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The impact of ageing on health care expenditures: a study of steepening

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  • Fredrik Gregersen

Abstract

Some researchers claim that health care expenditures for older people are growing faster than for the rest of the population. This process is referred to as steepening. The aim of this paper is to test steepening, applying new data and revised methods. Furthermore, we explain the connection between the terms red herring hypothesis, i.e., that time to death and not age per se drives the health care expenditures, and steepening. We also present the mechanisms that may induce steepening, as presented in the literature. When testing steepening, we apply data from all inpatient stays in somatic hospitals in Norway in the period 1998–2009, i.e., the data has no self-selection and covers the entire population of Norway (5 million). Our analysis does not reject steepening, with the exception of the 0-year-olds. The results also hold when controlling for mortality-related expenditures. Furthermore, we observe an increase in expenditures for the 0-year-olds. Finally, we find increasing mortality-related expenditures over time. We find the link between steepening and the red herring hypothesis to be vague, and we find steepening and the red herring hypothesis to be independent. Copyright The Author(s) 2014

Suggested Citation

  • Fredrik Gregersen, 2014. "The impact of ageing on health care expenditures: a study of steepening," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 15(9), pages 979-989, December.
  • Handle: RePEc:spr:eujhec:v:15:y:2014:i:9:p:979-989
    DOI: 10.1007/s10198-013-0541-9
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    1. 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.
    2. Breyer Friedrich, 2015. "Demographischer Wandel und Gesundheitsausgaben: Theorie, Empirie und Politikimplikationen," Perspektiven der Wirtschaftspolitik, De Gruyter, vol. 16(3), pages 215-230, October.
    3. Carsten Colombier & Thomas Braendle, 2018. "Healthcare expenditure and fiscal sustainability: evidence from Switzerland," Public Sector Economics, Institute of Public Finance, vol. 42(3), pages 279-301.
    4. Braendle, Thomas & Colombier, Carsten, 2017. "Healthcare expenditure projections up to 2045," MPRA Paper 104737, University Library of Munich, Germany.
    5. Chandoevwit, Worawan & Phatchana, Phasith, 2018. "Inpatient care expenditure of the elderly with chronic diseases who use public health insurance: Disparity in their last year of life," Social Science & Medicine, Elsevier, vol. 207(C), pages 64-70.
    6. Anna Kollerup & Jakob Kjellberg & Rikke Ibsen, 2022. "Ageing and health care expenditures: the importance of age per se, steepening of the individual-level expenditure curve, and the role of morbidity," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 23(7), pages 1121-1149, September.
    7. Maciej Lis, 2016. "Age or time-to-death – what drives health care expenditures? Panel data evidence from the OECD countries," IBS Working Papers 04/2016, Instytut Badan Strukturalnych.
    8. Moore, Patrick V. & Bennett, Kathleen & Normand, Charles, 2017. "Counting the time lived, the time left or illness? Age, proximity to death, morbidity and prescribing expenditures," Social Science & Medicine, Elsevier, vol. 184(C), pages 1-14.
    9. Isabel Correia Dias & Priscila Ferreira & Lígia Costa Pinto & Marieta Valente & Paula Veiga, 2017. "Growing old, unhealthy and unequal: an exploratory study on the health of Portuguese individuals aged 50+," NIMA Working Papers 67, Núcleo de Investigação em Microeconomia Aplicada (NIMA), Universidade do Minho, revised Jun 2018.
    10. Usman Shakoor & Mudassar Rashid & Ashfaque Ali Baloch & Muhammad Iftikhar ul Husnain & Abdul Saboor, 2021. "How Aging Population Affects Health Care Expenditures in Pakistan? A Bayesian VAR Analysis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 153(2), pages 585-607, January.
    11. 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.
    12. Nico Keilman & Dinh Q. Pham & Astri Syse, 2018. "Mortality shifts and mortality compression. The case of Norway, 1900-2060," Discussion Papers 884, Statistics Norway, Research Department.

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    More about this item

    Keywords

    Red herring hypothesis ; Hospital expenditure; Trends in health care expenditures; Steepening ; Ageing; A19; I15; I19;
    All these keywords.

    JEL classification:

    • A19 - General Economics and Teaching - - General Economics - - - Other
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • I19 - Health, Education, and Welfare - - Health - - - Other

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