Forecasting National Health Expenditures

AbstractLong-run health forecasts over 10, 20, or 50 years are conditional, taking expected trends in the economy and population as given. They are commonly formulated as cumulative annualized growth rates (that is, GDP + X%). Projections for various countries, regions and time spans are discussed. Short-term actuarial “nearcasts” for specific groups over the next two or three years are quite different since they use rafts of current and local information and are typically stated in nominal currency amounts. Inclusion of many variables improves short-term forecast accuracy, yet univariate GDP + X% trend estimation has proven more accurate for national growth trends over decades. Forecasting COVID-19 effects illustrates budgetary dynamics and institutional inertia discussed in prior chapters.