There have been dire predictions that population ageing will result in skyrocketing health costs. However, numerous studies have shown that the effect of population ageing on health expenditure is likely to be small and manageable.
Pessimism about population ageing is popular in policy debates because it fits with ideological positions that favour growth in the private sector and seek to contain health expenditure in the public sector. It might also distract attention from the need to evaluate the appropriateness and effectiveness of current patterns of care.
Pessimistic scenarios have stifled debate and limited the number of policy options considered. Policy making in Australia would be improved if we took a more realistic view of the effect of population ageing on health expenditure.
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