Dynamic Microsimulation of Health Care Demand, Health Care Finance and the Economic Impact of Health Behavior. Part I: Background and a Comparison with Cell-Based Models

Cell-based health care models, as well as macro-level projections of future population and economic trends used as input to health care models, are limited to a few variables, which makes microsimulation an interesting modeling option, especially as it allows for modeling of the interaction of demographic with social, environmental and economic variables. Micro-approaches can incorporate the wealth of substantive analysis gained from a large number of micro- and macro-level studies with regard to demographic, economic and health behavior. Compared to cell-based macro models, microsimulation can produce useful projections for the analysis of different health-related phenomena considering additional dimensions, i.e., detailed issues regarding health care finance (insurance schemes, individual accounts etc.) and individual risk exposure. This paper constitutes the first part of an investigation of the potential of dynamic microsimulation for the modeling and projection of health care demand, health care finance and the economic impact of health behavior. The main purpose of this part is to provide a brief theoretical background with regard to the dynamic microsimulation approach and a comparison of the microsimulation approach with the cell-based macro approach. Starting with a definition of dynamic microsimulation and a classification of the types and approaches, microsimulation modeling is brought into the context of the life-course paradigm. This paradigm, meanwhile being the dominant paradigm in demography, can also be a useful organizational principle for the study and projection of health-related phenomena using microsimulation. Microsimulation is then compared with cell-based approaches, and the potential strengths as well as drawbacks of the microsimulation approach with regard to health care modeling are investigated. Dynamic microsimulation might turn out to be increasingly appropriate as a modeling approach in this field, which is currently dominated by cell-based macro-models

Microsimulation Modeling of Population, Economic Growth, and Social Security Systems

This paper is a first step in trying to develop a modeling and simulation framework that allows to incorporate the strengths of microsimulation in economic growth modeling in the context of demographic change. This is mainly done by restating and programming an existing neoclassical macroeconomic growth model in terms of microsimulation, which allows to explore and demonstrate some of the features microsimulation techniques can possibly "add" to this kind of modeling. The starting point of the analysis is the IIASA "Social Security Forecasting and Simulation Model", developed by the IIASA Social Security Reform (SSR) Project as described in MacKellar et al. (2000). This model was developed to study the influence of pension systems on the economy mainly by investigating long-run capital accumulation and economic growth as functions of the evolving age distribution of the population and the nature of pension schemes. Differently to most economic growth models, the IIASA macro-model explicitly introduces "realistic demography" by disaggregating the household sector (and all model outputs) by age cohorts. This kind of economic modeling is incorporated in a dynamic microsimulation framework by further disaggregation of the cohorts to the individual micro-level. Allowing for heterogeneous individual agents, economic and demographic behavior can be modeled taking into account a wide set of individual and household characteristics. As part of this research a "microSSR" software is developed, both as a tool for the testing of different behavioral theories and as a projection and forecasting tool

Dynamic Microsimulation of Health Care Demand, Health Care Finance and the Economic Impact of Health Behavior. Part II: Survey and Review

This report is the second part of an investigation of the potential of dynamic microsimulation for modeling and projection of health care demand, health care finance and the economic impact of health behavior. While the first part (Spielauer, 2002) provided a theoretical and methodological background of dynamic microsimulation in this research area and compared the microsimulation approach with the cell-based macro-approach, this paper contains a survey of existing microsimulation projects and draws some conclusions with regard to health care modeling. The purpose of this survey is to capitalize on the expertise acquired by what is now more than 40 years of dynamic microsimulation model development with regard to modeling health care demand, health care finance and the economic impact of health behavior. Based on literature research, 33 dynamic microsimulation projects were identified for which documentation is available. While a short description and classification of these projects is given in the appendix of this report, 9 projects are reviewed in more detail. All of these 9 models include health-related variables, however, the range of health-related issues that can be studied using these models varies widely, as health is not the central focus of the majority of the models. Consequently, this review does not exclusively concentrate on the treatment of health issues in microsimulation models, but the selection of models was also made with the intention to cover most approaches towards dynamic data-based microsimulation with regard to the general structure and modeling options. The review focuses on the modeling of demographic and health behaviors and on the way these models are integrated into the whole model structure, including policy and accounting issues. After giving a brief description of each of the selected models, the modeling approaches are summarized and commented by means of five distinguished criteria. These are the use of alignment techniques, the model's complexity and range of variables used, the theoretical foundation of the model, the type of starting population used, and the extent and detail of financial issues covered. The conclusions are then summarized in a series of "lessons" that can be learned from existing projects

Microsimulation of Life Course Interactions between Education, Work, Partnership Forms and Children in Five European Countries

In 1997, the dynamic Family Microsimulation Model FAMSIM, a microsimulation model for projections and the evaluation of family policies - was developed at the Austrian Institute for Family Studies, in collaboration with IIASA. The purpose of the FAMSIM project was to demonstrate the feasibility of a microsimulation model based on standardized international data sets through the development of a FAMSIM prototype for Austria. FAMSIM is based on the Family and Fertility Survey (FFS) that is available in standardized form for more than 20 industrialized countries and contains detailed event history data for a series of family-related life events such as partnerships, births as well as education and job histories. In a next step, the software necessary to run simulation experiments based on the model was developed by the author in 1999. Recently, the parameters for the FAMSIM model were estimated for the first time for five European countries: Austria, Belgium, Italy, Spain and Sweden. Estimation and simulation results together with the model are presented in this report

Summary of the Discussion in the Session on Generational Solidarity and Conflict

Because the low fertility rates observed in the European Union are the driving force in the current population dynamics of an ageing European society, most of the discussion focused on the causes of low fertility and on policies that might increase fertility. Nevertheless, participants agreed that a mere increase in fertility would not solve all the current problems and that our social system needs to be changed in a much broader sense, especially with regard to the organisation of labour markets, pension funds and ways to ensure income...

Microsimulation of Life Course Interactions between Education, Work, Partnership Forms and Children in Five European Countries.

In 1997, the dynamic Family Microsimulation Model FAMSIM, a microsimulation model for projections and the evaluation of family policies - was developed at the Austrian Institute for Family Studies, in collaboration with IIASA. The purpose of the FAMSIM project was to demonstrate the feasibility of a microsimulation model based on standardized international data sets through the development of a FAMSIM prototype for Austria. FAMSIM is based on the Family and Fertility Survey (FFS) that is available in standardized form for more than 20 industrialized countries and contains detailed event history data for a series of family-related life events such as partnerships, births as well as education and job histories. In a next step, the software necessary to run simulation experiments based on the model was developed by the author in 1999. Recently, the parameters for the FAMSIM model were estimated for the first time for five European countries: Austria, Belgium, Italy, Spain and Sweden. Estimation and simulation results together with the model are presented in this report.