Aging, health and aggregate medical care spending in France

The research follows this general frame and aims at explaining ex post facto aggregate expenditure using individual data: at the aggregate level, the variation of national medical expenditure is modeled as depending on the variation in the age composition of the population and the variation in medical cost per age; the latter in turn depends on epidemiology, personal socio- economic circumstances, [...] Its unique features lie in the type of data available, which allows an investigation of the effect of health status among the non decedents, as well as a test of the endogeneity of health status as a factor of medical expenditure. [...] This paper has prompted many methodological disputes; first, the risk of colinearity stemming from the use of an inverse Mills ratio in the second step of the analysis (the estimation of expenditure, conditional to any use) was emphasized (Dow and Norton, 2002); second, the issue of endogeneity of time to death to expenditure, which might jeopardize the estimated effect of both age and time to dea [...] The Profile of spending per age group should be distorted in the future The common wisdom of assessing the effect of need on total expenditure assumes the profile of spending per age to remain constant and derives need from changes in the age structure of the population. [...] Last, I use the coefficients estimated in the four-part model of expenditure on age, squared age, supplementary coverage dummy and health status to assess the impact of changes in the proportion of individuals covered (at each age) and in the health status per age.