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“Steeping” of Health Expenditure Profiles

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  • Florian Buchner

    (Institute for Health Care Management, University Duisburg-Essen, Universitaetsstrasse, Essen 45127, Germany)

  • J�rgen Wasem

    (Institute for Health Care Management, University Duisburg-Essen, Universitaetsstrasse, Essen 45127, Germany)

Abstract

If health care expenditure for the elderly grows faster than for younger people, the expenditure profiles become “steeper” – we call that “steeping”. Three instruments for measuring “steeping” are presented: (1) trend of the relation between per capita expenditure of the old and the young; (2) comparing the linear slopes of per capita expenditure in age groups; (3) trend in parameters of nonlinear modelling of expenditure profiles. Using data of the largest German private health insurer over a period of 18 years, “steeping” could be observed by all three methods in most examined insurance plans. There are some hints that steeping also occurs in Germany's social health insurance system. The impact of steeping on the sustainability of the health system is discussed. Consequences for the calculation methods in a capital-funded health insurance system and for the implicit inter-generational contract within a pay-as-you-go financed social health insurance system are analysed. The link between “steeping” and the topic of the “red herring” discussion is elaborated. The Geneva Papers (2006) 31, 581–599. doi:10.1057/palgrave.gpp.2510100

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Bibliographic Info

Article provided by Palgrave Macmillan in its journal The Geneva Papers on Risk and Insurance Issues and Practice.

Volume (Year): 31 (2006)
Issue (Month): 4 (October)
Pages: 581-599

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Handle: RePEc:pal:gpprii:v:31:y:2006:i:4:p:581-599

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Cited by:
  1. Felder, Stefan & Werblow, Andreas, 2008. "Do the age profiles of health care expenditure really steepen over time? New evidence from Swiss cantons," Dresden Discussion Paper Series in Economics 05/08, Dresden University of Technology, Faculty of Business and Economics, Department of Economics.
  2. Christian Hagist & Laurence J. Kotlikoff, 2009. "Who’s going broke? Comparing growth in Public healthcare expenditure in Ten OECD Countries," Hacienda Pública Española, IEF, vol. 188(1), pages 55-72, March.
  3. Christian Hagist & Laurence Kotlikoff, 2005. "Who's Going Broke? Comparing Growth in Healthcare Costs in Ten OECD Countries," NBER Working Papers 11833, National Bureau of Economic Research, Inc.
  4. Ried, Walter, 2007. "On the relationship between aging, edical progress and age-specific health care expenditures," Wirtschaftswissenschaftliche Diskussionspapiere 08/2007, Ernst Moritz Arndt University of Greifswald, Faculty of Law and Economics.

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