What is the impact of the aging population on both increased health care expenditures and wasted resources?
DNP 810 Topic 6 Discussion Question One

What is the impact of the aging population on both increased health care expenditures and wasted resources? Do genetics play a role? How can the doctoral-prepared nurse apply this information in practice? Explain. Support your rationale with a minimum of two scholarly sources.

Although the consequences of population aging for growth in health expenditures have been widely investigated, research on this topic is rather fragmented. Therefore, these consequences are not fully understood. This paper reviews the consequences of population aging for health expenditure growth in Western countries by combining insights from epidemiological and health economics research.

DNP 810 Topic 6 Discussion Question One
DNP 810 Topic 6 Discussion Question One

Based on a conceptual model of health care use, we first review evidence on the relationship between age and health expenditures to provide insight into the direct effect of aging on health expenditure growth. Second, we discuss the interaction between aging and the main societal drivers of health expenditures. Aging most likely influences growth in health expenditures indirectly, through its influence on these societal factors. The literature shows that the direct effect of aging depends strongly on underlying health and disability. Commonly used approximations of health, like age or mortality, insufficiently capture complex dynamics in health.

Population aging moderately increases expenditures on acute care and strongly increases expenditures on long-term care. The evidence further shows that the most important driver of health expenditure growth, medical technology, interacts strongly with age and health, i.e., population aging reinforces the influence of medical technology on health expenditure growth and vice versa. We therefore conclude that population aging will remain in the centre of policy debate. Further research should focus on the changes in health that explain the effect of longevity gains on health expenditures, and on the interactions between aging and other societal factors driving expenditure growth.

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Introduction
The societal consequences of population aging, the increasing share of older people in the population, are the subject of extensive public and scholarly debate in many different fields. In health economics, the focus has been largely on the effect of population aging on health expenditure growth (see Payne et al. (2007) for a review). The aging of Western populations stems mainly from decreasing fertility rates, the aging of the post-World War II baby boom generation and longevity gains in general. In Western countries, average health expenditures increased from approximately 5 % of GDP in 1970 to nearly 10 % in 2009 (OECD 2011). The assumed relationship between old age and health expenditure has raised serious concerns about the financial sustainability of health care systems in Western countries. Despite extensive research on the effect of population aging on health expenditure growth, consensus on its role has not yet been achieved. Instead, two contra posing views coexist (Reinhardt 2003). Some analysts and policy makers view population aging as the major cause of the rapid growth in health expenditure. Others, mainly health economists as well as scholars from other fields, have argued that population aging is largely irrelevant for the growth in health expenditure. An important reason as to why these views are able to coexist is a lack of research combining epidemiological insights on the relationship between health and aging with health economic research. Given that changes in underlying health importantly determine the effect of longevity on health expenditures, insights combining health economics and epidemiological evidence are crucial.

It seems obvious that the relationship between age and health expenditures depends on health. As individuals age, their health generally decreases and this in turn leads to increasing utilization of health care. Less clear, however, is how expected increases in longevity relate to health, and to health expenditures. Epidemiological research on the relationship between longevity improvements and health can be broadly characterized by three hypotheses proposed in the 1980s: expansion, compression, and postponement of morbidity (Kramer 1980; Fries 1980; Olshansky et al. 1991; Payne et al. 2007). The expansion hypothesis assumes that longevity gains will increase the period of time lived with morbidity or disability. The compression hypothesis assumes that this period will shrink. In the postponement, or dynamic equilibrium, hypothesis longevity gains are expected merely to shift the period with morbidity or disability to an older age, while its duration remains constant.

Projections of the consequences of aging for health expenditure growth have traditionally been based solely on age, and thus on the implicit assumption that gains in longevity do not alter age-specific risks of disease or poor health. During the last two decades, however, health expenditure models have been developed that do allow for changes in the age profile of health expenditures, most notably by controlling for proximity to death (Zweifel et al. 1999). In general, this line of research has found a much smaller effect of aging on health expenditures than the traditional age-based studies.

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