ABSTRACT
This chapter describes type 2 diabetes in Australia as a case-study. It examines the development of a methodology that links microsimulation and macro-economic modelling for testing robust scenarios to support the making of broad policy decisions about public health investment and human capital agendas aimed at improving workforce participation and productivity. The chapter illustrates this methodology by investigating the possible effects of a hypothetical diabetes prevention program on health and economic outcomes. While microsimulation models (MSM) are well suited to modelling individual units within a particular system the strength of macro-economic models is their capacity to model change within the entire economy. Chronic disease is reaching epidemic proportions in developed nations around the world. Diabetes has been a National Health Priority Area in Australia since 1996 with nearly one million adult Australians having type 2 diabetic and a further 16.4% of Australians aged 25 years or above having pre-diabetes.
