Sustainability of Long-term Care: Puzzling Tasks Ahead for Policy-Makers.

BACKGROUND: The sustainability of long-term care (LTC) is a prominent policy priority in many Western countries. LTC is one of the most pressing fiscal issues for the growing population of elderly people in the European Union (EU) Member States. Country recommendations regarding LTC are prominent under the EU's European Semester. METHODS: This paper examines challenges related to the financial- and organizational sustainability of LTC systems in the EU. We combined a targeted literature review and a descriptive selected country analysis of: (1) public- and private funding; (2) informal care and externalities; and (3) the possible role of technology in increasing productivity. Countries were selected via purposive sampling to establish a cohort of country cases covering the spectrum of differences in LTC systems: public spending, private funding, informal care use, informal care support, and cash benefits. RESULTS: The aging of the population, the increasing gap between availability of informal care and demand for LTC, substantial market failures of private funding for LTC, and fiscal imbalances in some countries, have led to structural reforms and enduring pressures for LTC policy-makers across the EU. Our exploration of national policies illustrates different solutions that attempt to promote fairness while stimulating efficient delivery of services. Important steps must be taken to address the sustainability of LTC. First, countries should look deeper into the possibilities of complementing public- and private funding, as well as at addressing market failures of private funding. Second, informal care externalities with spill-over into neighboring policy areas, the labor force, and formal LTC workers, should be properly addressed. Thirdly, innovations in LTC services should be stimulated to increase productivity through technology and process innovations, and to reduce costs. CONCLUSION: The analysis shows why it is difficult for EU Member State governments to meet all their goals for sustainable LTC, given the demographic- and fiscal circumstances, and the complexities of LTC systems. It also shows the usefulness to learn from policy design and implementation of LTC policy in other countries, within and outside the EU. Researchers can contribute by studying conditions, under which the strategies explored might deliver solutions for policy-makers.

Modeling healthcare expenditures: overview of the literature and evidence from a panel time-series model.

The rapid growth of healthcare expenditures in the past 40 years in many industrial countries has contributed to an improvement in life expectancy and the quality of life, but has also jeopardized the sustainability of public budgets. For the future, it is important to get more insight into the determinants of this growth. Factors, such as aging, income growth and technological development have been discussed extensively. In this review, we want to pay attention to a somewhat neglected factor: the increase in the relative price of healthcare. Owing to the Baumol effect, healthcare tends to become more expensive over time. How does the demand for healthcare react to this price increase?

Pharmaceutical promotion and GP prescription behaviour.

The aim of this paper is to empirically analyse the responses by general practitioners to promotional activities for ethical drugs by pharmaceutical companies. Promotion can be beneficial as a means of providing information, but it can also be harmful in the sense that it lowers price sensitivity of doctors and it merely is a means of maintaining market share, even when cheaper, therapeutically equivalent drugs are available. A model is estimated that includes interactions of promotion expenditures and prices and that explicitly exploits the panel structure of the data, allowing for drug specific effects and dynamic adjustments, or habit persistence. The data used are aggregate monthly GP prescriptions per drug together with monthly outlays on drug promotion for the period 1994-1999 for 11 therapeutic markets, covering more than half of the total prescription drug market in the Netherlands. Identification of price effects is aided by the introduction of the Pharmaceutical Prices Act, which established that Dutch drugs prices became a weighted average of the prices in surrounding countries after June 1996. We conclude that GP drug price sensitivity is small, but adversely affected by promotion. Ltd.