OECD forecasts spending on public health to rise rapidly in decades

OECD forecasts spending on public health to rise rapidly in decades

(oecd.org)

Under reasonable assumptions about improving health conditions of the elderly in ageing societies..."
Paris (ANTARA News/Xinhua-OANA) - Public spending on health and long-term care in the Organization for Economic Co-operation and Development (OECD) countries will rise rapidly over the next 50 years, said the OECD while releasing its new projections.

On average across OECD countries, total health and long-term care expenditure is projected to increase by 3.3 and 7.7 percentage points of GDP between 2010 and 2060 in the cost-containment and the cost-pressure scenarios respectively, the OECD paper said.

The forecasts for the spending in the leading emerging economies like Brazil, Russia, India, Indonesia, China and South Africa are also on rise over the same period, with the rising on average from the current 2.5 percent of GDP to 5.3 percent in the cost-containment scenario and 9.8 percent in the cost-pressure scenario, an increase of 2.8 and 7.3 percentage points of GDP respectively.

The OECD survey indicated that Korea, Chile, Turkey and Mexico are expected to experience above average increases in public health expenditures. By contrast, the Nordic countries, the United States and Britain, display lower than average growth over the next 50 years.

The differences partly reflect differing demographic trends as well as initial levels of income and informal long-term care supply.

The paper also analyzed how technology and ageing populations are driving the cost increases. It said the health care spending will be pushed up mostly by the combined effect of technology, relative prices and exogenous factors, such as institutions and policies, while pressures on long-term care costs will originate mostly from weaker productivity gains than in the economy as a whole.

"Under reasonable assumptions about improving health conditions of the elderly in ageing societies (the so-called `healthy ageing` hypothesis) and the response of health spending to rising incomes, pure demographics and income effects will play only a minor role in the projected increase of public health and long-term care expenditures," the OECD said.
(U.C003)

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