Aims: The demographic ageing of New Zealand society has greatly increased the proportion of older people (aged 65 years and over), with major policy implications. We tested the effects on health service use of alterations to morbidity profile and the balance of care.

Methods: We developed a microsimulation model using data from an official national health survey series to generate a synthetic replicate for scenario testing.

Results: Projections on current settings from 2001 to 2021 showed increases in morbidity-long-term illness (2%)-and in health service use-doctor visits (21%), public hospital admissions (16%). Scenarios with decreasing morbidity levels showed moderate reductions in health service use. By contrast, rebalancing towards the use of practice nurses showed a large decrease in public hospital admissions for people aged 85 years and over.

Conclusion: Demographic ageing may not have a major negative effect on system resources in New Zealand and other developed countries. Rebalancing between modalities of care may soften the impact of increasing health service use required by a larger older population.

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