Links between ageing, health, and health expenditure
Health expenditure rises steeply at older ages
Figure 1 shows the relationship between age and average government health expenditure per person in New Zealand, in the financial year 2001/02. Public health covers things such as health protection, health promotion and disease control. Disability support services include items such as home support, residential care, and equipment, while personal health includes primary, secondary and tertiary medical care.
- Figure 1 – Annual government health expenditure by age and service group (males and females combined), 2001/02
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Source – Ministry of Health
Per capita expenditure on personal care and disability support services increases with age, though the most pronounced increases occur with disability support services. For people aged 85 and over, 61% of health expenditure is accounted for by disability support services.
High health expenditure is not a product of age per se, but of poor health
Why does health expenditure increase with age? International research suggests that people in poor health need more health care than people in good health, and that the prevalence of poor health, particularly chronic disease and associated disability, rises with age. The health measures that we use in our model are “distance to death” (ie, the proportion of people in their final year of life), and disability (i.e. the proportion of people experiencing functional limitation requiring assistance).
