Research Paper Working Papers of the ESRC Research Centre on Micro-Social Change 97-16
Uncertainty and health care spending by the elderly: is there a role for prevention?
01 Aug 1997
The development of preventive health strategies for the elderly has been limited by the view that risk factors have little or no role to play at old age. Using a simple health capital model, this paper shows how uncertainty about the time of death among people who have retired from the workforce may give rise to a 'pure investment' motive for buying units of health care in order to offset health-losses due to depreciation. If rates of health depreciation in the population depend on modifiable risk factors, this provides additional theoretical support for the implementation of broadly based preventive strategies to alleviate future demand for health care by the elderly.