Download - PRESENTATION: Prospects of runaway health care cost in the graying emerging economies of Asia
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8/12/2019 PRESENTATION: Prospects of runaway health care cost in the graying emerging economies of Asia
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Indu Bhushan, Patricia Moser and Vivian Francisco
Hic Sunt Dracones (Here
are dragons): Prospects ofrunaway health care cost inthe graying emerging
economies of Asia
Disclaimer: The views expressed in this paper/presentation are the views of the author and do notnecessarily reflect the views or policies of the Asian Development Bank (ADB), or its Board ofGovernors, or the governments they represent. ADB does not guarantee the accuracy of the dataincluded in this paper and accepts no responsibility for any consequence of their use. Terminologyused may not necessarily be consistent with ADB official terms.
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Economic and
DemographicInformation, 2012
Peoples
Republic ofChina
Indonesia
Viet Nam
Population (million) 1,351 247 89
Population , >65 (%) 8.7 5.1 6.6
Old-age Dependency Ratio
(% of working-agepopulation)
11.8 7.8 9.3
GDP per capita (constant2005 US$)
3,348 1,732 986
Health expenditure per
capita, PPP (constant 2005international $, 2012)
480 150 233
Background
Source: UN, Department of Economic and Social Affairs. World Population Prospects: The 2012 Revisionhttp://esa.un.org/wpp/Excel-Data/population.htm(accessed 4 April 2014) and World Bank, World DevelopmentIndicators online database http://data.worldbank.org/data-catalog/world-development-indicators (Accessed 30 May2014).
http://esa.un.org/wpp/Excel-Data/population.htmhttp://esa.un.org/wpp/Excel-Data/population.htmhttp://esa.un.org/wpp/Excel-Data/population.htmhttp://esa.un.org/wpp/Excel-Data/population.htm -
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Demographic Shifts
0
20
40
60
80
100
120
140
160
0
-4
5
-9
10-14
15-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65-69
70-74
75-79
80-84
85-89
90-94
95-99
100
+
InMillions
Age Group
PRC
2010
2030
2050
0
5
10
15
20
25
30
0-4
5-9
10-14
15-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65-69
70-74
75-79
80-84
85-89
90-94
95-99
100+
InMillions
Age Group
Indonesia
2010
2030
20500
1
2
3
4
5
6
7
8
9
10
0-4
5-9
10-14
15-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65-69
70-74
75-79
80-84
85-89
90-94
95-99
10
0+
InMillions
Age Group
Viet Nam
2010
2030
2050
Total population by five-year agegroup (million)
Source: UN, Department of Economic and Social Affairs.World Population Prospects: The 2012 Revisionhttp://esa.un.org/wpp/Excel-Data/population.htm(accessed 4 April 2014)
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Demographic Shifts
0
50
100
150
200
250
300
350
PRC Indonesia Viet Nam
InMillion
s 2010
2030
2050
Total population, 65 years and over (million, percent)
Source: UN, Department of Economic and Social Affairs. World Population Prospects: The 2012 Revisionhttp://esa.un.org/wpp/Excel-Data/population.htm(accessed 4 April 2014)
0
5
10
15
20
25
30
PRC Indonesia Viet Nam
InPercen
t
2010
2030
2050
http://esa.un.org/wpp/Excel-Data/population.htmhttp://esa.un.org/wpp/Excel-Data/population.htmhttp://esa.un.org/wpp/Excel-Data/population.htmhttp://esa.un.org/wpp/Excel-Data/population.htm -
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PRC
Indonesia
Viet Nam
USA
0
5
10
15
20
25
30
35
40
2010 2015 2020 2025 2030 2035 2040
Percent
Demographic Shifts
Source: UN, Department of Economic and Social Affairs. World Population Prospects: The 2012 Revisionhttp://esa.un.org/wpp/Excel-Data/population.htm(accessed 1 July 2014).
Old-age dependency ratio (ratio of population aged 65+ per 100 population 15-64)
http://esa.un.org/wpp/Excel-Data/population.htmhttp://esa.un.org/wpp/Excel-Data/population.htmhttp://esa.un.org/wpp/Excel-Data/population.htmhttp://esa.un.org/wpp/Excel-Data/population.htm -
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Speed of Population Aging
Share in total population (percent)
The shares of elderly population rose more steeply in PRC and Indonesia than in Viet Nam where rapid
increase happened instead in the 15-64 age group in 1995-2012. The share of elderly population in Viet Nam
will begin to climb and at rate faster than in two other countries only in years after 2015.
0
5
10
15
20
25
30
35
1995
1997
1999
2001
2003
2005
2007
2009
2011
2015
2025
2035
2045
2055
2065
2075
2085
2095
Model Forecast
Pe
rcent
65 years and over
Viet Nam PRC Indonesia
0
10
20
30
40
50
60
70
80
1995
1997
1999
2001
2003
2005
2007
2009
2011
2015
2025
2035
2045
2055
2065
2075
2085
2095
Model Forecast
Percent
15-64 years
Viet Nam PRC Indonesia
Source: UN, Department of Economic and Social Affairs. World Population Prospects: The 2012 Revisionhttp://esa.un.org/wpp/Excel-Data/population.htm(accessed 4 April 2014)
http://esa.un.org/wpp/Excel-Data/population.htmhttp://esa.un.org/wpp/Excel-Data/population.htmhttp://esa.un.org/wpp/Excel-Data/population.htmhttp://esa.un.org/wpp/Excel-Data/population.htm -
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Speed of Population Aging
7
8
9
10
11
12
13
14
1860 1880 1900 1920 1940 1960 1980 2000 2020 2040
Percentofpopulationa
ged65+
Time required or expected for percentage of population aged 65 and over to rise from 7 to14 percent
The proportion of elderly people is rising faster in developing countries
than in the developed world.
Source: Adapted from Kinsella K. He W. An Aging World: 2008. Washington DC: National Institute on Aging and U.S.
Census Bureau, 2009.
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Determinants of Health Care Cost
Income
Morbidity levels
Technology Other factors (including
health system coverage andefficiency)
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Health Care Costs
Health expenditure per capita, PPP (constant 2005 international $)
health care expenditures has risen significantly in recent years
Source: World Bank, World Development Indicators online database http://data.worldbank.org/data-catalog/world-
development-indicators (Accessed 30 May 2014)
PRC
Indonesia
Viet Nam
0
100
200
300
400
500
600
1995 1997 1999 2001 2003 2005 2007 2009 2011
2005interna
tional$
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Effects of Aging and Population Growth onHealth Expenditure
MODEL Health expenditure per capita= f (GDP per capita, % ofpopulation 65 and over)
Country InterceptGDP per
capita
% of
popn 65
and over
R2 N
PRC -6.5717 0.6718 3.3591 0.9945 18
t-stat -17.2381 3.1092 3.5160
Indonesia -12.8105 1.7461 2.9778 0.9580 18
t-stat
-12.9965
9.0666
5.8503
Viet Nam -6.3863 2.1172 -1.4211 0.9861 18
t-stat
-6.2581
21.8896
-1.8121
Notes: N refers to number of time series observations from 1995 to 2012when data for health expenditure per capita is available. Regressioncoefficients and t-values in gray are insignificant.
Health expenditure per capita tendsto increase with GDP per capita andpopulation aging in PRC andIndonesia
Health spending in Viet Nam,however, is influenced only byincome. The share of elderlypopulation in Viet Nam is relativelystable during the period whenregression was done. In contrast,those for PRC and Indonesia havebeen rising more steeply.
Population aging measured by % ofpopulation aged 65 and over hashigher impact on health spendingthan GDP per capita.
Original estimates
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Effects of Aging and Population Growth onHealth Expenditure
MODEL Health expenditure per capita= f (GDP per capita, % ofpopulation 65 and over)
Country InterceptGDP per
capita
% of
popn 65
and over
R2 N
PRC -6.5717 0.6718 3.3591 0.9945 18
t-stat -17.2381 3.1092 3.5160
Indonesia -12.8105 1.7461 2.9778 0.9580 18
t-stat
-12.9965
9.0666
5.8503
Viet Nam -8.1110 1.9754 0.9841 18
t-stat
-20.6084 32.4840
Notes: N refers to number of time series observations from 1995 to 2012when data for health expenditure per capita is available.
Health expenditure per capita tendsto increase with GDP per capita andpopulation aging in PRC andIndonesia
Health spending in Viet Nam,however, is influenced only byincome. The share of elderlypopulation in Viet Nam is relativelystable during the period whenregression was done. In contrast,those for PRC and Indonesia havebeen rising more steeply.
Population aging measured by % ofpopulation aged 65 and over hashigher impact on health spendingthan GDP per capita.
Preferred solution: Viet Nam model excludes elderlypopulation.
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Health care cost in 2030
Viet Nam estimates excludes elderly population.
PRC, 6780
Indonesia, 5828
Viet Nam, 3071
0
1000
2000
3000
4000
5000
6000
7000
8000
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
Health
expend
iture
percapita,
PPP
(2005in
ternational$)
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Health expenditure, total (% of GDP)
0
20
40
60
80
100
120
140
2005 2006 2007 2008 2009 2010 2011 2012 2030
Percent
PRC
Indonesia
Viet Nam
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No research to support this hypothesis in thesecountries: we are in uncharted territories
However, two factors might need to be considered
Increase in elderly population outweighs anypotential morbidity compression
Morbidity compression might not happen inemerging economies, since todays elderly
population experienced
poor nutrition in their childhood
environmental insult during adulthood
Will Morbidity Compression Attenuate theIncrease in Health Costs?
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The three Asian Countries are likely to see largeincrease in their health care costs, which canbecome unaffordable
Population aging will be one key factor in thisincrease
Much more research is needed to understand thelikely impact of aging process on health care costs
New models of health care costs need to bedeveloped
Need to start working on this issue NOW
CONCLUSION