Dynamic microsimulation of health care demand, health care finance and the economic impact of health behaviours: Survey and review

ABSTRACT: This paper reviews the issues to be faced in attempting to create a microsimulation of health care demand, health care finance and the economic impact of health behaviour. These issues identified via an in-depth review of seven dynamic microsimulation models, selected from an initial set of 27 models in order to highlight the main differences in approaches and modelling options currently adopted. After presenting a brief description of each of the seven selected models, the main modelling approaches are summarized and critically appraised using five main distinguishing criteria. These criteria are the use of alignment techniques, model complexity (as reflected in the range of variables used), theoretical foundations, type of starting population, and the extent and detail of financial issues covered. Building upon this appraisal, the paper goes on to show how the ‘12 SAGE lessons ’ apply in the field of health care microsimulation. The trade-off between complexity and predictive power is shown to be key. Finally an appendix summarises the main features of all 27 of the dynamic microsimulation models originally surveyed.