The Drivers of Public Expenditure on Health and Long-Term Care: An Integrated Approach

44 Pages Posted: 20 Jul 2006

See all articles by Joaquim Oliveira Martins

Joaquim Oliveira Martins

CEPII, Paris; University Paris-Dauphine - PSL

Christine de la Maisonneuve

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

Date Written: December 2006

Abstract

This paper proposes a framework for projecting public health and long-term care expenditures. It considers demographic and other (non-demographic) drivers of expenditures. The paper extends demographic drivers by incorporating death-related costs and the health status of the population. Concerning health care, the projections incorporate income and the effects of technology cum relative prices. For long-term care, the effects of increased labour participation, reduction of informal care and Baumol's cost disease are taken into account. Using this integrated approach, public health and long-term care expenditures are projected for all OECD countries. Alternative scenarios are simulated, together with sensitivity analysis. Depending on the scenarios, total public OECD health and long-term care spending is projected to increase 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, The Drivers of Public Expenditure on Health and Long-Term Care: An Integrated Approach (December 2006). Available at SSRN: https://ssrn.com/abstract=917782 or http://dx.doi.org/10.2139/ssrn.917782

Joaquim Oliveira Martins (Contact Author)

CEPII, Paris ( email )

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HOME PAGE: http://www.cepii.fr

University Paris-Dauphine - PSL ( email )

PARIS
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

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