HEALTH-CARE EXPENDITURES, DEMOGRAPHIC-CHANGE, AND MEDICAL PROGRESS

The drastic increase in the proportion of the elderly in the German population in the coming 30 to 40 years and the rapid technological progress in medicine form a vast potential for a rise of health care expenditures as a fraction of gross national product. Three possible strategies to cope with this development are discussed, It is shown that the predominant strategy of stabilizing the rate of contribution to the sickness funds will soon lead to a sharp rationing even of life-prolonging medical services, As an alternative, a strategy of ''freedom of choice'' is presented.