More than just population ageing : an evaluation using dynamic microsimulation of the escalation of Australian government expenditure on health over the next 40 years

Abstract

Health of the ageing population has the potential to place fiscal pressure on future Australian governments. The aim of this research was to build a dynamic microsimulation model of the Australian health system to evaluate the impact of an ageing population on government health expenditure, as well as consider the moderating effects of the population's health status and health behaviour profiles. As a modelling platform, the Australian Population and Policy Simulator (APPSIM) was used to provide the basefile and inform general socio-economic parameter inputs across time. This allowed the consideration of health from a wider socioeconomic perspective including factors such as education, income and labour force status. Further, the module was developed to consider health risk behaviours, as well as general health status and their resultant impacts on health service usage and expenditure. Generalised linear models were used for both the baseline imputation and the transitioning through time of the individual’s health characteristics. Development of equations to inform the transition of an individual’s health status and obesity status used both socio-economic explanatory variables and lagged dependant variables, due to the strong persistence of health characteristics. Validation to look at the quality of the health module has included comparative analysis with external data. Both cross-sectional and longitudinal comparisons have been used in the validation. To demonstrate the capacity of the health module and its ability to evaluate possible policy levers, scenarios around shifts in population levels primarily of obesity and secondarily of physical activity have been completed. In comparison with the baseline simulations, which project an ageing population and allows the probability equations of the model to operate as is, scenarios that increase obesity have substantial effect on the population health profile and associated health expenditure. Also, there are substantial gains to be made with respect to the population health profile with decreases in the prevalence of inadequate physical activity. Under the assumptions of this modelling, change in physical activity offered more potential to improve health due to it acting on health both directly but also on health through obesity, than only changing obesity levels within the population. The health module that has been developed offers a framework from which relevant policy levers can be examined. It also provides a starting point for the development of more sophisticated relationships associated with the health system within a dynamic microsimulation model.

Date of Award	2011
Original language	English
Supervisor	Laurie Brown (Supervisor), Alan Duncan (Supervisor), Ann Harding (Supervisor) & Anthony King (Supervisor)