Health and Elderly Care Expenditure in an Aging World

Mayhew, L.D. (2000). Health and Elderly Care Expenditure in an Aging World. IIASA Research Report. IIASA, Laxenburg, Austria: RR-00-021

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Abstract

The world's population is aging, albeit at different rates in different countries. The International Institute for Applied Systems Analysis (IIASA) is building an economic-demographic model for exploring the consequences of population aging on the global economy. So far it has concentrated on impacts mediated through public and private pension systems. It now wishes to extend the model to cover other sectors whose provision is also highly age sensitive, including health and elderly care services. This report explores the consequences of population aging for these vital services and considers the basic mechanisms fueling their growth. These mechanisms fall into essentially two categories: The first is related to the biomedical processes of aging, which can lead to chronic illness and disability in old age. The second concerns the costs of treatment and long-term care -- which in turn are a function of medical technology and institutional factors -- how services are delivered, and who bears the costs.

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