Impact of demographic changes on health care expenditure in Germany: An analysis considering the expenditures of decedents

The purpose of this study was to evaluate the impact of demographic changes on future health care expenditure of the German social health insurances considering the expenditures of survivors and decedents by age. The study analysed data from 269,646 members up to the age of 99 years of the AOK - one of Germany's largest social health insurers - in the State of Hesse in 2000/2001. In order to determine future health care expenditures, per-capita expenditures by age for outpatient, inpatient, rehabilitation, and nursing services of survivors and decedents (death within the next 12 months) were multiplied by the estimated number of survivors and decedents by age in Germany in 2020, 2035 und 2050. Expenditures for all ages were summed together. The paper shows that demographic changes until 2050 will lead to an increase of health care expenditures by 20% in total or less than 1 % annually. Considering the future reduction in workforce, demographic changes until 2050 will result in an estimated increase in health care expenditures per employee by about 57% (undifferentiated model). Considering the cost of survivors and decedents separately, this increase will amount to 50%. Hence, undifferentiated models overestimate the impact of demographic changes by about 10 %.