1. International Evidence on Medical Spending
Robert D. Lieberthal, PhD
Jefferson School of Population Health, Thomas Jefferson University
Long term average growth rates
Country
Medical spending (A)
GDP per capita (B)
Population 65+ (C)
Annual excess growth (A–B–C)
Austria
0.08
0.06
0.01
Canada
-0.01
Finland
0.10
0.02
0.00
Iceland
0.21
0.20
Ireland
0.12
0.11
Japan
0.09
0.07
0.03
Norway
Spain
0.15
Switzerland
0.05
U.K.
U.S.
Background: Many developed countries are struggling to control the growth in medical spending.
Objectives: Determine the average medical spending growth rate and volatility in the growth rate in the U.S. and other developed countries.
Methods: Time series modeling of medical spending and other macroeconomic variables. Results: The U.S. has above average spending but average spending growth. U.S. spending growth volatility is below that in other countries.
Conclusions: It may be easier to write long tailed lines of medical linked insurance in the U.S. That may change as the PPACA changes the U.S. health care cost curve.
Abstract 1
U.S. spending is high.
U.S. spending growth is average.
U.S. SD, skew, kurtosis are low.
Volatility has lessened—possibly part of the Great Moderation.
Public funded systems are more volatile.
Not enough data to determine causality.
Public versus private spending
GDP growth rates
U.S. is just an outlier
Results
U.S. spending is high.
U.S. healthcare cost curve is not outrageous.
Average spending
Low volatility
Long tailed medical linked insurance may be easier to write in the U.S.
Conclusions
Many developed countries are struggling to control the growth in medical spending.
There have been multiple rounds of health reform in the U.S. and in other developed countries.
The experience of other countries may help to forecast spending growth in the U.S. post-PPACA.
Background
OECD data on national health spending per capita, other aggregates.
Chose 11 counties with data going back to 1960.
Austria, Canada, Finland, Iceland, Ireland, Japan, Norway, Spain, Switzerland, the United Kingdom, and the United States
Calculate average spending, growth rates, SD, skew and kurtosis of growth rates.
Calculate unit roots of spending, spending growth, and differenced spending growth.
Fit AR(1) models of spending where appropriate.
Methods
Funding to support this work came from AHRQ
Funding to support presentation came from the SOA
This work appears as a working paper in the CAS 2011 Spring Forum
The table style comes from White, 2007
Acknowledgements
Determine the time series properties of medical spending.
Assess the proper time series model(s) for medical spending growth.
Objectives