MEDPRO - Medical Progress, Health Expenditure and Population Ageing

Background: The nexus of population ageing, health expenditure and medical progress attracts great political and academic interest. While empirical work reveals the mutual dependence of the three phenomena, little is yet known about

• the nature of the dynamic interrelationship;
• the incentives for individuals, medical providers and innovators, whose decisions drive the process; and
• the way in which these incentives and the resulting outcomes are affected by policy-making.

Objectives:

• To study how the individual valuation of health and demand for health care varies with medical technology and health care policy
• To assess the determinants of the private and social value of medical technology
• To understand the joint dynamics of medical progress, population ageing and health care expenditure based on a realistic economic and demographic modeling
• To assess the efficiency and sustainability of health care policies in the light of medical and population change

ROLE OF MEDICAL PROGRESS

• Status quo: Medical progress and ageing cause health expenditure, but…
• …effectiveness of health care (expenditure) depends on technology
• …development of technology depends on market size/structure and, thus, on health expenditure levels and age structure.