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Financial Crisis in the EU countries
Health impact Health Systems Response
A framework for decision making
www.healthobservatory.eu
Lisbon, 11th January 2012
Josep Figueras
4
5
6
7
8
9
10
11
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
% G
DP
Austria
Belgium
Czech Republic
Denmark
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Luxembourg
Netherlands
Poland
Portugal
Slovak Republic
Slovenia
Spain
Sweden
United Kingdom
Total Health Expenditure % GDP (1975-2010)
Source OECD HEALTH DATA 2010, October
Based on I. Kickbush
The European social modelThe Lifestyle Superpower
“Obama is a big-spending liberal. And he takes his political inspiration from Europe (…) Guess what? Europe isn't working in Europe. It's not going to work here”.
Mitt Romney 22 September 2011
Economic recession
“Those of us who have looked to the self-interest of lending institutions to protect shareholder's equity -- myself especially -- are in a state of shocked disbelief” A. Greenspan
• Threat to health and health systems? – E.g. Indiscriminate cross cutting– E.g. Further ration health budgets
or• Opportunity to reform?
– E.g. Demonstrate the value of health on wealth– E.g. Reform health services– E.g. Prioritize interventions
Outline
• Impact on Health • Social protection response• Health services response
• Protect health budget• Health for economic productivity• Invest on health services as economic sector
• Reduce (or raise) statutory resources• Ration HS (coverage & private funding)• Prioritise / reallocate resources• Improve health systems performance
• Concluding remarks
Disaster? Blessing?
“Econocide to surge as recession bites” – BBC Mar 2009
“Recession is a lifestyle blessing in disguise” – Times Oct 2008
Health impact?
From Stuckler D. & McKee M.
Source: Hanley 1931 Life
Sources: NYT Oct 1930; AP 1932; WP 1930
Health impact? Lessons from previous crises
From Stuckler D. & McKee M.
Falling road deaths and increasing suicideHealth impact?
In short....Health impact?
• Contradictory evidence • Effects on alcohol, tobacco, diet?• Negative health impact of recovery?
• Increase in psychiatric disorders and suicide• Decrease in traffic accidents• Decrease in access / health service utilisation• Strengthen Social Protection
• Labour protection and unemployment policies• Family & housing benefits• Anti-poverty measures
• Foster Social Support Networks
Stuckler, Basu & McKee, BMJ 2010
Social Spending and Mortality
Health System ResponseIn short ....
• In majority of countries many new policies introduced e.g. Czech Republic, Greece, Ireland, Portugal.
• In few countries few policy changes e.g. Denmark, Finland, Germany, Norway, Poland.
• Pre 2008 reforms (continuation, acceleration, reversal)• Health budget
• Cuts in most e.g. Bulgaria, Czech Republic, Estonia, Ireland, Italy, Greece, Latvia, Romania, Portugal, Spain.
• Maintain e.g. ring fenced in the UK and Belgium• Increase in France and Denmark
Mladowsky, P, Srivastava, D Cylus J, KaranikolosM, Thompson S & McKee M Forthcoming, 2011
WealthHealth
Health Systems
SocietalWell-being
1. Protect the health budget Health Impact on Economic Productivity
Effects of ill health on economic growth
Direct contribution
to the economyDemonstrate performance!!!
Figueras J, McKee M 2011
• Component of stimulus packages: • Hospitals (France, Denmark) • Health employment• Retraining (Germany)
• But in most countries cuts in capital investment
1. Protect the health budget Invest on HS as component of economy
Mladowsky, P, Srivastava, D Cylus J, KaranikolosM, Thompson S & McKee M Forthcoming, 2011
2. Reduce (or raise) statutory resources
• How much to spend vs other sectors?• Decrease tax base in most countries• Increase tax base only Italy and Czech Republic.• Increased SHI contribution rates: Bulgaria, Czech
Republic, Greece, Portugal, Romania and Slovenia• Increase (tax based) unemployment contributions to SHI
e.g. Bulgaria, Czech Republic, Estonia, Hungary, Romania• Increase ‘sin’ taxes: alcohol, tobacco, fat.
E.g. Bulgaria, Czech Republic, Denmark, Greece, Hungary, Israel & Estonia
Mladowsky, P, Srivastava, D Cylus J, KaranikolosM, Thompson S & McKee M Forthcoming, 2011
16
R. Busse
3. Rationing Health ServicesCoverage dimensions
3. Rationing Health Services
• Reduce coverage • Population (breadth): no changes in most• Benefit package (scope): no changes, only small in
Ireland, Netherlands & Portugal• Services: e.g. Waiting times in many countries
• Increase private funding• Private voluntary health insurance• Cost-sharing / out of pocket: E.g. Czech Republic,
Denmark, Estonia, Finland, France, Greece, Ireland, Latvia, Netherlands, Portugal and Romania.
• Reduced cost-sharing: e.g. BelgiumMladowsky, P, Srivastava, D Cylus J, KaranikolosM, Thompson S & McKee M Forthcoming, 2011
Public-private mix in financing in the EU(Thomson, S. and E. Mossialos (2009). Private health insurance in the European Union.
Percent distribution of health system funding sources, 2007
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Cyp
rus
Bu
lgari
a
Latv
ia
Gre
ece
Po
lan
d
Lit
hu
an
ia
Po
rtu
gal
Slo
vakia
Hu
ng
ary
Sp
ain
Ro
man
ia
Belg
ium
Slo
ven
ia
Fin
lan
d
Au
str
ia
Germ
an
y
Italy
Malt
a
Esto
nia
Fra
nce
Irela
nd
Neth
erl
an
ds
Sw
ed
en
Den
mark
Un
ited
Kin
gd
om
Czech
Rep
ub
lic
Lu
xem
bo
urg
Public VHI OOP Other
50
3,4
10
2,5
10
4
10
6,9
5
5,6
5
8,8
5
15,6
5
53,2
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
% of population
% of expenditure
The well-known 20/80 distribution –actually the 5/50 or 10/70 problem
How can we predictwho these 5 or 10% are?
Where the cost of seeking care is lower, the reduction of utilization is also lower
Source: Lusardi et al. The economic crisis and medical care usage 2010. Harvard Business School
“Reductions in routine care today might lead to undetected illness tomorrow and reduced individual health and well-being in the more distant future.”
4. Prioritise / reallocate resources
– Target services to vulnerable populations and with highest health need: e.g. mental health services
– Cost effective interventions• Primary Health Care• Public Health / Rebalancing prevention and cure • Health in All Policies
– e.g Increasing long term unemployment coverage – e.g. Measures to combat poverty
Mladowsky, P, Srivastava, D Cylus J, KaranikolosM, Thompson S & McKee M Forthcoming, 2011
5. Improve performance
• Reforms in purchasing & payment systems– Purchasing leverage– Introduce case mix / payment for performance Austria, Hungary, Bulgaria, Czech Republic, England – Reduce/freeze prices paid to providers, reduction of
salaries of health professionals e.g. France, Greece, Spain Ireland, Lithuania, Romania, England, Portugal, Slovenia
• Rationalising hospital/specialist services e.g. Hospital mergers in several countries
Mladowsky, P, Srivastava, D Cylus J, KaranikolosM, Thompson S & McKee M Forthcoming, 2011
5. Improve performance
• Improve pharmaceutical / technology policies
Most EU27 strengthened policies to reduce the prices of medical goods or improve the rational use of drugs – Austria, Belgium, Czech Republic, France, Estonia, Greece,
Ireland, Hungary, Latvia, Lithuania, Malta, Poland, Portugal, Romania, Slovakia, Slovenia and Spain
• Wide variety of measures– generic substitution– Improve quality of prescribing– claw-back mechanisms– negotiations on prices
Mladowsky, P, Srivastava, D Cylus J, KaranikolosM, Thompson S & McKee M Forthcoming, 2011
5. Improve performance
• Eliminate ineffective / inappropriate services & cut the volume of least cost-effective services• Strengthened HTA but limited use in cuts• European Network for HTA – Improving evidence/base/medicine
• Enhancing integrated care • Skill mix optimisation• Market ‘like’ mechanisms / New public
management e.g Hospital Self Governance
In conclusion...
• Fiscal sustainability: constraint, not policy objective• Cost containment ≠ efficiency• (Extra) spending should demonstrate value• Be transparent & explicit about trade offs• Don’t forget the other sectors (social)!• Learn to communicate the case for Health & Wealth
In conclusion......
• Coverage (two dimensions) largely unaffected – Benefits package and population – Increase coverage targeted at low-income groups
• Increased user charges– If substantial: likely to decrease equity and efficiency
• Few public health policies: missed opportunity
In conclusion...
• Increases in performance: reducing costs through efficiency– Hospital reconfiguration– Improved purchasing– Drugs: rational use and pricing– Evidence base medicine
• Savings may not be inmediate: hospital restructuring• The short-term balancing acts are not sustainable on the
long run– Delaying investments and maintenance– Lowering salaries carries the risk of losing qualified staff
Short-term solutions are important to keep the system running during crisis, but…
…aim for sustainable efficiency gains!
www.healthobservatory.eu
Bridging the gap between evidence and policy-making
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