Appended Note 3-5 Estimated future medical expenditure

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1. We estimated medical expenditure, separately for hospitalization and outpatient care, by age group (age 10-14, age 15-44, age 45-66, and age 65 or over).

*Costs of dental treatment or drugs prepared by pharmacies are not included in these estimates.

2. Benchmark case

We first fixed the per-capita medical expenses (hospitalization and outpatient care) for each age group at the 2002 levels and then estimated the future expenditures by multiplying the fixed levels by the future population of respective age group (medium-level estimates).

3. Cases with growth of per-capita medical expenditure

In addition to the assumptions made for the benchmark case in 2 above, we assumed the per-capital medical expenditure (hospitalization and outpatient care) for each age group grows in line with the past rate of growth.

The specific rate of growth (annual rate) we set for each age group is shown in the table below (using the average growth between 1990 and 1999).


* In 2000 and 2002, the per-capita medical expenditure for the age group of 65 or over declined due to changes in the medical care system (the enforcement of the nursing care insurance system in 2000, and the 2.7% reduction in medical service fees and standard drug prices as well as the introduction of the fixed-rate self-pay under the elderly health care system in 2002). In order to exclude the effects of these system changes, we used the average rate of growth up to 1999 to set the assumed growth in the estimates.

Sources: "National Medical Expenses," Ministry of Health, Labour and Welfare, and the "Population Projections for Japan," National Institute on Population and Social Security Research

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