Health Care Expenditures

  • Edward C. Norton
  • Sally C. Stearns
Part of the International Handbooks of Population book series (IHOP, volume 1)

Changes in the size and composition of the older population will have profound effects on future health care expenditures in developed nations. With the baby boom cohorts joining the ranks of the elderly after 2010, the absolute amount of health care spending on elderly will increase greatly. The increasing expenditures raise concerns about the effectiveness of such spending and the ability of public insurance to provide high quality coverage.


Health Expenditure Informal Care Health Care Expenditure Formal Care Nursing Home Care 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Bass DM, Noelker LS (1987) The influence of family caregivers on elder’s use of in-home services: An expanded conceptual framework. J Health Soc Behav 28:84–196CrossRefGoogle Scholar
  2. Bebbington A, Comas-Herrera A (2000) Healthy life expectancy: Trends to 1998, and the implications for long term care costs: PSSRU discussion paper 1695Google Scholar
  3. Bissett B (2002) Healthy life expectancy in England at subnational level. Health Stat Q 14:21–29Google Scholar
  4. Bone M, Bebbington A, Jagger C, Morgan K, Nicolaas G (1995) Health expectancy and its uses. London: HMSOGoogle Scholar
  5. Bone M, Bebbington A, Nicolaas G (1998) Policy applications of health expectancy. J Aging Health 10(2):136–153CrossRefGoogle Scholar
  6. Cambois E, Robine J (1996) An international comparison of trends in disability free life expectancy. In R. S. Eisen, F (ed.), Long-term Care: Economic Issues and Policy Solutions. Kluwer: DordrechtGoogle Scholar
  7. Carmichael F, Charles S (2003) The opportunity costs of informal care: Does gender matter? J Health Econ 22(5):781–803CrossRefGoogle Scholar
  8. CBO (1999) Projections of services for longterm care services for the elderly. Washington, DC: Congressional Budget OfficeGoogle Scholar
  9. Charles KK, Sevak P (2005) Can family caregiving substitute for nursing home care? J Health Econ 24(6):1174–1190CrossRefGoogle Scholar
  10. Chernew ME, Goldman DP, Pan F, Shang B (2005) Disability and health care spending among medicare beneficiaries. Health Affairs (Millwood) 24(Suppl2):W5R42–W5R52Google Scholar
  11. Christianson, JB (1988) The effect of channeling on informal caregiving, Health Serv Res 23(1):99–117Google Scholar
  12. Cohen MA, Kumar AKN (1997) The changing face of longterm care insurance in 1994: Profiles and innovations in a dynamic market. Inquiry 34:50–61Google Scholar
  13. Cutler DM, Meara E (2001) The concentration of medical spending: An Update. In: Wise DA (ed.), Themes in the economics of aging. Cambridge, Massachusetts: The University of Chicago Press, National Bureau of Economic ResearchGoogle Scholar
  14. Cutler DM, Sheiner L (1998) Demographic and medical care spending: standard and non-standard effects, National Bureau of Economic Research Working Paper Series, Working Paper 6866Google Scholar
  15. Dozet A, Lyttkens CH, Nystedt P (2002) Health care for the elderly: Two cases of technological diffusion. Soc Sci Med 54:49–65CrossRefGoogle Scholar
  16. Emanuel EJ, Emanuel LL (1994) The economics of dying – The illusion of cost savings at the end of life. New Eng J Med 330(8):540–544CrossRefGoogle Scholar
  17. Fassbender K, Fainsinger R, Brenneis C, Brown P, Braun T, Jacobs P (2005) Utilization and costs of the introduction of system-wide palliative care in Alberta 1993–2000. Palliat Med 19(7):513–520CrossRefGoogle Scholar
  18. Felder S, Meier M, Schmitt, H (2000) Health care expenditure in the last months of life. J Health Econ 19(5):679–695CrossRefGoogle Scholar
  19. Flory J, Young-Xu Y, Gurol P, Levinsky N, Ash A, Emanuel E (2004) Place of death: US trends since 1980. Health Affairs 23(3):194–200CrossRefGoogle Scholar
  20. Freedman VA, Crimmins E, Schoeni RF, Spillman BC, Aykan H, Kramarow E, Land K, Lubitz J, Manton K, Martin LG, Shinberg D, Waidmann T (2004) Resolving inconsistencies in trends in old-age disability: Report from a technical working group. Demography 41(3):417–441CrossRefGoogle Scholar
  21. Fries JF (1980) Aging, natural death, and the compression of morbidity. New Eng J Med 303(3):130–135CrossRefGoogle Scholar
  22. Fuchs VR (1990) The health sectors share of the gross national product. Sci 247 (4942):534–538CrossRefGoogle Scholar
  23. Fuchs VR (1999) Health care for the elderly: How much? Who will pay for it? Health Affairs 18(1):11–21CrossRefGoogle Scholar
  24. Garber A (1989) Long-term care, wealth, and health of the disabled elderly living in the community. In: Wise, DA (ed.), Econ Aging, University of Chicago Press, Chicago, pp 255–277Google Scholar
  25. Gold MR, Siegel JE, Russell LB, Weinstein MC (1996) Costeffectiveness in health and medicine. Oxford University Press, New YorkGoogle Scholar
  26. Greene VL (1983) Substitution between formally and informally provided care for the impaired elderly in the community. Medical Care 21(6):609–619CrossRefGoogle Scholar
  27. Greer DS, Mor V (1986) An overview of National Hospice Study findings J Chron Dis 39(1):5–7CrossRefGoogle Scholar
  28. Grossman M (1972) On the concept of health capital and the demand for health. J Political Econ 80(2):223–255CrossRefGoogle Scholar
  29. Hamel MB, Phillips RS, Davis RB, et al. for the SUPPORT Investigators (1997) Outcomes and costeffectiveness of initiating dialysis and continuing aggressive care in seriously ill hospitalized adults. Ann Intern Med 127:195–202Google Scholar
  30. Kemper P (1992) The use of formal and informal home care by the disabled elderly. Health Serv Res 27(4):421–451Google Scholar
  31. Kidder D (1992) The effects of hospice coverage on Medicare expenditures. Health Serv Res 27(2):195–217Google Scholar
  32. Kotlikoff L (1989) How much care do the aged receive from their children? A bimodal picture of contact and assistance. The University of Chicago Press, ChicagoGoogle Scholar
  33. Laditka SB (1998) Modeling lifetime nursing home use under assumptions of better health. J Gerontol: Soc Sci 53B(4): S177–S187Google Scholar
  34. Lakdawalla D, Philipson T (2002) The rise in old age longevity and the market for longterm care. Am Econ Rev 92:295–306CrossRefGoogle Scholar
  35. Langa KM, Chernew ME, Kabeto MU, Katz SJ (2001) The explosion in paid home care in the 1990s: Who received the additional services? Med Care 39(2):147–157CrossRefGoogle Scholar
  36. Lee R, Tuljapurkar, S (1998) Uncertain Demographic Futures and Social Security Finance. Am Econ Rev 88:237–241Google Scholar
  37. Levinsky NG, Yu W, Ash A, Moskowitz M, Gazelle G, Saynina O, Emanuel E (2001) Influences of age on Medicare expenditures and medical care in the last year of life. J Am Med Assoc 286:1349–1355CrossRefGoogle Scholar
  38. Liu K, Manton KG, Aragon C (2000) Changes in home care use by disabled elderly persons: 1982–1994. J Gerontol B: Psycholog Sci Soc Sci 55 (4):S245–253Google Scholar
  39. Lo JC (2002) The impact of hospices on health care expenditures – the case of Taiwan. Soc Sci Med 54(6):981–991CrossRefGoogle Scholar
  40. Lo Sasso AT, Johnson RW (2002) Does informal care from adult children reduce nursing home admissions for the elderly? Inquiry 39(3):279–297Google Scholar
  41. Lubitz J, Beebe J, Baker C (1995) Longevity and Medicare expenditures. New Eng J Med 332(15):999–1003CrossRefGoogle Scholar
  42. Lubitz J, Riley G (1993) Trends in Medicare payments in the last year of life. New Eng J Med 328:1092–1096CrossRefGoogle Scholar
  43. Lynn J, DeVries KO, Arkes HR, Stevens M, Cohn F, Murphy P, Covinsky KE, Hamel MB, Dawson NV, Tsevat J (2000) Ineffectiveness of the SUPPORT intervention: Review of explanations. J Am Geriatr Soc 48:S206–S213Google Scholar
  44. Manton KG, Gu X (2001) Changes in the prevalence of chronic disability in the United States black and non-black population above age 65 from 1982 to 1999. Proceedings of the National Academy of Science USA 98(11):6354–6359CrossRefGoogle Scholar
  45. Manton KG, Gu X, Lamb VL (2006) Long-term trends in life expectancy and active life expectancy in the United States. Popul Dev Rev 32(1):81–105CrossRefGoogle Scholar
  46. Manton KG, Stallard E, Liu K (1993) Forecasts of active life expectancy: Policy and fiscal implications. J Gerontol 48(Special Issue):11–26Google Scholar
  47. MCBS Project (2006) Health & health care of the medicare population: Data from the 2003 medicare current beneficiary survey. Rockville, MD: WestatGoogle Scholar
  48. McClellan M, Kessler D (1999) Global analysis of technological change in health care: the case of heart attacks. Health Affairs 18(3):250–255CrossRefGoogle Scholar
  49. McGrail K, Green B, Barer ML, Evans RG, Hertzman C, Normand C (2000) Age, costs of acute and long-term care and proximity to death: evidence for 1987–88 and 1994–95 in British Columbia. Age Aging 29(3):249–253CrossRefGoogle Scholar
  50. Miller PJ, Mike PB (1995) The Medicare hospice benefit: Ten years of federal policy for the terminally ill. Death Stud 19(6):531–542CrossRefGoogle Scholar
  51. Mor V, Kidder D (1985) Cost savings in hospice: Final results of the National Hospice Study. Health Serv Res 20(4):407– 422Google Scholar
  52. Murtaugh CM, Kemper P, Spillman BC (1995) Risky business: Long-term care insurance underwriting. Inquiry 32:271–284Google Scholar
  53. Newhouse JP (1992) Medical-care costs – how much welfare loss? J Econ Perspect 6(3):3–21 SUMGoogle Scholar
  54. Norton EC (2000) Long-term care. In Handbook of health economics, Volume IB, Culyer AJ, Newhouse JP (eds) New York, NY: Elsevier Science BV, pp 956–994Google Scholar
  55. Norton EC, Wang H, Stearns SC (2006) Behavioral implications of out-of-pocket health care expenditures. Swiss J Econ Stat 142 (Special Issue): 3–11Google Scholar
  56. OECD (1998) The health of older persons in OECD countries: Is it improving fast enough to compensate for population ageing? Labor Market and Social Policy Paper No. 37. Paris: Organisation for Economic Co-operation and DevelopmentGoogle Scholar
  57. Olshansky SJ, Ault AB (1986) The fourth stage of the epidemio-logic transition: the age of delayed degenerative diseases. Milbank Q 64(3):355–391CrossRefGoogle Scholar
  58. Parrillo, JE (1996) The SUPPORT project and improving care for seriously ill patients. J Am Med Assoc (letter) 275:1229CrossRefGoogle Scholar
  59. Pezzin LE, Kemper P, Reschovsky J (1996) Does publicly provided home care substitute for family care? Experimental evidence with endogenous living arrangements. J Hum Res 31(3):650–676CrossRefGoogle Scholar
  60. Pezzin LE, Schone BS (1999) Parental marital disruption and intergenerational transfers: An analysis of lone elderly parents and their children. Demography 36(3):287–297CrossRefGoogle Scholar
  61. Robine JM, Romieu I, Combois E (1997) Health expectancies and current research. Rev Clin Gerontol 7:73–81CrossRefGoogle Scholar
  62. Scitovsky A (1988) Medical care in the last 12 months of life: The relation between age, functional status, and medical care expenditures. Milbank Q 66(4):640–660CrossRefGoogle Scholar
  63. Seshamani M, Gray A (2004) Ageing and health-care expenditure: The red herring argument revisited. Health Econ 13(4):303–314CrossRefGoogle Scholar
  64. Soldo BJ (1985) In-home services for the dependent elderly. Res Aging 7:281–304CrossRefGoogle Scholar
  65. Spector WD, Fleischman JA, Pezzin LE, Spillman BC (2000) the characteristics of long-term care users (No. AHRQ Publication No. 00-0049) Rockville, Md.: Agency for Healthcare Research and PolicyGoogle Scholar
  66. Spector WD, Mor V (1984) Utilization and charges for terminal cancer patients in Rhode Island. Inquiry 21(4):328–337Google Scholar
  67. Spillman BC (2004) Changes in elderly disability rates and the implications for health care utilization and cost. Milbank Q 82(1):157–194CrossRefGoogle Scholar
  68. Spillman BC, Lubitz J (2002) New estimates of lifetime nursing home use: Have patterns of use changed? Med Care 40(10):965–975CrossRefGoogle Scholar
  69. Spillman BC, Lubitz J (2000) The effect of longevity on spending for acute and long-term care. New Eng J Med 342(19):1409–1415CrossRefGoogle Scholar
  70. Spillman BC, Pezzin LE (2000) Potential and active family care-givers: Changing networks and the “sandwich generation”. Milbank Q 78(3):347+CrossRefGoogle Scholar
  71. Stearns SC, Kovar MG, Hayes K, Koch GG (1996) Risk indicators for hospitalization during the last year of life. Health Serv Res 31(1):49–69Google Scholar
  72. Stearns SC, Norton EC, Yang Z (2007) How age and disability affect long-term care expenditures in the United States. Soc Pol Society 6(3):367–378CrossRefGoogle Scholar
  73. Stearns SC, Norton EC (2004) Time to include time to death? The future of health care expenditure predictions. Health Econ 13(4):315–327CrossRefGoogle Scholar
  74. Stern S (1995) Estimating family long-term care decisions in the presence of endogenous child characteristics. J Hum Res 30(3):551–580CrossRefGoogle Scholar
  75. Van Houtven CH, Norton EC (2004) Informal care and health care use of older adults. J Health Econ 23(6):1159–1180CrossRefGoogle Scholar
  76. Van Houtven CH, Norton EC (2008) Informal care and Medicare expenditures: Testing for heterogeneous treatment effects. J Health Econ 27(1):134–156CrossRefGoogle Scholar
  77. Weaver F, Stearns SC, Norton EC, Spector W (In press 2009) Proximity to death and participation in the long-term care market. Health EconGoogle Scholar
  78. Welch HG, Albertsen PC, Nease RF, Bubolz TA, Wasson JH (1996) Estimating treatment benefits for the elderly: The effect of competing risks. Ann Int Med 124 (6):577–584Google Scholar
  79. Werblow A, Felder S, Zweifel P (In press 2007) Population ageing and health care expenditure: A school of “red herrings”? Health EconGoogle Scholar
  80. Wolinsky FD, Mosely II RR, Coe RM (1986) A cohort analysis of the use of health services by elderly Americans. J Health Soc Behav 27:209–219CrossRefGoogle Scholar
  81. Yang Z, Norton EC, Stearns SC (2003) Longevity and health care expenditures: the real reasons older people spend more. J Gerontol B Psychol/Soc Sci 58(1):S2–S1Google Scholar
  82. Zweifel P, Felder S, Meiers M (1999) Ageing of population and health care expenditure: a red herring? Health Econ 8(6):485–496CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media B.V. 2009

Authors and Affiliations

  • Edward C. Norton
    • 1
  • Sally C. Stearns
    • 2
  1. 1.Department of Health Management and Policy School of Public HealthUniversity of MichiganAnn Arbor, MIUSA
  2. 2.University of North Carolina – Chapel HillChapel Hill, NCUSA

Personalised recommendations