The impact of age and sex on person-level Medicare costs

To the Editor: The impact of population ageing on health care expenditure was a hot topic in the late 1990s in Australia.1 Previous studies have adopted various modelling approaches to estimate age- and sex-specific health care costs to inform population health care expenditure projections.2-4 Medicare funds about 3800 medical services, including consultations provided by general practitioners and specialists, medical diagnostic services (such as medical imaging and pathology), dental surgery, optometry and selected allied health services through the Medicare Benefits Schedule (MBS). It also funds about 2100 pharmaceutical therapies, or about 80% of all prescription medications dispensed in Australia, through the Pharmaceutical Benefits Scheme (PBS).

This letter reports annual Medicare costs at the person level for 10-year age and sex groups, drawing on de-identified Medicare linked data. Medicare randomly selected 10 000 men and 10 000 women from each of the following 2009 age groups, irrespective of their associated Medicare expenditure: 15–24, 25–34, 35–44, 45–54, 55–64, 65–74 and 75–84 years. Health care cost data for each of the samples were sourced from the MBS and PBS databases for the period 1 July 2005 to 31 December 2008. Costs were annualised and mean costs per person were calculated for each sample in 2007 Australian dollars.5

Medicare costs increased with each 10-year age increment, with the exception of a decrease in costs observed in the 75–84-year age group, which is likely to have resulted from the death of patients who previously had heavy health care use. Medicare costs per person peaked for both sexes in the population aged 65–74 years (women, $4518; men, $4215), where costs were 3.7 times and 5.6 times higher than equivalent costs for women and men aged 15–24 years. Medicare costs per capita were consistently higher for women. The differential was most pronounced for the younger age groups, particularly the 25–34-year and 35–44-year age groups where costs for women were more than double the equivalent costs for men (Box).

Observed health care cost data for demographic groups can be used to inform future Australian health care expenditure projections.

Mean annual Medicare costs per person by age and sex*

* Costs in 2007 Australian dollars.