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The current crisis, hospitals and healthcare PART 2

HOPE representatives of twelve European Union 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

The following questions were asked to HOPE Members:
1. What kind of impact has the crisis had on the budget of hospitals? 
2. Which measures have been undertaken by your government/health insurance?
Dr Ulrike Schermann-Richter
Federal Ministry of Health
Although there are cuts in the  public sector budgets, hospitals and the healthcare system have not yet been directly affected. However, there have been recent declines in public sector investment expenditure and in expenditure for healthcare administration. 
In 2012, an agreement on the future of the Austrian healthcare system was reached, which is expected to increase the coordination among the main partners and therefore the efficiency of healthcare delivery while ensuring the long-term sustainability of the Austrian healthcare system through expenditure containment. 
Within the agreement, a so-called expenditure containment path was defined to keep the ratio of public healthcare expenditures compared to total GDP constant at around 7%. Following this path results in a growth rate of healthcare expenditures at around 3.6% p.a. in the period until 2016 (equivalent to estimated GDP growth), which allows for continuous and steady growth of the Austrian healthcare system. 
Mrs Eva M Weinreich-Jensen
Danish Regions
In 2010 and 2011, the regions have drastically slowed down healthcare spending growth from 3.5–4.5% annually in 2006–2009, reaching almost -2% from 2010–2011, including medicine spending.
The tendency of low growth in healthcare spending continues in the expected accounts for 2012, where the growth is expected to be about 2.5%. The same applies to the budget of 2013, where the growth expectation is estimated to be 0.9%, including medicine spending.
With the increased funding in 2012, the hospital and healthcare sectors have been asked to increase activity and productivity. 
A 3% increase in activity is planned for 2013 for the five regions as a whole. Productivity is planned to increase by 2% in 2013. A number of initiatives have been put to work to reduce the activity levels in the healthcare sector. A certain number of procedures have been given new guidelines to reduce the amount of patients being led to surgery. The focus is on how it is possible to avoid the surgery by treatments from physiotherapy and dieticians (for example). 
In the 2013 economic agreement, the new government and the regions have agreed upon a new diagnosis right, which is put into effect by 1st September 2013. With this, the patient has the right to get a diagnosis within one month or to receive a plan for further diagnosis if medically needed. By 1st January 2013, the one-month guarantee for patient to be treated in a private hospital with public funding, will become differentiated between one or two months, depending on a medical evaluation of the single patient.
Dr Urmas Sule
Estonian Hospital Federation
Hospitals provide healthcare services by contracts with the Estonian Health Insurance Fund. The Estonian Government’s regulation about the healthcare services price list applies to all hospitals and therefore all hospitals have been affected by the changes in Health insurance budget described in the first chapter.
In 2012, according to the first nine months’ data, the cost of one treatment case has increased (compared to 2011) in inpatient care (13%), outpatient care (16%) and day care (17%). 
Healthcare expenses were cut during the crisis. This was hard for healthcare providers, but successful, as Estonia is on its way to recovering from the crisis. 
Before the crisis, benefits of temporary incapacity of work were mostly in the Health Insurance Fund (HIF) budget, but to use the healthcare budget more efficiently, some of these costs were detached from the HIF budget and that money was distributed in the budget of HIF. This was a very good political decision, to use HIF income from social tax more purposefully.
Dr Aino-Liisa Oukka
Oulu University Hospital
The budget of the hospital district increased by 6% from 2010 to 2011. In the first four months of 2012, the increase was 3.6%. The prediction for the whole year is an overrun of 4%. The increase in due to growth in population, patient numbers and reduction the waiting times.
The growth of 2013 budgets will be very modest, at 1–3%. It is obvious that the hospitals have to postpone their investments and cut personnel and equipment expenses. The implementations of new medications and technologies must then be assessed carefully. The healthcare act from 2011 states that implementation of new methods must be assessed and coordinated by the five university hospital districts. The cost effectiveness will be evaluated also for methods already in use.
IT technologies are encouraged to improve the efficiency of processes and empower patients in their own treatment.
Mr Gérard Vincent
French Hospital Federation (FHF)

Mr Yves-Jean Dupuis
French Federation of Non-Profit Hospitals (FEHAP)
In May 2010, the French President declared that all public hospitals must reduce deficit and reach a balance in their budget. This message has been heard: in 2012, public hospitals deficit represents only 1% of public hospital budget; 80% of this deficit concerns 50 hospitals.
The healthcare budget reached 2.7% in 2011 and 2.6% in 2012. It is planned to reach 2.7% next year. Even though this increase is more important than what had been announced by the previous government, this rate is not of sufficient importance to cover hospital spending increase. The efforts that have already been made by French public hospitals in order to save money (in total, €2.9 billion has been saved in the last seven years) will then be pursued.
The 2013 bill funding social security plans the saving to reach €657 million next year. The government is excepting to save this money by fostering public hospital efficiency, through specific programs that target some expenses (such as the rationalisation of hospital purchases or the improvements in their organisational performance – €314 million) or measures such as lowering the prices of medicines (€150 million).
If the government has repealed a particularly deleterious measure consisting of alignment of public hospitals’ tariffs with those of private hospitals, the health ministry still fixes tariffs that do not sufficiently take into account hospital- specific activity and burdens. As a matter of fact, public hospitals do not receive enough money with regard to their activity and their specific charges (emergency services, taking care of the elderly). 
Nevertheless, despite the inadequate resources, public hospitals are provided with, there has been no impact on the quality of care.
Dr György Harmat
Heim Pál Children’s Hospital
Hospitals have a strict limit to produce Diagnoses Related Groups. Over the limit, they do not get more money. This led to a reduction by 25–30%. Hospitals finally got money by a specific and limited account mechanism authorised by the government.
Mr Joe Caruana
Ministry of Health, the Elderly and Community Care
These include the building on the new oncology hospital, which is progressing and is set to open in 2013, and the allocation of funds for the commissioning of certain services to the private sector to address to address waiting lists and capacity problems in public institutions and hence increase access to patients.
These services include operations for eye cataracts, emergency services and PET scanning, among others. Furthermore, the Government has focused further on modernising, expanding and better equipping the primary health sector, with the aim of alleviating the pressure from the main acute hospital – Mater Dei Hospital. In 2012, Malta’s dedicated rehabilitation hospital has also seen the opening of two new wards catering for an additional 59 persons requiring inpatient rehabilitation services. Further expansion is envisaged to increase capacity for another 60 patients.
Mr Robbert Smet
NVZ Vereniging van Ziekenhuizen
Hospitals see their volume growth trends reduced to 2.5% per year in the period  2012–2015. From 2015 onwards, the Government wants to further reduce growth to 2% per year. To be able to digest this further reduction, hospitals are expected to control the number of treatments, fight overtreatment, reduce excess capacity and combat spills of resources. Furthermore, hospitals are expected to concentrate complex treatments in fewer locations in order to increase quality and reduce costs. The salary of medical specialists will be reduced and the length of training shortened to the European minimum of five years. In a plan that was withdrawn medical specialists would have been taxed a certain annual amount as compensation for the public costs of their specialist training. 
More in particular, government has taken, or will take, cuts on:

–  the coverage of collective funding, for example: diet advising, programs for smoking cessation, logopedics, medicines, physiotherapy

– coverage of mental heath therapies

– tariff cuts on general practitioners

– cuts on innovation funds, patients’ organisations and project subsidies, for example.

Mr Simon Vrhunec
Association of Health Institutions of Slovenia
During the period 2008–2011, the total income of hospitals established by the Republic of Slovenia increased by €115,739,189 (10.04% in nominal terms). Higher income is the result of wage-system reform in the public sector implemented on 1 August 2008, exceeding the work programme for HIIS in areas where waiting lists are long and the availability of funds for new, innovative biological drugs. 
In the first nine months of 2012, in comparison with the first nine months of 2011, a decrease by 1.3% of total income in public hospitals was recorded as a result of another healthcare prices reduction (by 3% by 1st May 2012).
State-owned healthcare providers should not have been operating with a loss, but unfortunately, during the period 2010–2011, accumulated losses did increase. In general, in recent years, the Health Insurance Institute of Slovenia (HIIS) and the Ministry of Health have been implementing measures to reduce hospital financial resources in various ways.
In 2011, the Government adopted additional austerity measures to ensure the financial stability of HIIS at a total value of €25 million on an annual basis (reduction of the value of some of the healthcare services). 
Due to a lower growth of revenues from contributions into the compulsory health insurance system, some intervention measures have been taken concerning the revenues of the HIIS, focused on lowering the prices of healthcare services and medications as well as reducing allowances considered to be a right under compulsory health insurance in year 2012:

–  lowering the percentage of the value of healthcare services covered under the compulsory health insurance by 5% 

–  reducing the percentage of remuneration for periods of absence from work chargeable to compulsory health insurance up to 90 days by 10%, with the exception of care, injury at work and occupational 

–  change in levels of contribution for the unemployed (12.92% to 11.92%), 

–  abolishing the salary compensation during temporary absence from work for the unemployed 

–  abolishing the possibility of lowering and cancellation of debt resulting from contributions for compulsory health insurance 

–  lowering price standards for medical technical aids 

–  increasing pre-established compensation from compulsory car insurance premium (from 6.5% to 8.5%) 

–  healthcare prices reduction by 3% (with 1.5. 2012)

–  lowering of the basis for parental compensation by 10% (other than maternity compensation) and reducing the highest compensation (lowering of revenues from the contributions for compulsory health insurance), indexation of pensions and other transfers, providing missing contribution rates.

The above measures brought HIIS in year 2012 around €52.82 million of saving (that is, €103.58 million of savings annually). Austerity measures are a short-term solution: when GDP growth exceeds 2.5%, intervention measures will be partly corrected. 
For 2009–2012, the total amount of austerity measures undertaken is €300 million. 
All savings measures at the national level were adopted with the aim of preserving the level of healthcare programmes and accessibility of services. Thus, the scope of the healthcare service programme was not reduced; instead, certain rationalisations are expected from providers focused on the optimisation of labour and material costs with no impact on the quality of health services.
The government has already adopted another measure – additional reduction of healthcare services by 3% (which will come into force 1st January 2013). Healthcare providers are being expected to implement this measure specifically in the area of workforce costs (costs of wages and salaries).
Mrs Sara C Pupato Ferrari
Institute for Health Care Management (INGESA)
The main measures adopted concerning hospitals address human resources and pharmaceuticals. In 2009, the drugs expenditure per medical prescription was reduced by 2.36%. Then, in 2010 and 2011, new measures (including reduction of staff salaries, enhancement of retirements and cuts of new hiring) have been adopted to cut spending by €1.5 billion. Moreover, in 2010, reductions of general expenses by 15% and investments by 25% were established.
In 2011, administrators and managers were to ensure the effective, efficient, and equitable sharing of public resources allocated to them to save 1.2 billion in the autonomous regions and municipalities, which at last was not possible to achieve.
It had been agreed that a common strategy for the care of chronic patients in the NHS was to be developed. The Strategy for the Care of Chronic Patients in the National Health System has been finally adopted in 2012. In 2012 some Autonomous Communities have announced a shift of the management of public hospitals from the public to the private sector. In some cases, the private management will be focused only on hospitals’ auxiliary services but, in other cases, will assume the whole management of public hospitals, including clinical management. These measures, planned to be adopted widely in Madrid, are being refused by public workers and affected citizens, who show their opposition through strikes and public demonstrations.
Mr Erik Svanfeldt
International Coordinator,
Health and Social Care Division,
Swedish Association of Local Authorities and Regions (SALAR)
In 2009 (and even more in 2010 and 2011), most county councils/regions showed a surplus, thanks to temporary increases of government grants, other income enhancements and efforts to save costs. In this way, county councils/regions, which are responsible for the provision of most healthcare services, have been able to ensure their inhabitants adequate healthcare.
Mr Mike Farrar
NHS Confederation
Providers in England are facing a net price reduction of -1.5% across all services, with efficiency savings in the tariff, as well as new rules restricting payment for emergency activity and the increasing prevalence of penalty clauses and fines for underperformance. 
Hospitals are continuing to deliver cost improvement plans of at least 4.4%, with some organisations facing much higher efficiency savings of up to 10%. A number of local payers are examining the options for restricting some services where there are doubts about clinical effectiveness.
Some individual provider organisations are starting to show signs of financial distress. Already, nine acute NHS trusts have been identified as having the most serious problems. Recently, South London Healthcare NHS Trust became the first NHS trust to enter administration. The most common factors leading to acute trusts’ financial challenges appear to be: a rise in non-elective admissions (for which they are paid at reduced tariff, 30–50%) and a fall in more profitable elective work (often because beds were filled by extra emergency cases), which could also lead to fines for missing waiting time targets.
From the government’s side, a national programme was launched to improve efficiency and productivity and to safeguard quality (QIPP). NHS organisations have developed a range of initiatives as part of the QIPP programme. These include programmes such as:

– achieving non-recurrent savings though querying and subsequent non-payment of contract activity (though this is savings-neutral across the NHS as a whole)

–  improved procurement of non-medical services by grouping together to achieve economies of scale

–  use of enhanced recovery experience to drive down lengths of stay

–  tendering of pathology services to secure efficient provision.

The government has also launched a White Paper on reforming social care. The White Paper does not, however, address the long term funding challenges that currently exist in this area.