The Effects of Demographic Change on Health and Medical Expenditures

Satoshi Nakanishi and Noriyoshi Nakayama

in Aging Issues in the United States and Japan

Published by University of Chicago Press

Published in print September 2001 | ISBN: 9780226620817
Published online February 2013 | e-ISBN: 9780226620831 | DOI:
The Effects of Demographic Change on Health and Medical Expenditures

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This chapter analyzes the impact of the aging Japanese population on the health sector and on the economy as a whole. It focuses on (a) the effect of population aging on future medical care costs; (b) the effect of cost containment strategies on medical care expenditures; and (c) the extent to which licensing systems can or should be used to control the flow of new entrants into the medical profession. A simulation shows that maintaining the present system of payment for health care as the population ages will result in medical care expenditures growing at an average annual rate of 4.3 percent between 1991 and 2040. The share of medical expenditure in GDP will reach 10.8 percent in 2015, before gradually starting to decline. Moreover, even though people invest in their futures rather than their present medical care, their health status in the twenty-first century will be lower because of population aging. Controlling medical expenditures through cost containment will require the Japanese people to accept both major increases in the rate of self-payment for medical care and a decline in national health status.

Keywords: aging population; Japanese; health care costs; medical care costs; licensing systems; self-payment; health status

Chapter.  5642 words.  Illustrated.

Subjects: Economic History

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