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Sascha G. Wolf, Medicalisation Thesis in:

Sascha G. Wolf

Pharmaceutical Expenditure in Germany, page 21 - 22

Future Development, Political Influence and Economic Impact

1. Edition 2009, ISBN print: 978-3-8329-4164-2, ISBN online: 978-3-8452-2005-5 https://doi.org/10.5771/9783845220055

Series: Neue Studien zur Politischen Ökonomie, vol. 6

Bibliographic information
21 2.3. Age and Health Care Expenditure The great differences of the predicted contribution rates primarily arise from the assumptions about the in? uence of medical technological progress and its impact on the long-term development of the age-speci? c health care expenditure. Age-speci? c health care disbursements can be visualised by means of “per capita age-related health care expenditure pro? les” (in the following referred to as “expenditure pro? les”), which show health care costs as a function of age. The current (status quo) expenditure pro? le of the SHI shows the typical shape (? gure 2.2): except for comparatively high costs for infants, disbursements stay very low in younger ages and reveal only a slight upward trend. Starting at the age of 40, however, the gradient of the expenditure pro? le suddenly becomes much steeper. This observation has led to the popular belief that there is a strong relationship between the ageing population and increasing health spending, thus “as the elderly’s share of the population increases, so too will the demand for health care” (Longman 1987, p. 88). Figure 2.2: Per Capita Age-Related Health Care Expenditure Pro? le of the SHI in 2004 (Status Quo) and Hypothetical Future Pro? les According to Medicalisation and Compression Theses. 0 100 200 300 400 500 600 700 800 900 1000 0 10 20 30 40 50 60 70 80 90 Ag e 1 0 = 1 00 P er ce nt Age Medicalisation Thesis Status Quo Compression Thesis Source: Based on data of the German Federal (Social) Insurance Authority. Presentation following Fetzer (2005). Of course, it cannot be denied that a direct cost-driving effect results from the ageing population. Since older people generate higher expenditure than younger people, an increasing number of the elderly may cause rising health care disbursements. But, in fact, health care expenditure depends on a wider set of in? uences (e.g. Gray 2005). In particular, technological progress leads to changes in medical therapies and treatments and affects morbidity as well as mortality (Ulrich 2000). Consequently, the expenditure pro? le is not ? xed, but varies over time. The way the expenditure pro? le’s shape 22 will change in the future has been widely discussed in scienti? c literature. There are two competing main theses: the medicalisation thesis and the compression thesis. 2.3.1. Medicalisation Thesis The medicalisation thesis is based on the so-called “calendar-effect” (Ulrich 2000, pp. 165 - 167). The calendar-effect represents the ordinary relationship between morbidity and age and thus draws on the assumption that on average health care costs increase with age. From this point of view, future health costs only depend on the status quo expenditure pro? le (? gure 2.2) and on the prospective age structure of the population. However, Verbrugge (1984b) supposes that the increasing life expectancy will cause higher usages of health care services due to technological progress, which constitutes, for example, new drugs, surgical procedures and diagnostics which enable the treatment of deadly diseases. Two consequences arise: ? rstly, unhealthy people who would have died with the absence of new techniques survive and thus the average state of health of the population declines. Secondly, if the new techniques only prolong lifespan but are not able to de? nitely cure chronic diseases, multimorbidity of people occurs.4 If Verbrugge’s medicalisation thesis is correct, the proportion of per-head expenditure for older to younger people will increase and the SHI expenditure pro? le will become steeper in the future (? gure 2.2). 2.3.2. Compression Thesis In contrast, Fries’ compression thesis claims that health care expenditure does not depend mainly on age but on distance to death (Fries 1980). This supposition is based on the observation that a high proportion of lifetime health care expenditure accrues in the last months of life. This is called the “residual life-time effect” (Ulrich 2000, pp. 166 - 167). Associated with the fact that more people die at higher ages, on average older people demand more health care costs than younger people do. Thus increasing expenditure for older people is not due to the calendar effect, but to the residual lifetime effect. The impact of the residual life-time effect on the expenditure pro? le depends on the development of the mortality rates. In the last century the probability of dying has signi? cantly shifted to the highest age groups. Fries (1980, p. 131) calls this observation “rectangularization” of the survival curves (see ? gure 2.3). He attributes this development to a further elimination of premature death by assuming that more and more people achieve the “natural limit” of human life. 4 See also Krämer (1997).

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Zusammenfassung

Der Arzneimittelsektor der Gesetzlichen Krankenversicherung stand wiederholt im Fokus zahlreicher Gesundheitsreformen. Dennoch ist es bislang nicht gelungen, den Trend steigender Ausgaben nachhaltig zu bremsen. Die vorliegende Untersuchung leistet einen Beitrag dazu, die Ursachen dieser Entwicklung zu erklären und Lösungsansätze aufzuzeigen. Mittels Hauptkomponenten- und Cluster-Analyse wurden Gruppen von Arzneimitteln mit vergleichbaren Konsumeigenschaften gebildet. Jede Gruppe wurde auf den Einfluss der Altersabhängigkeit und des technologischen Fortschritts hin analysiert. Aufbauend auf diesen Ergebnissen wurde eine Prognose der zukünftigen Ausgabenentwicklung bis zum Jahr 2050 erstellt. Obwohl die Hauptkostenfaktoren exogen sind, steht der Gesetzgeber dem vorhergesagten ansteigenden Kostenpfad nicht hilflos gegenüber. Im Gegenteil: Anhand ökonometrischer Tests wird gezeigt, dass die Gesundheitspolitik in der Vergangenheit durch wahl- und klientelorientierte Interessendurchsetzung geprägt war. Mehr Effizienz in der Arzneimittelversorgung könnte durch die Einführung individueller Gesundheitssparkonten erzielt werden. Dies bestätigen die Resultate eines vertikal differenzierten Wettbewerbsmodells.