Healthy aging and future health spending

Abstract

This article examines the extent to which differences in life-expectancy are associated with shifts in average hospital costs for different age groups. The effect of increases in life expectancy on the cost curves is identified by comparing two countries with different life expectancies, but which are very similar on other variables like culture, technology and health systems (Norway and Denmark). Using data from the National Patient Registries the paper compares the ratio of average spending on individuals who die and individuals who survive in different age groups in these two countries. The best fit between the age related cost curves is achieved when the cost curve in the country with a two year longer life expectancy is also shifted by two years.

Keywords

• healthy aging
• health spending
• Red herring hypothesis
• cost projections