The impact of ageing on health care expenditures: a study of steepening

Abstract

Some researchers claim that health care expenditures for older people are growing faster than for the rest of the population. This process is referred to as steepening. The aim of this paper is to test steepening, applying new data and revised methods. Furthermore, we explain the connection between the terms red herring hypothesis, i.e., that time to death and not age per se drives the health care expenditures, and steepening. We also present the mechanisms that may induce steepening, as presented in the literature. When testing steepening, we apply data from all inpatient stays in somatic hospitals in Norway in the period 1998–2009, i.e., the data has no self-selection and covers the entire population of Norway (5 million). Our analysis does not reject steepening, with the exception of the 0-year-olds. The results also hold when controlling for mortality-related expenditures. Furthermore, we observe an increase in expenditures for the 0-year-olds. Finally, we find increasing mortality-related expenditures over time. We find the link between steepening and the red herring hypothesis to be vague, and we find steepening and the red herring hypothesis to be independent.

The Contribution of Ageing to Hospitalisation Days in Hong Kong: A Decomposition Analysis

“…The impact of an ageing population on healthcare expenditures has been widely discussed over the past three decades. [1][2][3][4][5][6][7][8][9][10][11][12] While some studies have suggested that rapid growth in the older adult population (defined as ages 65 and above) is a significant cost-driver for healthcare services, through mechanisms such as increased utilisation due to longer lifespan, [1][2][3]6,8,10 some have argued that the ultimate effect on healthcare expenditure is mild. 5,7,9,11,12 In either case, the magnitude and rate of the increases in the demand for healthcare services relating to age-associated medical conditions has left many countries unprepared.…”

Are healthcare expenditures increasing faster for the elderly than the rest of the population?

“…With respect to the steepening hypothesis, Felder and Werblow have argued that the steepening effect is real, but weaker than previously believed [8]. More recently, Gregersen reported some evidence of steepening in Norwegian hospital data [9], but it was not as strong as indicated by Buchner and Wasem. It should be noted that the strength of the empirical conclusions also depends on whether the definition of health expenditure includes long-term nursing care.…”

Comparison of Health Care Expenditure Patterns between Various Income Deciles: Iran Urban Households (2009–2014)

“…This research has detected income elasticity to be above unity, implying that the share of health expenditure of GDP increases with the rise in per capita income. However, other papers like Smith, Newhouse, and Freeland (2009) and Follette andSheiner (2008 and2014), declare that household-level estimates may not be predicted and illustrated by macroeconomic data. Therefore, they propose that adopting microeconomic data is more useful for estimating income elasticity.…”

“…Similarly, Amy Finkelstein (2007 and showed that analyzing the effect of medical service prices is not accurate without considering the role of insurance. Dalgaard and Strulik (2012, 2014 have investigated the role of age in healthcare expenditure and find it to be one of the most important effecting variables of healthcare expenditure. Wagstaff's (1986) effort for identifying effecting variables of demand for health and healthcare expenditure finds family income, age of family and family size as the most important variables to consider.…”

“…F. A. Gregersen (2014) has investigated the effects of aging on healthcare expenditure and finds it as the central variable.…”