3. The substitution of more costly new procedures for less costly, although less effective (in most instances), older procedures.
It was estimated that between 0.5 percent and 1.0 percent per year was added to the per capita health care costs for Americans between 1970 and 1980, as a result of advances in medical science and biological science (Drake, 1982). In 1989, there appears to be little reason to believe that cost increases resulting from advances in medical science and in biological science would moderate during the 1990s.
In addition to this aspect of the cost problem, many observers believe that the elderly tend to overuse the health care system because they do not participate fully in its funding (Congressional Budget Office, 1984). The cost of providing health care services for the elderly has, thus, become a critical issue (Balinsky, 1985). First, because of an increasing elderly population segment, and second, because of cost increases associated with the delivery of services.
On a national basis, approximately $140 billion was spent in the United States in 1987 on the provision of health care services for the elderly (U.S. Department of Health and Human Services, 1988). The fastest growing population segment is the 65 years old and older group a group requiring more health care than is required by younger persons, and more costly health care than that required for younger persons. Thus, it may be expected that health care costs for the elderly will consume an increasingly larger share of total health care expenditures.
While the 65 and over group is the fastest growing segment of the American population, the 75 and over group is the fastest growing segment among those aged 65 or older. Prior to the 1970s, the 75 and over segment of the population was too small to merit much attention as a separate population segment. In the late 1980s, however, this segment of the p...