Working Paper: NBER ID: w14361
Authors: Robert W. Fogel
Abstract: One of the most important debates among health economists in rich nations is whether advances in biotechnology will spare their health care systems from a financial crisis. We must consider that prevalence rates of chronic diseases declined during the twentieth century and that this rate of decline has accelerated. However, health care costs may continue to increase even as the age of onset of chronic diseases is delayed, because the proportion of a cohort living to late ages will increase. The accelerating decline in the prevalence of chronic diseases during the course of the twentieth century supports the proposition that increases in life expectancy during the twenty-first century will be fairly large, but the effect on health care in the U.S. will be modest. The income elasticity for health services is calculated at 1.6, meaning that income expenditures on health care in the U.S. are likely to rise from a current level of about 15 percent to about 29 percent of GDP in 2040.
Keywords: No keywords provided
JEL Codes: I11
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| decline in prevalence rates of chronic diseases (I12) | health care costs (I11) |
| income growth (O49) | health care demand (I11) |
| advancements in health interventions (I14) | decline in prevalence rates of chronic diseases (I12) |
| aging population (J14) | health care costs (I11) |
| rise in life expectancy (J17) | health care costs (I11) |
| delayed onset of chronic diseases (I12) | health care costs (I11) |