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The current crisis, hospitals and healthcare PART 3

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 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


So far, no consequences of the crisis can be highlighted concerning the work of healthcare professionals. The number of hospital staff (FTE) is constantly increasing. 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.

Mrs Eva M Weinreich-Jensen
Danish Regions


In order to curtail spending and keep spending within budgets in 2012, 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.

Dr Urmas Sule
Estonian Hospital Federation


In 2010, healthcare providers were forced to diminish the wages of health care workers because of the budget cuts in the end of 2009 and at the beginning of 2010. In 2011, the wages were increased to the same level as 2008 and, in the autumn of 2012, Estonia experienced the first strike of healthcare workers in the history of Estonia. As the budget of HIF has increased in 2011 and 2012, the doctors, nurses and nursing care workers decided to demand rise of minimum wages and proposed to sign a very voluminous collective agreement between Hospitals Association and Healthcare workers unions. The strike lasted 25 days and ended with a pre-agreement that states that, from 1st March 2013, the minimum wages of doctors will increase by 11%, nurses by 17.5% and nursing care workers by 23%.

Dr Aino-Liisa Oukka
Oulu University Hospital


The number of personnel has increased steadily since the end of 1990’s and in the near future, Finland will experience a deficit of the workforce due to ageing. However, to govern the expenses, most hospitals and primary care units have to limit the recruitment of temporary workforce. Some municipalities and hospital districts have also encouraged personnel to take paid free leave, at least in the administrative level.

Mr Gérard Vincent
French Hospital Federation (FHF)

Mr Yves-Jean Dupuis
French Federation of Non-Profit Hospitals (FEHAP)


The various measures undertaken to reduce public spending have resulted in decreasing the money devoted for hospitals, which has immediate consequences on unemployment.

In 2011 and 2012, 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 numerus clausus for doctors, geographical inequalities are more and more striking, both within and between regions. 

Dr György Harmat
Heim Pál Children’s Hospital


In the context of the financial and economic crisis, the direct intervention in progress on hospital workforce is the development of the career model based on homogenous career groups, together with the renewal of the professional training system.

To retain residents in work in the country, a scholarship program was introduced, ensuring that participating residents receive a monthly grant of HUF100,000 in addition to their wages if they commit themselves to remain in full-time employment in Hungary for a period of time equal to their participation in the scholarship program and if they do not accept any direct payments from the patients.  
Based on a Government decision in spring 2012, a differentiated wage increase to health professionals (with the exception of GPs) took place in the course of August, with a retrospective legal effect from January 2012, while the Government also decided to increase the per capita financing for GPs, health visitors and nurses involved in primary care.

Mr Joe Caruana
Ministry of Health, the Elderly and Community Care


The increase in public recurrent expenditure has allowed the recruitment of new graduates in nursing and other healthcare professions. As described above, the Government is committed to ensure that financial resources available are well spent and, therefore, in this area, action is being taken to ensure that the overtime expenditure is better controlled.

Mr Robbert Smet
NVZ Vereniging van Ziekenhuizen


Over 90% of the health labour force is privately organised. Therefore, direct recruitment stops through government actions are basically impossible. In addition, the Government has announced that, from 2016, it will cut budget allowances meant for improvement of labour conditions (salaries in the first place). Although, for example, hospitals are themselves responsible for pay levels and other labour conditions of their personnel, there is a threat that labour conditions might suffer.

Mr 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 concerning the 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. 
Furthermore, 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%.

In July 2012, the elimination of wage disparities was carried out and the salaries of all public sector employees were decreased by 8%. As agreed, public sector employees are not entitled to regular work-performance pay, at least until 2014. In 2012, the share of funds intended for the payment of market performance bonus was decreased by 10% (to 50%). 

Before 2012, public hospitals hired and dismissed employees independently within the frame of financial stability of operation. In May 2012, the Public Finance Balance Act was adopted and, since then, all public healthcare institutes are constrained concerning hiring new employees. First, they have to get authorisation of the funder (that is Ministry of Health or local municipality) and then, of governing councils of institutes. 

Mrs Sara C Pupato Ferrari
Institute for Health Care Management (INGESA)


A package of measures was adopted in 2010 to cut spending by €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 ten retirements, only one employee can be replaced in the State General Administration.

The wages of doctors and nurses have been reduced since 2010. In 2012, in real terms, it is said that this reduction could be approximately 15% (taking into account the inflation rate). The wages of professionals, as well of other civil servants, will keep frozen in 2013 (an additional reduction of 2-3% in real terms).

The staff reductions are difficult to quantify, due to differences between regions, although it can be estimated at 5%.

Mr Erik Svanfeldt
International Coordinator,
Health and Social Care Division,
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 elderly care 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 health care.

Mr 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 has renegotiated this part of the national agreement with a view to reducing the need for job losses and securing better value for money. Proposals for changes to the NHS pay system on elements of performance-related progression are currently being considered by the NHS trade unions.

A review of 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 one. The Government is implementing a range of changes to the scheme, including raising contributions for employees and increasing the retirement age. 

As part of overall controls on expenditure, employers have been looking at how to control and reduce labour costs. Local employers have also been strongly encouraged to restrict recruitment, with new recruitment exercises requiring senior sign-off and controls on establishment. There are restrictions on the use of temporary staff and the NHS is seeking to reduce absence levels.  The key trend in NHS staffing levels is now clear, with a trajectory of slow reduction after a period of growth. The headcount for the NHS was 1,182,933 in August 2012. This is 3857 (0.3%) less than the previous month (1,186,790) and 8273 (0.7%) less than in August 2011 (1,191,206). There has been a fall of over 20,000 since 2010.  Local employers have been asked to seek to protect front line jobs and most losses so far are amongst managerial and support staff. There has been a small reduction in nursing staff, and increases in medical staff numbers have slowed after a decade of growth. 

The structural reorganisation of the NHS in England will largely be complete by April 2013. It is widely estimated that the cost of this restructure in redundancy terms to date is around £600m. The reforms will lead to a significant increase in the use of non-NHS providers of healthcare, meaning a sizeable health workforce will be moved to new employers outside the NHS. This will certainly initiate debates around issues of fairness between NHS and non-NHS employees and arrangements for this are currently being reviewed. The application of TUPE Regulations remain a major issue when such transfers take place. The reforms will also mean the health service workforce needing to adapt to the changes in where, and how, care is provided in future.