Skip to main content
Article thumbnail
Location of Repository

Projecting future health care expenditure at European level: drivers, methodology and main results.

By Bartosz Przywara


Summary for non-specialistsTo correctly assess the demography-related risks facing public finances in the EU over the next couple of decades and establish adequate policy responses to the demographic, social and economic developments, it is essential to devise a reliable method to estimate future health care expenditure. To tackle this issue, the European Commission and the Economic Policy Committee projected future public health care expenditure in all EU Member States over the period 2007-2060. A unique internationally comparable database has been established and a model built allowing to project health care spending in a common, coherent framework of macroeconomic variables. The model incorporates the most recent developments in demography and epidemiology and draws on new insights from health economics, allowing the comparison of the challenges facing both individual countries' health care systems and European society in its entirety.Healths Ageing Demography Budgetary projection Public finances Health care expenditure

OAI identifier:

Suggested articles


  1. (2007). A realist view of aging, mortality and future longevity,
  2. A.Gray (2004a), Ageing and health care expenditure: the red herring argument revisited,
  3. (2009). Ageing Report: economic and budgetary projections for the EU-27 Member States (2008-2060),
  4. (1980). Ageing, natural death, and the compression of morbidity,
  5. (1994). Aggregate health care expenditure in the United States: evidence from cointegration tests,
  6. (1996). Aggregate health care expenditure in the United States: evidence from cointegration tests: a comment,
  7. (1990). An Aging Society: opportunity or Challenge?, Brookings Papers on Economic Activity,
  8. and A.M.Gray (2004b), A longitudinal study of the effects of age and time to death on hospital costs,
  9. and C.D.Mathers (1993), Measuring the compression or expansion of morbidity through changes in health expectancy,
  10. (1999). and E.Meara
  11. (1999). and E.Mossialos
  12. and E.Westerhout (2004), Alternative scenarios for health, life expectancy and social expenditure. The influence of living longer in better health on health 64 expenditures, pension expenditures and government finances in the EU, in:
  13. (1993). and G.F.Riley
  14. (2003). and H.Oxley (2003), Health care systems: lessons from the reform experience, OECD Directorate for Employment, Labour and Social Affairs,
  15. and J.Gampe (2005), The cost of population aging: forecasting future hospital expenses in Germany, Max Planck Institute for Demographic Research Working Paper WP
  16. (1992). and J.Posnett
  17. and J.Schreyögg (2004), Towards sustainable health care systems. Strategies in health insurance schemes in France, Germany, Japan and the Netherlands. A comparative study, International Social Security Association.
  18. and J.W.Vaupel (2002), Broken Limits to Life Expectancy,
  19. (1997). and L.Sheiner
  20. and M.D.Hayward (2004), The Evolution of Demographic Methods to Calculate Health Expectancies,
  21. and M.Lagergren (2004), Inpatient/outpatient health care costs and remaining years of life. Effect of decreasing mortality on future acute health care demand,
  22. and P.Hussey (2000), Population Aging: A comparison Among Industrialized Countries,
  23. and R.S.Huckman (2002), Technological Development and medical productivity: Diffusion of Angioplasty in
  24. and S.Jacobzone (1997), L’hypothèse de demande induite : un bilan économique,
  25. and S.Vujić (2008), Rising health spending, new medical technology and the Baumol effect, CPB Discussion Paper,
  26. and V.Skirbekk (2005), Policies addressing the tempo effect in low-fertility countries,
  27. (2007). are the outcomes of the econometric specification (see Table 6 and Dybczak and Przywara
  28. B.Jönsson, F.Andersson (1992a), A Pooled Cross-Section Analysis of the Health Care Expenditures of the OECD Countries, Developments in Health Economics And Public Policy,
  29. (2006). Baumol's Disease: A Macroeconomic Perspective,
  30. (2002). Biotechnology and the Burden of Age-Related Diseases, in: OECD, Healthy Ageing and Biotechnology. Policy Implications of New Research.
  31. (2001). Budgetary challenges posed by ageing populations: the impact on public spending on pensions, health and long-term care for the elderly and possible indicators of the long-term sustainability of public finances,
  32. (2002). C.Krauth and F.W.Schwartz (2002), Use of acute hospital beds does not increase as the population ages: results from a seven year cohort study in Germany,
  33. (2003). Caisse Nationale de l’Assurance Maladie des Travailleurs Salariés
  34. (2002). Can Defined Contribution Health Insurance Reduce Cost Growth?, EBRI Issue Brief,
  35. (1999). Catching up with the economy,
  36. (1982). Changing concepts of morbidity and mortality in the elderly population,
  37. (2003). Compression of Morbidity,
  38. (1993). Compression of morbidity: life span, disability, and health care costs, Facts and Research in Gerontology,
  39. (2005). Demographics and demand for care. How to incorporate death-related costs in long-term budgetary projections of health care and long-term care?, presentation in the framework of the Visiting Fellows Programme,
  40. (2005). Disentangling demographic and nondemographic drivers of health spending: a possible methodology and data requirements, presentation at the Joint EC/OECD Workshop,
  41. (1982). E.Stallard, L.Corder (1995); Changes in morbidity and chronic disability in the U.S. elderly population: Evidence from the
  42. (2004). Economic Implications of an Ageing Australia, Draft Research Report, Australian Government, Productivity Commission,
  43. (2005). Economic Policy Committee and European Commission
  44. Emergence of supercentenarians in low mortality countries, available at: Robine J.M. and J.P.Michel (2004), Looking Forward to a General Theory on Population Aging,
  45. (2005). EU population rises until 2025, then falls,
  46. (2004). European Commission (2004a) Controlling health care expenditures: some recent experiences with reform. Note for the attention of the Economic Policy Committee,
  47. (2007). EUROPOP2007 Convergence Scenario: Summary Note, note for the Joint Working Group on Population Projections and Working Group on Ageing Populations and Sustainability,
  48. (2009). EUROPOP2008: a set of population projections for the European Union, paper presented at
  49. F.Andersson, B.Jönsson (1992b), An Econometric Analysis of Health Care Expenditure: a
  50. F.Pellikaan (2005), Can we afford to live longer in better health? CPB Netherlands Bureau for Economic Policy Analysis, CPB Document No.85.
  51. (1994). Factors Affecting Health Spending: a Cross-country Econometric Analysis, in: H.Oxley and M.MacFarland, Health Care Reform. Controlling Spending and Increasing Efficiency, OECD Economics Department Working Papers No.149,
  52. (2002). Future health care costs—do health care costs during the last year of life matter? Health Policy,
  53. G.Myers (1992), Demography of older populations in developed countries,
  54. H.Telser, P.Zweifel (2005), The Impact of Ageing on Future Healthcare Expenditure, Working Paper no.
  55. (2006). H.van Oers
  56. (1993). Health care expenditure and income in
  57. (2010). Health care expenditure and income in the OECD reconsidered: Evidence from panel data,
  58. (2000). Health Care for the Ageing Baby Boom: Lessons from Abroad,
  59. (2000). Health care is an individual necessity and a national luxury: Applying multilevel decision models to the analysis of health care expenditures,
  60. (1998). Health Care Systems in the EU. A Comparative Study,
  61. (1987). Health care utilization in the years prior to death. Milbank Quarterly.
  62. (2000). Health Expenditures and the Elderly: A Survey of Issues in Forecasting, Methods Used, and Relevance for Developing Countries,
  63. (1990). Health expenditures in major industrialized countries, 1960-1987, Health Care Financing Review,
  64. (1998). Health Policy Brief. Ageing and Technology, Working Party on Biotechnology,
  65. (2004). Health-adjusted Life Expectancy
  66. (2002). Healthy Ageing and the Challenges of New Technologies. Can OECD Social and Health-Care Systems Provide for the Future?, in: OECD, Healthy Ageing and Biotechnology. Policy Implications of New Research.
  67. (2007). i n i a g n a g M s
  68. (2006). Increasing life expectancy and the compression of morbidity: a critical review of the debate, Oxford Institute of Ageing Working Paper,
  69. (2005). Interpreting national evidence on the evolution of morbidity and disability prevalence over time and perspectives for extended healthy life expectancy, presentation at the Joint EU-OECD workshop,
  70. (1998). L.Bonneux, J.J.Polder, M.A.Koopmanschap, P.J.van der Maas
  71. (2005). L.Pickard (2005), Making projections of public expenditure on long-term care for the European member states: Methodological proposal for discussion, paper presented at the Commission-AWG-OECD workshop,
  72. (2004). La santé, un bien supérieur ?, Chronique Internationale de l'IRES,
  73. (2003). Les conséquences du vieillissement de la population sur les dépenses de santé, in:
  74. (1984). Longer life but worsening health? Trends in health and mortality of middle-aged and older persons,
  75. (2002). Longevity advances in high-income countries, 1955-96, Population and Development Review,
  76. (1995). Longevity and Medicare Expenditures, The New England
  77. (2002). Low fertility: unifying the theory and the demography, Paper prepared for Session 73, Future of fertility in Low Fertility Countries,
  78. (1991). M.A.Rudberg, B.A.Carnes, C.K.Cassel, J.A.Brody
  79. M.Grignon, H.Huber (2006), Health expenditure growth: reassessing the threat of ageing,
  80. (1990). Macro Forecasting of National Health Expenditures,
  81. (1992). Medical Care Costs: How Much Welfare Loss?,
  82. (1977). Medical care expenditure: a cross national survey,
  83. (2004). Methodologies to incorporate ‘death-related’ costs in projections of health and long-term care based on Danish data, Ministry of Finance,
  84. (1970). Motivation and Personality,
  85. (2001). No.317, pp.111-115, appendix 'Cost of illness in the Netherlands 1994' available at: Miller T.
  86. (1983). Office of Technology Assessment
  87. P.W.Achterberg (2004), Cost of Illness in the Netherlands, National Institute for Public Health and the Environment.
  88. (1992). Population Aging and the Growth of Health Expenditures,
  89. (2006). Projecting OECD health and long-term care expenditures: what are the main drivers?, Economics Department Working Papers No.477,
  90. (1991). Prospects for the compression of morbidity: Evidence from the Alameda County study,
  91. R.Sauto Arce, S.Tsolova, J.Mortensen (2005), The contribution of health to the economy in the European Union, European Commission, Health and Consumer Protection Directorate General.
  92. Raggioneria Generale dello Stato (2004), How to take account of death related costs in projecting health care expenditure – the evidence for Italy and a proposal for the EPCWGA.
  93. (1997). Rectangularisation of the survival curve in the Netherlands,
  94. (1996). Robine and the EHLEIS team (2009), Trends in Disability-free Life Expectancy at age 65 in the European Union 1995-2001: a comparison of 13 EU countries, EHEMU Technical report 2009_5.1. Kanavos P. and E.Mossialos
  95. (2002). S.Bartolacci, R.Berni, S.Forni (2002), Hospital expenditure as function of the distance from birth and death,
  96. S.Frells, T.P.Miles (1992), Epidemiological issues in the developed world,
  97. (2002). Securing our Future Health: Taking a Long-Term View. Final report,
  98. (1999). Sensitivity of elasticity estimates for OECD health care spending: analysis of a dynamic heterogeneous data field,
  99. (2009). Sustainability Report
  100. Technology as a ‘major driver’ of health care costs: a cointegration analysis of the Newhouse conjecture,
  101. (1995). Technology, Health Costs and the NIH,
  102. (2000). The ‘Toolbox’ of Public Policies to Impact on Fertility – a Global View, Paper presented at the seminar ‘Low fertility, families and public policies’ organised by the European Observatory on Family Matters in
  103. (1998). The black box of health care expenditure growth determinants,
  104. (2004). The Boards of Trustees, Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds
  105. (1983). The compression of morbidity,
  106. (1989). The compression of morbidity: near or far?,
  107. (1998). The Determinants of Health Expenditure in the OECD Countries: a Pooled Data Analysis. In:
  108. (1996). The determinants of technological change in heart attack treatment, NBER Working Paper, no.5751. 58 Cutler D. and E.Meara
  109. (1977). The failure of success,
  110. (1991). The Health Care Quadrilemma: An Essay on Technological Change, Insurance,
  111. (2006). The impact of death-related costs on health-care expenditure. A survey,
  112. (2005). The influence of supply and demand dfactors on aggregate health care expenditure with a specific focus on age composition.
  113. (2004). The Netherlands (2004), Health Care in an Ageing Society. A Challenge for all European Countries,
  114. (1986). The public-private mix and international health care costs,
  115. (1990). The Willingness to Pay for Medical Care,
  116. Towards high-performing health systems,
  117. Towards high-performing health systems. Policy studies, The OECD Health Project.
  118. (2008). What drives health care expenditure? – Baumol's model of 'unbalanced growth' revisited,
  119. (2002). Why is less money spent on health care for the elderly than for the rest of the population? Health care rationing in German hospitals,
  120. Will There be a Helping Hand? Macroeconomic scenarios of future needs and costs of health and social care for the elderly in Sweden, 2000-30. Annex to The Long-Term Survey 1999/2000,
  121. (2003). World Health Organisation
  122. (2007). x n a g n a g es ed
  123. Y.Eggli, T.Yalcin, T.Ribeiro (2004), Health-based risk adjustment in Switzerland : an exploration using medical information from prior hospitalisation, Institut d’économie et management de la santé,

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.