Munich Personal RePEc Archive

Healthcare expenditure projections up to 2045

Braendle, Thomas and Colombier, Carsten (2017): Healthcare expenditure projections up to 2045. Published in: Healthcare expenditure and fiscal sustainability: evidence from Switzerland , Vol. 42, No. 3 (2018): pp. 279-301.

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Abstract

These projections show that demographic change will have a significant impact on the dynamism of healthcare expenditure. The effect of an ageing population is most significant in the area of long-term care. For healthcare excluding long-term care, non-demographic cost drivers – such as the Baumol effect and determinants captured indirectly by income elasticity such as advances in medical technology and market failures as a result of asymmetric information – are likewise very significant. As the key player in this area, (acting not just as regulator, but also as a source of financing and service provider), it is the cantons that will have to bear the main burden of rising healthcare expenditure. In addition, the public sector will be more heavily affected by an ageing population than OKP, as the general government sector spends a greater proportion of its funds on long-term care than OKP. The projections provide the following pointers for the orientation of healthcare policy. On the one hand, measures should be promoted that sustainably alleviate the illness burden on the population, particularly in the case of chronic conditions, thereby facilitating healthy ageing. The focus here should be on strengthening healthcare skills and promoting healthy lifestyles by means of adequate preventive measures. On the other hand, existing efficiency reserves need to be better exploited by avoiding unnecessary treatments, incorporating cost-benefit considerations more strongly into the design of the OKP service catalogue (health technology assessment), and ensuring that the increasing productivity of medical services is appropriately reflected in the corresponding prices and tariffs. While the new DRG flat-rate payments per case should contribute to reducing misplaced incentives and strengthening competition in the inpatient area, the obsolete fee-for-service remuneration system in the outpatient area generally contains an oversupply incentive, particularly in the case of technical services. A strengthening of Spitex and the improved compatibility of professional life and family-based care would also help to reduce the length of the average care home stay. Finally, the next two decades will see an increase in demand for healthcare and nursing care staff, which will make forward-looking personnel planning and an improvement of working processes more necessary than ever.

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