Decomposing and analysing the drivers of health expenditure play a crucial role in understanding and navigating the complexities of healthcare systems and their financing in order to make better health expenditures projections for the future. This is especially true in current times of global health challenges and an ageing population, health workforce shortages, changing lifestyles, high inflation rates and wider availability of new treatments and technology. These developments put major challenges on the sustainability of healthcare systems.

Detailed analysis of expenditure based on decomposition of drivers can be used as projection tools for future healthcare costs, enabling governments and organizations to allocate resources efficiently. Decompositions of health expenditures further enhance understanding by breaking down spending patterns into components, like price and volume, sectors or disease groups, which allows policymakers to identify areas for targeted reform, investment, or cost containment.

In this session different models to decompose and project health expenditure in several countries as well as across countries will be presented. The individual presentations complement each other by focusing on (i) health expenditure decompositions by subsectors of the health care system and by illnesses, (ii) testing macro-level health expenditure projections based on decompositions and how explicit modeling of demographic factors can improve predictions, (iii) presenting modeling possibilities of health expenditures and revenues in the case of exceptional data availability, each at a national level, and (iv) an international modeling approach of health care expenditures and government revenues. A common element of all models is the demographic driver, particularly ageing populations. Together we compare how the projections model the effect of ageing on health spending and how the findings differ across countries.The commonalities and differences between the various modeling approaches and results can provide information on current trends in healthcare expenditure. It is important to understand the influence of various driving factors, including technological change, general inflation and health sector specific inflation, aspects of service delivery (in- vs. outpatient treatment) and demographic challenges (ageing).

Current modeling of health expenditure projections and breakdowns is mostly undertaken by national research and health institutions, with the thematic focus primarily based on the respective national policy agenda and country-specific data availability. Recently, international organizations such as the OECD have also presented relevant work that raises the topic to a more global level. The aim of the session is to provide an international forum to discuss current drivers of health expenditures as well as current challenges and best practices in modeling health expenditure decompositions and their projections.