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The European Journal of Health Economics
Published in: The European Journal of Health Economics 8/2014

01-11-2014 | Original Paper

Population ageing and healthcare expenditure projections: new evidence from a time to death approach

Authors: Claudia Geue, Andrew Briggs, James Lewsey, Paula Lorgelly

Published in: The European Journal of Health Economics | Issue 8/2014

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Abstract

Background

Health care expenditure (HCE) is not distributed evenly over a person’s life course. How much is spent on the elderly is important as they are a population group that is increasing in size. However other factors, such as death-related costs that are known to be high, need be considered as well in any expenditure projections and budget planning decisions.

Objective

This article analyses, for the first time in Scotland, how expenditure projections for acute inpatient care are influenced when applying two different analytical approaches: (1) accounting for healthcare (HC) spending at the end of life and (2) accounting for demographic changes only. The association between socioeconomic status and HC utilisation and costs at the end of life is also estimated.

Methods

A representative, longitudinal data set is used. Survival analysis is employed to allow inclusion of surviving sample members. Cost estimates are derived from a two-part regression model. Future population estimates were obtained for both methods and multiplied separately by cost estimates.

Results

Time to death (TTD), age at death and the interaction between these two have a significant effect on HC costs. As individuals approach death, those living in more deprived areas are less likely to be hospitalised than those individuals living in the more affluent areas, although this does not translate into incurring statistically significant higher costs. Projected HCE for acute inpatient care for the year 2028 was approximately 7 % higher under the demographic approach as compared to a TTD approach.

Conclusion

The analysis showed that if death is postponed into older ages, HCE (and HC budgets) would not increase to the same extent if these factors were ignored. Such factors would be ignored if the population that is in their last year(s) of life were not taken into consideration when obtaining cost estimates.
Footnotes
1
SMR01 has episode-based patient records that relate to all acute inpatient and day cases. A record is generated when a patient completes an episode of inpatient or day case care and episodes are summarised into ‘Continuous Inpatient Stays’, CIS.
 
2
An initial exploration of the data showed that costs increased markedly in the last two quarters of life. Exploratory regression analysis determined when TTD became an insignificant predictor for costs. It was therefore decided to analyse the last 5 years of life, measured in quarters to provide variance for the analysis. Quarters have also been used in previous studies [4, 5].
 
3
Since population estimates are only available until 2033 and since it is required for the TTD approach to be able to calculate the proportion of the population in year 1 to 5 before death, the last estimate can be obtained for the year 2028.
 
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Metadata
Title
Population ageing and healthcare expenditure projections: new evidence from a time to death approach
Authors
Claudia Geue
Andrew Briggs
James Lewsey
Paula Lorgelly
Publication date
01-11-2014
Publisher
Springer Berlin Heidelberg
Published in
The European Journal of Health Economics / Issue 8/2014
Print ISSN: 1618-7598
Electronic ISSN: 1618-7601
DOI
https://doi.org/10.1007/s10198-013-0543-7

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