Ageing of population and health care expenditure: A red herring?

This paper studies the relationship between health care expenditure (HCE) a nd age, using longitudinal rather than cross-sectional data. The econometri c analysis of HCE in the last eight quarters of life of individuals who die d during the period 1983-1992 indicates that HCE depends on remaining lifet ime but not on calendar age, at least beyond 65 +. The positive relationshi p between age and HCE observed in cross-sectional data may be caused by the simple fact that at age 80, for example, there are many more individuals l iving in their last 2 years than at age 65. The limited impact of age on HC E suggests that population ageing may contribute much less to future growth of the health care sector than claimed by most observers. Copyright (C) 19 99 John Wiley & Sons, Ltd.