Long-term care cost drivers and expenditure projection to 2036 in Hong Kong.
BACKGROUND
Hong Kong's rapidly ageing population, characterised by one of the longest life expectancies and the lowest fertility rate in the world, is likely to drive long-term care (LTC) expenditure higher. This study aims to identify key cost drivers and derive quantitative estimates of Hong Kong's LTC expenditure to 2036.


METHODS
We parameterised a macro actuarial simulation with data from official demographic projections, Thematic Household Survey 2004, Hong Kong's Domestic Health Accounts and other routine data from relevant government departments, Hospital Authority and other LTC service providers. Base case results were tested against a wide range of sensitivity assumptions.


RESULTS
Total projected LTC expenditure as a proportion of GDP reflected secular trends in the elderly dependency ratio, showing a shallow dip between 2004 and 2011, but thereafter yielding a monotonic rise to reach 3.0% by 2036. Demographic changes would have a larger impact than changes in unit costs on overall spending. Different sensitivity scenarios resulted in a wide range of spending estimates from 2.2% to 4.9% of GDP. The availability of informal care and the setting of formal care as well as associated unit costs were important drivers of expenditure.


CONCLUSIONS
The "demographic window" between the present and 2011 is critical in developing policies to cope with the anticipated burgeoning LTC burden, in concert with the related issues of health care financing and retirement planning.
Chung
Roger Y
RY
School of Public Health, Li Ka Shing Faculty of Medicine, The University of Hong Kong, Hong Kong SAR, PR China. rychung@hkusua.hku.hk
Tin
Keith Yk
KY
Cowling
Benjamin J
BJ
Chan
King Pan
KP
Chan
Wai Man
WM
Lo
Su Vui
SV
Leung
Gabriel M
GM
D000368:Aged; D003710:Demography; D005260:Female; D005544:Forecasting; D005102:Health Expenditures / Q000639:trends*; D006299:Health Services for the Aged / Q000191:economics* / Q000639:trends; D006723:Hong Kong; D006801:Humans; D008017:Life Expectancy; D008134:Long-Term Care / Q000191:economics* / Q000639:trends; D008297:Male; D018803:Models, Economic