Health Policy Manag.  2018 Dec;28(4):378-391. 10.4332/KJHPA.2018.28.4.378.

The Effect of Population Ageing on Healthcare Expenditure in Korea: From the Perspective of ‘Healthy Ageing’ Using Age-Period-Cohort Analysis

Affiliations
  • 1Health Insurance Review and Assessment Research Institute, Health Insurance Review and Assessment Service, Wonju, Korea.
  • 2Department of Health Administration, Yonsei University College of Health Sciences, Wonju, Korea. jeonghs@yonsei.ac.kr

Abstract

BACKGROUND
People who were born in different years, that is, different birth cohorts, grow in varying socio-historical and dynamic contexts, which result in differences in social dispositions and physical abilities.
METHODS
This study used age-period-cohort analysis method to establish explanatory models on healthcare expenditure in Korea reflecting birth cohort factor using intrinsic estimator. Based on these models, we tried to investigate the effects of ageing population on future healthcare expenditure through simulation by scenarios.
RESULTS
Coefficient of cohort effect was not as high as that of age effect, but greater than that of period effect. The cohort effect can be interpreted to show ‘healthy ageing’ phenomenon. Healthy ageing effect shows annual average decrease of −1.74% to 1.57% in healthcare expenditure. Controlling age, period, and birth cohort effects, pure demographic effect of population ageing due to increase in life expectancy shows annual average increase of 1.61%–1.80% in healthcare expenditure.
CONCLUSION
First, since the influence of population factor itself on healthcare expenditure increase is not as big as expected. Second, ‘healthy ageing effect’ suggests that there is a need of paradigm shift to prevention centered-healthcare services. Third, forecasting of health expenditure needs to reflect social change factors by considering birth cohort effect.

Keyword

Demographic aging; Healthy ageing; Healthcare expenditures; Age-period-cohort analysis
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