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Forecasting lifetime and aggregate long-term care spending: accounting for changing disability patterns.
Claudine A M de Meijer1, Istvan M Majer, Marc A Koopmanschap
1Institute of Health Policy & Management, Erasmus University Rotterdam, Rotterdam, The Netherlands. demeijer@bmg.eur.nl
Medical Care
|March 14, 2012
Summary
Population aging will significantly increase long-term care (LTC) spending by 56% by 2030. While severe disability is compressing, increased mild disability will drive up homecare costs, necessitating disability compression strategies.
Area of Science:
- Gerontology
- Health Economics
- Public Health Policy
Background:
- Population aging presents a significant challenge to future long-term care (LTC) spending.
- Few studies have adequately incorporated evolving disability trends into LTC expenditure forecasts.
- Understanding the interplay between longevity, disability, and LTC costs is crucial for policy development.
Purpose of the Study:
- To forecast individual lifetime and aggregate annual LTC spending for the Dutch 55+ population up to 2030.
- To account for the impact of changing disability patterns on future LTC expenditures.
- To provide insights into the financial implications of population aging and longevity on long-term care.
Main Methods:
- Utilized three disability levels: none, mild, and severe.
- Employed two-part models to estimate LTC spending based on age, sex, and disability status.
- Applied a multistate life table model to project disability prevalence and life expectancy, integrating these with spending models for comprehensive LTC expenditure forecasts.
Main Results:
- Life expectancy is projected to increase, with stable life years in severe disability, indicating a compression of severe disability.
- Increased life years in mild disability, particularly for women, are expected to drive up lifetime homecare spending.
- Aggregate LTC spending for the 55+ population is forecasted to rise by 56.0% between 2007 and 2030, primarily due to cohort growth.
Conclusions:
- Increased longevity with compressed severe disability will not substantially raise lifetime LTC costs.
- The growing elderly population cohort is a primary driver of increased aggregate LTC spending.
- Policies promoting disability compression are essential to mitigate the financial impact of population aging on LTC spending.
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