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

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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.

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Notes

  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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Acknowledgments

The authors would like to thank Fiona Cox, Lee Williamson, Claire Boag and Joan Nolan of the Longitudinal Studies Centre-Scotland (LSCS) for their help provided. The LSCS is supported by the ESRC/JISC, the Scottish Funding Council, the Chief Scientist’s Office and the Scottish Executive. The authors alone are responsible for the interpretation of the data. Census output is Crown copyright and is reproduced with the permission of the Controller of HMSO and the Queen’s Printer for Scotland. This work was supported by a Medical Research Council (MRC) PhD studentship.

Conflict of interest

None.

Ethical standard

Permission was given by the Privacy Advisory Committee of ISD to use linked SMR data.

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Authors and Affiliations

  1. Health Economics and Health Technology Assessment, Institute of Health and Wellbeing, University of Glasgow, 1 Lilybank Gardens, Glasgow, G12 8RZ, UK

    Claudia Geue, Andrew Briggs & James Lewsey

  2. Centre for Health Economics, Monash University, Building 75, Clayton, VIC, 3800, Australia

    Paula Lorgelly

Authors
  1. Claudia Geue
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  2. Andrew Briggs
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  3. James Lewsey
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  4. Paula Lorgelly
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Correspondence to Claudia Geue.

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Geue, C., Briggs, A., Lewsey, J. et al. Population ageing and healthcare expenditure projections: new evidence from a time to death approach. Eur J Health Econ 15, 885–896 (2014). https://doi.org/10.1007/s10198-013-0543-7

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  • DOI: https://doi.org/10.1007/s10198-013-0543-7

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