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What Drives the Increase in Health Care Costs with Age

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  • Maciej Lis

Abstract

The aim of the article is to show the role of the drivers of health care costs increases with age. An innovative decomposition strategy has been proposed and applied to the population-wide data on health care expenditure in Poland. We have found that the health care costs dynamics with age are driven by the rise in prevalence and the frequency of the use of the health care system. The cost of procedures and the share of decedents play minor roles here. If the pattern of morbidity remains constant, mortality constitutes an important restraint that prevents the costs of care exploding.

Suggested Citation

  • Maciej Lis, 2015. "What Drives the Increase in Health Care Costs with Age," IBS Working Papers 5/2015, Instytut Badan Strukturalnych.
  • Handle: RePEc:ibt:wpaper:wp052015
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    File URL: http://ibs.org.pl/app/uploads/2015/02/IBS_Working_Paper_05_2015.pdf
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    References listed on IDEAS

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    1. France Weaver & Sally C. Stearns & Edward C. Norton & William Spector, 2009. "Proximity to death and participation in the long‐term care market," Health Economics, John Wiley & Sons, Ltd., vol. 18(8), pages 867-883, August.
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    5. Polder, Johan J. & Barendregt, Jan J. & van Oers, Hans, 2006. "Health care costs in the last year of life--The Dutch experience," Social Science & Medicine, Elsevier, vol. 63(7), pages 1720-1731, October.
    6. Andreas Werblow & Stefan Felder & Peter Zweifel, 2007. "Population ageing and health care expenditure: a school of ‘red herrings’?," Health Economics, John Wiley & Sons, Ltd., vol. 16(10), pages 1109-1126, October.
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    Cited by:

    1. 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.

    More about this item

    Keywords

    healthcare expenditure; ageing; red herring; death related costs;

    JEL classification:

    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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