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HOPE representatives of ten European Member States have been interviewed. They present their views on the current situation in their countries, and explain the impact of the economic and financial crisis on the resources of the healthcare system, the organisation of the hospital sector and the activity of healthcare professionals
HEALTHCARE SYSTEM
The following questions were asked to HOPE members:
What has been the impact of the crisis on the overall healthcare budget and on the distribution of healthcare expenditure?
Has your country experienced changes in the balance between private (out-of-pocket, complementary insurance…) and public expenditure?
DENMARK
Mrs Eva M Weinreich-Jensen
Danish Regions
During the crisis, the municipalities and the State had to deal with austerity measures. The new left-centered government has, together with the opposition, passed a balanced-budget requirement law (the budget law). With this law, the region, municipality and State-driven institutions are penalised if the budget is above what was agreed or if the balance sheet is higher than the initial budget.
The former government had promised an increase in the national health budget of €670million over the period 2011-2013. Despite €670million being less than the increase in the previous three years, the healthcare sector is the only part of the public sector with increased funding. The new government has recognised this promise from the former government, and the full amount embodied with the 2013 economic agreement between the State and the regions. Due to the tight fiscal situation in the coming years, there will be only a modest growth in the public expenditure, of 0.6% of GDP (0.4% average in 2014 with an increase in the yearly growth reaching 0.75% in 2018-2020). In the government’s revisited 2020 plan, no parts of the public sector are specifically prioritised. Furthermore, the government has passed a law about the growth in public expenditure for the period 2014-2017. This law implies zero-growth in the regions and in the municipalities, with the possibility of gaining part of the overall growth in the public expenditure. The growth in healthcare expenditure is thus set to be 0.4% in 2014.
AUSTRIA
Mrs Ulrike Schermann-Richter
Federal Ministry of Health
In Austria, the main consequence of the crisis on the healthcare system was a general decrease in financial resources from taxes and from contributions to the social insurance. Moreover, the requirement expressed by the European Union parameters to bring the deficit below 3.0% of GDP reference value caused a drop in the share of public expenditure on the healthcare sector of about 0.6% of GDP (€1.7billion) between 2010 and 2013. There were no significant changes in the balance between private and public healthcare expenditures in the period from 2008 to 2011 in Austria.
ESTONIA
Mr Urmas Sule
Estonian Hospital Federation
The Estonian healthcare budget is currently increasing slowly but steadily. In 2009, the financial crisis impacted the Estonian Healthcare budget and the income of the Health Insurance Fund (HIF) decreased by 11% and the expenses by 2%. In 2010, income decreased even more than 5% and expenses were cut by 9%. But in 2011, the Estonian economy started to revive a little and, compared to 2010, incomes and expenses increased by 6% and 4%, respectively. In 2013 (according to the data produced in the first nine months), the social tax accrual increased by 6.7% and the expenses on specialised care increased by 6.5% compared to 2012. Nursing care expenses have increased by 23% compared to 2012. Distribution of healthcare expenditure has not changed significantly. There have been no changes regarding the balance between private and public expenditure.
FINLAND
Mrs Aino-Liisa Oukka
Oulu University Hospital
The prolonged financial crisis has had a clear impact on the Finnish healthcare sector. Municipalities responsible for organising healthcare have severe difficulties due to deeper-than-expected decreases in tax and other incomes. Also, the State has cut its grants to the municipalities but, nevertheless, the national debt keeps increasing. Due to the declining of the GDP, the total healthcare expenditure has grown from 8.7% to 9%. The government has tried to encourage municipalities to form larger primary healthcare units, to develop social and health co-operation, and to further develop healthcare pathways between social care, primary care and specialised care.
Both in general practice and in hospitals, emergency care will be centralised in fewer service centres. Also, in secondary and tertiary healthcare, centralisation and task distribution have continued. The renewal of the healthcare legislation is still unfinished due to deep disagreement between the political parties and between the government and the municipalities. At this point, the government has begun to evaluate how to lessen the legal responsibilities of municipalities to help them to survive through the crisis. For example, subjective rights of the citizens to public services are under consideration. No change in the share of public and private expenditure seems to be induced by the financial situation.
FRANCE
Mr Yves-Jean Dupuis
Chief Executive,
French Federation of Non-Profit Hospitals
Mrs Pascale Flamant
Chief Executive
UNICANCER
(French Federation of Comprehensive Cancer Centers)
Mr Gérard Vincent
Chief Executive
French Hospital Federation
The financing of 85% of French acute care hospitals is, for the large part, based on activity. In combination with budgets for research and education, public healthcare missions (for example, palliative care, emergency) and contracts between regulatory authority and hospitals (for example, financial aid to develop a new activity or to support an activity in deficit). National healthcare insurance is the main payer for hospitals (80%).
The French healthcare system is financed mainly by contributions and taxes deducted from earnings, which account for 80% of its total revenue. Hence, the negative impact of the financial crisis on the employment rate meant fewer resources for the system, which dropped off by 1.3% in 2009, a level never experienced since the Second World War. In 2010, the Social security resources grew slightly, thanks to a small rise in employment rate and some taxes. Between 2008 and 2010, resources have grown by 2%, while expenses have increased by 6.5%, which explains the deficit digging. In 2010, the social security deficit (which includes health insurance) widened to €23.9billion from €20.3billion in 2009 and €10billion in 2008.
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Over the same period, the only deficit of health insurance has increased from €10.6billion to €11.6billion. In order to bring the deficit down, many spending cuts were planned in the 2011, 2012 and 2013 social security budgets. We now observe the consequences of this policy, with the deficit brought back to €17.4billion in 2011, to €13.3billion in 2012 and to €13.5billion in 2013. In the 2014 bill funding social security, adopted by parliamentarians last fall, the deficit is thus planned to be brought down to €13billion. Accordingly, increases in the national healthcare expenditure target are capped to a reasonable level: 2.7% in 2012 and 2.4% in 2014.
MALTA
Mr Joe Caruana
Ministry of Health, the Elderly and Community Care
The need to strike the right balance between providing universal access to high-quality health services and respecting budgetary constraints is increasingly being felt. In Malta, health outcomes still seem to be improving despite the crisis and this is deemed to be a positive outcome, mainly attributable to the continued investment in health and the fact that Government has strived to keep people in employment. Cognisant of the fact that a healthy population leads to increased economic productivity, the provision of equitable and increased healthcare services rank very highly on the Government’s agenda. This is evident from the Government’s increased investment in health and elderly service provision over the past number of years.
The total recurrent health budget has increased by 8.2% from 2013 to 2014. The capital budget has increased by 16.7% from 2013 to 2014. The overall health budget (recurrent and capital) has increased by 9.3% from 2013 to 2014. Nonetheless, the demographic projections are showing that making savings in the years to come will become more difficult and therefore the only way to ensure the sustainability of health systems while maintaining a high-quality service is to strengthen the drive for the attainment of better efficiency within the sector and increase the cost-effectiveness of each intervention. The approach being taken in this regard is found in the following section. Efforts are largely being focused on improving efficiency of expenditure in the Healthcare system. The provisional ratio of total expenditure on health (public and private) as a % of GDP was 9.11% in 2012 and increased from 8.68% in 2011.
SPAIN
Mrs Sara Pupato Ferrari
Institute for Health Care Management
The main component of the healthcare expenditure in Spain is the cost of the Healthcare Services of the Autonomous Communities, which are funded by transfers from Central Government and their own taxation. The rate of increase of the budgets of the Healthcare Services of the Autonomous Communities has progressively declined. From 2012 to 2013, the decrease was about 5.12%. The rate of increase of the budgets for healthcare of all public administrations (including Central Government) has also decreased by about 2.12% from 2012 to 2013. Spain is implementing a National Health System reform as part of its efforts to reduce the deficit. The results so far show a reduction in healthcare expenditure of 8%.
New initiatives will also be adopted, with an estimated total impact of €3.13billion in 2013. The implemented measures include the introduction of portfolio of services and a common extra portfolio of services subject to a contribution from users (outpatient provision of diet therapies and orthopedic prostheses, and the use of non-urgent health transport). These measures alone are expected to generate efficiency gains in the range of €175million in 2013. Copayment for extra portfolio of services has not yet been implemented.
Other measures have been adopted since 2011, mainly in the pharmaceutical domain:
- prescription of active principle and dispensation of the more cost-effective available drugs
- shared decision between the State and the regions on the funding of the new drugs will be incorporated (now exclusive competence of the State)
- new procedure to finance the medicines of high therapeutic value and innovation
- agility in the incorporation of the generic drugs and reference prices, as well as homogeneity in the revocation of patents
- compensation to pharmacies in towns of fewer than 1500 inhabitants.
- co-ordination between healthcare services and social care, with active participation of professionals
- implementation of the National Health System electronic clinical record to enable clinical information in any Autonomous Community
- homogenisation of the electronic prescription system throughout the National Health System
The Royal Decree 9/2012 unified the discounts of the distribution for all drugs and established the adaptation of drugs presentations to the duration of treatment.
The Spanish Government has undertaken several legislative measures in different domains. The most relevant legislative initiative in Healthcare has been the Royal Decree-Law 16/2012, of 20 April, on urgent measures to ensure the sustainability of the NHS and improve the quality and security of their benefits. This law:
- sets the right to public healthcare coverage in relation with the employment status of each citizen
- modifies the basket of services provided by the National Health System and establishes three categories: ‘basic’ (general practice, hospital, emergencies) with no co-payment; ‘supplementary’ (prescriptions, prostheses) with co-payment, and ‘accessories’ with different types of reimbursement. Pensioners now should pay 10% of the price of prescriptions until a threshold
- introduces a wide array of initiatives aiming to increase the rational use of medicines and to lower their price
- foresees the introduction of measures for the rationalisation of the human resources management in the National Health System, including professional mobility and a national registry. The development of these measures is now pending on the negotiations with the Autonomous Communities and professional organizations
Other legislative measure of interest:
- Royal Decree 1506 / 2012, 2 November, regulates supplementary common portfolio prosthetics provision of the national health system
- Order SSI/2366/2012, 30 October, establishes the common factor of billing for the provision with dietetic products
- Resolution of August 2nd on list of excluded drugs for provision funded by the national health system
THE NETHERLANDS
Mr Robbert Smet
NVZ Vereniging van Ziekenhuizen
The new government, consisting of the Liberal (VVD) and Labour (PvdA) parties, has fixed a goal of total expenditure reduction of €18billion in the period 2012 to 2015. The health sector will contribute a substantial part of this reduction: increasing from €145million in 2013 to €5.7billion structurally. Due to the length and strength of the economic crisis, additional cost saving measures were necessary in order to keep the budget within the budgetary limits set by the European Union (Eurozone). A major part of this additional reduction of €6billion will be covered by diminishing entitlements in domestic and elderly care and further reducing the volume growth ceiling to 1.5% in 2014 and 1% in 2015 (instead of the 2.5% and 2% reduction volumes earlier agreed between government, hospitals and medical specialists). After hefty reactions from the public, a proposal to make healthcare premiums (almost fully) dependent on income was withdrawn before it was sent to parliament.
SWEDEN
Mr Erik Svanfeldt
International Coordinator,
Health and Social Care Division,
Swedish Association of Local Authorities and Regions (SALAR)
A basic trait of Sweden is the extensive welfare system whereby individual rights, such as education and healthcare, are financed collectively through taxes. The county councils/regions provide most of the healthcare services. Healthcare represents in fact about 90% of their budgets and it is financed almost entirely through own taxation and grants from the State. The tax-funded Swedish healthcare system covers everyone who lives or works in Sweden. Very few people have additional private healthcare insurance and almost all of these insurances are paid by the employer. The recent international economic crisis has not changed this. Private healthcare insurances account for less than one-half percent of the total financing of Swedish healthcare. Due to temporary increases of government grants and other income enhancements, the international financial crisis had a limited effect on the Swedish healthcare system. Sweden was hit in the end of 2008, but recovered substantially in the end of 2009 and 2010. In these years, the county councils/regions as a whole showed an increased surplus.
In 2009, five out of twenty county councils/regions (less than in 2008) had a deficit. In 2010 and 2011, eighteen out of twenty county councils/regions made a surplus. Among the reasons for this positive development are temporary extra government grants to municipalities and county councils/regions and efforts to save costs, but also significantly higher tax revenues than budgeted. In 2012, seventeen county councils/regions made a surplus. Repayment of insurance premiums and increased taxes contributed to this positive result.
For 2013, five county councils/regions are forecasting a deficit, adjusted for extraordinary items. In 2010, the county councils/regions received SEK5.1billion (approximately €586million) in additional government grants. Of these additional resources, SEK3.6 billion (about €414million) were temporary grants and SEK1.5billion (about €172million) a permanent increase in the yearly general grants. In 2011, the county councils/regions made a surplus of SEK3.2billion (about €368million) adjusted for extraordinary items. In that year, the county councils/regions received SEK900million (approximately €103million) in temporary government grants. In 2012, the county councils/regions made a surplus of SEK5billion (about €568million).
Prior to 2013, the economic situation looked much tougher, for example, the government grants were unchanged in nominal terms, and several county councils/regions decided to raise their county council tax by 0.14 percentage points. The situation looks even tougher prior to 2014. The Swedish labour market is predicted to be weak throughout 2014, and the government grants are also unchanged in nominal terms. Therefore, several county councils/regions have decided to raise their county council tax. As a result of the economic crisis, efforts to improve efficiency have been intensified. This work took full effect in 2010, when the costs (in fixed prices) increased by only 0.3 percent. The costs increased faster in 2011, almost in line with historical trends. In 2012, revenues developed weakly and the temporary state grants were, for example, fully phased out, but the costs were increasing rather quickly. We predict that, in 2013, the costs will increase in line with the historical trend.
UK
Mr Mike Farrar
CBE Chief Executive
NHS Confederation
The financial challenge facing the NHS across the UK remains an exceptional one. In England, the service has required unprecedented savings year on year of at least 4% p.a. (around €17.6billion to €23.5billion) from 2010 until March 2015 to bridge the gap between a broadly flat budget and rising demand for care. Given the current economic situation, it is probable that the NHS will be required to deliver efficiencies on a similar scale for the foreseeable future beyond 2015, too. Previously, rising demand has been met through increasing the NHS’s budget, but this is no longer the case. If the NHS budget remains flat in real terms, the gap between funding and demand for care has been estimated at between €26billion and €37billion by 2016 and 2017. The total NHS budget (Departmental Expenditure Limit) for England is projected to rise from €119.5billion in 2010/11 to €137.0billion by 2015/16.
However, in real terms, that would only equate to an increase of around €5billion over that period. The Government also announced in June 2013 an ‘Integration Transformation Fund’, a single pooled budget for health and social care services to work more closely together in local areas. This fund totals €4.5billion and takes full effect from 2015/16. The money will come from existing funds.
The NHS in England has made some progress in delivering the required savings to ensure that the NHS remains in financial balance despite the reduced growth in budget compared to previous years. NHS England’s routine monitoring of the national Quality, Innovation, Productivity and Prevention program (QIPP) suggests that €11.15billion savings have been delivered in England between 2010 and 2012. A further €4.8billion savings are projected for this year, making a total of €15.95billion in efficiency savings in three years.
As regards the balance between public and private expenditure, the most recent evidence compiled by analysts Laing & Buisson shows that private health insurance has continued to see a fall in demand in the UK, with the recession forcing employers and individuals to cut back on the costs of cover.
The number of people covered by private medical care has fallen to 6.8m, the lowest total since 1995. Of these, around 1.6m people buy their own insurance. There has been a real-terms drop in spending of 7% across all health cover markets since 2008.
For 2011/2012, 83.6% of UK elective surgery was publicly funded and publicly supplied. 11.7% was both privately funded and supplied, 3.8% was publicly funded but privately supplied and 0.9% was privately funded, but publicly supplied.
