Title: AGEING POPULATION AND THE FUTURE OF HEALTH CARE PLANS An international perspective
1AGEING POPULATION AND THE FUTURE OF HEALTH CARE
PLANSAn international perspective
- J. François Outreville
- UNCTAD
- Visiting Professor SUFE
- Adjunct Professor HEC Montréal
2AGEING 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
3Health care expenditure as of GDPSource OCDE
Health Data 2005A comparison between 1980 and
2003
4The Growth of HCE todayexamples
- Rapid Growth USA, Greece, Portugal, Korea,
Turkey - Stabilized Netherlands, UK, Austria Germany,
Canada - No growth Sweden, Finland, Denmark
5A linear relationship?
6Health care expenditurethe size of public
sectorsSource OCDE Health Data 2006
7Out of Pocket expenditure and Private Health
insurance No relationshipSource OCDE Health
Data 2004
8Health Insurance systems principles
- Bismarcks principle
- Beveridges principle
- State budget
- Private insurers under state control
9Health Insurance systems Examples
10Increasing role of Private Insurance HCE as
GDPSource OCDE Health Data 2004
11Population covered by Private Insurance Source
OCDE Health Data 2004
12Classification of Private Health Insurance Plans
- Primary coverage
- Risks not covered by the public scheme
(supplementary insurance) - Complementary insurance
- Access to private market (substitutable)
13Private Health Insurance Examples
14The 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.
15The problems
- Budget deficits
- Tax limits
- Cost of new medical treatments
- Ageing of the population
- Decreasing labor force
16Several 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
17Satisfaction rate for public schemes is
highSource OCDE Health Data 2004
18AGEING 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)
19Ageing 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
20Ageing of population and health care expenditure
21Ageing of population and health care expenditure
Source S. Jacobzone (2003)
22Ageing 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?
23References
- 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
24Empirical evidence
- UN health insurance plan
- 15,000 insured persons
- 2 periods 1996-1997 and 2000-2002
25HEALTH CARE EXPENDITURE (HCE)
26HCE in the two samples
27Hospital HCE in the 12 months preceding deathBy
class of age in CHF
28HCE last four quarters of life
29HCE before deathFrom one month to one year
30HCE for survivors
31Ageing 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
32Alzheimers diseasePercentage of cases by age
group
33Cost of pharmaceuticals by age
On average from 13 to 16 of total HCE within 10
years
34Nursing and Long-Term Care (LTC)
Average number of days in an hospital has been
reduced from 10 to 7 days within 10 years
35AGEING 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).
36Mortality and disability scenariosT Total
expected lifeH Healthy expected life
Source E. Pitacco (2002)
37The demand for LTC
38Negative 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
39Improving 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
40End of life HCE
?
41Nursing and Long-Term Care
42AGEING 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
43AGEING POPULATION AND THE FUTURE OF HEALTH CARE
PLANS
- As people are living longer, the hope is that
they will also live healthily.