AGEING POPULATION AND THE FUTURE OF HEALTH CARE PLANS An international perspective - PowerPoint PPT Presentation

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AGEING POPULATION AND THE FUTURE OF HEALTH CARE PLANS An international perspective

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Title: AGEING POPULATION AND THE FUTURE OF HEALTH CARE PLANS An international perspective


1
AGEING POPULATION AND THE FUTURE OF HEALTH CARE
PLANSAn international perspective
  • J. François Outreville
  • UNCTAD
  • Visiting Professor SUFE
  • Adjunct Professor HEC Montréal

2
AGEING POPULATION AND THE FUTURE OF HEALTH CARE
PLANS
  • Background information on health care systems
  • The increasing role of private health plans
  • Challenges to come
  • Ageing revisited

3
Health care expenditure as of GDPSource OCDE
Health Data 2005A comparison between 1980 and
2003
4
The Growth of HCE todayexamples
  • Rapid Growth USA, Greece, Portugal, Korea,
    Turkey
  • Stabilized Netherlands, UK, Austria Germany,
    Canada
  • No growth Sweden, Finland, Denmark

5
A linear relationship?
6
Health care expenditurethe size of public
sectorsSource OCDE Health Data 2006
7
Out of Pocket expenditure and Private Health
insurance No relationshipSource OCDE Health
Data 2004
8
Health Insurance systems principles
  • Bismarcks principle
  • Beveridges principle
  • State budget
  • Private insurers under state control

9
Health Insurance systems Examples
10
Increasing role of Private Insurance HCE as
GDPSource OCDE Health Data 2004
11
Population covered by Private Insurance Source
OCDE Health Data 2004
12
Classification of Private Health Insurance Plans
  • Primary coverage
  • Risks not covered by the public scheme
    (supplementary insurance)
  • Complementary insurance
  • Access to private market (substitutable)

13
Private Health Insurance Examples
14
The challenges
  • Health insurance schemes are being dragged into
    increasing expenditure by demographic changes and
    improvements in medical treatment.
  • A growing interest in the problem of the
    long-term survival of public schemes is
    paralleled by a desire to arrive at an acceptable
    compromise between equity and efficiency, between
    meeting individual needs and controlling
    collective expenditure.
  • The European social philosophy of each
    contributing according to his means is radically
    opposed to the individualistic North American
    arrangement whereby everyone takes out insurance
    according to his needs.

15
The problems
  • Budget deficits
  • Tax limits
  • Cost of new medical treatments
  • Ageing of the population
  • Decreasing labor force

16
Several options are available
  •  Opt out  (Germany)
  • Voluntary or compulsory
  • Public scheme covers only catastrophic risks
  • Case of LTC (Netherlands and Germany)
  • Higher and competitive premiums but subsidies for
    lower income
  • Case in Switzerland
  • Covers only basic health treatments (Doctors
    Hospitals)
  • Some treatments excluded (drugs in Canada)
  • Open markets to free choice and free trade
  • Cultural barriers
  • Portability of insurance coverage

17
Satisfaction rate for public schemes is
highSource OCDE Health Data 2004
18
AGEING POPULATION AND THE FUTURE OF HEALTH CARE
PLANS
  • The first and primary cause of this crisis is
    once again the ageing of the population
    (Longman, 1987)

19
Ageing of the population
When Bismarck devised the social security
contract for Germany, the official pension age
was 65 and life expectancy 45. Keeping the same
ratio, retirement age today should be at 98. Old
age estimated to be at 75 years in 1985, will be
82 years by 2040 an annual gain of 1.5 months
20
Ageing of population and health care expenditure
21
Ageing of population and health care expenditure
Source S. Jacobzone (2003)
22
Ageing and HCE What is the relationship?
  • Hypotheses
  • The probability of initiating a treatment episode
    is independent of age.
  • Medical expenditure per treatment episode
    increases with age.
  • Medical expenditure increases sharply with
    closeness to death regardless of age.
  • Medical expenditure before death
    increases/decreases with age?

23
References
  • Lubitz and Riley, New England J. of Medicine,
    1993
  • Zweifel, Felder and Meier, Health Economics, 1999
  • Felder and Schmitt, J. Health Economics, 2000
  • Hogan, Lunney, Gabel and Lynn, Health Affairs,
    2001
  • Levinsky et al., J. of American Medical
    Association, 2001
  • Outreville, Geneva Papers on Risk and Insurance,
    2001
  • Seshamani and Gray, Applied Health Economics and
    Health Policy, 2003
  • Seshamani and Gray, J. of Health Economics, 2004
  • Outreville, Applied Health Economics and Health
    Policy, 2005

24
Empirical evidence
  • UN health insurance plan
  • 15,000 insured persons
  • 2 periods 1996-1997 and 2000-2002

25
HEALTH CARE EXPENDITURE (HCE)
26
HCE in the two samples
27
Hospital HCE in the 12 months preceding deathBy
class of age in CHF
28
HCE last four quarters of life
29
HCE before deathFrom one month to one year
30
HCE for survivors
31
Ageing and HCE What is increasing with age?
  • Trends in medical expenditure are influenced by
    trends in disability and product innovation.
  • Product innovation focus on increasing quality of
    life at higher ages.
  • LTC expenditure before death increases with age

32
Alzheimers diseasePercentage of cases by age
group
33
Cost of pharmaceuticals by age
On average from 13 to 16 of total HCE within 10
years
34
Nursing and Long-Term Care (LTC)
Average number of days in an hospital has been
reduced from 10 to 7 days within 10 years
35
AGEING AND THE FUTURE OF HEALTH CARE PLANS
  • SUSTAINABILITY
  • Individuals are living longer in good health.
  • People over 95 are on average in better state of
    health than those over 85 (absence of chronic
    diseases).

36
Mortality and disability scenariosT Total
expected lifeH Healthy expected life
Source E. Pitacco (2002)
37
The demand for LTC
38
Negative factors
  • Medical expenditure per treatment episode
    increases with age.
  • Trends in medical expenditure are influenced by
    trends in disability and product innovation.
  • Product innovation focus on increasing quality of
    life at higher ages.
  • The traditional family structure continue to
    change

39
Improving trends
  • Declines in disability rates (-1 per year) even
    at older age (85).
  • Instrumental activities of daily living (IADLs)
    are easier to perform today than 20 years ago.
  • Product innovation may change the trends

40
End of life HCE
?
41
Nursing and Long-Term Care
42
AGEING AND THE FUTURE OF HEALTH CARE PLANS
  • SUSTAINABILITY
  • Individuals are living longer in good health
  • EQUITY
  • Health Care or Good Health
  • Health Care or Long Term Care
  • Health Care or Terminal Care
  • INNOVATION
  • Health Insurance or Life Insurance
    (terminal illness)
  • Traditional Insurance or Alternative Risk
    Transfer

43
AGEING POPULATION AND THE FUTURE OF HEALTH CARE
PLANS
  • As people are living longer, the hope is that
    they will also live healthily.
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