The evaluation of health policies through dynamic microsimulation methods

Abstract

This paper presents an overview of microsimulation as a method to evaluate health and health care policies and interventions. After presenting a brief survey of microsimulation models and applications we describe the main features of the approach and how these are implemented in practice. We pay particular attention to the innovative features of dynamic microsimulation as a method of ex-ante policy evaluation. The final section describes two leading microsimulation models, POHEM and FEM used to simulate lifecycle health trajectories and associated health care costs under competing policy scenarios to illustrate the power of microsimulation as a valid and relevant tool for policy evaluation.