The mixed economy of long-term care in England, Germany, Italy, and Spain

This paper is based on a European Commission-funded study of future long-term care expenditure in Germany, Italy, Spain and the United Kingdom. It investigates how sensitive long-term care expenditure is to assumptions about demographic trends, future dependency rates, care arrangements, and real inflation. Macro-simulation projection models for each country reflecting the national characteristics of the care system were used to make comparable projections based on a set of common assumptions. This central case was then used as a point of comparison in order to explore the sensitivity of the models to alternative scenarios about key determinants of future expenditure. The proportion of GDP spent on longterm care is projected to more than double between 2000 and 2050 in each country under the central case. However, projections are highly sensitive to changes in the above assumptions.