Analysis: Projecting OECD health and long-term care expenditures – What are the main drivers?

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Public spending on health and long-term care in OECD countries will double by 2050, according to projections are from a new OECD report entitled Projecting OECD health and long-term care expenditures: What are the main drivers? 

The report finds that, if present trends continue, public health spending will reach an average level equivalent to nearly 13% of GDP compared with 6.7% today. Even if governments manage to contain rising costs, spending would still amount to the equivalent of around 10% of GDP by the middle of the century. 

The report, published in February 2006, looks at the main factors driving up healthcare spending over the long-term. It finds that apart from the upward pressure on costs due to the demands of older and wealthier populations, government spending on health is growing at a rate of one percentage point faster than OECD countries’ overall incomes. Advances in medical technology and rapid expansion of health services are the main causes. Even where new technology brings down the cost of a treatment, public spending may rise as demand for the treatment increases. 

It is these factors, which are not specifically related to ageing populations, that will put the most pressure on health spending over the long term, the paper suggests. 

To read the full report, click here. To read the OECD press release: EnglishFrench.