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. 2018 Aug 9;13(8):e0201697.
doi: 10.1371/journal.pone.0201697. eCollection 2018.

Estimating the future health and aged care expenditure in Australia with changes in morbidity

Anthony Harris  1 , Anurag Sharma  1   2
Affiliations

Estimating the future health and aged care expenditure in Australia with changes in morbidity

Anthony Harris et al. PLoS One. .

Abstract

Aims: We estimate the pure effect of ageing on total health and aged care expenditure in Australia in the next 20 years.

Methods: We use a simple demographic projection model for the number of people in older age groups along with a needs based estimate of changes in the public and private cost of care per person in each group adjusted for expected changes in morbidity.

Results: A pure ageing model of expenditure growth predicts an increase in health expenditure per elderly person from $7439 in 2015 to $9594 in 2035 and an increase in total expenditure from $166 billion to $320 billion (an average annual growth of 3.33%). If people live longer without additional morbidity, then total health expenditure only grows at an average annual rate of 0.48%. If only some of those additional years are in good health, then the average year on year growth is 1.87%.

Conclusion: Ageing will have a direct effect on the growth of health spending but is likely to be dwarfed by other demand and supply factors. A focus on greater efficiency in health production and finance is likely to be more effective in delivering high quality care than trying to restrain the demand for health and aged care among the elderly.

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Conflict of interest statement

The authors have declared that no competing interests exist.

Figures

Fig 1
Fig 1. Life expectancy at birth.
Source: Australian Historical Population Statistics 2014 ABS cat. no. 3105.0.65.001).
Fig 2
Fig 2. Total health expenditure 2008–09 per person, allocated by age.
Source: Australian Institute of Health and Welfare. Australia's health 2014. Australia's health series no. 14. Cat. no. AUS 178. Canberra: 2014.
Fig 3
Fig 3. Age related projected health expenditure per person for those over 65 years of age.
Fig 4
Fig 4. Age related projected health expenditure for those over 65 years of age.
See this image and copyright information in PMC

References

    1. Australian Bureau of Statistics (2013) Population Projections, Australia, 2012, ABS Cat no.3222.0. Canberra.
    1. Breyer F, Costa-Font J, Felder S (2010) Ageing, Health, and Health Care. Oxford Review of Economic Policy 26 4: 674–690.
    1. Cdl Maisonneuve, Oliveira Martins J (2013) A Projection Method for Public Health and Long-Term Care Expenditures. Paris: OECD Publishing.
    1. Rossen B, Faroque A (2016) Diagnosing the Causes of Rising Health-Care Expenditure in Canada: Does Baumol's Cost Disease Loom Large? American Journal of Health Economics 2: 184–212.
    1. Jacobzone S (2003) Ageing and the Challenges of New Technologies: Can OECD Social and Healthcare Systems Provide for the Future? The Geneva Papers on Risk and Insurance Issues and Practice 28: 254–274.

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