Modeling the relationship between health and health care expenditures using a latent Markov model.
We investigate the dynamic relationship between several dimensions of health and health care expenditures for older individuals. Health data from the Longitudinal Aging Survey Amsterdam is combined with data on hospital and long term care use. We estimate a latent variable based jointly on observed health indicators and expenditures. Annual transition probabilities between states of the latent variable are estimated using a Markov model. States associated with good current health and low annual health care expenditures are not associated with lower cumulative health care expenditures over remaining lifetime. We conclude that, although the direct health care cost saving effect is limited, the considerable gain in healthy lifeyears can make investing in the improvement of health of the older population worthwhile.
Tranzo Scientific Center for Care and Welfare, Tilburg School of Social and Behavioral Sciences, Tilburg University, Tilburg, The Netherlands. b.wouterse@uvt.nl
Bram
B
Wouterse
Martijn
M
Huisman
Bert R
BR
Meijboom
Dorly J H
DJ
Deeg
Johan J
JJ
Polder
D000368:Aged; D005102:Health Expenditures / Q000706:statistics & numerical data*; D006304:Health Status; D006306:Health Surveys; D006761:Hospitals / Q000706:statistics & numerical data; D006801:Humans; D008134:Long-Term Care / Q000706:statistics & numerical data; D008137:Longitudinal Studies; D008390:Markov Chains; D017059:Models, Econometric; D009426:Netherlands; D012042:Registries