The Impact of Aging on Future Healthcare Expenditure

Lukas Steinmann (), Harry Telser () and Peter Zweifel ()
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Lukas Steinmann: Swiss Re, Zurich
Harry Telser: Socioeconomic Institute, University of Zurich
Peter Zweifel: Socioeconomic Institute, University of Zurich

No 510, SOI - Working Papers from Socioeconomic Institute - University of Zurich

Abstract: The impact of aging on healthcare expenditure (HCE) has been at the center of a prolonged debate. This paper purports to shed light on several issues. First, it presents new evidence on the relative importance of the two components of HCE that have been distinguished by Zweifel, Felder and Meier (1999), viz. the cost of morbidity and the cost of mortality (their "red herring" hypothesis claims that neglecting the mortality component results in excessive estimates of future growth of HCE). Second, it takes account of recent evidence suggesting that HCE does increase life expectancy, implying that time-to-death is an endogenous determinant of HCE. Third, it investigates the contribution of population aging to the future growth of HCE. For the case of Switzerland, it finds this contribution to be relatively small regardless of whether or not the cost of dying is accounted for, thus qualifying the "red herring" hypothesis.

Keywords: Health econometrics; Aging; Cost of dying; Healthcare expenditure (search for similar items in EconPapers)
JEL-codes: I12 J14 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2005-09, Revised 2006-12
New Economics Papers: this item is included in nep-hea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in Forum for Health Economics and Policy 10(2), Article 1, 2007

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https://www.zora.uzh.ch/id/eprint/52359/1/wp0510.pdf Revised version, 2006 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:soz:wpaper:0510

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