Does age or life expectancy better predict health care expenditures?
AbstractIt is an unresolved issue whether age or (expected) remaining life years better predicts health care expenditures. We first estimate a set of hazard models to predict life expectancy based on individual demographic characteristics and health conditions, and then use regression analyses to compare the predictive power of age and life expectancy in explaining health care expenditures. This paper differs from previous studies in that it uses predicted life expectancy to address the censoring of death; as a result, this paper goes beyond the large health care expenditures at the end of life and the results apply to both deceased and survivors. We find that age has little additional predictive power on health care expenditures after controlling for life expectancy, but the predictive power of life expectancy itself diminishes as health status measures are introduced into the model. These results are not of esoteric interest only for their statistical properties; we show that using life expectancy rather than age results in lower projections of future health care expenditures. This result suggests that increases in longevity might be less costly than models based on the current age profile of spending would predict. Copyright © 2007 John Wiley & Sons, Ltd.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. 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.
Bibliographic InfoArticle provided by John Wiley & Sons, Ltd. in its journal Health Economics.
Volume (Year): 17 (2008)
Issue (Month): 4 ()
Contact details of provider:
Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749
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.:
- Joseph P. Newhouse, 1992. "Medical Care Costs: How Much Welfare Loss?," Journal of Economic Perspectives, American Economic Association, vol. 6(3), pages 3-21, Summer.
- Manning, Willard G. & Mullahy, John, 2001.
"Estimating log models: to transform or not to transform?,"
Journal of Health Economics,
Elsevier, vol. 20(4), pages 461-494, July.
- Willard G. Manning & John Mullahy, 1999. "Estimating Log Models: To Transform or Not to Transform?," NBER Technical Working Papers 0246, National Bureau of Economic Research, Inc.
- Peter Zweifel & Stefan Felder & Andreas Werblow, 2004.
"Population Ageing and Health Care Expenditure: New Evidence on the "Red Herring","
The Geneva Papers on Risk and Insurance,
The International Association for the Study of Insurance Economics, vol. 29(4), pages 652-666, October.
- Peter Zweifel & Stefan Felder & Andreas Werblow, 2004. "Population Ageing and Health Care Expenditure: New Evidence on the “Red Herring”," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan, vol. 29(4), pages 652-666, October.
- Peter Zweifel & Stefan Felder & Markus Meiers, 1999. "Ageing of population and health care expenditure: a red herring?," Health Economics, John Wiley & Sons, Ltd., vol. 8(6), pages 485-496.
- Frank T. Denton & Amiram Gafni & Byron G. Spencer, 2001.
"Exploring the Effects of Population Change on the Costs of Physician Services,"
Social and Economic Dimensions of an Aging Population Research Papers
43, McMaster University.
- Denton, Frank T. & Gafni, Amiram & Spencer, Byron G., 2002. "Exploring the effects of population change on the costs of physician services," Journal of Health Economics, Elsevier, vol. 21(5), pages 781-803, September.
- Frank T. Denton & Amiram Gafni & Byron G. Spencer, 2001. "Exploring the Effects of Population Change on the Costs of Physician Services," Quantitative Studies in Economics and Population Research Reports 358, McMaster University.
- Seshamani, Meena & Gray, Alastair M., 2004. "A longitudinal study of the effects of age and time to death on hospital costs," Journal of Health Economics, Elsevier, vol. 23(2), pages 217-235, March.
- Duan, Naihua, et al, 1983. "A Comparison of Alternative Models for the Demand for Medical Care," Journal of Business & Economic Statistics, American Statistical Association, vol. 1(2), pages 115-26, April.
- Friedrich Breyer & Normann Lorenz & Thomas Niebel, 2012.
"Health Care Expenditures and Longevity: Is There a Eubie Blake Effect?,"
Discussion Papers of DIW Berlin
1226, DIW Berlin, German Institute for Economic Research.
- Friedrich Breyer & Normann Lorenz & Thomas Niebel, 2012. "Health Care Expenditures and Longevity: Is there a Eubie Blake Effect?," Research Papers in Economics 2012-01, University of Trier, Department of Economics.
- Karlsson, Martin & Klohn, Florian, 2011. "Some notes on how to catch a red herring - Ageing, time-to-death and care costs for older people in Sweden," HERO On line Working Paper Series 2011:6, Oslo University, Health Economics Research Programme.
- Gielen, Birgit & Remacle, Anne & Mertens, Raf, 2010. "Patterns of health care use and expenditure during the last 6 months of life in Belgium: Differences between age categories in cancer and non-cancer patients," Health Policy, Elsevier, vol. 97(1), pages 53-61, September.
- Thomas Barnay & Sophie Thiebaut & Bruno Ventelou, .
"Ageing, chronic conditions and the evolution of future drugs expenditures,"
2010-8, TEPP Working Papers.
- Thomas Barnay & Sophie Thiebault & Bruno Ventelou, 2010. "Ageing, chronic conditions and the evolution of future drugs expenditures," Working Papers halshs-00809736, HAL.
- Anthony Webb & Natalia Zhivan, 2010. "How Much Is Enough? The Distribution of Lifetime Health Care Costs," Working Papers, Center for Retirement Research at Boston College wp2010-1, Center for Retirement Research, revised Feb 2010.
- Ross Stolzenberg, 2011. "Do Not Go Gentle Into That Good Night: The Effect of Retirement on Subsequent Mortality of U.S. Supreme Court Justices, 1801–2006," Demography, Springer, vol. 48(4), pages 1317-1346, November.
- Stefan Felder, 2013. "The Impact of Demographic Change on Healthcare Expenditure," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, vol. 11(1), pages 03-06, 04.
- Louise Sheiner, 2009. "Intergenerational aspects of health care," Finance and Economics Discussion Series 2009-38, Board of Governors of the Federal Reserve System (U.S.).
- van Baal, Pieter H. & Wong, Albert, 2012. "Time to death and the forecasting of macro-level health care expenditures: Some further considerations," Journal of Health Economics, Elsevier, vol. 31(6), pages 876-887.
- Murphy, Michael & Martikainen, Pekka, 2013. "Use of hospital and long-term institutional care services in relation to proximity to death among older people in Finland," Social Science & Medicine, Elsevier, vol. 88(C), pages 39-47.
- Karlsson, Martin & Klohn, Florian, 2011. "Some notes on how to catch a red herring Ageing, time-to-death & care costs for older people in Sweden," Darmstadt Discussion Papers in Economics 57663, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute of Economics (VWL).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.