THE IMPACT OF AGEING-POPULATION ON DEMAND FOR HEALTH CARE SERVICES IN SRI LANKA

Abstract

Among other issues related to population ageing, changing the demand patterns for health careservices has become an important concern in developing countries including Sri Lanka.Therefore, in order to evaluate the impact of ageing population on demand for health careservices, the study examines the factors influencing the demand for healthcare of the elderlypopulation in Sri Lanka. Grossman Model of Health Demand is based largely in the study withsome refinements to explain the healthcare demand of the elderly population. The study uses amixed methodology based on a sample of 300 elderly people with self-reported healthinformation and then the analysis of the study was performed with the use of Grossman'seconomic model for the demand of health where healthcare is treated as an input for theproduction of health.This study revealed that expenditure on drugs, cost per visit for medical consultation, healthstatus, cost of drugs per visit, distance to the medical institute and the method of the treatmentare the most influential factors that determine the demand for health care services in Sri Lanka.Most importantly, the study found that the health status depreciates when older people movefrom young-old to old-old status. lt is also imperative to remark, that the study found the healthstatus being regarded as an important predictor of the demand for healthcare. Although healthstatus or 'health stock' is treated as an outcome variable in Grossman's model, the study usehealth status as an exogenous variable which can have a significant influence in determininghealthcare utilization. Therefore, the study adds another dimension to the Grossman Model bytreating health status of the elderly and associated healthcare costs as two major significantvariables that affect their demand for healthcare services. Conceptually, this explains that whenthe price of drugs increases, stock of health of the elderly decreases because the demand forhealthcare services mainly depend on the cost of drugs prescribed by the healthcare providers.Moreover, financial factors play a crucial role in seeking for health care in the backdrop ofpoverty of the elderly individuals and their families. The results suggest the presence of a strongfinancial barrier to health care access. It is expected that the study will help to necessitate policyactions that promote good health in old age.