Evolution of outpatient healthcare expenditure due to ageing in 2030, a dynamic micro-simulation model for France

Population ageing will be a major challenge in Europe in the coming decades. This phenomenon will raise the question of the sustainability of public spending with increasing healthcare provision costs. This paper presents a dynamic micro-­‐simulation model for outpatient healthcare expenditure in France, which projects healthcare costs in the long run. Like all the dynamic micro-­‐simulation models, the model projects the population structure over time. The projections are run using a transition process between three states: two non-­‐absorbing (good-­‐health or ill-­‐health) and one absorbing state (death). The outpatient healthcare expenditure is estimated on data between 2002 and 2008 through a two-­‐part model. While healthcare spending of 25 years old and more represent 3.9% of GDP in 2008, they would reach 4.6% in the baseline scenario in 2032 (+0.7 percentage point of GDP or +17.5%). A difference in the share of expenditure in GDP appears between scenarios with different evolutions of health status during the projection period. Outpatient healthcare spending represents 4.6% of GDP in the central scenario in 2032, against 4.4 % in the most optimistic scenario and 4.7% in a pessimistic scenario.