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Age and Ageing 2002; 31: 287-294
© 2002, British Geriatrics Society

Research papers

The impact of ageing on expenditures in the National Health Service

Meena Seshamani and Alastair Gray

Health Economics Research Centre, University of Oxford, Oxford, UK

Abstract

Background: health policy makers in many countries have expressed concern over the pressures that increased numbers of older people will exert on health care costs. Previous studies have shown that, in addition to increasing size of older populations, per capita expenditures have risen disproportionately among the old compared to the middle age groups. Documentation of such trends is essential for more accurate projection of health expenditures.

Objective: we examined detailed national age-specific expenditure trends for England and Wales, comparing findings with Canada, Japan, and Australia.

Methods: we obtained total health expenditures for each age group from the UK Department of Health for time periods 1985–87 to 1996–99. We examined changes in age-specific per capita expenditure, population demographics, and the allocation of national expenditures to the different age groups. We then determined the association of changes in population, age structure, and age-specific per capita expenditure to increases in national health care expenditure for England and Wales, comparing results to Canada, Japan, and Australia.

Results: per capita health expenditures in England and Wales increased by 8% for ages 65 and over, compared to 31% for ages 5–64. Hence the proportion of total expenditures allocated to the population aged 65 and over decreased from 40% to 35%, a trend most noticeable for non-acute hospital costs. Demographic shifts and population growth accounted for only 18% of the observed increases in health care expenditures in England and Wales, compared to 68%, 44%, and 34% in Japan, Canada, and Australia respectively.

Conclusions: in contrast to other countries, England and Wales had slower rises in per capita costs and a decreasing proportion of national expenditures allocated to older people. These differences invite future research into the actual demand drivers of these costs.

Keywords: health expenditures, aging, demographic trends


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