The effect of age and time to death on health care expenditures: the Italian experience

A large body of literature shows that time to death (TTD) is by far a better predictor of health spending than age. In this paper, we investigate if this finding holds true also in presence of primary care costs (pharmaceuticals, diagnostic tests and specialist visits) in Italy, where they represent an important share (about 30%) of the total health care expenditure (HCE). Our analysis is based on a large sample of the Italian population (about 750,000 individuals), obtained from the Health Search-SiSSI database, which contains patient-level data collected routinely by General Practitioners in Italy since 2002. We study individuals aged 19 and older, over the period 2006e2009. By means of a two-part model which accounts for the presence of zero expenditure, our findings show that age represents the most important driver of primary care costs in Italy, although TTD remains a good predictor. These results suggest that age and TTD can have a different role in shaping health care costs according to the component of health expenditure examined. Therefore, our advice to policy makers is to use disaggregated models to better disentangle these contributions and to produce more reliable health spending forecasts.