Posting date: September 26, 2005

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Health Affairs, 10.1377/hlthaff.w5.r5
Copyright © 2005 by Project HOPE

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Consequences Of Health Trends And Medical Innovation For The Future Elderly

¹ Dana Goldman is corporate chair and director of health economics at RAND in Santa Monica, California.
² Baoping Shang is a fellow at the Pardee RAND Graduate School.
³ Jay Bhattacharya is an assistant professor of medicine at Stanford University in Stanford, California.
⁴ Alan Garber is a staff physician at the Veterans Affairs (VA) Palo Alto Health Care System and the Henry J. Kaiser Jr. Professor at Stanford.
⁵ Michael Hurd directs the RAND Center for the Study of Aging.
⁶ Geoffrey Joyce is an economist at RAND.
⁷ Darius Lakdawalla is an associate economist at RAND.
⁸ Constantijn Panis is a manager at Deloitte and Touche LLP in Los Angeles.
⁹ Paul Shekelle is director of the Evidence-Based Practice Center at RAND Health and a staff physician at the Greater Los Angeles VA Medical Center.

^*Corresponding author.

Abstract

Recent innovations in biomedicine seem poised to revolutionize medical practice. At the same time, disease and disability are increasing among younger populations. This paper considers how these confluent trends will affect the elderly's health status and health care spending over the next thirty years. Because healthier people live longer, cumulative Medicare spending varies little with a beneficiary's disease and disability status upon entering Medicare. On the other hand, ten of the most promising medical technologies are forecast to increase spending greatly. It is unlikely that a "silver bullet" will emerge to both improve health and dramatically reduce medical spending.

Key Words: Chronic Care, Demography, Elderly, Health Promotion/Disease Prevention, Medicare, Research And Technology, Health Spending

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