Abstract
Across all developed countries, there is a steep life expectancy gradient with respect to deprivation. This paper provides a theoretical underpinning for this gradient in line with the Grossman model, indicating that deprivation affects morbidity and, consequently, life expectancy in three ways: directly from deprivation to morbidity, and indirectly through lower income and a trade-off between investments in health and social status. Using rich German claims data covering 6.3 million insured people over four years, this paper illustrates that deprivation increases morbidity and reduces life expectancy. It was estimated that highly deprived individuals had approximately two more chronic diseases and a life expectancy reduced by 15 years compared to the least deprived individuals. This mechanism of deprivation is identified as fundamental, as deprived people remain trapped in their social status, and this status results in health investment decisions that affect long-term morbidity. However, in the German setting, the income and investment paths of the effects of deprivation were of minor relevance due to the broad national coverage of its SHI system. The most important aspects of deprivation were direct effects on morbidity, which accumulate over the lifespan. In this respect, personal aspects, such as social status, were found to be three times more important than spatial aspects, such as area deprivation.
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Due to the nature of this research, participants of this study did not agree for their data to be shared publicly, so supporting data is not available.
Notes
Grossman’s model attempts to address the problem by introducing an age-dependent health degradation rate.
It is worth noting that recent extensions of the classical model also employed this mechanism and reached comparable conclusions (Galama and Kippersluis 2019).
As a robustness check, we performed a first-differences approach instead of CLPD (the theory for identification and the results are presented in the supplement).
Note that the share of additional (unobserved) private health investments (out-of-pocket and private insurance) in the overall health sector in Germany amounts to 27.3% (BMWE, 2020) and preventive services, in particular, are often excluded from the benefits of the SHI system.
Notably, if spouses are subject to compulsory insurance but are members of different insurance schemes, the primary individual is considered a single household. OECD scale: https://www.oecd.org/els/soc/OECD-Note-EquivalenceScales.pdf.
Note that Mitnitski et al. (2006) used a frailty index divided by the maximum number of diseases to assess morbidity. We omitted the denominator to interpret the results in terms of absolute rather than relative morbidity.
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Acknowledgements
The authors are grateful to two anonymous referees for careful discussion and to the members of the Standing Committee on Health Economics of the German Economic Association for valuable comments on an earlier version of the paper. We also thank our colleagues at WIG2 GmbH for technical support and scientific debate.
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Danny Wende: conceptualization, methodology, data curation, writing-original draft preparation. Alexander Karmann: validation, writing-reviewing, supervision. Ines Weinhold: validation, writing-reviewing and editing.
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Wende, D., Karmann, A. & Weinhold, I. Deprivation as a fundamental cause of morbidity and reduced life expectancy: an observational study using German statutory health insurance data. Int J Health Econ Manag. (2024). https://doi.org/10.1007/s10754-024-09374-3
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DOI: https://doi.org/10.1007/s10754-024-09374-3