Lifetime healthcare expenditures across socioeconomic groups

BACKGROUND: A socioeconomic gradient affects healthcare expenditures and longevity in opposite directions as less affluent individuals have higher current healthcare expenditures but simultaneously enjoy shorter lives. Yet, it is unclear whether this cross-sectional healthcare expenditure gradient persists from a lifetime perspective. This paper analyzes lifetime healthcare expenditures across socioeconomic groups using detailed individual-level healthcare expenditure data for the entire Danish population. METHOD: Using full population healthcare expenditures from Danish registries, we estimate lifetime healthcare expenditures as age-specific mean healthcare expenditures times the probability of being alive at each age. Our data enables the estimation of lifetime healthcare expenditures by sex, socioeconomic status, and by various types of healthcare expenditure. RESULTS: Once we account for mortality differences and all types of healthcare expenditures, all socioeconomic groups spend an almost equal amount on healthcare throughout a lifetime. Lower socioeconomic groups incur the lowest lifetime hospital expenditures, whereas higher socioeconomic groups experience the highest lifetime expenditures on long-term care services. Our findings remain robust across various socioeconomic measures and alternative estimation methodologies. CONCLUSION: Improving the health status of lower socioeconomic groups to align with that of higher socioeconomic groups is costly but may ultimately reduce current healthcare expenditures. Enhanced health outcomes likely increase lifespan, leading to extended periods of healthcare consumption. However, since all socioeconomic groups tend to have similar lifetime healthcare expenditures, this prolonged consumption has limited impact on overall lifetime healthcare costs. Additionally, a significant benefit is the deferment of healthcare expenditures into the future. Overall, our results diminish concerns about socially inequitable utilization of healthcare resources while socioeconomic differences in health and longevity persist, even in a universal healthcare system.