Forecasting public health expenditures in the Netherlands

The model distinguishes several sub-sectors within healthcare, and decomposes health expenditure growth into four determinants, namely: demographic, epidemiologic and budgetary factors, and the residual. This decomposition provides insight into health expenditure allocation as well as its drivers. The model offers a tool for the analysis of potential budgetary implications of government policies. In particular, in the current application, we make forecasts under two alternative scenarios for policy intervention: no intervention and an increase in compulsory copayments. Important advantages of the proposed model are its limited data needs, transparency and practicality.