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Generational equity in health service

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  • Robert Fenge

Abstract

A fundamental change is taking place In Germany involving both the size and age structure of the population. This change is due to the increasing longevity and the on-gong decline of the population and will have lasting effects on the pay-as-you-go social insurance systems in particular. In the statutory health insurance (GKV) the pay-as-you-go financing means that the present contributors finance the health services for the sick. Unlike private health insurance that is financed according to the equivalence principle, the contributions to the GKV are calculated, up to the income ceiling, according to the performance principle, independent of health risk considerations and thus also independent of the anticipated claims of the contributors. In an ageing society the number of pensioners insured in the GKV increases, which means that within the GKV an intergenerational redistribution from the employed to the pensioners takes place. More generational equity in the financing of health care costs requires a stronger capital cover for medical services. It is also necessary to provide stronger incentives for investment in preventive medicine in order to lower the rise in health care costs of the elderly.

Suggested Citation

  • Robert Fenge, 2003. "Generational equity in health service," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 56(14), pages 8-13, July.
    • Handle: RePEc:ces:ifosdt:v:56:y:2003:i:14:p:8-13
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    References listed on IDEAS

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    1. Breyer Friedrich & Ulrich Volker, 2000. "Gesundheitsausgaben, Alter und medizinischer Fortschritt: Eine Regressionsanalyse / Ageing, Medical Progress and Health Care Expenditures: A Regression Analysis," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 220(1), pages 1-17, February.
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    Cited by:

    1. Niehaus, Frank, 2007. "Die Bedeutung der ausgabenintensiven Fälle im Gesundheitswesen," WIP-Analysen August 2007, WIP – Wissenschaftliches Institut der PKV.

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    More about this item

    JEL classification:

    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy

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