This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Time to include time to death? The future of health care expenditure predictions

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Sally C. Stearns (Department of Health Policy and Administration, University of North Carolina at Chapel Hill, USA)
Edward C. Norton (Department of Health Policy and Administration, University of North Carolina at Chapel Hill, USA)

Additional information is available for the following registered author(s):

Abstract

Government projections of future health care expenditures - a great concern given the aging baby-boom generation - are based on econometric regressions that control explicitly for age but do not control for end-of-life expenditures. Because expenditures increase dramatically on average at the end of life, predictions of future cost distributions based on regressions that omit time to death as an explanatory variable will be biased upward (or, more explicitly, the coefficients on age will be biased upward) if technology or other social factors continue to prolong life. Although health care expenditure predictions for a current sample will not be biased, predictions for future cohorts with greater longevity will be biased upwards, and the magnitude of the bias will increase as the expected longevity increases. We explore the empirical implications of incorporating time to death in longitudinal models of health expenditures for the purpose of predicting future expenditures. Predictions from a simple model that excludes time to death and uses current life tables are 9% higher than from an expanded model controlling for time to death. The bias increases to 15% when using projected life tables for 2020. The predicted differences between the models are sufficient to justify reassessment of the value of inclusion of time to death in models for predicting health care expenditures. Copyright © 2003 John Wiley & Sons, Ltd.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://hdl.handle.net/10.1002/hec.831
File Format: text/html
File Function: Link to full text; subscription required
Download Restriction: no

Publisher Info
Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

Volume (Year): 13 (2004)
Issue (Month): 4 ()
Pages: 315-327
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:wly:hlthec:v:13:y:2004:i:4:p:315-327

Contact details of provider:
Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

For technical questions regarding this item, or to correct its listing, contact: (Christopher F. Baum).

Related research
Keywords:

Other versions of this item:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. David Cutler & Ellen Meara, 2001. "Changes in the Age Distribution of Mortality Over the 20th Century," NBER Working Papers 8556, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  2. Felder, Stefan & Meier, Markus & Schmitt, Horst, 2000. "Health care expenditure in the last months of life," Journal of Health Economics, Elsevier, vol. 19(5), pages 679-695, September. [Downloadable!] (restricted)
  3. Christian Salas & James P. Raftery, 2001. "Econometric issues in testing the age neutrality of health care expenditure," Health Economics, John Wiley & Sons, Ltd., vol. 10(7), pages 669-671. [Downloadable!]
  4. David M. Cutler & Louise Sheiner, 1998. "Demographics and Medical Care Spending: Standard and Non-Standard Effects," NBER Working Papers 6866, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  5. Newhouse, Joseph P, 1992. "Medical Care Costs: How Much Welfare Loss?," Journal of Economic Perspectives, American Economic Association, vol. 6(3), pages 3-21, Summer. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Laurence J. Kotlikoff, 2005. "Who’s Going Broke? Comparing Growth in Healthcare Costs in Ten OECD Countries," Working Papers id:286, esocialsciences.com. [Downloadable!]
  2. Brigitte Dormont & Hélène Huber, 2006. "Causes of Health Expenditure Growth: the Predominance of Changes in Medical Practices Over Population Ageing," Annales d'Economie et de Statistique, ADRES, issue 83-84, pages 08, Juillet-D. [Downloadable!]
  3. Stefan Felder & Peter Zweifel & Andreas Werblow, 2006. "Population Ageing and Health Care Expenditure: Is Long-term Care Different?," Swiss Journal of Economics and Statistics (SJES), Special Issues, Swiss Society of Economics and Statistics (SSES), vol. 142(S (specia), pages 43-48. [Downloadable!]
  4. Lukas Steinmann & Harry Telser & Peter Zweifel, 2007. "Aging and Future Healthcare Expenditure: A Consistent Approach," Forum for Health Economics & Policy, Berkeley Electronic Press, vol. 10(2), pages 1041-1041. [Downloadable!] (restricted)
  5. Warren C. Sanderson & Sergei Scherbov, 2007. "A new perspective on population aging," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 16(2), pages 27-58, January. [Downloadable!]
  6. Brigitte Dormont & Hélène Huber, 2006. "Ageing and changes in medical practices : reassessing theinfluence of demography," Post-Print halshs-00274723_v1, HAL. [Downloadable!]
  7. 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. [Downloadable!] (restricted)
  8. Edward Norton & Hua Wang & Sally Stearns, 2006. "Behavioral Implications of Out-of-Pocket Health Care Expenditures," Swiss Journal of Economics and Statistics (SJES), Special Issues, Swiss Society of Economics and Statistics (SSES), vol. 142(S (specia), pages 3-11. [Downloadable!]
  9. Ed Westerhout & Frank Pellikaan, 2005. "Can we afford to live longer in better health?," CPB Documents 85, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
  10. Brigitte Dormont & Michel Grignon & Hélène Huber, 2006. "Health expenditure growth : reassessing the threat of ageing," Post-Print halshs-00181605_v1, HAL. [Downloadable!]
    Other versions:
  11. Friedrich Breyer & Stefan Felder, 2004. "Life Expectancy and Health Care Expenditures: A New Calculation for Germany Using the Costs of Dying," Discussion Papers of DIW Berlin 452, DIW Berlin, German Institute for Economic Research. [Downloadable!]
    Other versions:
  12. Valerie Albouy & Laurent Davezies & Thierry Debrand, 2009. "Dynamic Estimation of Health Expenditure: A new approach for simulating individual expenditure," Working Papers DT20, IRDES institut for research and information in health economics, revised Jan 2009. [Downloadable!]
  13. Warren C. Sanderson & Sergei Scherbov, 2009. "A New Perspective on Population Ageing," European Demographic Research Papers 0503, Vienna Institute of Demography (VID) of the Austrian Academy of Sciences in Vienna. [Downloadable!]
Statistics
Access and download statistics

Did you know? IDEAS uses the data collected within the RePEc project, the largest online bibliographic database in Economics.

This page was last updated on 2009-11-16.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.