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An Analysis of the Impact of Age and Proximity of Death on Health Care Costs in Ireland

  • Richard Layte

    (Economic and Social Research Institute (ESRI))

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    Research has shown that older individuals are far more likely to avail of health care and there is concern in a number of countries that the trend toward population ageing may mean that health care expenditures increase to unsustainable levels. However, there is a growing body of evidence that the approach of death rather than age per se may be the main determinant of health care costs. Previous analyses of the relationship between proximity to death and costs have used rare longitudinal data on costs and whether died and none have used a national sample. In this paper we use a more commonly found data type ? a national panel survey to show that proximity to death is indeed a more significant predictor of expenditure on GP and hospital services than age. Using random effects panel models we show that there is a significant gradient in costs as death approaches. Controlling for proximity to death there is no age gradient in costs. This conclusion remains unchanged adjusting for differential health inpatient costs across age groups. In fact, adjustment steepens the gradient in costs as death approaches.

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    File URL: http://www.esri.ie/UserFiles/publications/20070528105733/WP193.pdf
    File Function: First version, 2007
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    Paper provided by Economic and Social Research Institute (ESRI) in its series Papers with number WP193.

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    Length: 24 pages
    Date of creation: May 2007
    Date of revision:
    Handle: RePEc:esr:wpaper:wp193
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    1. Seshamani, Meena & Gray, Alastair M., 2004. "A longitudinal study of the effects of age and time to death on hospital costs," Journal of Health Economics, Elsevier, vol. 23(2), pages 217-235, March.
    2. Ciaran O'Neill & Lindsay Groom & Anthony J. Avery & Daphne Boot & Karine Thornhill, 2000. "Age and proximity to death as predictors of GP care costs: results from a study of nursing home patients," Health Economics, John Wiley & Sons, Ltd., vol. 9(8), pages 733-738.
    3. Thomas C. Buchmueller & Agnès Couffinhal & Michel Grignon & Marc Perronin, 2002. "Access to Physician Services: Does Supplemental Insurance Matter? Evidence from France," NBER Working Papers 9238, National Bureau of Economic Research, Inc.
    4. Peter Zweifel & Stefan Felder & Markus Meiers, 1999. "Ageing of population and health care expenditure: a red herring?," Health Economics, John Wiley & Sons, Ltd., vol. 8(6), pages 485-496.
    5. Manning, Willard G., 1998. "The logged dependent variable, heteroscedasticity, and the retransformation problem," Journal of Health Economics, Elsevier, vol. 17(3), pages 283-295, June.
    6. Layte, Richard & Nolan, Brian, 2003. "Equity in the Utilization of Health Care in Ireland," Papers HRBWP02, Economic and Social Research Institute (ESRI).
    7. Manning, Willard G. & Mullahy, John, 2001. "Estimating log models: to transform or not to transform?," Journal of Health Economics, Elsevier, vol. 20(4), pages 461-494, July.
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