Health financing and population ageing: evidence on the links between financial sustainability and financial hardship from the PASH simulator

Background Countries around the world worry about the financial sustainability of their health systems as populations age; however, few have considered the consequences of future gaps in health financing on the risk of financial hardship due to out-of-pocket payments. If countries are unable to raise sufficient revenues to meet health needs, people will pay more out-of-pocket to use health services and risk experiencing catastrophic or impoverishing health spending. Objective We aim to simulate the effect of health financing gaps due to changes in the population age-mix on the risk of financial hardship from out-of-pocket payments and to identify relevant policy mechanisms. Methods Using the Population Ageing financial Sustainability gap for Health systems (PASH) simulator and the WHO Europe approach to measure catastrophic and impoverishing out-of-pocket expenditure, we simulate the effects of ageing-related health financing gaps on financial hardship in Bulgaria, Italy, Slovakia, Slovenia, and Spain through 2060. Results Our results indicate that all five countries will face significant health financing gaps due to population ageing. These gaps are expected to lead to increased out-of-pocket spending, resulting in higher incidences of catastrophic and impoverishing health expenditures to varying extents depending largely on each country’s current approach to revenue raising and co-payment policies. Conclusion We argue that countries should adopt diverse and sustainable health financing mechanisms and implement strong coverage policies to protect households from financial hardship as their populations age. This study underscores the importance of addressing health system financial sustainability to ensure progress towards universal health coverage.