February 3, 2011

Forecasting public health expenditures in the Netherlands

This background document presents the forecasting methodology applied in the Netherlands for the medium-term health expenditure forecast of 2011-2015.

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.


Victoria Shestalova
Paul Besseling

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