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

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  • Anthony Harris
  • Anurag Sharma

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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  • Anthony Harris & Anurag Sharma, 2018. "Estimating the future health and aged care expenditure in Australia with changes in morbidity," PLOS ONE, Public Library of Science, vol. 13(8), pages 1-10, August.
    • Handle: RePEc:plo:pone00:0201697
    DOI: 10.1371/journal.pone.0201697
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    References listed on IDEAS

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    2. Kaambwa, Billingsley & Chen, Gang & Khadka, Jyoti & Milte, Rachel & Mpundu-Kaambwa, Christine & Woods, Taylor-Jade & Ratcliffe, Julie, 2021. "A preference for quality: Australian general public's willingness to pay for home and residential aged care," Social Science & Medicine, Elsevier, vol. 289(C).
    3. Ángel Denche-Zamorano & María Mendoza-Muñoz & Jorge Carlos-Vivas & Laura Muñoz-Bermejo & Jorge Rojo-Ramos & Frano Giakoni-Ramírez & Andrés Godoy-Cumillaf & Sabina Barrios-Fernandez, 2022. "Associations between Physical Activity Level and Health Services Use in Spanish Adults," IJERPH, MDPI, vol. 19(14), pages 1-14, July.
    4. Yevgeniy Goryakin & Sophie P Thiébaut & Sébastien Cortaredona & M Aliénor Lerouge & Michele Cecchini & Andrea B Feigl & Bruno Ventelou, 2020. "Assessing the future medical cost burden for the European health systems under alternative exposure-to-risks scenarios," PLOS ONE, Public Library of Science, vol. 15(9), pages 1-14, September.
    5. Hutchinson, Claire & Worley, Anthea & Khadka, Jyoti & Milte, Rachel & Cleland, Jenny & Ratcliffe, Julie, 2022. "Do we agree or disagree? A systematic review of the application of preference-based instruments in self and proxy reporting of quality of life in older people," Social Science & Medicine, Elsevier, vol. 305(C).
    6. Usman Shakoor & Mudassar Rashid & Ashfaque Ali Baloch & Muhammad Iftikhar ul Husnain & Abdul Saboor, 2021. "How Aging Population Affects Health Care Expenditures in Pakistan? A Bayesian VAR Analysis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 153(2), pages 585-607, January.

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