Abstract
Background: In recent years the use of time to death (TTD) variables in the modeling of individual health expenditures has been of interest to health economics researchers. The aim of this study was to investigate the effect of age and TTD on hospital inpatient expenditure (HIE). Methods: We used a claims database from Iran Health Insurance Organization of Tehran city that includes considerable proportion of Tehran residents and contains information on insured individuals’ HIE. We included HIE of all insured decedents (30 to 90 years old) who died during March 2013 and March 2014 (n=1018). No sampling was required. According to the decedents’ date of death, we extracted their last 24 months HIE. The period of time March 30, 2011 until March 30, 2014 (3 years) was used to guarantee a full 24 months of observations for decedents. A two-part econometric model was employed to investigate the effect of age, TTD, and some demographic variables on probability and conditional amount of individuals’ hospital expenditure. Stata software (version 16.0) was used for data processing and analysis. Results: Our results demonstrated that the month-based TTDs especially near months before death of decedents (TTD1 to TTD10) significantly affected both probability and conditional amount of HIE. One month before death incurred more HIE than the rest of the months. A further interesting finding is that after including TTD, age variable as a conditional driver of HIE loses its direct effect on decedents’ HIE, but age TTD interaction effect on HIE is still positive and statistically significant. Conclusion: The results confirm that TTD as a proxy of mortality indicator has a considerable effect on decedents’ HIE. The age variable has not directly affected decedents’ HIE but indirectly and through its interaction with TTD has a statistically significant effect on HIE. In addition to age, policy-makers should consider TTD to make better predictions of future HIE.
Highlights
One of the important issues in health economics research is the effect of population ageing on demand for healthcare and on health expenditure growth
Results of the model without time to death (TTD) dummy variables demonstrate that in both first and second part of the model, age plays an important role in explaining hospital inpatient expenditure (HIE)
In other words, when one gets older, both the probability and amount of HIE conditional on any HIE increases. This finding is in line with the traditional role of age that suggests age is associated with healthcare utilization and subsequent expenditures
Summary
One of the important issues in health economics research is the effect of population ageing (increasing the percentage of the population that is 60 years and over) on demand for healthcare and on health expenditure growth. Ageing is related to high healthcare costs, there is not yet a consensus among researchers about the association between ageing and the growth of healthcare costs.[1] There are 2 opposing views on this matter. Some analysts and policymakers, based on a naive approach, believe that healthcare costs are a function of population size, age composition, and age-geder specific healthcare utilization rate. According to this approach, health expenditure will increase when the population size or the share of elderly groups (as % of the total population) increases.[2] In contrast, the second approach, proposed by Werblow et al suggests
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
