Hospital expenditures and the red herring hypothesis: Evidence from a complete national registry
AbstractThe aim of this paper is to contribute to the debate on population aging and growth in health expenditures. The Red Herring hypothesis, i.e., that hospital expenditures are driven by the occurrence of mortal illnesses, and not patients’ age, forms the basis of the study. The data applied in the analysis are from a complete registry of in-patient hospital expenditures in Norway from the years 1998-2009. Since data registration is compulsory and all hospital admissions are recorded, there is no self-selection into the data. Mortality related hospital expenditures were identified by creating gender-cohort specific panels for each of the 430 Norwegian municipalities. We separated the impact of mortality on current hospital expenditures from the impact of patients’ age and gender. This approach contributes to the literature by applying sensible aggregation methods on a complete registry of inpatient hospital admissions. We apply model estimates to quantify the mortality related hospital expenditures for twenty age groups. The results show that mortality related hospital expenditures are a decreasing function of age. Further the results clearly support that, both age and mortalities should be included when predicting future health care expenditure. The estimation results suggest that 9.2 % of all hospital expenditure is associated with treating individuals in their last year of life.
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Bibliographic InfoPaper provided by Oslo University, Health Economics Research Programme in its series HERO On line Working Paper Series with number 2013:3.
Length: 24 pages
Date of creation: 08 May 2013
Date of revision:
Contact details of provider:
Postal: HERO / Institute of Health Management and Health Economics P.O. Box 1089 Blindern, N-0317 Oslo, Norway
Phone: 2307 5309
Fax: 2307 5310
Web page: http://www.hero.uio.no/eng.html
More information through EDIRC
mortality related expenditures; hospital expenditures; red herring hypothesis; ageing;
Find related papers by JEL classification:
- H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
- I12 - Health, Education, and Welfare - - Health - - - Health Production
- I19 - Health, Education, and Welfare - - Health - - - Other
This paper has been announced in the following NEP Reports:
- NEP-AGE-2014-02-02 (Economics of Ageing)
- NEP-ALL-2014-02-02 (All new papers)
- NEP-HEA-2014-02-02 (Health Economics)
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