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The relationship between baseline health and longitudinal costs of hospital use

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  • Bram Wouterse
  • Bert R. Meijboom
  • Johan J. Polder

Abstract

In this paper, we investigate the relationship between baseline health and costs of hospital use over a period of eight years. We combine cross‐sectional survey data with information from the Dutch national hospital register. Four different indicators of health (self‐perceived health, long‐term impairments, ADL limitations and comorbidity) are considered. We find that for ages 50 to 70, differences in hospital costs between good health and bad health are substantial and persist during the whole time period. However, for higher ages expected hospital costs for individuals in bad health decline rapidly and become lower than those for people in good health after about six to seven years. The higher mortality rate among people in bad health is the primary cause here. Our results are confirmed for all four health indicators. We conclude that relying on better health to contain healthcare expenditures is too optimistic, and the interaction between health and mortality should be taken into account when projecting healthcare costs. Healthy ageing is important, but more for health gains than for cost savings. Copyright © 2010 John Wiley & Sons, Ltd.

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  • Bram Wouterse & Bert R. Meijboom & Johan J. Polder, 2011. "The relationship between baseline health and longitudinal costs of hospital use," Health Economics, John Wiley & Sons, Ltd., vol. 20(8), pages 985-1008, August.
    • Handle: RePEc:wly:hlthec:v:20:y:2011:i:8:p:985-1008
    DOI: 10.1002/hec.1664
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    1. Jonas Krämer & Jonas Schreyögg, 2019. "Demand-side determinants of rising hospital admissions in Germany: the role of ageing," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 20(5), pages 715-728, July.
    2. Wouterse, Bram & Huisman, Martijn & Meijboom, Bert R. & Deeg, Dorly J.H. & Polder, Johan J., 2013. "Modeling the relationship between health and health care expenditures using a latent Markov model," Journal of Health Economics, Elsevier, vol. 32(2), pages 423-439.
    3. Lindgren, Björn, 2016. "The Rise in Life Expectancy, Health Trends among the Elderly, and the Demand for Health and Social Care," Working Papers 142, National Institute of Economic Research.
    4. Anne Mason & Idaira Rodriguez Santana & María José Aragón & Nigel Rice & Martin Chalkley & Raphael Wittenberg & Jose-Luis Fernandez, 2019. "Drivers of health care expenditure: Final report," Working Papers 169cherp, Centre for Health Economics, University of York.

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