The fast growth rate of the ageing European population puts additional pressure on expenditures for health care. The EU-funded project 'Ageing, health status and determinants of health expenditure' (AHEAD) addressed this issue using EU funding, to refine existing estimates of the links between reported states of health and the use of medical services. Project partners also studied the link between health expenditure and fertility rates, and examined demands made on health services by non-native populations. They paid particular attention to issues related to costs of care near death as well as factors such as financial control, that influence health spending. Despite improvements in health status, there are still important differences noted between the EU-15 and new Member States. Research results pointed to the importance of public health activities in countering health problems of various societies. For example, activities promoting health and healthy living styles (such as smoking cessation, healthier food and alcohol consumption habits) as well as prevention of civilisation diseases, should be emphasised in central European countries. Rapid ageing has set the focus of expenditure on prevention of disabilities related to chronic diseases. This allows for lesser demands related to long-term and palliative care, but entails increased public health spending in countries where this is already at a low level. As such, it is important to increase spending for the most effective programmes, and systematic evaluation is needed to identify which are efficient and effective. On the other hand, high economic growth rates, to which increased life expectancy can contribute, play a role in extended health care services, shorter waiting lists for elective surgeries and new technical equipment purchases. Further research is needed to determine how countries with varying policy and economic outlooks can approach the issue of health spending and budgeting in relation to ageing populations.