HERO On line Working Paper Series
Fredrik Alexander Gregersen
Hospital expenditures and the red herring hypothesis: Evidence from a complete national registry
() and Geir Godager
Abstract: The aim of this paper is to contribute to the debate on
population aging and growth in health expenditures. The Red Herring
hypothesis, i.e., that hospital expenditures are driven by the occurrence
of mortal illnesses, and not patients’ age, forms the basis of the study.
The data applied in the analysis are from a complete registry of in-patient
hospital expenditures in Norway from the years 1998-2009. Since data
registration is compulsory and all hospital admissions are recorded, there
is no self-selection into the data. Mortality related hospital expenditures
were identified by creating gender-cohort specific panels for each of the
430 Norwegian municipalities. We separated the impact of mortality on
current hospital expenditures from the impact of patients’ age and gender.
This approach contributes to the literature by applying sensible
aggregation methods on a complete registry of inpatient hospital
We apply model estimates to quantify the mortality related
hospital expenditures for twenty age groups. The results show that
mortality related hospital expenditures are a decreasing function of age.
Further the results clearly support that, both age and mortalities should
be included when predicting future health care expenditure. The estimation
results suggest that 9.2 % of all hospital expenditure is associated with
treating individuals in their last year of life.
Keywords: mortality related expenditures; hospital expenditures; red herring hypothesis; ageing; (follow links to similar papers)
JEL-Codes: H51; I12; I19; (follow links to similar papers)
24 pages, May 8, 2013
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