Observatory presents new research on health financing and population ageing at a side event to the G20 Health Ministers Meeting

WHO

At a side event of the G20 Health Ministers Meeting, Director of the European Observatory, Josep Figueras, tells participants that population ageing will not necessarily lead to large increases in health expenditure growth.

During a side event to the G20 Health Ministers Meeting, Josep Figueras, Director of the European Observatory, presented new research exploring the economic implications of population ageing, and how countries are responding and can learn from each other. The new study, produced by the Observatory in collaboration with the WHO Centre for Health Development (Kobe), seeks to address concerns of policy-makers that population ageing will lead to inexorable growth in health care spending.

Population ageing, a global phenomenon

One-third of the population of Japan is 60 years old or older. It is therefore of little surprise that population ageing was one of the major themes of the recent G20 Health Ministers Meeting held in Okayama, Japan from 19–20 October 2019. The issue is relevant not only for high-income countries; life expectancy is also increasing in many low- and middle-income countries due to successes in communicable disease control and reductions in premature mortality. In their post-meeting Declaration, health ministers recognized population ageing as “a global phenomenon with social and economic implications for progress towards achieving the 2030 Agenda for Sustainable Development”.

How ageing affects our society and economy is a choice

At first glance, data on health system spending in the EU would appear to justify this concern; people in older age groups do, on average, have substantially higher health care expenses than those in younger age groups. However, the new research shows that this does not necessarily mean that population ageing will lead to large increases in health expenditure growth. In fact, projections to 2060 for the total EU population suggest that population ageing plays only a minor role in driving health expenditure growth.

The greatest drivers of health care spending will be policy decisions on how health services are delivered, the prices paid (or negotiated) for services, medicines and technologies, and volumes of care. Research authors conclude that policy options implemented to target these factors can help to limit future growth in health expenditure in the context of population ageing. “This research highlights that the way population ageing affects our economies, our public sectors, and our society is a choice,” says Dr Jon Cylus of the European Observatory and one of the authors of the study. “There are many policy options at our disposal to ensure that, as the population ages, health and long-term care systems are adequately financed and that health costs do not grow out of control.”

Sustainability of health expenditure determined by policies

The Health Ministers’ Declaration includes a commitment to work across sectors “to create age-friendly environments, and sustainable health and long-term care”. The side event emphasized how keeping older people healthy is both a social good and an economic good – reducing care costs and ensuring that older people remain active and productive for longer. In all countries, policy decisions made by health ministries and other ministries will ultimately determine the sustainability of health expenditure and it is important that those decisions are evidence-informed.

The headline on this article was amended on 15 November 2019 because an earlier version incorrectly referred to the G20 Health Ministers Meeting when it was in fact a side event to the G20 Health Ministers Meeting.