The Impact of Ageing on the Fiscal Sustainability of EU Health Care Systems

This Economic Brief analyses the effects of population ageing on public expenditure on health care in the EU. Health care expenditure projections show ageing will put upward pressure on public finances in the EU. The 2024 Ageing Report projects an increase in public spending on health care in the EU that may range from 4% to 20% by 2070. More critically, one third of the increase will occur already in the next ten years. In parallel, ageing will reduce the financial contribution base for sustaining of and investing in EU health systems. Other factors such as technological progress, AI and climate change will also have an impact on expenditure. Structural reforms accompanied by well-targeted investments need to be deployed in a timely manner to alleviate the effects of ageing on health care systems. The academic literature and recent EU experiences both suggest structural reforms with the largest potential to do so include improving budgeting governance, rebalancing towards primary care and prevention, integrating care (including with long-term care), improving hospital efficiency, benchmarking performance, cost-effective purchasing and workforce planning. Such reforms are supported at EU level, notably through the European Semester, and by EU funding, including the Recovery and Resilience Facility as well as structural funds and other EU instruments.