Projections of OECD Health and Long-Term Care Public Expenditures

44 Pages Posted: 15 Feb 2012  

Joaquim Oliveira Martins

Organization for Economic Co-Operation and Development (OECD) - Statistics Directorate (STD); University Paris-Dauphine; Public Governance Directorate

Christine de la Maisonneuve

Organization for Economic Co-Operation and Development (OECD) - Economics Department (ECO)

Simen Bjørnerud

Organization for Economic Co-Operation and Development (OECD)

Date Written: March 30, 2006

Abstract

This paper proposes a comprehensive framework for projecting public heath and long-term care expenditures. Notably, it considers the impact of demographic and non-demographic effects for both health and long-term care. Compared with other studies, the paper extends the demographic drivers by incorporating death-related costs and the health status of the population. Concerning non-demographic drivers, for health care the projection method accounts for income elasticity and a residual effect of technology and relative prices. For long-term care, the effects of increased labor participation, reducing informal care, and wage inflation are taken into account. Following this approach, public health and long-term care expenditure are projected for all OECD countries for the years 2025 and 2050. Alternative scenarios are simulated, in particular a 'cost-pressure' and 'cost-containment' scenario, together with sensitivity analysis. Depending on the scenarios, the total health and long-term care spending is projected to increase on average across OECD countries in the range of 3.5 to 6 percentage points of GDP for the period 2005-2050.

Keywords: Public health expenditures, long-term care expenditures, ageing populations, longevity, demographic and non-demographic effects, projection methods

JEL Classification: H51, I12, J11, J14

Suggested Citation

Oliveira Martins, Joaquim and de la Maisonneuve, Christine and Bjørnerud, Simen, Projections of OECD Health and Long-Term Care Public Expenditures (March 30, 2006). Available at SSRN: https://ssrn.com/abstract=2005171 or http://dx.doi.org/10.2139/ssrn.2005171

Joaquim Oliveira Martins (Contact Author)

Organization for Economic Co-Operation and Development (OECD) - Statistics Directorate (STD) ( email )

2 Rue André Pascal
75775 Paris Cedex 16
France
+33 1 45 24 88 53 (Phone)

University Paris-Dauphine ( email )

PARIS
France

Public Governance Directorate ( email )

2 rue Andre Pascal
Paris Cedex 16, 75775
France

Christine De la Maisonneuve

Organization for Economic Co-Operation and Development (OECD) - Economics Department (ECO) ( email )

2 rue Andre Pascal
Paris Cedex 16, MO 63108
France

Simen Bjørnerud

Organization for Economic Co-Operation and Development (OECD) ( email )

2 rue Andre Pascal
Paris Cedex 16, 75775
France

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