Evaluating the Consequences of Ageing Population on Healthcare Cost to Ghana using Inflation-Adjusted Expenditure and Demographic Factors

There is a gap between rhetoric and reality concerning healthcare expenditures and population aging: although decades-old research suggests otherwise, there is widespread belief that the sustainability of the healthcare system is under serious threat owing to population aging. To shed new empirical light on this old debate, we used population-based administrative data to quantify recent trends and determinants of expenditure on hospital, medical and pharmaceutical care in Ghana. We modelled changes in inflation-adjusted expenditure per capita between 2006 and 2013 as a function of two demographic factors (population aging and changes in age-specific mortality rates) and three non-demographic factors (age-specific rates of use of care, quantities of care per user and inflation-adjusted costs per unit of care). We found that population aging contributed more than 10% per year to spending on medical, hospital and pharmaceutical care. Moreover, changes in age-specific mortality rates actually increased hospital expenditure by –13% per year. Based on forecasts through 2036, we found that the future effects of population aging on healthcare spending will continue to be large. We therefore conclude that population aging has exerted, and will continue to exert, high pressures on medical, hospital and pharmaceutical costs in Ghana. As indicated by the specific non-demographic cost drivers computed in our study, the critical determinants of expenditure on healthcare stem from both demographic and non-demographic factors over which practitioners, policy makers and patients have discretion.