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“Steeping” of Health Expenditure Profiles

Author

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  • Florian Buchner

    (Institute for Health Care Management, University Duisburg-Essen, Universitaetsstrasse, Essen 45127, Germany)

  • Jürgen Wasem

    (Institute for Health Care Management, University Duisburg-Essen, Universitaetsstrasse, Essen 45127, Germany)

Abstract

If health care expenditure for the elderly grows faster than for younger people, the expenditure profiles become “steeper” – we call that “steeping”. Three instruments for measuring “steeping” are presented: (1) trend of the relation between per capita expenditure of the old and the young; (2) comparing the linear slopes of per capita expenditure in age groups; (3) trend in parameters of nonlinear modelling of expenditure profiles. Using data of the largest German private health insurer over a period of 18 years, “steeping” could be observed by all three methods in most examined insurance plans. There are some hints that steeping also occurs in Germany's social health insurance system. The impact of steeping on the sustainability of the health system is discussed. Consequences for the calculation methods in a capital-funded health insurance system and for the implicit inter-generational contract within a pay-as-you-go financed social health insurance system are analysed. The link between “steeping” and the topic of the “red herring” discussion is elaborated. The Geneva Papers (2006) 31, 581–599. doi:10.1057/palgrave.gpp.2510100

Suggested Citation

  • Florian Buchner & Jürgen Wasem, 2006. "“Steeping” of Health Expenditure Profiles," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 31(4), pages 581-599, October.
    • Handle: RePEc:pal:gpprii:v:31:y:2006:i:4:p:581-599
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    1. 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.
    2. 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.
    3. Friedrich Breyer & Normann Lorenz, 2021. "The “red herring” after 20 years: ageing and health care expenditures," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 22(5), pages 661-667, July.
    4. Laurence J. Kotlikoff, 2005. "Who’s Going Broke? Comparing Growth in Healthcare Costs in Ten OECD Countries," Working Papers id:286, eSocialSciences.
    5. Anna Kollerup & Jakob Kjellberg & Rikke Ibsen, 2022. "Ageing and health care expenditures: the importance of age per se, steepening of the individual-level expenditure curve, and the role of morbidity," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 23(7), pages 1121-1149, September.
    6. Wong, Albert & Wouterse, Bram & Slobbe, Laurentius C.J. & Boshuizen, Hendriek C. & Polder, Johan J., 2012. "Medical innovation and age-specific trends in health care utilization: Findings and implications," Social Science & Medicine, Elsevier, vol. 74(2), pages 263-272.
    7. Christian Hagist & Laurence Kotlikoff, 2005. "Who's Going Broke? Comparing Growth in Healthcare Costs in Ten OECD Countries," NBER Working Papers 11833, National Bureau of Economic Research, Inc.
    8. Gasche Martin & Rausch Johannes, 2016. "Beitragssatzentwicklung in der Gesetzlichen Krankenversicherung und der Sozialen Pflegeversicherung – Projektionen und Determinanten," Zeitschrift für Wirtschaftspolitik, De Gruyter, vol. 65(3), pages 195-238, December.
    9. Henke, Klaus-Dirk & Reimers, Lutz, 2006. "Zum Einfluss von Demographie und medizinisch-technischem Fortschritt auf die Gesundheitsausgaben," Discussion Papers 2006/8, Technische Universität Berlin, School of Economics and Management.
    10. Felder, Stefan & Werblow, Andreas, 2008. "Do the age profiles of health care expenditure really steepen over time? New evidence from Swiss cantons," Dresden Discussion Paper Series in Economics 05/08, Technische Universität Dresden, Faculty of Business and Economics, Department of Economics.
    11. Ried, Walter, 2007. "On the relationship between aging, edical progress and age-specific health care expenditures," Wirtschaftswissenschaftliche Diskussionspapiere 08/2007, University of Greifswald, Faculty of Law and Economics.
    12. Wasem, Jürgen & Buchner, Florian & Walendzik, Anke & Schröder, Michael, 2016. "Qualitative Analysen zur harmonisierten Berechnung einer Alterungsrückstellung und der verfassungskonformen Ausgestaltung ihrer Portabilität: Endbericht - Studie im Auftrag des Verbraucherzentrale Bun," IBES Diskussionsbeiträge 218, University of Duisburg-Essen, Institute of Business and Economic Studie (IBES).
    13. Christian Hagist & Laurence J. Kotlikoff, 2009. "Who’s going broke? Comparing growth in Public healthcare expenditure in Ten OECD Countries," Hacienda Pública Española / Review of Public Economics, IEF, vol. 188(1), pages 55-72, March.

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