Health Economics & Policy 2 nd Edition James W. Henderson Chapter 10 The Aging of the Population Copyright 2002, South-Western, a division of Thomson Learning, James W. Henderson, Health Economics and Policy, 2e

Population Demographics l Trends –Average age of population increasing –Increased percentage of population over age 65 l Life expectancies –Annual increase in male life expectancy 2.39% since 1900; for females it’s 2.64% –In 1998 male life expectancy at birth 73.8 years; female life expectancy 79.5 years

Life Expectancy at Birth, Female Male

Elderly in the U.S.

Medical Care Costs for the Elderly l Use of services l Intensity of services l Long-term care l End-of-life care

Change in Medical Paradigm l Acute care model –Episode of illness –Diagnosis and treatment –Recover or die l Chronic care model –Recurring illness –Diagnosis and treatment –Lifetime of care

Medical Care Utilization by Age Group, 1996

The High Cost of Dying l Dying is the most costly medical event in a person’s life l Over ¼ of Medicare spending on individuals during last year of life l Per capita spending on those who die over 6 times that of those who survive l Spending on those who die amounts to 1% GDP l Not a recent phenomenon

Summary and Conclusions l Ethics of dying –Euthanasia –Physician-assisted suicide l End-of-life episode is expensive, regardless of the age at death l As society ages, medical expenditures increase primarily due to increased incidence of chronic illness, not cost of dying