Effect of Longevity on Health Care Expenditures

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Effect of Longevity on Health Care Expenditures

By the year 2030, individuals 65 years of age or older will comprise an estimated 20% of the U.S. population. Longitudinal studies of health care use provide insight into the relationship between demographic variables and expenditures.

Previous studies have estimated lifetime Medicare expenses based on age of death and lifetime use and cost of nursing home care; however, these studies failed to examine both variables concurrently, such that estimated spending in patients utilizing nursing home care was evaluated according to age at death.
This study combined data from Medicare, the National Mortality Followback Survey, and the National Medical Expenditure Survey to estimate total national expenditures for health care according to age at death. Estimated expenditures were also generated using two different age populations: people turning 65 in year 2000 and those turning 65 in 2015. Results are presented as follows:

Total expenditures (in 1996 dollars) from the age of 65 years until death increase substantially with longevity, perhaps because of steep increases in nursing home costs for the very elderly.
Spending in the last two years of life also increases with longevity, but a reduction in Medicare expenses moderates this increase.
Increased longevity after age 65 has a relatively small effect on anticipated spending increases, particularly with respect to Medicare-covered services.
Health care spending for women was consistently higher than for that of men.
Major increases in cost were not necessarily attributable to lifespan, but to an increased number of people born in 1950 compared with previous years.

Conclusion: Longevity has different effects on expenditures for acute vs. long-term care. The authors note that these patterns have implications on health care financing and cost distribution among insurance systems.
Spillman BC, Lubitz J. The effect of longevity on spending for acute and long-term care. The New England Journal of Medicine 2000:342, pp1409-15.