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. 2009 Sep 24:9:172.
doi: 10.1186/1472-6963-9-172.

Long-term care cost drivers and expenditure projection to 2036 in Hong Kong

Roger Y Chung  1 , Keith Yk Tin, Benjamin J Cowling, King Pan Chan, Wai Man Chan, Su Vui Lo, Gabriel M Leung
Affiliations

Long-term care cost drivers and expenditure projection to 2036 in Hong Kong

Roger Y Chung et al. BMC Health Serv Res. .

Abstract

Background: Hong Kong's rapidly ageing population, characterised by one of the longest life expectancies and the lowest fertility rate in the world, is likely to drive long-term care (LTC) expenditure higher. This study aims to identify key cost drivers and derive quantitative estimates of Hong Kong's LTC expenditure to 2036.

Methods: We parameterised a macro actuarial simulation with data from official demographic projections, Thematic Household Survey 2004, Hong Kong's Domestic Health Accounts and other routine data from relevant government departments, Hospital Authority and other LTC service providers. Base case results were tested against a wide range of sensitivity assumptions.

Results: Total projected LTC expenditure as a proportion of GDP reflected secular trends in the elderly dependency ratio, showing a shallow dip between 2004 and 2011, but thereafter yielding a monotonic rise to reach 3.0% by 2036. Demographic changes would have a larger impact than changes in unit costs on overall spending. Different sensitivity scenarios resulted in a wide range of spending estimates from 2.2% to 4.9% of GDP. The availability of informal care and the setting of formal care as well as associated unit costs were important drivers of expenditure.

Conclusion: The "demographic window" between the present and 2011 is critical in developing policies to cope with the anticipated burgeoning LTC burden, in concert with the related issues of health care financing and retirement planning.

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Figures

Figure 1
Figure 1
Projected elderly, total dependency ratios based on official United Nations statistics, 1950-2050 [39].
Figure 2
Figure 2
An overview of Hong Kong's long-term care system.
Figure 3
Figure 3
Estimated total expenditure on long-term care as a proportion (%) of GDP. Sub-figure: (a) base case + three hypothetical scenarios, (b) base case + demographic effect, (c) base case + compression of disability, (d) base case + informal care shift, (e) base case + institutional care shift to non-institutional care, (f) base case + carer-blind, (g) base case + cost-pressure, (h) base case + cost-containment, (i) base case + income elasticity.
Figure 4
Figure 4
Projected proportions of expenditure for base case every ten years from 2004 to 2034*. Sub-figure: (a) total long-term care by service types, (b) total long-term care by funding source, (c) institutional care by funding source, (d) non-institutional care by funding source. * Projected proportions of expenditure for social allowances and assessment & care management are not shown because they are respectively 100% public and 100% public throughout the projection period.
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