Reviews the epidemiological, financial, and institutional implications of the increasing demand for health services in Chile. Employs an innovative simulation model to project morbidity and mortality patterns. The social and economic transformations of the past several decades have led to profound demographic and epidemiological changes in many developing countries, including Chile. As this country's population evolves toward an older age structure, the relative importance of noncommunicable diseases and injuries as leading causes of morbidity and mortality will grow relative to acute infectious diseases, increasing the demand for high-cost health services. This study examines how these demographic and health changes occurred in Chile in recent decades. It also uses an innovative simulation model that projects morbidity and mortality patterns as well as the costs of treating major noncommunicable conditions (cancer, heart disease, etc.) under two scenarios: (1) maintenance of current prevalence levels for the risk factors of these diseases, and (2) intervention by which risk factor prevalence is reduced, based on experiences in industrial countries. Recommendations focus on reforms in health care delivery and regulation, health promotion and disease protection interventions, and strategies for more efficient use of critical health care inputs and for containment of escalating health care costs. The report also discusses the relevance for middle-income countries such as Chile of the experiences and lessons of OECD countries in managing the incorporation of medical care technology and containing health care costs.… (more)