Dr Adam W. Shao
Senior Quantitative Analyst, Mine Wealth + Wellbeing Super
Associate Investigator, CEPAR, UNSW Australia
1 Introduction
2 Methodology
3 Results
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Age and disability
1/30
Background - LTC costs and funding
LTC costs are increasingly higher and the increasing trend is projected
to continue (Congressional Budget Oce, 2004; Shi and Zhang, 2013;
Productivity Commission of Australia, 2013)
LTC costs funding scheme
Australia: means-tested aged care, lifetime stop-loss mechanism
proposed by Productivity Commission of Australia (2011)
U.S.: Medicaid and Medicare + private insurance + personal payment
The private LTC insurance market is an important supplement for the
public funding source (Productivity Commission of Australia, 2011;
Glendinning et al., 2004; Colombo et al., 2011)
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Background - LTC Insurance
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Types of LTC Insurance
Product features
Elimination period (3 months to 2 years)
Maximum benet period (3 to 5 years)
Base policies
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Fixed Benet LTC Insurance
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Motivation
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Our research
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Topic coverage
1 Introduction
2 Methodology
3 Results
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Model: three-state Markov
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Notation
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Data
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Transition counts - male
ix = # of transitions
Age Band : N F : F N : N D : F D
50-54 13 10 5 2
55-59 80 61 60 20
60-64 160 143 192 37
65-69 222 148 325 85
70-74 282 141 405 120
75-79 310 113 447 143
80-84 274 108 446 192
85-89 236 56 325 203
90-94 126 28 186 140
95-100 40 4 50 52
Total 1,743 812 2,441 994
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Transition counts - female
ix = # of transitions
Age Band : N F : F N : N D : F D
50-54 34 19 9 1
55-59 153 132 58 14
60-64 293 260 137 48
65-69 417 285 236 113
70-74 422 274 272 127
75-79 443 227 319 185
80-84 542 222 413 269
85-89 498 168 413 341
90-94 308 100 247 313
95-100 107 21 75 177
Total 3,217 1,708 2,179 1,588
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Estimation approach: GLM
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Estimation approach: GLM
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Topic coverage
1 Introduction
2 Methodology
3 Results
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Log of crude transition rates
Nondisabled to Disabled Disabled to Nondisabled
0 0
Male
ln(crude rates)
2 Female 2
4 4
6 6
60 80 100 60 80 100
Age Age
Nondisabled to Dead Disabled to Dead
0 0
ln(crude rates)
2 2
4 4
6 6
60 80 100 60 80 100
Age Age
Model selection
0.2 0.2
0 0
60 80 100 60 80 100
Age Age
0 .4 0.4
0 .3 0.3
Rates
0 .2 0.2
0 .1 0.1
0 0
60 80 100 60 80 100
Age Age
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Graduated mortality rates: non-disabled (t) and disabled (b)
1 1
Mean graduated rates Mean graduated rates
0.8 0.8
Crude rates Crude rates
0.6 0.6
Rates
0.4 0.4
0.2 0.2
0 0
60 80 100 60 80 100
Age Age
1 1
0 .8 0.8
0 .6 0.6
Rates
0 .4 0.4
0 .2 0.2
0 0
60 80 100 60 80 100
Age Age
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More on condence intervals
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Competing risks: males (t) and females (b)
0 .6
Disability rate
Recovery rate
Rates 0 .4 Mortality(nondisabled)
Mortality(disabled)
0 .2
0
50 60 70 80 90 100
0 .6
0 .4
Rates
0 .2
0
50 60 70 80 90 100
Age
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Life expectancy in non-disability and disability
35
Male LE in nondisability
30 Male LE in disability
Female LE in nondisability
25 Female LE in disability
20
Years
15
10
0
50 60 70 80 90
Age
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Comparing with published sources: female
0.6
GLM (non-disabled)
GLM (disabled)
SSA cohort
RP2000 (disabled)
0.4 Wolfram (non-disabled)
Probabilities
Wolfram (disabled)
0.2
0
50 55 60 65 70 75 80 85 90 95 100
Age
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SOA's method
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GLM v.s. Robinson's method
Nondisabled to Disabled Disabled to Nondisabled
0.3 0.3
0.2 0.2
Rates
0.1 0.1
0 0
60 80 100 60 80 100
Nondisabled to Dead Disabled to Dead
Female, SOA/Robinson
0.2 0.2
0 0
60 80 100 60 80 100
Age Age
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Dierent benet triggers
Nondisabled to Disabled Disabled to Nondisabled
0.3 0.3
2+ ADLs
2+ ADLs or CI
Probability
0.2 3+ ADLs
0.2
0.1 0.1
0 0
60 80 100 60 80 100
Nondisabled to Dead Disabled to Dead
0.4 0.4
0.3 0.3
Probability
0.2 0.2
0.1 0.1
0 0
60 80 100 60 80 100
Age Age
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Topic coverage
1 Introduction
2 Methodology
3 Results
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Summary
This paper uses GLM to assess disability and mortality transitions for
elderly individuals;
GLM is comprehensive and exible;
Women tend to suer longer due to higher disability and lower
mortality rates;
Men and women have distinct age patterns of recovery;
Mortality rates of the disabled from Robinson's method are higher
than our estimate and published sources.
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Limitations and Extensions
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Time Trend: Transition Rates with Systematic Risk
Disability Mortality
1 1
95% CI 95% CI
0 Frailty 0 Frailty
No Frailty No Frailty
1 No Frailty with Time Trend 1 No Frailty with Time Trend
2 2
log(Rates)
log(Rates)
3 3
4 4
5 5
6 6
7 7
50 55 60 65 70 75 80 85 90 95 100 50 55 60 65 70 75 80 85 90 95 100
Age Age
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Time Trend: Survival Curves with Systematic Risk
1
95% CI
Frailty
0.8 No Frailty
No Frailty with Time Trend
Survival Probability
0.6
0.4
0.2
0
50 60 70 80 90 100 110 120
Age
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References
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Cutler, D. M. (2001). Declining disability among the elderly. Health Aairs, 20:1127.
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