Abstract
As life expectancy continues to rise, Africa is witnessing the early stages of a demographic shift called population ageing. Policy assumes that ageing inherently increases healthcare costs, which is misleading. The Red Herring Hypothesis (RHH) argues that proximity to death (TTD), rather than chronological age, is the true cost driver, a view rarely tested in low-income settings like Malawi. This research addresses this gap by employing Cragg’s Double Hurdle model to assess the significance of TTD in the Malawian context. TTD is proxied by an interaction of age-specific mortality rates and the comorbidity index, sourced from the Global Burden of Diseases. Key covariates include age, insurance, education and urban/rural residence. Findings indicate that TTD has a significant impact on healthcare expenditure (HCE), with a unit decrease resulting in a 25% increase in HCE. This means that as individuals approach death, regardless of age, they tend to spend more. Ageing’s effects on HCE are rendered insignificant once we control for TTD, proving the existence of the RHH in Malawi. The research challenges age-based assumptions in health policy and calls for a strategic shift towards mortality-based targeting, and investing in end-of-life care, offering a Global South contribution to the international debate on sustainable healthcare systems. As Malawi approaches Vision 2063, sustainable healthcare financing must adapt to reflect the real cost drivers of HCE.
Details
Presentation Type
Paper Presentation in a Themed Session
Theme
Economic and Demographic Perspectives on Aging
KEYWORDS
Population ageing, Red herring hypothesis, Time-to-death, Healthcare expenditure, Policy, Africa
