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Aging and Future Healthcare Expenditure: A Consistent Approach

Author

Listed:
  • Steinmann Lukas

    (Avenir Suisse, Switzerland)

  • Telser Harry

    (University of Zurich, Switzerland)

  • Zweifel Peter S.

    (University of Zurich, Switzerland)

Abstract

The impact of aging on healthcare expenditure (HCE) has been at the center of a prolonged debate. This paper purports to shed light on several issues of this debate by presenting new evidence on the "red herring" hypothesis advanced by Zweifel, Felder and Meier (1999). This hypothesis amounts to distinguishing a mortality from a morbidity component in healthcare expenditure (HCE) and claiming that failure to make this distinction results in excessive estimates of future growth of HCE. A re-estimation based on a much larger data set is performed, using the refined econometric methodology. The main contribution is consistency, however. Rather than treating the mortality component as a residual in forecasting, its dynamics are analyzed in the same detail as that of the morbidity component when predicting the impact of population aging on the future growth of HCE. For the case of Switzerland, it finds this impact to be relatively small regardless of whether or not the mortality component is accounted for, thus qualifying the "red herring" hypothesis.

Suggested Citation

  • Steinmann Lukas & Telser Harry & Zweifel Peter S., 2007. "Aging and Future Healthcare Expenditure: A Consistent Approach," Forum for Health Economics & Policy, De Gruyter, vol. 10(2), pages 1-28, March.
    • Handle: RePEc:bpj:fhecpo:v:10:y:2007:i:2:n:1
    DOI: 10.2202/1558-9544.1041
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    Citations

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    Cited by:

    1. Joan Costa‐Font & Cristina Vilaplana‐Prieto, 2020. "‘More than one red herring'? Heterogeneous effects of ageing on health care utilisation," Health Economics, John Wiley & Sons, Ltd., vol. 29(S1), pages 8-29, October.
    2. Colombier, Carsten, 2012. "Healthcare expenditure projections up to 2060," MPRA Paper 104919, University Library of Munich, Germany.
    3. Mason, Thomas & Sutton, Matt & Whittaker, William & Birch, Stephen, 2015. "Exploring the limitations of age-based models for health care planning," Social Science & Medicine, Elsevier, vol. 132(C), pages 11-19.
    4. Eling, Martin, 2016. "Gesundheit 2020+: Aktuelle strategische Herausforderungen und Handlungsfelder in der sozialen Krankenversicherung," I.VW HSG Schriftenreihe, University of St.Gallen, Institute of Insurance Economics (I.VW-HSG), volume 60, number 60.
    5. Friedrich Breyer & Normann Lorenz, 2021. "The “red herring” after 20 years: ageing and health care expenditures," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 22(5), pages 661-667, July.
    6. Breyer Friedrich, 2015. "Demographischer Wandel und Gesundheitsausgaben: Theorie, Empirie und Politikimplikationen," Perspektiven der Wirtschaftspolitik, De Gruyter, vol. 16(3), pages 215-230, October.
    7. Stefan Felder, 2013. "The Impact of Demographic Change on Healthcare Expenditure," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 11(1), pages 03-06, 04.
    8. Stefan Felder, 2013. "The Impact of Demographic Change on Healthcare Expenditure," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 11(01), pages 03-06, April.
    9. Rudi Rocha & Isabela Furtado & Paula Spinola, 2021. "Financing needs, spending projection, and the future of health in Brazil," Health Economics, John Wiley & Sons, Ltd., vol. 30(5), pages 1082-1094, May.
    10. repec:jns:jbstat:v:227:y:2007:i:5-6:p:578-602 is not listed on IDEAS
    11. Eugster, Patrick & Sennhauser, Michèle & Zweifel, Peter, 2010. "Capping risk adjustment?," Journal of Health Economics, Elsevier, vol. 29(4), pages 499-507, July.
    12. Sophie Mitra & Patricia A. Findley & Usha Sambamoorthi, 2008. "Healthcare Expenditures of Living with a Disability: Total Expenditures, Out of Pocket Expenses and Burden, 1996-2004," Fordham Economics Discussion Paper Series dp2008-18, Fordham University, Department of Economics.
    13. Viktor von Wyl & Konstantin Beck, 2014. "Risk adjustment in aging societies," Health Economics Review, Springer, vol. 4(1), pages 1-14, December.
    14. repec:ces:ifodic:v:11:y:2013:i:1:p:19078503 is not listed on IDEAS

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