Population aging and medical cost growth—From the perspective of medical cost concentration and Sustainability

Abstract

This paper examines the causes of increasing medical expenses caused by population aging from the aspects of concentration and sustainability. Counterfactual calculation shows that the important fact that population aging increases medical expenses at different quantiles and reduces the distribution gap of medical expenses is rooted in the high concentration and strong sustainability of medical expenses of the elderly population. The medical expenses of the elderly population not only have the characteristics of high single hospitalization expenses, large proportion of continuous hospitalization and strong dispersion of medical expenses, but also have a heavier expenditure burden in the five medical expense levels. The influence of population aging on the growth of medical expenses is lower than that of the change of age structure of the whole population. The influence of endowment effect increases with time, and the increase of high score medical expenses is the most obvious. In addition, the improvement of health awareness plays a leading role in the structural effect affecting the growth of medical expenses. By constructing the theoretical logic that the medical needs of the elderly population affect the medical expenses, this paper strongly explains the reality of the rapid growth of medical expenses under the background of China’s aging population.