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The Medical Costs of The Young and Old: A Forty Year Perspective

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  • David M. Cutler
  • Ellen Meara

Abstract

In this paper, we examine the growth in medical care spending by age over the past 40 years. We show that between 1953 and 1987, medical spending increased disproportionately for infants, those under 1 year, and the elderly, those 65 and older. Annual spending growth for infants was 9.8 percent and growth for the elderly was 8.0 percent compared to 4.7 percent for people aged 1-64. Within the infant and the elderly population, excess spending growth was largely driven by more rapid growth of spending at the top of the medical spending distribution. Aggregate changes in outcomes for infants and the elderly are consistent with these changes in spending growth, but we do not present any causal evidence on this point.

Suggested Citation

  • David M. Cutler & Ellen Meara, 1997. "The Medical Costs of The Young and Old: A Forty Year Perspective," NBER Working Papers 6114, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:6114
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    References listed on IDEAS

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    1. Cutler, David M, 1995. "The Incidence of Adverse Medical Outcomes under Prospective Payment," Econometrica, Econometric Society, vol. 63(1), pages 29-50, January.
    2. David M. Cutler & Mark McClellan & Joseph P. Newhouse & Dahlia Remler, 1996. "Are Medical Prices Declining?," NBER Working Papers 5750, National Bureau of Economic Research, Inc.
    3. Joseph P. Newhouse, 1992. "Medical Care Costs: How Much Welfare Loss?," Journal of Economic Perspectives, American Economic Association, vol. 6(3), pages 3-21, Summer.
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    Cited by:

    1. David M. Cutler, 2003. "Employee Costs and the Decline in Health Insurance Coverage," NBER Chapters,in: Frontiers in Health Policy Research, Volume 6, pages 27-54 National Bureau of Economic Research, Inc.
    2. L.D. Mayhew, 1999. "Health and Welfare Services Expenditure in an Aging World," Working Papers ir99035, International Institute for Applied Systems Analysis.
    3. David M. Cutler & Ellen Meara, 2001. "The Concentration of Medical Spending: An Update," NBER Chapters,in: Themes in the Economics of Aging, pages 217-240 National Bureau of Economic Research, Inc.
    4. David Meltzer & Jeanette Chung, 2001. "Effects of Competition under Prospective Payment on Hospital Costs among High and Low Cost Admissions: Evidence from California, 1983 - 1993," NBER Working Papers 8069, National Bureau of Economic Research, Inc.
    5. Juergen Jung & Chung Tran, 2010. "Medical Consumption over the Life Cycle: Facts from a U.S. Medical Expenditure Panel Survey," Working Papers 2010-09, Towson University, Department of Economics, revised Mar 2013.
    6. Dov Chernichovsky & Sara Markowitz, 2001. "Toward a Framework for Improving Health Care Financing for an Aging Population: The Case of Israel," NBER Working Papers 8415, National Bureau of Economic Research, Inc.
    7. Gan, Lydia L. & Frederick, James R., 2010. "The Willingness to Spend on Healthcare: Evidence from Singapore," Review of Applied Economics, Review of Applied Economics, vol. 6(1-2).
    8. Dov Chernichovsky & Sara Markowitz, 2004. "Aging and aggregate costs of medical care: conceptual and policy issues," Health Economics, John Wiley & Sons, Ltd., vol. 13(6), pages 543-562.
    9. Ernst R. Berndt & Iain M. Cockburn & Douglas L. Cocks & Arnold M. Epstein & Zvi Griliches, 1998. "Is Price Inflation Different for the Elderly? An Empirical Analysis of Prescription Drugs," NBER Chapters,in: Frontiers in Health Policy Research, Volume 1, pages 33-76 National Bureau of Economic Research, Inc.
    10. Louise Sheiner, 2009. "Intergenerational aspects of health care," Finance and Economics Discussion Series 2009-38, Board of Governors of the Federal Reserve System (U.S.).
    11. Denisard C. O. Alves & Christopher D. Timmins, 2001. "Social Exclusion And the Two-Tiered Healthcare System of Brazil," Anais do XXIX Encontro Nacional de Economia [Proceedings of the 29th Brazilian Economics Meeting] 072, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    12. David M. Cutler & Ellen Meara, 2000. "The Technology of Birth: Is It Worth It?," NBER Chapters,in: Frontiers in Health Policy Research, Volume 3, pages 33-68 National Bureau of Economic Research, Inc.
    13. Louise Sheiner, 2004. "The effects of technology on the age distribution of health spending: a cross-country perspective," Finance and Economics Discussion Series 2004-14, Board of Governors of the Federal Reserve System (U.S.).
    14. Carlos Bethencourt & Vincenzo Galasso, "undated". "On the Political Complementarity between Health Care and Social Security," Working Papers 184, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    15. Stolpe, Michael, 2003. "Ressourcen und Ergebnisse der globalen Gesundheitsökonomie: Einführung und Überblick," Kiel Working Papers 1177, Kiel Institute for the World Economy (IfW).
    16. James Banks & Alastair Muriel & James Smith, 2010. "Disease prevalence, disease incidence, and mortality in the United States and in England," Demography, Springer;Population Association of America (PAA), vol. 47(1), pages 211-231, March.
    17. Peter Lloyd-Sherlock, 2000. "Failing the needy: public social spending in Latin America," Journal of International Development, John Wiley & Sons, Ltd., vol. 12(1), pages 101-119.
    18. Margherita Giannoni & Theodore Hitiris, "undated". "The Regional Impact of Health Care Expenditure: the Case of Italy," Discussion Papers 99/20, Department of Economics, University of York.
    19. Uwe E. Reinhardt, 2000. "Health Care for the Aging Baby Boom: Lessons from Abroad," Journal of Economic Perspectives, American Economic Association, vol. 14(2), pages 71-83, Spring.
    20. Cláudia Koeppel Berenstein & Renata Guimarães Vieira de Souza & Simone Wajnman & Carla Jorge Machado, 2005. "Custos de internação no Nordeste e Sudeste em 1998: análise do efeito estrutura etária, freqüência de internações e estrutura de custos," Textos para Discussão Cedeplar-UFMG td273, Cedeplar, Universidade Federal de Minas Gerais.
    21. Yamada, Tadashi & Yamada, Tetsuji & Kang, J. Moonwon, 1999. "A study of time allocation of Japanese households," Japan and the World Economy, Elsevier, vol. 11(1), pages 41-55, January.
    22. Vollrath, Dietrich, 2013. "Inequality and school funding in the rural United States, 1890," Explorations in Economic History, Elsevier, vol. 50(2), pages 267-284.
    23. Jin Feng & Pingyi Lou & Yangyang Yu, 2015. "Health Care Expenditure over Life Cycle in the People's Republic of China," Asian Development Review, MIT Press, vol. 32(1), pages 167-195, March.
    24. Theo Hitiris, "undated". "Growth and Containment of Health Care Expenditure in Industrial Countries," Discussion Papers 99/15, Department of Economics, University of York.
    25. Tara Watson, 2005. "Public Health Investments and the Infant Mortality Gap: Evidence from Federal Sanitation Interventions on U.S. Indian Reservations," Department of Economics Working Papers 2005-02, Department of Economics, Williams College.

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