The Effect of Age and Time to Death on Health Care Expenditures: the Italian Experience
Atella VincenzoConti Valentina
CEIS Research Paper
There exists a large body of literature, mainly based on hospital costs, showing that time to death is by far a better predictor of health spending than age. In this paper, we investigate if this finding holds true also in presence of outpatient costs (drugs, diagnostic tests and specialist visits). To accomplish this task we use data from the Health Search-SiSSI dataset, a large unbalanced panel of Italian patients that collects detailed information on patient clinical records and costs. Our results show that age is a strong driver of outpatient costs in Italy. In particular, we find that age produces a 500% increase in health costs from age 40 to 80, while proximity to death rises costs only by about 30%. Our advice for policy makers is then to use disaggregated models to better disentangle the role that age and time to death may have on different components of health expenditure.
Keywords: ageing, time to death, outpatient health care expenditure, cost of dying
JEL codes: J14,I12
Date: Friday, March 8, 2013
Revision Date: Friday, March 8, 2013