Health Economics and Geriatrics: Challenges and Opportunities

The fundamental economic problem of limited resources coupled with unlimited claims upon those resources holds particular resonance for geriatrics given the projected huge future growth in demand for health and aged care services for older people as a consequence of demographic change. Population ageing is a world-wide phenomenon which poses major challenges and opportunities for health economics and geriatrics. Currently approximately 2 million Australians, almost 10% of the total population, are aged 70 years and over and this figure is set to double during the next two decades. It is estimated that by 2045, one in four Australians will be aged 65 years or more and nearly one in ten will be 80 years or over [Productivity Commission, 2005]. This situation is not unique to Australia, population ageing forecasts in many countries and regions throughout the world mirror these statistics. In addition, factors other than an ageing population are creating new pressures and challenges for geriatrics, particularly in relation to how health and aged care services are provided in the future. The so called post-war “baby boomer” generation is generally expected to have much higher expectations for choice and responsiveness in the provision of health and aged care services relative to previous generations. Therefore, techniques for systematically engaging older people to establish their preferences in relation to the provision and configuration of geriatric services are likely to become more important. This chapter discusses the challenges and opportunities for the application of health economics and geriatrics from two main perspectives. Firstly, in relation to economic evaluation and the methods for assessing the cost effectiveness of new health care technologies and models of aged care service delivery. Secondly, in relation to methods adopted by health economists for measuring and valuing patient or consumer preferences in health care.