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Forecasting the Cost of U.S. Health Care in 2040

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  • Robert W. Fogel

Abstract

One of the most important debates among health economists in rich nations is whether advances in biotechnology will spare their health care systems from a financial crisis. We must consider that prevalence rates of chronic diseases declined during the twentieth century and that this rate of decline has accelerated. However, health care costs may continue to increase even as the age of onset of chronic diseases is delayed, because the proportion of a cohort living to late ages will increase. The accelerating decline in the prevalence of chronic diseases during the course of the twentieth century supports the proposition that increases in life expectancy during the twenty-first century will be fairly large, but the effect on health care in the U.S. will be modest. The income elasticity for health services is calculated at 1.6, meaning that income expenditures on health care in the U.S. are likely to rise from a current level of about 15 percent to about 29 percent of GDP in 2040.

Suggested Citation

  • Robert W. Fogel, 2008. "Forecasting the Cost of U.S. Health Care in 2040," NBER Working Papers 14361, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:14361
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    1. Fogel, Robert William, 2000. "The Fourth Great Awakening and the Future of Egalitarianism," University of Chicago Press Economics Books, University of Chicago Press, number 9780226256627, Febrero.
    2. Robert W. Fogel, 2003. "Forecasting The Demand For Health Care In Oecd Nations And China," Contemporary Economic Policy, Western Economic Association International, vol. 21(1), pages 1-10, January.
    3. Costa, Dora L., 2004. "The Measure of Man and Older Age Mortality: Evidence from the Gould Sample," The Journal of Economic History, Cambridge University Press, vol. 64(1), pages 1-23, March.
    4. Stuck, Andreas E. & Walthert, Jutta M. & Nikolaus, Thorsten & Büla, Christophe J. & Hohmann, Christoph & Beck, John C., 1999. "Risk factors for functional status decline in community-living elderly people: a systematic literature review," Social Science & Medicine, Elsevier, vol. 48(4), pages 445-469, February.
    5. Robert W. Fogel, 2007. "Capitalism and Democracy in 2040: Forecasts and Speculations," NBER Working Papers 13184, National Bureau of Economic Research, Inc.
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    Cited by:

    1. McCloskey, Deirdre Nansen, 2009. "Growth, Quality, Happiness, and the Poor," MPRA Paper 17967, University Library of Munich, Germany.
    2. McGuire Thomas G., 2014. "A Note on Income Effects and Health Care Cost Growth in Medicare," Forum for Health Economics & Policy, De Gruyter, vol. 17(1), pages 1-12, January.
    3. Joel Mokyr & Chris Vickers & Nicolas L. Ziebarth, 2015. "The History of Technological Anxiety and the Future of Economic Growth: Is This Time Different?," Journal of Economic Perspectives, American Economic Association, vol. 29(3), pages 31-50, Summer.
    4. Astolfi, Roberto & Lorenzoni, Luca & Oderkirk, Jillian, 2012. "Informing policy makers about future health spending: A comparative analysis of forecasting methods in OECD countries," Health Policy, Elsevier, vol. 107(1), pages 1-10.

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    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets

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