Thomas Leoni - The impact of ageing, inequality and the evolution of morbidity on future health expenditure

  • Presenting author: Thomas Leoni (University of Applied Sciences Wiener Neustadt)

  • Authors: Thomas Horvath, Thomas Leoni, Peter Reschenhofer, Martin Spielauer

  • Session: A02C - Health [1] - Monday 16:30-18:00 Senate Hall

  • Slides: PDF


Population ageing is associated with increasing healthcare expenditure (HCE). However, there is little evidence on the quantitative effect of different components of ageing and other factors that influence cost dynamics. To guide policy and the adaptation of health systems, a more accurate understanding of these different drivers of HCE is needed.


This study uses dynamic microsimulation modelling to project HCE and disentangle the impact of changes in longevity, population age-structure, healthy life years and socioeconomic health inequalities in Austria. Combining price weights for healthcare services with information on healthcare consumption from the Austrian Health Interview Survey (n=15,771), we calculate average cost profiles by gender, age, and education consistent with aggregate System of Health Accounts. These cost profiles are combined with official population projections in the microsimulation model microDEMS to project different HCE scenarios for the Austrian population up to the year 2060.


Our baseline results show that, under the assumption of constant age-specific mortality rates, the shift in age structure will lead to an increase in healthcare costs of 11.8% in 2060. Accounting for higher life expectancy adds 19.2% to total HCE in 2060. This scenario implicitly assumes an expansion of morbidity. Closing the gap in healthcare costs and in longevity between education groups would result in HCE that are only marginally higher than in the baseline. If, additionally, we assume a compression of morbidity, HCE are 17.5% lower than in the baseline projection for 2060 and 5.8% lower than in 2020.


Demographic ageing will likely increase future health care costs, even after accounting for a marked compression of morbidity over time. Policies that specifically reduce the above-average healthcare costs of the low-skilled can significantly contribute to counteract this dynamic.