Future long-term care expenditure in Germany, Spain, Italy and the United Kingdom

Abstract

This paper reports findings from a European Commission funded study of future long-term care expenditure in Germany, Italy, Spain and the United Kingdom, and presents projections of future long-term care expenditure in the four countries under a number of assumptions about the future. Macro-simulation (or cell-based) models were used to make comparable projections based on a set of common assumptions. A central base-case served as a point of comparison by which to explore the sensitivity of the models to alternative scenarios for the key determinants. The sensitivity of the models to variant assumptions about the future numbers of older people, the prevalence of functional dependency and informal care, patterns of long-term provision, and macroeconomic conditions are examined. It was found that, under the base-case, the proportion of gross domestic product spent on long-term care is projected to more than double between 2000 and 2050 in each country. The projected future demand for long-term care services for older people is sensitive to assumptions about the future number of older people, the prevalence of dependency and the availability of informal care, and projected expenditure is sensitive to assumptions about rises in the real unit-costs of services and the structure of the models. It is important, for planning purposes, to recognise the considerable uncertainty about future levels of long-term care expenditure.