Modeling the demand for long‐term care services under uncertain information

Developing a network of long‐term care (LTC) services is currently a health policy priority in many countries, in particular in countries with a health system based on a National Health Service (NHS) structure. Developing such a network requires proper planning and basic information on future demand and utilization of LTC services. Unfortunately, this information is often not available and the development of methods to properly predict demand is therefore essential. The current study proposes a simulation model based on a Markov cycle tree structure to predict annual demand for LTC services so as to inform the planning of these services at the small‐area level in the coming years. The simulation model is multiservice, as it allows for predicting the annual number of individuals in need of each type of LTC service (formal and informal home‐based, ambulatory and institutional services), the resources/services that are required to satisfy those needs (informal caregivers, domiciliary visits, consultations and beds) and the associated costs. The model developed was validated using past data and key international figures and applied to Portugal at the Lisbon borough level for the 2010–2015 period. Given data imperfections and uncertainties related to predicting future LTC demand, uncertainty was modeled through an integrated approach that combines scenario analysis with probabilistic sensitivity analysis using Monte Carlo simulation. Results show that the model provides information critical for informing the planning and financing of LTC networks.