details on the general structure of the German health insurance market. Hofmann and Browne (2013) and Atal et al (2019) provide additional specific details on the individual private market.…”