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On 1 February 2004 a CEPS-led consortium with 18 partners, most of which are members of ENEPRI, started the implementation of a three-year research project on the future evolution of health expenditure in the enlarged European Union. This project is financed under the 6th Research Framework Programme.
With the general goal of "Investigating into different key factors driving health care expenditures and in particular their interaction with particular reference to ageing", the Strategic Objectives of AHEAD are:
- An assessment of pressures on health spending in the existing EU and in selected candidate countries, looking both at those arising directly from ageing and at those affected by changing incomes, social change and methods of expenditure control.
- The development of models embedded in EXCEL spreadsheets for projecting future health spending.
- Estimation of confidence limits for these projections.
Expenditure on medical treatment has tended to rise as a proportion of national income throughout the European Union. There has been an element of uplift to the mean as countries with low proportions of spending, such as the United Kingdom, have faced political pressure to spend at least the average EU proportion of their national income on the provision of health services, medical treatment and long-term care. A particular concern is that, with an ageing population and therefore the prospect of more old people around, the pressures for expenditure on health care will increase further. This issue is of concern both in its own terms and because of its fiscal implications. Rising health expenditures put pressure on the targets of the Stability and Growth Pact. They also raise the question whether budgetary targets should be tightened ahead of projected growth in public expenditures, so as to "save up" for future spending and keep expected future tax rates reasonably constant.
This project will refine existing estimates of the links between reported states of health and use of medical services. As well as looking at the effects of ageing on health care the research will take account of the link between health expenditure and fertility rates and the demands on health services made by non-native populations. Particular attention is paid to costs of care near death. A study will be made of factors other than demand (such as methods of financial control) which may influence health spending. An important aspect of this research is that the work is carried out so as to be able to provide not only the familiar projections and scenarios but also standard deviations and confidence limits for predictions of key variables such as healthy life expectancy and demand-driven expenditure levels. These will allow policy-makers to judge not only possible outcomes but also the risks surrounding them and to assess their implications.
Centre for European Policy Studies, CEPS, BE
National Institute for Economic and Social Research, NIESR, UK
Netherlands Bureau for Economic Policy Analysis, CPB NL
Deutsche Institut für Wirtschaftsforschung, DIW, DE
Economic and Social Research Institute, ESRI, IRL
Research Institute of the Finnish Economy, ETLA, SF
Federal Planning Bureau, FPB, BE
Istituto di Studi e Analisi Economica ISAE, IT
Institute for Advanced Studies, IHS, AT
Institute for Public Health, IPH, DK
Laboratoire d'Économie et de Gestion des Organisations de Santé, FR
Personal Social Services Research Unit, PSSRU, UK
Fundación de Estudios de Economía Aplicada
Centre for Social and Economic Research , CASE, PL
Institute for Economic Research , IER- SAS, SK
Institute of Economics at the BulgarianAcademy of Sciences , IE-BAS, BG
Social Research Centre, TARKI, HU
Department of Public Health, University of Tartu, UniTartu, EE
WPI - Health and Morbidity by Age and Socio-economic Circumstances
WPII - Health and Morbidity in some New EU Member states
WPIII - Incidence of Poor Health and Long-term Care
WPIV - Health status transitions
WPV - Healthy Life Expectancy
WPVI - Determinants of aggregate health care expenditure with specific focus on age composition.
WPVII- Health Costs Prior to Death
WPVIII - Development of Scenarios for Health Expenditure in European Union (15) Countries
WPIX - Development of Scenarios for Health Expenditure in some New EU Member States
Mini conference 10 October 2005 - agenda ; Mini conference 10 October 2005
Work package 1: Health and Morbidity by Age and Socio-Economic Characteristics, study performed by Economic and Social Research Institute (ESRI), Ireland
Expenditure on medical treatment has tended to rise as a proportion of national income throughout the European Union. A particular concern is that, with an ageing population, the pressures on health expenditure will increase further. The aim of this particular work package is to describe and model health and morbidity, and the associated use of health services, by age and socio-economic characteristics across the EU. Although many studies find that time to mortality, rather than age, is more important in determining health care costs, owing to the nature of our data we concentrate on the effect of age on both health status and health services utilisation. Using longitudinal micro-data from the European Community Household Panel (ECHP), we estimate multivariate models of health status and health services utilisation for each of the EU-15 member states. This research highlights that while there is a similar pattern of worsening health status and increasing health services utilisation as age increases, much of this variation is removed when we account for differences in socio-economic characteristics (and health status where applicable). This finding concurs with previous research that argues that it is time to mortality rather than ageing per se that plays a large part in determining health care expenditures. A further lesson from this research is that the age-health and age-utilisation relationships may also be affected by the particular cultural and institutional factors of the country concerned, including the gate-keeping role of GPs, the extent of eligibility for free care, etc.
Work package 2: Health Status and Health Care Systems in Central and Eastern European Countries: Bulgaria, Estonia, Poland, Slovakia and Hungary
Work package coordinator: Centre for Social and Economic Research (CASE), Poland
The analysis aims to describe processes of demographic and epidemiological change, as well as health status self-assessment in selected Central and Eastern Europe countries (CEECs), including both the new member states and the candidate countries. The analysis is presented in the context of the use of medical services and the structure of services used. Special attention is given to those demographic and epidemiological changes that have direct impact on the frequency of medical services used and, as such, determine increases in health care costs. The ageing process and health status improvement are the main hypothethical determinants of health care costs and are therefore presented in more detail. Additionally, changes in health behaviour - mainly in the use of medical services - are discussed in the context of institutional changes in the health care sector.
Comparative analysis covers the countries representing groups characterised by similar tendencies and specific health and demographic characteristics. Estonia respresents the Baltic states, Bulgaria, the Balkan countries, and Slovakia represents countries of Central Europe. Poland is a specific country, with demographic and epidemiological characteristics similar to Slovakia, but it is much larger, with a high share of rural population. In Hungary, demographic processes related to the second demographic transition began much earlier and are still dynamic, and as such, constitute a reference for other CEECs.
Not unlike other countries in Europe, Bulgaria has been subject to the steady process of population ageing, partly owing to the well-established downward trend in birth rates over the last several decades. In the past 15 years, this trend has been accompanied by the consequences of rising emigration, which has primarily involved young and active persons. As a result of the continual process of depopulation and an increase in population ageing, Bulgaria has one of the larger shares of older persons in Europe. The worsening demographic situation and health status of the Bulgarian people, exacerbated by the conditions of economic and social crisis during the transition period to a market economy may be the most alarming phenomena in Bulgaria. Although there are differences among the countries from Central and Eastern Europe, most of them also experienced a deterioration of demographic and health indicators in the 1990s. In Bulgaria, the economic crisis gravely damaged access to health care services in particular.
This report presents the health status and morbidity of the population in Bulgaria over the past several decades, emphasising developments in the 1990s, during the country's transition period. Using statistical data it offers an in-depth analysis of the social and economic factors that determine health status as well as the utilisation of health care services in Bulgaria.
The report gives a brief overview of the demographic situation and recent trends in Estonia during the last 10 years. A current picture of the morbidity and health status of the population is presented, wherein the most important mortality and morbidity issues are discussed along with basic data concerning the Estonian health care system, its financing and utilisation patterns. Using household survey data, health status is revealed and described according to age group as well as other socio-economic characteristics.
The report analyses the influence of socio-economic factors on the prevalence of good health and the relations between self-reported health status and use of medical services in Estonia.
Expenditure on medical treatment has tended to rise as a proportion of national income throughout the European Union. A particular concern is that with an ageing population and therefore the prospect of more elderly persons, the pressures on expenditure for health care will increase further. The Ageing, Health Status and Determinants of Health Expenditure (AHEAD) project has aimed at refining existing estimates of the links between ageing, reported states of health and use of medical services. This research report analyses the prevalence of good and poor health and the related use of medical services by individuals in different age groups in Hungary. The report describes morbidity owing to specific diseases (high blood pressure, high cholesterol levels, heart attack, diabetes and anxiety/depression) in Hungary and identifies the social and economic factors behind good or poor health status. It goes on to outline health service utilisation by people in good or bad health and to analyse the influence of age and other factors on health status and service utilisation. The report further studies the use of health care resources by individuals not covered in household surveys.
The analysis relies on data collected by the National Health Interview Survey (NHIS) in 2003. Data weights were devised to allow for an unbiased estimation of population variables. Associations between variables and differences across categories were examined using cross-tabulations and were assessed by Pearson's Chi-square tests. To analyse influence, logistic regression models were built using a stepwise selection method with removal testing based on the likelihood ratio statistic. According to historical data and predictions, the population of Hungary is ageing. Further, age has had a significant impact on the prevalence of selected diseases and self-reported health status. A significantly higher proportion of older persons reported that they were in bad health. Individuals with bad health were more likely to have had contact with health care services and to have had a greater number of visits. With these trends in population ageing, pressures for more expenditure on health care are likely to increase.
The objective of this report is to analyse the prevalence of good and poor health in Poland and the impact of self-assessed health on the use of health care services. Special attention is given to the impact of ageing on health status and the utilisation of health care. In addition, other social and economic factors that underpin health status and drive the utilisation of health care services are described. The analysis differentiates utilisation by type of medical service, including primary care, consultations with specialists and hospital care. The main research question is whether the ageing process is leading to a worsening health status of the population or if living longer means living in better health. The answer to this question implies possible changes in the structure of medical care utilisation and - finally - allows for recognition of the impact of population ageing on the level of health care expenditure.
Over the last 15 years, dramatic changes have been underway in the Slovak Republic in terms of both the health of the population and healthcare provision. This study provides information and key findings on the morbidity, health status and utilisation of healthcare services in the Slovak Republic. In presenting the demographic picture in the country, the report highlights trends in fertility, morbidity and mortality rates. It points to the rising age of the population and stagnating population growth. An overview is also given of the current Slovak healthcare system and its organisation. The key legislative reforms that have driven changes in social benefits are summarised, along with their impact on the delivery of healthcare services.
The main characteristics of the health status of the population are then identified, from the perspectives of self-assessed health and healthcare utilisation, drawing on data from national surveys. Further analyses are undertaken using a logit model, which seeks to identify the factors that influence health status and the use of medical services. Detailed findings are presented by age group, gender, type of economic activity and marital status.
Work package 3: Incidence of Poor Health and Long-Term Care: Health Transitions in Europe - Results from the European Community Household Panel Survey and Institutional Data, study performed by Personal Social Services Research Unit (PSSRU), UK
This is the final report of Work Package 3 of the AHEAD project, undertaken by the Personal Social Services Research Unit (PSSRU) at the University of Kent. This Work Package has aimed at providing estimations, based on the European Community Household Panel (ECHP), of annual probabilities of transition between health states, including two states regarded as absorbing: permanent institutionalisation and mortality. The purpose of this work is to serve as a building block for estimating healthy life expectancy and forecasting the future health expenditure needs of populations. This report breaks new ground in providing comparative information on rates of long-stay entry into permanent health-care institutions for persons aged over 65. Two definitions of health state are used for this purpose: self-assessed health and a chronic, hampering health condition. After an initial assessment of the ECHP, undocumented problems regarding the reporting of mortality and institutionalisation resulted in a change of strategy. This change involved post-stratification to adjust for mortality and obtaining information about rates of institutionalisation from alternative sources on a country-by-country basis for those countries for which information was available. Yet this approach was not practicable for all of the countries participating in the ECHP. Full results are provided for Belgium, the UK, Ireland and Italy; partial results are provided for Germany, Denmark, the Netherlands, Greece, Portugal and Finland. These results consist of the estimated annual probabilities of transition between health states (including mortality) for adults living in private households, and for persons over 65 the estimated annual probabilities of first-time admission from the community as a long-stay resident of a health-care institution. The results are presented in the form of probit equations, which enable estimates to be prepared by age and gender.
Work package 4: Health Status Transitions, study performed by Institute for Advanced Studies (IHS), Vienna
This paper was prepared as Work Package IV of the AHEAD project "Ageing, Health Status and the Determinants of Health Expenditure" which has received financing from the European Commission under the 6th Research Framework Programme. The purpose of this work package was to build up a picture of the movements in health status of the elderly population of each country in the EU by age and sex. Residential care and death were considered as well as states of health. Due to the scarcity of data regarding residential care, however, we calculated transition probabilities between the different states of health only for Belgium, Germany and UK. In addition, we calculated healthy life expectancies for those three countries. The calculations/estimations were derived from various micro- and macro-data sources (e.g. ECHP), and build upon results of WP III. The Stone-algorithm was used as a means of calibration.
Work package 5: Healthy Life Expectancy in the EU Member States, study performed by National Institute of Economic and Social Research, London, U.K.
A shift in emphasis from increasing survival to improving both the length and quality of peoples' lives has led to a greater policy interest in the United Kingdom and in Europe as a whole in summary measures of population health. Since health expectancy is a complex, multi-faceted concept, there are consequently as many types of health expectancies as there are empirical measures of sub-optimal health. Thus, this paper is essentially about the transition of health states and the dynamics of health and addresses two questions. First, what is the probability that an individual will be in the same health state next year, be free of disability, be in worse health, have left for a permanent health care institution or be dead? Secondly, what is the expected time spent in each health state, given that an individual is initially in a specified health category?
Work package 6A: The Influence of Supply and Demand Factors on Aggregate Health Care Expenditure with a Specific Focus on Age Composition, study performed by Deutsches Institut für Wirtschaftsforschung (DIW), Berlin, Germany
Expenditure on medical treatment has tended to increase as a proportion of national income throughout the European Union. Overall there has been a rising trend in the mean as low-spending countries such as the UK have faced political pressure to spend at least the average EU proportion of their national income on the provision of health services, medical treatment and long-term care. A particular concern is that with an ageing population and therefore the prospect of more old people around, the pressures on health care expenditure will increase further.
The aim of this 4th work package (WP4) of the AHEAD project is to explain how demand and supply factors influence aggregate health care expenditure with a specific focus on age composition. Several studies in the past have shown that health care expenditure is not only influenced by demand factors, but also by those on the supply side, particularly technological progress, political decisions and economic framework conditions.
In contrast with other studies (and aside from the focus on age), WP4 emphasises variables describing health care and financing systems. The idea is that the inclusion of these variables affords a better explanation of health care expenditure. This report collects data on demand, supply and utilisation of health care from official statistics and creates additional variables describing the health care and financing systems based on a literature review. In total, 63 variables are included in a basic data set for 28 countries, mostly covering the period 1980-2003. A brief statistical overview shows the development of some of the variables in the countries covered. The expected strong connection between health care expenditure and GDP can be seen in a cross-section analysis for 2003. The relation between health care expenditure and the share of the elderly in the population was also positive, but not as strong as in the case of GDP.
Work package 6B: Demographic Changes and Aggregate Health-Care Expenditure in Europe, study performed by the Institute of Public Health - Health Economics, University of Southern Denmark.
The main purpose of this paper is to investigate the relationship between ageing and the development in the aggregate health care expenditure in EU countries on a macroeconomic level when economic and institutional variables are included. The results of the model will be used to extrapolate the total health care expenditure for the next 10 years.
Work package 7 -1: The Impact of Death-Related Costs on Health-Care Expenditure: A survey, study performed by Istituto di Studi e Analisi Economica (ISAE), Italy
In the economic policy debate it is often stated that population ageing will lead to huge increases in the age-related components of public expenditure - primarily pensions and health care. This paper analyses a factor that may, at least partly, alleviate the fear that increased life expectancy will accelerate the rise in health-care spending: namely the fact that independent of decedent age, the bulk of per capita health-care costs are concentrated in the last years of life (the so-called "death-related" costs). It surveys the empirical literature on health economics, presenting the main results obtained by studies on the interaction among age, proximity to death and health-care expenditure. Based on this analysis, it concludes with certainty that age alone is not a good predictor of rises in health-care spending, and that proximity to death must also be used as a predictor of health-care expenditure.
Work package 7-2: Demographic Factors and Health Expenditure Profiles by Age: The Case of Italy, study performed by Istituto di Studi e Analisi Economica (ISAE), Italy
This paper analyses the health expenditure profile by age and gender of survivors and deceased in four Italian regions. Per capita spending on the deceased constantly diminishes after middle age. The ratio between per capita expenditures on deceased and survivors by age shows a downward trend after about 40 years. Although we chose four regions situated in the North, Centre and South of Italy, we may conclude that there are no significant differences among them with respect to health costs near death, in spite of the wide regional gap and the different Regional Health Service models. Health spending projections for Italy - as well as for other countries - are less pessimistic when account is taken of costs near death. The main result of this study is that both the specific profile of per capita health expenditure for the deceased and the characteristic trend of the deceased/survived ratio, found for Tuscany and for other countries, can be roughly confirmed for Italy.
WPVIII - Development of Scenarios for Health Expenditure in European Union (15) Countries Work package 8 - WORK in PROGRESS!!!
WPIX - Development of Scenarios for Health Expenditure in some New EU Member States -Work package 9 - WORK in PROGRESS!!!