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The current crisis, hospitals and healthcare (part 3)


The following question was asked to HOPE Members

1. In the context of the financial and economic crisis, what have been the direct interventions and/or the indirect effects on healthcare professionals (wages reduction, stop recruitment…)?
Dr Ulrike Schermann-Richter
Federal Ministry of Health
As of the beginning of 2011, no consequences of the crisis can be highlighted concerning the work of healthcare professionals. 
However, for the future, more rigorous negotiations on contracts between public health insurance funds and healthcare providers regarding tariffs, budget caps, or any other commitments and measures on cost containment have to be expected.
Eva M  Weinreich-Jensen
Danish regions
In order to curtail spending and keep spending within budgets in 2011, several regions have been forced to lay off healthcare workers, including healthcare professionals. This has been the consequence of both the financial crisis and the need to scale down healthcare spending to achieve long-term fiscal sustainability.
The reform of the healthcare system adopted by law on December 2010 introduced coordinating doctors, but the details of their missions are still to be defined. Meanwhile, doctors insist on their autonomy in prescriptions.
Dr Aino-Liisa Oukka
Oulu University Hospital
The number of personnel working in the social and health care administration has decreased due to municipal merges. 
However, in general the number of doctors and nurses working in the public sector has remained stable, as highlighted by the Statistical Report of the National Institute for Health and Welfare.
Gérard Vincent
French Hospital Federation (FHF)
Yves-Jean Dupuis
French Federation of Non-Profit Hospitals (FEHAP)
The various measures undertaken to reduce public spending has resulted in shortening the money devoted for hospitals, which has immediate consequences on unemployment.
In 2011, many hospitals had to cut their workforce in order to reduce expenses: more and more public hospitals were forced not to replace staff. Meanwhile, the salaries in the public sector are frozen. 
In the private non-profit sector, the crisis has led to many layoff plans, and even in a few cases to hospital closure.
The cost-containing measures have dramatic impacts on the workforce organisation, with a risk of damaging healthcare quality. 
Even if the French healthcare system will benefit from the policy implemented to increase the numerous clauses for doctors, geographical inequalities are more and more striking both within and between regions.
Dr György Harmat
Hungarian Hospital Association
The activity of the resident doctors has intensified during the year, despite the fact that the government ensured for them an additional income in form of a scholarship, which makes about +60% to their salary. 
At the same time, the migration of doctors is increased, by which is meant the number of doctors leaving the country was higher than the number of the yearly educated new doctors. 
The application of the European Working Time Directive became impossible, due to the decreasing number of doctors; the physicians can only compensate their salary by surplus labour and by fees for duty.
Dr John M Cachia
Ministry of Health,
The Elderly and 
Community Care
There are some positive aspects; in particular, more professionals are available. The increase in public recurrent expenditure registered in 2010 and 2011 allowed the recruitment of more nurses and other healthcare professionals.
Jacques Bettelheim
NVZ Dutch Hospitals 
Over 90% of the health labour force is privately organised. Therefore, recruitment stops are basically impossible. But, as noted earlier, government is reducing its contributions to health institutions meant for improving salaries. Although hospitals are responsible themselves for pay levels and other labour conditions of their personnel, there is a threat that labour conditions might suffer. In view of labour shortages that are likely to occur once the bleak economic years are over, this would be quite an undesirable policy.
Professor Ana Escoval
Portuguese Association for Hospital Development (APDH)
Following the policies imposed by the EU institutions, the government adopted, in early October 2010, the most restrictive budget in 25 years. Pay cuts ranged from 5% to 10% for public servants, for those having a monthly salary above €1500. In 2010, the government already decided to freeze the salaries of public workers and, for every two persons leaving the public service, only one would be recruited. 
According to the Memorandum of Understanding (MoU), measures to increase the efficiency and cost effectiveness in the Central, Regional and Local public administration were defined. Therefore, the recruitment is limited to one admission per every two workers leaving the service (due to retirement or any other reason), achieving 1% annual decrease between 2012-2014 in the staff of the central administration and 2% in local and regional administrations. In the first review of the Economic Adjustment Programme for Portugal, aims to reduce the number of management positions and administrative units by at least 15% in the central administration, as well as the need to prepare a comprehensive plan to promote flexibility, adaptability and mobility of human resources across the administration. 
Recently, the Portuguese government announced additional austerity measures for the 2012 budget. 
Temporary suspension of 13th and 14th month extra salary payments in 2012 and 2013 for all public workers (in 2011 they suffered a 50% cut), including pensioners in the general and special (public officials) regimen earning more than €1000. For salaries between €485 and €1000, the cuts will be gradual and equivalent, on average, to one of these two extra salary payments. In the private sector the working period will have a half an hour increase and the holidays calendar will be adjusted/reduced. Regarding the Personal Income Tax, the fiscal deduction will be eliminated for the two higher taxation levels and the ceilings for all the remaining levels will be reduced. The VAT is set to increase and health and education budgets will be reduced. 
The impact of these measures on public officials’ and pensioners will be much higher, when compared to previous austerity plans that included the salaries cuts. In the 2011 national budget, the previous government made cuts between 3.5% and 10% for all the public official’s earning more than 1500€. It is important to point out that all these cuts in the salaries are before taxes.
Simon Vrhunec
Association of Health Institutions of Slovenia
With regard to the public sector, in 2009 the recommendation of the Government of the Republic of Slovenia was implemented by non-replacement of retired employees and non-renewal of temporary employment contracts. However, due to the shortage of key operators (especially doctors), this orientation was not implemented in the field of healthcare.
Wages in the public sector were not reduced, but some measures were taken to limit the remuneration of public employees. 
In 2009, the amount of performance-related bonus associated with an increased amount of work was reduced so that, on aggregate, it cannot exceed 30% of a public employee’s basic wage. 
In January 2010, the wages of all public employees were partly adjusted to inflation, which means that they increased by 0.2%. In July 2010 this adjustment involved an increase by 0.65% and in January 2011 by 0.55%.
Dr Sara C Pupato Ferrari
Institute for Health Care Management (INGESA)
Healthcare professionals’ wages, as for the other civil servants, have been reduced by 5% due to the Government Adjustment Plan for 2011–2013.
A package of new measures has been adopted to cut spending at €15 billion between 2010 and 2011 through:
  • reduction of staff salaries by 5% in 2010 (in proportion there have been more cuts in higher salaries, including a discount of 15% of payroll for members of the Government) and freeze of staff salaries in 2011;
  • reduction of the replacement rate: for every 10 retirements only one employee can be replaced in the State General Administration.
Moreover, this package establishes a common mechanism to increase the participation of professionals in the management and direction of health services and the allocation of resources will be developed: professionals have to continue to cooperate as much as health spending depends on their clinical performances.
Roger Molin
Swedish Association of Local Authorities and Regions (SALAR)
The purpose of the temporary increase of government grants to the local government sector was to help the municipalities and county councils/regions to retain personnel despite strained economic conditions, and in that way maintain key welfare services such as schools, healthcare and care of the elderly during the recession. Nonetheless, some county councils/regions have adopted restrictive policies concerning new recruitment of staff, appointment of substitutes and further education for professionals. Wage cuts have not been considered in Swedish healthcare.


Mike Farrar
NHS Confederation
Salaries have been frozen for public sector workers earning over about €24,650 per annum and this will continue until 2013. Most public service workers also benefit from incremental progression and the NHS employers organisation is seeking to renegotiate this part of the national agreement with a view to reducing the need for job losses and securing better value for money. 
A review on public service pensions has now been completed. This review examined in particular the growing disparity between public service and private sector pension provision and costs of public sector pension schemes including the NHS scheme. The Government is seeking to implement a range of changes to the scheme, including raising contributions for employees and increasing the retirement age. This is opposed by most unions.
Local employers have also been strongly encouraged to restrict recruitment, with new recruitment exercises requiring senior sign-off and controls on establishment. The number of NHS staff has fallen for the first time in a decade, albeit a small decrease to date, with reductions especially amongst managerial and administrative staff. For example, the total headcount has fallen by over 9,000 members of staff, or 0.8% of the workforce, between September 2009 and June 2011, with the trend likely to continue. There has been a small reduction in nursing staff and increases in medical staff numbers have slowed after a decade of growth. Numbers of compulsory redundancies remain very low. 
The Government is implementing major changes to the structural organisation of the NHS and as a result large numbers of posts in these areas are to be removed. A Mutually Agreed Resignation Scheme (MARS) was launched to create vacancies for staff that are being redeployed or are at risk. Work has also been completed to develop a single set of HR principles and associated HR frameworks to support the proposed changes in the health white paper, reductions to management costs and the outcome of the arms-length review.