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Projecting health-care expenditure for Switzerland: further evidence against the 'red-herring' hypothesis

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  • Colombier, Carsten
  • Weber, Werner

Abstract

This paper contributes to the debate about the impact of population ageing on health care expenditure. Some health economists claim that the commonly presumed impact of population ageing is a "red herring". Based on empirical studies these authors conclude that proximity to death and not age per se matters. In projecting health care expenditure for Switzerland the present study provides evidence that proximity to death is of marginal importance. These projections suggest that population ageing is still the most important age-related cost-driver. Moreover, morbidity outweighs mortality as a factor of health-care expenditure. But most vital are non-demographic drivers such as medical progress. Thus, from the point of view of cost-benefit analysis one should even ignore costs of dying when projecting health care expenditure. Moreover, regressions might overestimate proximity to death due to systematic biases. Finally, ever-increasing health-care expenditure can be slowed down by appropriate policy measures.

Suggested Citation

  • Colombier, Carsten & Weber, Werner, 2009. "Projecting health-care expenditure for Switzerland: further evidence against the 'red-herring' hypothesis," MPRA Paper 26747, University Library of Munich, Germany, revised Nov 2009.
  • Handle: RePEc:pra:mprapa:26747
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    Cited by:

    1. Friedrich Breyer & Normann Lorenz & Thomas Niebel, 2015. "Health care expenditures and longevity: is there a Eubie Blake effect?," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 16(1), pages 95-112, January.
    2. 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.
    3. Gregersen, Fredrik Alexander & Godager, Geir, 2013. "Hospital expenditures and the red herring hypothesis: Evidence from a complete national registry," HERO Online Working Paper Series 2013:3, University of Oslo, Health Economics Research Programme.
    4. Friedrich Breyer & Normann Lorenz, 2019. "The "Red Herring" after 20 Years: Ageing and Health Care Expenditures," CESifo Working Paper Series 7951, CESifo.
    5. Maciej Lis, 2015. "Red Herring in the Vistula River: Time-to-Death and Health Care Expenditure," IBS Working Papers 13/2015, Instytut Badan Strukturalnych.
    6. 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.
    7. Vincenzo Atella & Valentina Conti, 2013. "The effect of age and time to death on health care expenditures: the Italian experience," CEIS Research Paper 267, Tor Vergata University, CEIS, revised 12 Nov 2013.
    8. Viktor von Wyl, 2019. "Proximity to death and health care expenditure increase revisited: A 15-year panel analysis of elderly persons," Health Economics Review, Springer, vol. 9(1), pages 1-16, December.
    9. Melberg, Hans Olav & Sørensen, Jan, 2013. "How does end of life costs and increases in life expectancy affect projections of future hospital spending?," HERO Online Working Paper Series 2013:9, University of Oslo, Health Economics Research Programme.
    10. Carsten Colombier, 2018. "Population ageing in healthcare – a minor issue? Evidence from Switzerland," Applied Economics, Taylor & Francis Journals, vol. 50(15), pages 1746-1760, March.
    11. Viktor von Wyl & Konstantin Beck, 2014. "Risk adjustment in aging societies," Health Economics Review, Springer, vol. 4(1), pages 1-14, December.
    12. 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.

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    More about this item

    Keywords

    health-care expenditure; population ageing; public health-care budget; proximity to death; morbidity;
    All these keywords.

    JEL classification:

    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I19 - Health, Education, and Welfare - - Health - - - Other
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts

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