Lisbon financial crisis january 2012

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  • 1. Financial Crisis in the EU countries Health impact Health Systems Response A framework for decision making Lisbon, 11th January 2012 Josep Figueras www.healthobservatory.eu
  • 2. Total Health Expenditure % GDP (1975-2010) 11 Austria Belgium 10 Czech Republic Denmark Finland 9 France Germany Greece Hungary 8% GDP Ireland Italy Luxembourg 7 Netherlands Poland Portugal Slovak Republic 6 Slovenia Spain Sweden 5 United Kingdom 4 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 19 19 19 19 19 19 19 19 19 19 19 19 19 20 20 20 20 20 Source OECD HEALTH DATA 2010, October
  • 3. “Obama is a big-spending liberal. And he takes his political inspiration from Europe (…) Guess what? Europe isnt working in Europe. Its not going to work here”. Mitt Romney 22 September 2011 The European social model The Lifestyle SuperpowerBased on I. Kickbush
  • 4. Economic recession “Those of us who have looked to the self-interest of lending institutions to protect shareholders equity -- myself especially -- are in a state of shocked • disbelief” Threat to health and health systems? A. Greenspan – 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
  • 5. 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
  • 6. Health impact? Disaster? Blessing? “Recession is a lifestyle blessing“Econocide to surge as recession in disguise” – Times Oct 2008bites” – BBC Mar 2009 From Stuckler D. & McKee M.
  • 7. Health impact? Lessons from previous crises Sources: NYT Oct 1930; AP 1932; WP 1930Source: Hanley 1931 Life From Stuckler D. & McKee M.
  • 8. Health impact?Falling road deaths and increasing suicide
  • 9. Health impact? In short....• Contradictory evidence • Effects on alcohol, tobacco, diet? • Negative health impact of recovery?• Increase in psychiatric disorders and suicide•• Decrease in Social Protection Strengthen traffic accidents• •Decrease inprotection and unemployment policies Labour access / health service utilisation • Family & housing benefits • Anti-poverty measures • Foster Social Support Networks
  • 10. Social Spending and MortalityStuckler, Basu & McKee, BMJ 2010
  • 11. Health System Response In 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 DenmarkMladowsky, P, Srivastava, D Cylus J, KaranikolosM,Thompson S & McKee M Forthcoming, 2011
  • 12. 1. Protect the health budget Health Impact on Economic Productivity Health SystemsDemonstrate performance!!! Direct contribution Societal to the economy Well-being Health Wealth Effects of ill health on economic growth Figueras J, McKee M 2011
  • 13. 1. Protect the health budget Invest on HS as component of economy • Component of stimulus packages: • Hospitals (France, Denmark) • Health employment • Retraining (Germany) • But in most countries cuts in capital investmentMladowsky, P, Srivastava, D Cylus J, KaranikolosM,Thompson S & McKee M Forthcoming, 2011
  • 14. 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
  • 15. 3. Rationing Health Services Coverage dimensions 16R. Busse
  • 16. 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
  • 17. Public-private mix in financing in the EU (Thomson, S. and E. Mossialos (2009). Private health insurance in the European Union. Pe rce nt distribution of he alth syste m funding source s, 2007100%90%80%70%60%50%40%30%20%10% 0% Finland Lithuania Bulgaria United Kingdom Estonia Latvia Hungary Romania Italy Poland Spain Czech Republic Slovakia Slovenia Portugal France Malta Belgium Austria Germany Cyprus Ireland Netherlands Denmark Greece Luxembourg Sweden Public VHI OOP Other
  • 18. The well-known 20/80 distribution – actually the 5/50 or 10/70 problem100% 590% 5 How can we predict 5 who these 5 or 10% are? 580% 10 53,270% 1060% 1050%40% 15,630% 8,8 5020% 5,6 6,910% 4 2,5 3,4 0% % of population % of expenditure
  • 19. Where the cost of seeking care is lower, the reduction of utilization is also lower “Reductions in routine care today might lead to undetected illness tomorrow and reduced individual health and well- being in the more distant future.”Source: Lusardi et al. The economic crisis and medical care usage 2010. Harvard Business School
  • 20. 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 povertyMladowsky, P, Srivastava, D Cylus J, KaranikolosM,Thompson S & McKee M Forthcoming, 2011
  • 21. 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
  • 22. 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 pricesMladowsky, P, Srivastava, D Cylus J, KaranikolosM,Thompson S & McKee M Forthcoming, 2011
  • 23. 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
  • 24. 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
  • 25. 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
  • 26. 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
  • 27. Short-term solutions are important to keep the system running during crisis, but……aim for sustainable efficiency gains!
  • 28. Bridging the gap between evidence and policy-makingwww.healthobservatory.eu