WHU
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03/01/2023

How will health care expenditures develop?

New study forecasts sharp rise in drug spending

Due to the aging population and medical innovations, healthcare spending is rising steadily. It is therefore important for policy makers to assess how healthcare spending will develop in the short and medium term. In a new study recently published in the journal PharmacoEconomics, Valeska Hofbauer-Milan, Prof. Dr. Stefan Fetzer (both HS Aalen) and Professsor Christian Hagist, Chair of Economic and Social Policy at WHU – Otto Beisheim School of Management, present a new framework for predicting pharmaceutical expenditures in the German statutory health insurance system. Using risk classes derived from an extensive data set, they simulate different development paths depending on mortality using a Markov model. Germany will have to prepare for a sharp increase in pharmaceutical spending if current trends continue.

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