OECD Health Working Papers

1815-2015 (online)
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This series is designed to make available to a wider readership health studies prepared for use within the OECD. Authorship is usually collective, but principal writers are named. The papers are generally available only in their original language - English or French - with a summary in the other.

Future trends in health care expenditure

A modelling framework for cross-country forecasts You or your institution have access to this content

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Alberto Marino1, David Morgan1, Luca Lorenzoni1, Chris James1
Author Affiliations
  • 1: OECD, France

23 June 2017
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Across the OECD, healthcare spending has typically outpaced economic growth in recent decades. While such spending has improved health outcomes, there are concerns about the financial sustainability of this upward trend, particularly as healthcare systems are predominantly funded from public resources in most OECD countries. To better explore this financial sustainability challenge, many countries and international institutions have developed forecasting models to project growth in future healthcare expenditure.

Despite methodological differences between forecasting approaches, a common set of healthcare spending drivers can be identified. Demographic factors, rising incomes, technological progress, productivity in the healthcare sector compared to the general economy (Baumol’s cost disease) and associated healthcare policies have all been shown to be key determinants of healthcare spending.

JEL Classification:
  • C53: Mathematical and Quantitative Methods / Econometric Modeling / Forecasting and Prediction Methods ; Simulation Methods
  • H51: Public Economics / National Government Expenditures and Related Policies / Government Expenditures and Health
  • I18: Health, Education, and Welfare / Health / Government Policy ; Regulation ; Public Health
  • J11: Labor and Demographic Economics / Demographic Economics / Demographic Trends, Macroeconomic Effects, and Forecasts
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