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Ageing Population Health Costs Unavoidable

AGEING POPULATION HEALTH COSTS UNAVOIDABLE

Pressures of population ageing on health spending are unavoidable, according to a report released by the Ministry of Health today.

The report, Population Ageing and Health Spending: 50-Year Projections, considers the impact of the baby boom which peaked in 1961, combined with increases in life expectancy and predicts what impact it will have on health spending in the future.

Acting Deputy Director General Policy, Judy Glackin, said an ageing population combined with economic growth will place increased demands on health care.

"We need to be aware of this to ensure we as a country can cope with the changing health needs of the population."

Figures provided by Statistics New Zealand show that people aged 65 and over are expected to make up 12 percent of the population in 2001 and this will more than double to 26 percent in the year 2051. In addition, life expectancy at age 65 has grown by 2.5 years for both women and men over the past 20 years.

In 1997 the average amount of health spending for each person aged 40-44 was around $1,000. This increased to over $10,000 per capita for people aged 85 and over.

Mrs Glackin said "As the population ages, more people will fall in the high cost health care age group."

"Over the past 20 years health spending has grown steadily and if these expenditure patterns are to continue, the amount of money spent on health will need to increase as the population ages."

Given similar expenditure patterns to the last 20 years, the report suggests Government health spending could increase from 6.5 percent of Gross Domestic Product (GDP) in 2001 to 8.4 percent in 2051. Government health spending in 1997/98 was $5.9-billion and accounted for about 70 percent of total health expenditure in New Zealand.

The pressures for increases in health spending will be less than the pressures that ageing will put on superannuation.

"Improvements in New Zealanders' nutrition, environmental conditions, education, smoking habits and medical technology could mean that older people will lead healthy lives for longer, and that health problems will be compressed into the very old ages."

Mrs Glackin said that future changes in the relative per capita health cost of older people, or in fertility and mortality trends did not make a large difference to the projections, but that changes in economic growth rates and changes in health spending above that due to ageing could influence long term projections.

"An ageing population is not unique to New Zealand, all developed nations are facing the same pressures."

A full copy of the report is available on the Ministry of Health website.

ENDS

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