Health Economics & Policy 3 rd Edition James W. Henderson Chapter 11 The Aging of the Population

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 2000 male life expectancy at birth 74.1 years; female life expectancy 79.5 years

Life Expectancy at Birth, Female Male

Elderly in the U.S. l Percent of total civilian population

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

Utilization of Medical Care Resources, 2001

Americans with Chronic Conditions, Disabilities, and Functional Limitations

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 As society ages, medical expenditures increase primarily due to 3 factors: –Quantity of care – related to chronic conditions –Intensity of care – availability of technology –Unit cost of care – medical care inflation –Not necessarily the high cost of dying l End-of-life episode is expensive, regardless of the age at death l Ethics of dying –Euthanasia –Physician-assisted suicide

Life is Short, Make it Count As for the days of our life, they contain seventy years, Or if due to strength, eighty years, Yet their pride is but labor and sorrow; For soon it is gone and we fly away. Psalms 90:10