This project adapts the Future Elderly Model (FEM), a demographic and economic Markov microsimulation model that projects the health conditions and functional status of an elderly population, to the Japanese population. The model starts with a “snap-shot” of the middle-aged and elderly Japanese population in 2010 and then projects risk of developing 19 chronic conditions, health care utilization, annual medical expenditures, and mortality. The researchers have received and analyzed the basic Japanese Study of Aging and Retirement (JSTAR) data; developed appropriate estimates of conditional mortality for the relevant diseases for the Japanese elderly; constructed a micro-simulation model; and used the 2007-2013 claims data for over 84,000 Japanese aged 40 to 70 to predict the medical spending associated with different constellations of medical conditions. The researchers will now look at how spending conditional on given co-morbidities differs by age group, and develop projections appropriate for the above-70 population. They have completed a preliminary integration of medical spending projections by age and health status into the FEM built from multiple waves of the JSTAR to estimate the health status transition matrix.