The improved health scenario is inspired by the compression of morbidity/disability
hypothesis in that it assumes that the number of years spent in bad health during a
lifespan falls while total life expectancy increases. In other words, the morbidity rate is
assumed to fall faster than mortality rate. Given the lack of empirical evidence on
possible extent of changes, the stylised picture of this process is achieved by
progressively shifting the age-related expenditure profile of the base year along the age
axis by more (by a stylised factor) than the projected gains in age and gender specific life
expectancy. Given the lack of a precise empirical indication of what the scale of possible
'compression' is, a factor of 2 is assumed, providing a mirror picture of morbidity
expansion hypothesis on the positive side of the constant health scenario deemed neutral
in macroeconomic terms. It is illustrated by dotted line on Graph 10 and is expected to
have a considerable impact on health care spending, amounting to about twice the effect
of constant health scenario. However, its results should be analysed with great caution,