Aging risk and health care expenditure in Korea

This paper analyzes the impact of population aging on health care expenditures in Korea. Examination of the age-expenditure profile reveals that health care resources are allocated more for the older cohort of population over time, suggesting significant growth of health care expenditures due to population aging. We contend, however, that population aging is considered as a parameter rather than an independent variable to explain rising health care expenditures. This paper shows that population aging is not found to be a significant determinant of health care expenditures according to the econometric analysis using OECD health data and time-series data for Korea. Using the components decomposition method, which measures the contribution of each component of health care expenditure, we estimate that population aging contributes only less than 10 percent.     

Life expectancy and health care expenditures: a new calculation for Germany using the costs of dying

Some people believe that the impact of population ageing on future health care expenditures will be quite moderate due to the high costs of dying. If not age per se but proximity to death determines the bulk of expenditures, a shift in the mortality risk to higher ages will not affect lifetime health care expenditures as death occurs only once in every life. We attempt to take this effect into account when we calculate the demographic impact on health care expenditures in Germany. From a Swiss data set, we derive age-expenditure profiles for both genders, separately for persons in their last 4 years of life and for survivors, which we apply to the projections of the age structure and mortality rates for the German population between 2002 and 2050 as published by the Statistische Bundesamt. In the extreme case, we assume that morbidity is compressed at the end of life in such a way that a 60-year old in 2050 is as healthy as a 56-year old today if his life expectancy is 4 years higher. We calculate that at constant prices, per-capita health expenditures of Social Health Insurance would rise from 2596 Euro in 2002 to between 2959 Euro and 3102 Euro in 2050 when only the age structure of the population changes and everything else remains constant at the present level, and to between 5232 Euro and 5485 Euro with a technology-driven exogenous cost increase of 1% per annum. A "na?ve" projection based only on the age distribution of health care expenditures, but not distinguishing between survivors and decedents, yields values of 3217 Euro and 5688 Euro for 2050, respectively. Thus, the error of excluding the "costs of dying" effect is small compared with the error of underestimating the financial consequences of expanding medical technology.     

Population ageing and health financing: A method for forecasting two sides of the same coin

There is a perception that population ageing will have deleterious effects on future health financing sustainability. We propose a new method—the Population Ageing financial Sustainability gap for Health systems (or alternatively, the PASH)—to explore how changes in the population age mix will affect health expenditures and revenues. Using a set of six anonymized country scenarios that are based on data from countries in Europe and the Western Pacific representing a diverse range of health financing systems, we forecast the size of the ageing-attributable gap between health revenues and expenditures from 2020 to 2100 under current health financing arrangements. In the country with the largest financing gap in 2100 (country S6) the majority (87.1%) is caused by growth in health expenditures. However in countries that are heavily reliant on labour-market related social contributions to finance health care, a sizeable share of the financing gap is due to reductions in health revenues. We argue that analyses giving equal attention to both health expenditures and revenues steers decision makers towards a more balanced set of policy options to address the challenges of population ageing, ranging from targeting expenditures and utilization of services to diversifying revenue.     

Ageing in India: Financial hardship from health expenditures

India's rapidly ageing population raises concerns about the burden of health care payments among older individuals who may have both limited income and greater health care needs. Using a nationally representative household survey, we investigate the association between age and financial hardship due to health expenditures. We find that both the probability of experiencing health problems and mean total out‐of‐pocket health expenditures increase with age. Second, the probability of households experiencing catastrophic health expenditures increases with each additional member aged 60 and above—33% of households with one 60+ member and 38% of households with 2 or more 60+ members experienced catastrophic health expenditures, compared to only 20% in households with all members under the age of 60 years. Lastly, we show that individuals aged 60 and above had a much higher probability of becoming impoverished as a result of health expenditures—the probability of impoverishment for 60+ individuals was 3 percentage points higher than for individuals under the age of 60. Overall, around 4.8% of the older population, representing 4.1 million people, fell into poverty. The results suggest that there is an urgent need for public investments in financial protection programs for older people in India.     

Effects of state Medicaid home care Medicare maximization programs on Medicare expenditures

Some state Medicaid programs have attempted to shift home health care costs to Medicare by using retrospective Medicare maximization billing practices. We used a two-part model with random effects to analyze whether retrospective billing practices increase Medicare expenditures for dual eligibles by analyzing primary data collected from 47 state Medicaid offices supplemented with Medicare Current Beneficiary Survey (MCBS) data from 1992-1997. Retrospective billing practices were projected to increase Medicare home health care expenditures by 73.8 million dollars over six years, although this was not statistically significant. We also found significantly higher Medicare spending in states with lower Medicaid spending levels, suggesting that states with high Medicaid utilization have potential to shift some of these expenditures to Medicare.     

Medical expenditure in urban China: a quantile regression analysis

Many countries have been trying to expand their public health insurance coverage in recent years. To achieve two fundamental policy goals—equity in health care utilization and control of health care costs—policymakers need a better understanding of the underlying determinants of individual health care expenditure beyond the results of mean regressions. In this paper, we apply a quantile regression method to investigate the heterogeneous effects of various determinants of medical expenditure in China. Comparing with the average effects, we find that health care expenditures at the upper end of the distribution are under stronger influences of need factors such as poor health status, and weaker influences of socioeconomic factors and insurance status. On the other hand, health care expenditures at the lower end of the distribution are under stronger influences of socioeconomic factors and insurance status, and weaker influences of need factors. Our study may provide useful information to policymakers for the optimal design of their health care systems, and it may be of particular interests to the health policymakers in China, where is currently still in a period of reshaping its health-care system.     

Does substituting home care for institutional care lead to a reduction in Medicaid expenditures?

In 1981 Congress introduced Home and Community Based Services (HCBS) waivers in an attempt to contain Medicaid long-term care expenditures. This paper analyzes the efficacy of the waiver program. To date, little is known about its impact on cost containment. Using state-level Medicaid data on expenditures and the number of individuals participating in HCBS waivers between 1992 and 2000, this study estimates the impact of HCBS waivers on total Medicaid expenditures as well as on Medicaid institutional, home health and pharmaceutical expenditures. A fixed effects model is used to analyze Medicaid expenditures using variation in the size of HCBS waiver programs across states and over time. The results, robust across multiple specifications, show increases rather than decreases in total Medicaid spending as well as increases in the other Medicaid spending categories analyzed. This implies that there is no evidence of substitution from institutional care to the HCBS waiver program or that cost-shifting is occurring. In fact, the large magnitude of the estimated spending increases suggests the waivers may induce more people to enter the Medicaid program.     

Does age or life expectancy better predict health care expenditures?

It is an unresolved issue whether age or (expected) remaining life years better predicts health care expenditures. We first estimate a set of hazard models to predict life expectancy based on individual demographic characteristics and health conditions, and then use regression analyses to compare the predictive power of age and life expectancy in explaining health care expenditures. This paper differs from previous studies in that it uses predicted life expectancy to address the censoring of death; as a result, this paper goes beyond the large health care expenditures at the end of life and the results apply to both deceased and survivors. We find that age has little additional predictive power on health care expenditures after controlling for life expectancy, but the predictive power of life expectancy itself diminishes as health status measures are introduced into the model. These results are not of esoteric interest only for their statistical properties; we show that using life expectancy rather than age results in lower projections of future health care expenditures. This result suggests that increases in longevity might be less costly than models based on the current age profile of spending would predict.     

How liability law affects medical productivity

Previous research suggests that "direct" reforms to the liability system-reforms designed to reduce the level of compensation to potential claimants-reduce medical expenditures without important consequences for patient health outcomes. We extend this research by identifying the mechanisms through which reforms affect the behavior of health care providers. Although we find that direct reforms improve medical productivity primarily by reducing malpractice claims rates and compensation conditional on a claim, our results suggest that other policies that reduce the time spent and the amount of conflict involved in defending against a claim can also reduce defensive practices substantially. In addition, we find that "malpractice pressure" has a more significant impact on diagnostic rather than therapeutic treatment decisions. Our results provide an empirical foundation for simulating the effects of untried malpractice reforms on health care expenditures and outcomes, based on their predicted effects on the malpractice pressure facing medical providers.     

Why do the sick not utilise health care? The case of Zambia

When ill the individual faces the options of seeking health care, using self-medication or doing nothing. In an economic perspective, an individual's propensity to utilise health care is determined by the costs of utilisation and the perceived benefits of health care. The propensity to utilise health care may hence be expected to vary between individuals. In this paper we attempt on the one hand to determine what factors influence sick individuals' propensity to seek health care at a health facility or use self-medication (or do nothing), and on the other hand attempt to determine the factors that influence the magnitude of their expenditures for health care, in particular what other factors than just health status influence utilisation. For the empirical analysis, data, covering 9700 individuals, from the 1998 Living Conditions Monitoring Survey (LCMS) is used. We use a Multinomial Logit selection model to estimate the equation, which allows us to analyse health-care utilisation through two separate processes, the decision to seek care and the magnitude of expenditures incurred. In general, we find that the individuals are influenced by income, insurance, type of illness and access variables such as distance and owning a vehicle.     

Catastrophic and poverty impacts of health payments: results from national household surveys in Thailand

OBJECTIVE: To estimate the incidence and describe the profile of catastrophic expenditures and impoverishment due to household out-of-pocket payments, comparing the periods before and after the introduction of universal health care coverage (UC). METHODS: Secondary data analyses of socioeconomic surveys on nationally representative households pre-UC in 2000 (n = 24,747) and post-UC in 2002 (n = 34,785) and 2004 (n = 34,843). FINDINGS: Households using inpatient care experienced catastrophic expenditures most often (31.0% in 2000, compared with 15.1% and 14.6% in 2002 and 2004, respectively). During the two post-UC periods, the incidence of catastrophic expenditures for inpatient services at private hospitals was 32.1% for 2002 and 27.8% for 2004. For those using inpatient care at district hospitals, the corresponding catastrophic expenditures figures were 6.5% and 7.3% in 2002 and 2004, respectively. The catastrophic expenditures incidence for outpatient services from private hospitals moved from 27.9% to 28.5% between 2002 and 2004. In 2000, before universal coverage was introduced, the percentages of Thai households who used private hospitals and faced catastrophic expenditures were 35.8% for inpatient care and 36.0% for outpatient care. Impoverishment increased for poor households because of payments for inpatient services by 84.0% in 2002, by 71.5% in 2004 and by 95.6% in 2000. The relative increase in out-of-pocket impoverishment was found in 98.8% to 100% of those who were poor following payments made to private hospitals, regardless of type of care. CONCLUSION: Households using inpatient services, especially at private hospitals, were more likely to face catastrophic expenditures and impoverishment from out-of-pocket payments. Use of services not covered by the UC benefit package and bypassing the designated providers (prohibited under the capitation contract model without proper referrals) are major causes of catastrophic expenditures and impoverishment.     

Health care expenditures and gross domestic product: the Turkish case

Our study examines the long-term relationship among per capita gross domestic product (GDP), per capita health expenditures and population growth rate in Turkey during the period 1984–2006, employing the Johansen multivariate cointegration technique. Related previous studies on OECD countries have mostly excluded Turkey—itself an OECD country. The only study on Turkey examines the period 1984–1998. However, after 1998, major events and policy changes that had a substantial impact on income and health expenditures took place in Turkey, including a series of reforms to restructure the health and social security system. In contrast to earlier findings in the literature, we find that the income elasticity of total health expenditures is less than one, which indicates that health care is a necessity in Turkey during the period of analysis. According to our results, a 10% increase in per capita GDP is associated with an 8.7% increase in total per capita health expenditures, controlling for population growth. We find that the income elasticity of public health expenditures is less than one. But, in the case of private health care expenditures, the elasticity is greater than one, meaning that private health care is a luxury good in Turkey.     

The Effect of Medicaid on Health Care Consumption of Young Adults

All states provide Medicaid until the age of 19 years. After 19 years, young adults may become ineligible for Medicaid. Using the Medical Expenditure Panel Survey, we find that the resulting loss of Medicaid coverage causes substantial changes to the level and composition of health care use. The total number of visits to health care providers falls by over 60%, two‐thirds of which is due to a decline in office visits. Expenditures, in particular inpatient expenditures, also appear to fall sharply. Copyright © 2014 John Wiley & Sons, Ltd.     

Health care expenditures after introduction of a gatekeeper and a global budget in a Swiss health insurance plan

STUDY OBJECTIVES: To assess whether the introduction of "managed care" (capitated budget and utilisation control by general practitioners) in a Swiss health insurance plan caused a selective disenrolment of plan members, and whether it achieved its goal of reducing health care expenditures. DESIGN: Controlled before-after analysis of health insurance claims. SETTING: Health insurance plan of the University of Geneva, Switzerland, which introduced managed care at the end of 1992, and comparison plan, which reimbursed health care expenditures without setting a budget or controlling access. PARTICIPANTS: Analysis of self selection: university plan members who accepted (3993) or refused (659) transfer to managed care. Analysis of change in expenditures: cohorts of persons continuously enrolled in the university (1575) and comparison (3384) plans in 1992 and 1993. MAIN RESULTS: During 1992, the year before the transformation of the university plan, persons who refused managed care had generated 35% higher expenditures than those who accepted managed care (p < 0.001). Between 1992 and 1993, expenditures per member decreased by 9% in the university cohort and increased by 11% in the comparison cohort (p = 0.004). Technical procedures (laboratory tests, physical therapy, drugs) decreased most in the university plan. No impact on hospital admissions was detected. CONCLUSIONS: Introduction of gatekeeping and budget management by physicians caused a favourable self selection process for the university plan. In addition, the managed care plan achieved a substantial decrease in overall health care expenditures in its first year of operation, chiefly by reducing outlays for technical procedures.

 

     

The impact of no-fault compensation on health care expenditures: An empirical study of OECD countries

Around the world, governments are faced with spiralling health care expenditures. This raises the need for further insight in the determinants of these expenditures. Existing literature focuses primarily on income, ageing, health care financing and supply variables. This paper includes medical malpractice system characteristics as determinants of health spending in OECD countries. Estimates from our regression models suggest that no-fault schemes for medical injuries with decoupling of deterrence and compensation reduce health expenditures per capita by 0.11%. Furthermore, countries that introduced a no-fault system without decoupling of deterrence and compensation are found to have higher (+0.06%) health care spending.     

National health expenditures projections through 2030

If current laws and practices continue, health expenditures in the United States will reach $1.7 trillion by the year 2000, an amount equal to 18.1 percent of the Nation's gross domestic product (GDP). By the year 2030, as America's baby boomers enter their seventies and eighties, health spending will top $16 trillion, or 32 percent of GDP. The projections presented here incorporate the assumptions and conclusions of the Medicare trustees in their 1992 report to Congress on the status of Medicare, and the 1992 President's budget estimates of Medicaid outlays.     

The financial burden of overweight and obesity among elderly Americans: the dynamics of weight, longevity, and health care cost

OBJECTIVE: To investigate the financial burdens attributed to overweight and obesity on the U.S. health care system among elderly Americans. DATA SOURCE: Longitudinal Cost and Use files of the Medicare Current Beneficiary Survey from 1992 to 2001. STUDY DESIGN: We constructed a simultaneous equation system to model the dynamic relationship between changes in body weight, chronic diseases, functional status, longevity, and health care expenditures using maximum likelihood estimation. Based on the estimation, we conducted a simulation of one cohort with different baseline weights at age 65 and followed to death or up to age 100 of their health outcomes and lifetime health care expenditures. PRINCIPAL FINDINGS: The elderly men who were overweight or obese at age 65 had 6-13 percent more lifetime health care expenditures than the same age cohort within normal weight range at age 65. Elderly women who were overweight or obese at age 65 spent 11-17 percent more than those in a normal weight range. Both elderly men and women who were overweight or obese at age 65 had worse health outcomes than the normal weight cohorts. The average body mass index among survivors decreased by age. CONCLUSION: Overweight and obesity could place significant financial burdens on the U.S. health care system.     

Analysis of primary health care utilisation in south-western Finland--a tool for management

Long-term health care planning is presently not based on the needs of the population at the local level in Finland but rather, it is based on retroactive economic values and already realised budget in hospital and primary health care. The existing health care structure and its health care practices continue to guide the supply of services. While we have the most extensive databases on primary health care and hospital services, such tools are not used in the broadest possible sense in the present health care planning at the local level. Simple and informative indicators available to health care planners and decision-makers from databases at the local level were used to appraise the use of health care services. Statistical profiles of health care clients were classified by age groups within the health authority area (population of 13,000) of Paimio-Sauvo in south-western Finland with the intent to explain utilisation of primary health care services, their coverage, and repeat visits as well as groups not using those services. Physicians recorded reasons for each patient visit with the ICD-10 categories. In the case municipalities, primary health care services provided 100% coverage to children of 0-6 years of age and more than 70% coverage to other groups. Most primary health care expenditures were assessed for people 65 years or older in 2000. As an example of a municipality, hospital and primary health care expenditures within Paimio varied from 24 to 30.4% of the total obligations for the last 10 years.     

Das Gesundheitswesen als Beschäftigungsund Wachstumsfaktor

On the one hand, go ernments, backed by public opinion, ha e started to iew the health care system as an important factor for employment and economic de elopment. On the other hand, heath care expenditures are seen as a burden, responsible for a hardly controllable escalation of contribution rates for statutory health care. To appreciate the economic alue of health care correctly, it is necessary to ha ea detailed knowledge of the role health care plays in the economic system. This article examines how the health care system is represented in the official statistics of Germany’s Central Office of Statistics. The production of health care goods is analysed in the sectional context of the economy. The importance of the interdependence between the health care sectors and the interdependence between health care and the rest of the economy is stressed. With this background, the importance of the health care system for employment and economic de elopment can be understood and consequences for economic policy can be highlighted.