An actuarial multi-state transition modelling in long-term care study

Abstract

With the growing numbers of elderly and numbers of disability among the elderly in the population, long-term care services are at great demand now. Long-term care provides a variety of services by helping the elderly or non-elderly with medical illnesses or disabilities who are unable to foster themselves for prolonged terms. Since Malaysia’s aged care and health care industry still has ways to go in contrast to other countries, such as Australia, therefore, understand the long-term care services could be helpful to provide quality lifestyle for the elderly in the future. We study the multi-state transition model which is the common model used on health-related data. Four levels of core activity restrictions are including in the model to allow the probability of disability to be included in the long-term care cost projection. Estimation of transition intensities are provided by fitting the Australian data with Gompertz and Weibull models. The graphs of actual and fitted transition probabilities are presented for better illustration. We concluded that Gompertz model has the better fit for both male and female in our study. Some limitations and recommendations have been outlined for future studies.