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Population ageing and health care expenditure: a school of red herrings?


Werblow, Andreas; Felder, Stefan; Zweifel, Peter (2007). Population ageing and health care expenditure: a school of red herrings? Health Economics, 16(10):1109-1126.

Abstract

This paper revisits the debate on the red herring, viz. the claim that population ageing will not have a significant impact on health care expenditure (HCE). It decomposes HCE into seven components, includes both survivors and deceased individuals, and estimates a two-part model of the demand for health care services, using a large Swiss data set for 1999. It finds no or weak age effects on HCE for the components of HCE when proximity to death is controlled for, and points to differences between users and non-users of long-term care (LTC). For deceased non-users of LTC services, a falling age curve for all components of HCE except for inpatient care is observed, while survivors show a weak age effect in ambulatory and inpatient care once proximity to death is controlled for. As to surviving users of LTC services, their probability of incurring LTC expenses markedly increases in old age, while most of the components of their conditional HCE show a decreasing age profile. Thus, a school of red herrings can be claimed to exist-with the possible exception of LTC, where ageing might matter regardless of proximity to death.

This paper revisits the debate on the red herring, viz. the claim that population ageing will not have a significant impact on health care expenditure (HCE). It decomposes HCE into seven components, includes both survivors and deceased individuals, and estimates a two-part model of the demand for health care services, using a large Swiss data set for 1999. It finds no or weak age effects on HCE for the components of HCE when proximity to death is controlled for, and points to differences between users and non-users of long-term care (LTC). For deceased non-users of LTC services, a falling age curve for all components of HCE except for inpatient care is observed, while survivors show a weak age effect in ambulatory and inpatient care once proximity to death is controlled for. As to surviving users of LTC services, their probability of incurring LTC expenses markedly increases in old age, while most of the components of their conditional HCE show a decreasing age profile. Thus, a school of red herrings can be claimed to exist-with the possible exception of LTC, where ageing might matter regardless of proximity to death.

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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Economics
Dewey Decimal Classification:330 Economics
Language:English
Date:2007
Deposited On:27 Mar 2009 13:51
Last Modified:05 Apr 2016 12:33
Publisher:Wiley-Blackwell
ISSN:1057-9230
Publisher DOI:10.1002/hec.1213
Permanent URL: http://doi.org/10.5167/uzh-5197

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