Growth projections for public spending on long-term care

Grossmann, Schuster – July 2017

The increasing demand for formal long-term care (LTC) services comes along with higher financial burden for general government. The article informs about the mid- and long-term developments of LTC-costs and evaluates a cost containment path – agreed between the federal, regional and local levels of government – to limit spending on LTC for the elderly. When breaking down the yearly public LTC cost growth demography and unit costs of in-kind services (resp. wage costs) are the most important contributors. Our calculated individual projection scenarios differ in their assumptions concerning mortality and the rising share of formal LTC as well as the indexation of unit costs. Our results show a boost of general government net spending on LTC to keep rising, from 1.2% of GDP (2016) to GDP ratios ranging from 1.4% to 1.7% (by 2030) or from 1.9% to as much as 3.4% (by 2060). Capping the increase in gross spending at the regional and local government level in the years 2017 to 2021 a cost containment path was agreed between the federal, regional and local levels of government for spending on LTC for the elderly. However, the projected cost paths would exceed the cost containment targets by amounts up to EUR 0.6 bn by 2021. With a view to sustaining budget funding for health care, long-term care and social care in Austria the earmarked subsidies from the LTC fund and supplemental annual funding for regional and local government budgets for inflation by EUR 300 million were agreed at the same time. Nevertheless, the funding share for LTC of the regional and local governments will rise.

Publikationsjahr: 2017
Haupt-Download: Growth projections for public spending on long-term care exceed agreed cost containment targets