The road to financiallly sustainable health
care in an aging society?
March 2012
Marc Koopmanschap (Claudine de Meijer/Johan Polder/
Bram Wouterse)
koopmanschap@bmg.eur.nl
Outline
•
•
•
•
Overview determinants of HCE
Explanation HCE 1995-2009
Determinants of LTC expenditures
Decomposition of acute care expenditures
• Impact of determinants on HCE
• The role of aging in perspective
Public
health
policy
Socioeconomic
status
Demography
Age, sex,
Household
composition
Health behavior,
living and
working
conditions
Health Status
Incidence/preva
lence disease
Mortality (TTD)
Medical
technology
Consumer
preferences,
income
Medical
consumption
Acute care
Long term
care
Informal care
Disability
Health care
costs
(acute care
/LTC)
Informal care
costs
ADL, IADL,
mobility
Health care system
Organisation of supply
and insurance, Financial
incentives
Informal
care supply
Wages
prices
Model Anderson and Newman (2005)
Determinants
Individual level
Predisposing
Age
Gender
Household composition
(Socio-economic status)
Enabling
Informal care supply
Individual income
Consumer preferences
Illness/need
Health (incl. mortality)
Disability
Societal
Societal level
National income
Medical technology
Wages/prices
Organisation health care
Fact: HCE and Age
20000
15000
Men
Wome n
10000
5000
0
10
30
50
Age (ye ars)
70
90
Fact: (Yearly) HCE at End of Life
25000
20000
Men
15000
Wome n
10000
5000
0
60
50
40
30
20
Time to death in months
10
0
Results 1995-2009 on aging and costs
(1)
• Naive projections of ageing, not taking into account
time to death overestimate cost of aging in acute
care by 10-20%.
(as most extra elderly will not be in their expensive
last year(s) of life)
• Consensus: time to death important in acute care
sector, calender age per se is not!
• However, is time to death really an explanatory
variable or more a proxy for health/disability?
LTC determinants of consumption
• Disability – but not general health – main determinant of
LTC use (age has a small impact)
• iADL disabilities had a greater effect on homecare, ADL
disabilities more on institutional LTC
• The number of disabilities matters, but first disability has a
larger effect on use than any additional disability
Probability of LTC use as a function of disability
Aging & LTC expenditures
The effect of age on LTC expenditures
Old age coincides with
more disability and a
higher probability to
live alone.
After controlling for
disability and coresidence status, age
hardly influences the
level of LTC
expenditures.
De Meijer, Koopmanschap, Bago d’ Uva, Van Doorslaer (2011)
Co-residence status and LTC spending
The effect of co-residence status
Co-residence status
approximates informal
care availability.
Informal care
substitutes and
postpones the use of
formal LTC
LTC expenditure determinants
The effect of TTD when controlling for additional covariates
Homecare (population model)
Homecare (ext. homecare model)
LTC projections – various scenario’s
Scenario
Index per capita LTC expenditures (55+)
in 2040 (2004=100)
“Naïve” (age only)
150 (institutional care = 154; home care =
141)
Age plus trend in co-residence 153
status
“proximity-to-death” (constant 128 (institutional LTC = 129; home care =
proximity-to-death of disability) 124)
Extrapolated recent decrease
in severe disability
117 (homecare)
De Meijer, Koopmanschap, Bago d’ Uva, Van Doorslaer (2011)
Living Longer in Good Health?
Life expectancy by disability status
35,0
30,0
Life expectancy at age 55
2,0
25,0
20,0
2,0
2,0
5,2
2,0
5,3
5,7
3,6
3,6
8,9
9,1
3,5
3,4
6,1
10,3
11,5
LE with severe disability
LE with mild disability
DFLE
15,0
10,0
17,8
18,0
19,1
20,2
16,1
16,1
15,9
15,7
5,0
0,0
0
2008 2010 2020 2030
Males
2008 2010 2020 2030
Females
Forecast of lifetime LTC spending
Forecast LTC spending (2008-2030)
Individual life proximity spending on LTC
• Future longevity gains coinciding with a compression of
severe disability are not very costly per person.
Aggregate population spending on LTC
• Accounts for growing number of elderly
• Increase 56.0% in 2008-2030, from €10.7 to €16.8 bln
Acute care: decomposition HCE
growth the Netherlands
• Decomposition of spending on total acute care and
separate analyses for hospital care and pharmaceuticals
• Analysis of changes in full marginal expenditure distribution
 relevant as HCE are heavily skewed
• 1998-2004: real spending growth of 28%, but not uniform
across the spending distribution
Acute care spending growth (19982004)
Full distribution
.4
.2
-.5
0
0
.5
Change in log expenditure
.6
1
Positive expenditures
0
.2
.4
.6
.8
1
0
.2
Quantile
Total acute care
.4
.6
Quantile
Hospital and other secondary acute care
Pharmaceuticals
.8
1
Decomposition of growth (1998-2004)
Hospital care
• Growth concentrated at centre distribution
• Increased admission rates due to relaxation of hospital budgets
• Decrease LOS and shift towards more day care and policlinic
care constraint spending at higher quantiles
Pharmaceuticals
• Growth concentrated at top of distribution
• More intensive/expensive drug use
• Technological progress dominates growth, especially at higher
percentiles (monopolistic prices new drugs)
• Moderate contribution of shift towards less intensive hospital
treatment (substitution to outpatient drugs)
Overview results of determinants
of health care expenditures
Predisposing determinants
Age and gender
• age composition of population has a limited (< 1% growth py)
role in growth HCE.
• For LTC expenditures, age has some impact, might be proxy for
frailty not measured by disability/health;
• Elderly females depend more on LTC services than males; a
longer life expectancy (but less in good health) -> need more
formal LTC and have less informal care.
Household composition
• Singles are substantially more likely to use LTC, and their
expenditures are much higher (less informal care).
Illness/need determinants
Health and disability
Acute care:
• Time to Death (TTD) important;
• Differences in effect of TTD on disease specific HCE ->
TTD vs HCE depends on epidemiology (Wong; de Meijer).
Long term care:
• when controlling for health and esp. disability, effect of
both age and TTD is substantially lower
Health status vs disability: dynamics: given disease, less
disability -> less LTC costs?? As result of acute care
investments?
Enabling determinants
Informal care
• informal care lowers LTC use;
• supply of informal care depends on household
composition and (future) female labor participation.
Income
• Macro-income major determinant of HCE;
• In case of comprehensive insurance, individual income
limited role in determining HCE.
Consumer preferences
• changing preferences important driver of rising HCE?
evidence is scarce; difficult to separate from shifts in
health care needs and supply.
Societal determinants
Medical technology
• Very important, exact contribution of medical technology hard to
estimate;
• The impact of technology on HCE strong for prescription drugs
and hospital care;
• medical technology value for money? Very broad range costeffectiveness;
Organization of health care
• might clearly affect HCE, but evidence on the link between
institutional aspects, ageing and HCE limited.
• Cost sharing lowers HCE, managed competition lowered
prices, but HC-utilisation increased considerably
Wages/prices
• Baumol effect (for NL estimated as 0.8% p.a.);
• serious labour shortages to come, will raise wages.
The role of aging in perspective (1)
• Health care costs related to interplay of:
– Demography (age, household composition)
– Epidemiology/health/disability
– Technology (plus demand attitude)
• Mechanisms different for acute care vs LTC
• Self assessed health, chronic conditions, TTD and cause
of death -> acute care costs;
• Disability & household composition -> LTC costs
• Medical technology major role in boosting HCE in acute
care, but might limit disability and lower LTC demand;
The role of aging in perspective (2)
• Häkkinen (2008): “.. future expenditure is more likely
to be determined by health policy than inevitable
trends in demography”.
– Calls for policies that lower disability further..
• Evans et al. (2001): there is nothing fixed or clinically
imperative about current age-specific health care
spending, nor do countries need to accept as an
unalterable fact that age-specific per capita HCE in
the future must necessarily go up for all groups, and
especially for the elderly.
The role of aging in perspective (3)
• From a broader policy perspective: when further
advances in medical technology are allowed to be
introduced swiftly (for elderly) and growing
expectations of future elderly regarding service levels
are accommodated, all researchers expect that HCE
as % of GDP will increase considerably, probably
together with healthy life expectancy.
– Calls for choices in medical technology….
• Hence, the policy question is: (how much) are we
willing to pay for all these “advances” in care?