This presentation was made by Chris James, OECD Secretariat, at the 6th Meeting of the Joint OECD DELSA-GOV Network on Fiscal Sustainability of Health Systems, held at the OECD Conference Centre, Paris, on 18-19 September 2017

1. AGEING: FISCAL IMPLICATIONS
AND POLICY RESPONSES
Chris James, OECD Health Division
6th meeting of OECD Joint Network on Fiscal Sustainability of
Health Systems, September 18-19, 2017

2. • Population aged over 65 years
– 17% in 2015, 27% in 2050
• Population aged over 80 years
– 4% in 2015, 10% in 2050
• ‘Working age’ to ‘elderly’ ratio
– 4.2 in 2012, 2.1 in 2050
Populations in OECD countries are
ageing rapidly

3. This will increase the risk of certain
types of costly illnesses (e.g. dementia)
Estimated prevalence of dementia, 2017 and 2037
Source: OECD Health at a Glance 2017 (forthcoming)

4. It could also increase health spending
Health expenditure profiles per capita, country average per capita = 1
Source: Eurostat (2016), HEDIC – Health expenditures by diseases and conditions. Eurostat Statistical Working Papers.

5. Ageing does not automatically mean
worse health and higher costs

6. Age cost curves and healthy ageing (OECD 2013)

7. • Ageing and death-related costs
• New technologies
• Rising incomes
• Low productivity (Baumol’s cost disease)?
• Different drivers for different types of HC
– Long-term care, Pharmaceuticals
Key drivers of health spending

8. What about ageing and revenues for
health?
84
42
84
36 39
81 80
67
13
72
45
5
30
11
30
18
24
41
42
46 43
10
62
1
25
66
6
59 20
39 28
10
3
35
11 1
2 2 5
3
2 10
6
15
5 5
7
6
5
34
14 14 16 13
18 19 16
20
24
17
21
14
24 25
33 36
43
16
0
20
40
60
80
100
Transfers from government domestic revenues Social insurance contributions
Compulsory prepayment Voluntary prepayment
Other domestic revenues
%
Health financing resources by type of revenue, 2015 (or nearest year)
Source: Health at a Glance 2017.

9. • Extent of healthy ageing will determine how
much ageing increases health expenditure
• Ageing may increase spending on long-term
care more than it does for other types of
healthcare
• Ageing will affect certain sources of financing –
diversifying revenue base for health is crucial
Concluding comments

10. Contact: chris.james@oecd.org
Read more about our work Follow us on Twitter: @OECD_Social
Website: www.oecd.org/health
Newsletter: http://www.oecd.org/health/update
Thank you

11. EXTRA SLIDES

12. (Data Source) MHLW, Japan – from Kwon 2017 presentation
Expenditure and revenues by age, Japan (2010)

13. Health spending growth today and in the future
Growth of GDP, health and LTC (health) spending per
capita, OECD average, 2005-2015
Source: OECD Health Statistics 2017
-6
-4
-2
0
2
4
6
8
GDP Health LTC (health)Growth rate in real terms (%)
Government health spending as % of GDP
without effective cost containment
Based on: OECD De La Maisonneuve & Oliveira Martins, 2013

14. LTC spending grown faster than other
health spending
2.0
4.0
6.0
2.3
4.6
2.2
1.3
2.3
3.2
-0.5
-0.2 -0.1
-2
-1
0
1
2
3
4
5
6
7
Inpatient care Outpatient care Long-term care Pharmaceuticals Prevention Administration
2003-2009 2009-2015
Annual growth rate in real terms (%)
Growth of per capita health spending for selected services, OECD average, 2003-2015
Source: Health at a Glance 2017.

15. Spending on total LTC (health + social)
varies widely across countries
Public LTC spending in relation to GDP, 2015 (or nearest year)
Source: Health at a Glance 2017.
3.7
3.2
2.5 2.5
2.3 2.2
2.0
1.8 1.7 1.7 1.7
1.5 1.4 1.3 1.3 1.3 1.2 1.2
0.9 0.8 0.8 0.7
0.5 0.5 0.4 0.4 0.4 0.2 0.2
0
1
2
3
4
Long-term care (health) Long-term care (social)% GDP