Immigration, Demography and Evolution of European Health Care Systems

Immigration, demography and evolution of European health care systems

Reinhard Busse, Prof. Dr. med. MPH FFPH Dept. Health Care Management, University of Technology, Berlin (WHO Collaborating Centre for Health Systems Research and Management) & European Observatory on Health Systems and Policies

Third-party Payer

C. Expenditure D. Mobilizing implications necessary resources

B. Securing access and provision http://mig.tu-berlin.dePopulation Providers

A. „Double ageing“: changing needs

Prof. Dr. Reinhard Busse -2- Venice, 17.11.2006

1 A. „Double ageing“: Challenges for the future of the changing needs European health care systems • Continuous increase in life expectancy „double • Fertility rates below the natural ageing“ population replacement rate • Retirement of baby-boom generation AND • Net immigration rate will not offset these problems

Prof. Dr. Reinhard Busse -3- Venice, 17.11.2006

http://mig.tu-berlin.de

Prof. Dr. Reinhard Busse -4- Venice, 17.11.2006

2 A. „Double ageing“: changing needs Health challenges and successes Cancer incidence per 100000 900

Aus tria Incidence800 increasing … Belgium Cyprus Czech Republic Denmark 700 Estonia Finland France Germany 600 Greece x Hungary Ireland Italy 500 Latvia Lithuania Luxembourg Malta 400 Netherlands Norway Poland Portugal Slovakia 300 Slovenia Spain Sweden United Kingdom 200 EU + 15%/ decade

100 WHO Euro: 1986 1996 2006 2016 HFA 2006

SDR, Neoplasms, per 100000 300 … treatment more successfull … Aus tri a Belgium Cyprus Czech Republic Denmark 250 Estonia Finland France Germany Hungary Ireland Italy Latvia 200 Lithuania Luxembourg Ma l ta Netherlands Norway x Poland Portugal Slovakia Slovenia http://mig.tu-berlin.de150 Spain Sweden Switzerland United Kingdom - 8%/ decade EU

100 WHO Euro: 1986 1991 1996 2001 2006 2011 2016 HFA 2006

3 Cancer prevalence, in % 5

… prevalence increasing Aus tri a Belgium Cyprus 4 Czech Republic Denmark Estonia Finland France Germany Greece 3 Hungary Ireland Italy Latvia Lithuania Luxembourg Ma l ta 2 Netherlands Norway Poland Portugal Slovakia Slovenia 1 Spain Sweden United Kingdom up to + 50%/ decade EU

0 WHO Euro: 1986 1996 2006 2016 HFA 2006

Life expectancy at birth, in years, male 83

Life expectancy is visibly rising … Aus tri a Belgium x Cyprus 78 Czech Republic Denmark Estonia Finland France Germany 73 Greece Hungary Ireland Italy Latvia Lithuania Luxembourg 68 Ma l ta Netherlands Poland Portugal Slovakia http://mig.tu-berlin.deSlovenia Spain 63 Sweden United Kingdom EU + 2.6 years/ decade

58 WHO Euro: 1986 1996 2006 2016 HFA 2006

4 Life expectancy at birth, in years, female 90

Aus tri a For men more than for women … Belgium Cyprus Czech Republic 85 Denmark Estonia x Finland France Germany Greece Hungary Ireland Italy 80 Latvia Lithuania Luxembourg Ma l ta Netherlands Poland Portugal Slovakia 75 Slovenia Spain Sweden United Kingdom EU + 1.8 years/ decade

70 WHO Euro: 1986 1996 2006 2016 HFA 2006

Life expectancy at age 65, in years, male 21

Almost20 2/3 of the gain occur in the elderly … Aus tri a Bulgaria Czech Republic Denmark 19 + 1.4 years/ decade Estonia Finland France 18 x Germany Greece Hungary 17 Ireland Italy Latvia Lithuania 16 Luxembourg Ma l ta Netherlands 15 Norway Poland Portugal 14 Romania Slovakia http://mig.tu-berlin.deSlovenia Spain 13 Sweden Switzerland United Kingdom 12 EU

11 WHO Euro: 1986 1996 2006 2016 HFA 2006

5 Life expectancy at age 65, in years, female 24

23 Aus tri a + 1.0 years/ decade Bulgaria Czech Republic Denmark 22 Estonia Finland x France 21 Germany Greece Hungary 20 Ireland Italy Latvia Lithuania 19 Luxembourg Ma l ta Netherlands 18 Norway Poland Portugal 17 Romania Slovakia Slovenia Spain 16 Sweden Switzerland United Kingdom 15 EU

14 WHO Euro: 1986 1996 2006 2016 HFA 2006

Longevity and health status scenarios

• Expansion of morbidity (Grunenberg, 1977) - Share of life spent in bad health increases as life expectency increases.

• Compression of morbidity (Fries, 1980) - Share of life spent in bad health decreases as life expectency increases.

• Dynamic equilibrium (Manton, 1982) http://mig.tu-berlin.de- Longevity gains are translated one-to-one into years in good health (Healthy ageing). Observed in many OECD countries.

Prof. Dr. Reinhard Busse -12- Venice, 17.11.2006

6 Longevity and health status scenarios

Source : DG ECFIN 2006

Prof. Dr. Reinhard Busse -13- Venice, 17.11.2006

Balancing factors (Michel and Robine 2004)

• Increase in survival rates of sick persons and emergence of very old and frail people. Expansion in morbidity

• Control of the progression of chronic diseases. Equilibrium between the fall in mortality and the increase in disability http://mig.tu-berlin.de• Improvement in health status and health behaviour of the old people. Compression of morbidity

Prof. Dr. Reinhard Busse -14- Venice, 17.11.2006

7 A. „Double ageing“: Projected changes in the age changing needs structure of the EU-25 population

Old-age Old-age dependency dependency ratio = 1:2 ratio = 1:4

Source: EPC and European Commission (2005a)

Prof. Dr. Reinhard Busse -15- Venice, 17.11.2006

A. „Double ageing“: changing needs Appropriate health care services

• Health care services are required to be rebalanced within an ageing population:

- more geriatrics, less pediatrics - out-reach possibilities - home health technologies http://mig.tu-berlin.de-…

Prof. Dr. Reinhard Busse -16- Venice, 17.11.2006

8 B. Securing access and provision

Prof. Dr. Reinhard Busse -17- Venice, 17.11.2006

B. Securing access and provision

France

World Health Report 2006 http://mig.tu-berlin.de

Prof. Dr. Reinhard Busse -18- Venice, 17.11.2006

9 B. Securing access and provision

Prof. Dr. Reinhard Busse -19- Venice, 17.11.2006

Medical workforce migration: not a solution but yet another problem!

receiving

sending http://mig.tu-berlin.desending

Prof. Dr. Reinhard Busse 2002: -20- Venice, 17.11.2006

10 Prof. Dr. Reinhard Busse -21- Venice, 17.11.2006

C. Expenditure implications Drivers of health care expenditure

• Demographic factors

• Non-demographic facors - Economic growth / GDP growth rate - Health care ressources (human and capital input) - New technology and medical progress (link between supply and demand) http://mig.tu-berlin.de- Health care system design (especially Bismarck vs. Beveridge)

Prof. Dr. Reinhard Busse -22- Venice, 17.11.2006

11 C. Expenditure implications Public health care expenditures by age group

Expenditure per capita in each age group divided by GDP per capita.

Source : OECD. Projection OECD Health and long-term care expenditures: What are the main drivers? OECD Economics Department Working Paper, 2006 (ENPRI- AGIR and Secretariat calculations).

Prof. Dr. Reinhard Busse -23- Venice, 17.11.2006

Methods to assess the „ageing effect“

• Standard projection method – Assumption: Age profile of expenditures will remain unchanged over time – Health expenditures per capita in the future = Projected fraction of the population in different age groups * Historical expenditures per capita in these age groups • Econometric approach – Regression models with age as independent variable http://mig.tu-berlin.de• Death-cost corrected projection method – Assumption: health care expenditures grow with age because older people are more closer to death and – this – rather than calender age (distance from birth) – greatly determines expenditure

Prof. Dr. Reinhard Busse -24- Venice, 17.11.2006

12 Average Sur- Persons in their Persons in their Persons in their rd nd vivors 3 last year of life 2 last year of life last year ofs life on rs days days days ratio to days ratio to dayspe ratio to ng survivors survivors dyi survivors m fro -24 y. 0.8 0.8 9.3 11.6 11.2 14.0ng 24.2 29.2 vi rvi su 25-34 y. 1.0 0.9 13.4 14.9 12.0 r 13.3 28.6 30.8 fo n io at 35-44 y. 1.3 1.1 13.7 12.5 iz22.5 20.5 34.7 31.0 til / u re 45-54 y. 2.2 1.9 11.0 5.8itu 15.5 8.2 39.2 21.1 nd pe 55-64 y. 2.8 2.3 6.9 ex 3.0 12.4 5.4 40.6 17.6 g in gl 65-74 y. 4.2 3.0 a9.0n 3.0 12.4 4.1 36.4 12.0 nt ise 75-84 y. 6.7 4.8 D 8.5 1.8 11.4 2.4 31.8 6.6

85+ y. 7.6 5.4 5.1 0.9 6.3 1.2 23.2 4.3

Source: Busse et al. (2002) Use of acute hospital beds does not increase as the population ages – results from a 7-year cohort study in Germany. J Epidemiol Community Health 56(4): 289-293

Average Sur- Persons in their Persons in their Persons in their vivors 3rd last year of life 2nd last year of life last year of life

days days days ratio to days ratio to days ratio to survivors survivors survivors

-24 y. 0.8 0.8 9.3 11.6 11.2 14.0 24.2 29.2

25-34 y. 1.0 0.9 13.4 14.9 12.0 13.3 28.6 30.8

35-44 y. 1.3 1.1 13.7 12.5 22.5 20.5 34.7 31.0

45-54 y. 2.2 1.9 11.0 5.8 15.5 8.2 39.2 21.1

55-64 y. 2.8 2.3 6.9 3.0 12.4 5.4 40.6 17.6 http://mig.tu-berlin.de65-74 y. 4.2 3.0 9.0 3.0 12.4 4.1 36.4 12.0 75-84 y. 6.7 4.8 8.5 1.8 11.4 2.4 31.8 6.6

85+ y. 7.6 5.4 5.1 0.9 6.3 1.2 23.2 4.3

Source: Busse et al. (2002) Use of acute hospital beds does not increase as the population ages – results from a 7-year cohort study in Germany. J Epidemiol Community Health 56(4): 289-293

13 C. Expenditure implications Ratio between expenditure per decedent vs. survivors - Males, by age cohort 140

BE 120 CZ DK ES 100 IT NL 80 AT PL EU average 60

4 4 9 4 9 9 -9 1 69 84 0- 5 -29 -54 -79 -94 5-1 5 0-34 0-4 5-49 0 5-5 5- 0-74 5 0- 5-89 0 5-9 100+ 10- 1 20-24 2 3 35-39 4 4 5 5 60-64 6 7 7 8 8 9 9 Source: National sources with ECFIN calculations

Prof. Dr. Reinhard Busse -27- Venice, 17.11.2006

C. Expenditure implications Ratio between expenditure per decedent vs. survivors - Females, by age cohort 180 BE 160 CZ DK 140 ES IT 120 NL AT PL 100 EU average

40 http://mig.tu-berlin.de20

4 9 9 9 4 4 4 -4 -9 2 3 4 7 8 9 0 5 ------0-2 5 5 5 5-59 0 0 0 100+ 10-14 15-19 2 2 30-34 3 40-44 4 50-54 5 60-64 65-69 7 75-79 8 85-89 9 95-99 Source: National sources with ECFIN calculations

Prof. Dr. Reinhard Busse -28- Venice, 17.11.2006

14 Breakdown of the health care cost curve Expenditure per capita in each age group

Source : OECD. Projection OECD Health and long-term care expenditures: What are the main drivers? OECD Economics Department Working Paper, 2006 (ENPRI-AGIR and Secretariat calculations). Prof. Dr. Reinhard Busse -29- Venice, 17.11.2006

Of course, total health care consumption increases with age at death but not per year of life lived ...

Person dying at the age of … 20 30 40 50 60 70 80 90 Hospital days 10.1 20.2 30.0 42.4 62.2 86.2 120.9 166.4 before last (18%) (27%) (30%) (39%) (51%) (60%) (70%) (83%) three years + days in 3rd 9.3 13.4 13.7 11.0 6.9 9.0 8.5 5.1 last year (17%) (18%) (14%) (10%) (6%) (6%) (5%) (3%) + days in 2nd 11.2 12.0 22.5 15.5 12.4 12.4 11.4 6.3 last year (20%) (16%) (22%) (14%) (10%) (9%) (7%) (3%) + days in last 24.2 28.6 34.7 39.2 40.6 36.4 31.8 23.2 http://mig.tu-berlin.deyear (44%) (39%) (34%) (36%) (33%) (25%) (18%) (12%) SUM (=100%) 54.8 74.2 100.9 108.1 122.1 144.0 172.6 201.0 Average 2.7 2.5 2.5 2.2 2.0 2.1 2.2 2.2 number of days per year of life

Source: Busse et al. (2002)

15 C. Expenditure implications Changes in age-related spending between 2004 and 2050 (EU-15) Age-related spending as a % of GDP

Long-term care: 0.9% »1.6%

Health: 6.4% » 8.0%

Source : DG ECFIN 2006

Prof. Dr. Reinhard Busse -31- Venice, 17.11.2006

C. Expenditure implications The uncertainty in the calculations of the impact of ageing

Demographers and economists differ about the „right“ methodology of demographic and budgetary projection.

Ageing has an impact on health care expenditures, but the predicted extent depends on the chosen methodology. http://mig.tu-berlin.deThere are other, non-demographic factors, which are possibly more relevant (but are also influenced by age).

Prof. Dr. Reinhard Busse -32- Venice, 17.11.2006

16 Economic growth

• Many studies with weak designs since 1960s - usual result: health care = luxury good (income elasticity of health care spending > 1)

• Few studies with longitudinal design (e.g. Murillo et al. 1993; Barros 1998; Kanavos & Yfantopoulos 1999) – result are mixed, but a positive correlation seems to exist

Prof. Dr. Reinhard Busse -33- Venice, 17.11.2006

Health care ressources and medical progress

• No clear correlation between health care structures (beds, physicians) or processes (length of stay) and health care expenditure

• “Medical progress“ is usually made responsible for majority of increase; it is, however, ill- defined and encompasses a wide range from http://mig.tu-berlin.denew technologies/ therapies via new indications for existing technologies to changing preferences

Prof. Dr. Reinhard Busse -34- Venice, 17.11.2006

17 The design of the health care system

Definetly: probably the single variable with the greatest explanatory power for the level of expenditure.

In the WHR 2000, the per-capita expenditure of the EU-15´s Bismarckian systems rank 3, 4, 5, 6, 9 and 15 in the world while the other ones are at number 7, 8, 11, 18, 24, 25, 26, 28 and 30.

But: the design does not seem to influence the rate of growth!

Prof. Dr. Reinhard Busse -35- Venice, 17.11.2006

D. Mobilizing necessary Who pays how much? resources

Average expenditure http://mig.tu-berlin.de

Prof. Dr. Reinhard Busse -36- Venice, 17.11.2006 contributors non-contributors

18 D. Mobilizing Projected working-age population necessary resources and total employment, EU-25

Source: DG ECFIN

Prof. Dr. Reinhard Busse -37- Venice, 17.11.2006

D. Mobilizing Projected employment rates and necessary resources Lisbon targets in the EU-25 http://mig.tu-berlin.de

Prof. Dr. Reinhard Busse -38- Venice, 17.11.2006

19 „Ageing is not a tsunami that will overwhelm public finances when the baby-boom generation starts to retire. It is a slow-moving, largely predictable process that is therefore manageable, provided policymakers act in an efficient and timely manner.“ Carone and Costello 2006

Prof. Dr. Reinhard Busse -39- Venice, 17.11.2006

This presentation and more material can be found on the following website: http://mig.tu-berlin.dehttp://mig.tu-berlin.de

Prof. Dr. Reinhard Busse -40- Venice, 17.11.2006