Assessing the impact of diversity and ageing population on health expenditure of United States

Background At the biological level, ageing results from a plodding decline in physical and mental capability, an emergent menace of malady, and eventually, fatality. Even though a few of the geriatric's health changes are hereditary, to a great extent is due to individual's physical and societal surroundings and their residence, locality, societies, gender, ethnicity or socio‐economic status. The current debate is well popular by the relationship between increasing diversity and the ageing population with healthcare expenditure in the United States. Higher diversity in society and increasing ageing population have various socio‐economic consequences. A good policy in this regard helpful to managed and get fruitful outcomes. Objective This study aims to examine the direct effects of diversity and ageing population on healthcare spending. The assortment observed in geriatrics is not arbitrary. A huge portion emerges from individual's physical and social settings and the influence of these environs on their prospect and well‐being demeanour. Method This study used the Bayesian‐vector autoregressive model, impulse response analysis, and variance decomposition and data over the period 1990–2018 for empirical analysis of the United States. Results The empirical findings indicate that diversity and ageing population are more persistent with health expenditure in the United States. This study concludes that an increase in diversity and ageing population will rely on the long‐term healthcare facility. Conclusion The study suggests that cohesive society and effective health intervention might aid in curtailing expenditure pressure linked with elderly population. Furthermore, a recommendation of this study is a good opportunity for healthcare policymakers and further researches. Key points •This study pointed towards major fiscal hurdle of population ageing caused by burden of pension annuity and healthcare expenditures. •Assessment of future requirement of healthcare infrastructure can help in designing and planning remedial measures. •The pension plans should also include the health insurance to cover age‐specific risks which will help keep elders from poverty.