It seems intuitive that as the population of this country ages, its going to have to spend more on health care. This chart does a good job of putting the baby boomer health care bomb in black and white.
Average Annual Health Care Spending by Age Group: 1990
| Age Group | Annual Expenditure | Population 1990 | % Pop. 1990 |
|---|---|---|---|
| Under 25 | $360 | 90.8 million | 36.5% |
| 25 to 34 | $1,030 | 43.2 million | 17.4% |
| 35 to 44 | $1,487 | 37.5 million | 15.1% |
| 45 to 54 | $1,727 | 25.0 million | 10.0% |
| 55 to 64 | $1,846 | 21.1 million | 8.5% |
| 65 to 74 | $2,300 | 18.0 million | 7.2% |
| 75 and over | $2,197 | 13.0 million | 5.2% |
Average Annual Health Care Spending by Age Group: 2006
| Age Group | Annual Expenditure | Population 2006 | % Pop. 2006 |
|---|---|---|---|
| Under 25 | $706 | 103.1 million | 34.5% |
| 25 to 34 | $1,652 | 40.2 million | 13.5% |
| 35 to 44 | $2,284 | 43.5 million | 14.6% |
| 45 to 54 | $2,757 | 43.2 million | 14.5% |
| 55 to 64 | $3,556 | 31.5 million | 10.5% |
| 65 to 74 | $4,379 | 18.9 million | 6.3% |
| 75 and over | $4,282 | 18.3 million | 6.1% |
If older people use more health care and there are more older people in the country today than in 1990, then overall health care costs are going to rise.
Query for the cheap seats: I want examine how the shift in demographics over the past fifteen years has affected health care costs. I.e., if older people spend more on health care and more people are older, then what part in the increase in total health care spending is due to the fact that people are simply older? I’m looking for a way to express it mathematically.
Thoughts?
We need to know: (some simple math in the tables above)
1. Total healthcare expenditures of the entire age range “y” as of a certain date (1990).
2. Total healthcare expenditures of the entire age range “z” as of a certain date (2006).
Then we can ask:
1. What percentage of total healthcare expenditures are accountable to those age x (and over) as of 1990?
2. What percentage of total healthcare expenditures are accountable to those age x (and over) as of 2006?
3. The difference between y and z is n and could be expressed as a raw number, a percentage of the new total expenditures, and as a percentage of the overall increase.
Am I thinking clearly on this?
Never mind. I’ve apparently misunderstood what exactly these numbers are. Census lists it as Average Annual Expenditures Per Consumer Unit for Health Care. Apparently, this includes only amounts spent on health insurance, medical services and drugs and supplies.
Basically, it must be “out of pocket” costs to consumers, which doesn’t tell us at all how much average health care costs are. For example, via the Census figures, total health care spending for the selected years.
1990 $714 billion
2006 $2,106 billion
But if we multiply out the numbers in the above chart we get only $285 billion for 1990 and $631 billion for 2006.