The effect of longevity on spending for acute and long-term care.

Background: The proportion of the population made up of elderly persons in the United States is projected to increase from 13 percent of the populatio n in 2000 to 20 percent by 2030. The implications for health care expenditu res may be profound, because elderly persons use health care services at a greater rate than younger persons. We estimated total expenditures for acut e and long-term care from the age of 65 years until death and in the last t wo years of life. Methods: We combined data from Medicare, the National Mortality Followback Survey, and the National Medical Expenditure Survey to estimate total natio nal expenditures for health care according to the age at death. We also sim ulated expenditures with the use of projected demographic characteristics o f two cohorts: people turning 65 in 2000 and those turning 65 in 2015. Results: Total expenditures (in 1996 dollars) from the age of 65 years unti l death increase substantially with longevity, from $31,181 for persons who die at the age of 65 years to more than $200,000 for those who die at the age of 90, in part because of steep increases in nursing home expenditures for very old persons. Spending in the last two years of life also increases with longevity, but a reduction in Medicare expenditures ($37,000 for pers ons who die at the age of 75 years and $21,000 for those who die at the age of 95) moderates the effect of the increase in nursing home expenditures ( $6,000 for those who die at the age of 75 years and $32,000 for those who d ie at the age of 95). Health care spending for women is consistently higher than that for men, after adjustment for the increased longevity of women. Simulations show that increased longevity after the age of 65 years has a r elatively small effect on the anticipated increase in spending, especially for services covered by Medicare, from 2000 to 2015. The effects of the lar ger number of people born in 1950 than in 1935 and the larger number of peo ple surviving to the age of 65 years are much more important. Conclusions: In the United States, the effect of longevity on expenditures for acute care differs from its effect on expenditures for long-term care. Acute care expenditures, principally for hospital care and physicians' serv ices, increase at a reduced rate as the age at death increases, whereas exp enditures for long-term care increase at an accelerated rate. Increases in longevity after the age of 65 years may result in greater spending for long -term care, but the increase in the number of elderly persons has a more im portant effect on total spending. (N Engl J Med 2000;342:1409-15.) (C)2000, Massachusetts Medical Society.