Concentration and Persistence of Health Care Expenditures Among the Non-Elderly Population

Abstract

This paper examines how health care expenditures are distributed within the non-elderly population in Japan with emphasis on concentration and persistence and analyzes the determinants of the persistence of high medical expenditures. It is well known that a small fraction of the population accounts for the bulk of health care expenditures. Even within the same age group or income group, the distribution of spending is highly skewed. Unfortunately, not much empirical research has been conducted on the distribution of health care expenditures in Japan. Using nonelderly individual health insurance claim data from 111 health insurance societies, we perform descriptive and econometric analyses in order to examine the extent of concentration and its duration, and we also analyze the determinants thereof. We find that a few patients are responsible for the bulk of total health care expenditure, which is consistent with the findings of previous research, and that high-cost medical expenditures are more persistent among the Japanese working population than among the same population in the US. Duration is especially long after a person reaches middle age. The patterns of persistence among the top ten percent of beneficiaries are different from those among beneficiaries in lower percentiles. It appears that once a large medical expenditure occurs, it lasts for a long period of time. Among the non-elderly population, not only hospitalization but also long-term out-patient medical care for chronic diseases contributes to the persistence of high medical expenditures.