DELSA/GOV 3rd Health meeting - Sarah THOMSON

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This presentation by Sarah THOMSON was made at the 3rd Joint DELSA/GOV Health Meeting, Paris 24-25 April 2014. Find out more at www.oecd.org/gov/budgeting/3rdmeetingdelsagovnetworkfiscalsustainabilityofhealthsystems2014.htm

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DELSA/GOV 3rd Health meeting - Sarah THOMSON

  1. 1. Health system responses to economic crisis in Europe Sarah Thomson Senior Health Financing Specialist WHO Barcelona Office for Health Systems Strengthening Senior Research Associate European Observatory on Health Systems and Policies OECD, Paris, 24 April 2014
  2. 2.  What did we expect?  What did we find?  What lessons?
  3. 3. What did we expect?
  4. 4. Pathways to lower health outcomes and health system fiscal pressure in an economic crisis: potentially vicious circles Source:adaptedfromMusgrove1987
  5. 5. Responses to fiscal pressure (not mutually exclusive)  cut spending to match revenue  get more out of available resources  find additional revenue to match commitments Challenges  sustaining health system performance  uncertainty, time, information, capacity, politics Health system fiscal pressure: threat and opportunity
  6. 6. What did we find?
  7. 7.  no country relied solely on cuts to address fiscal pressure  most tried to get more out of available resources  many tried to maintain public funding for the health system  but public spending on health has fallen  and access barriers have increased Countries understood the fiscal sustainability challenge…
  8. 8. Years of decline in real per capita public spending on health, 2008-2012 Source: WHO NHA for EU28 and OECD countries in Europe 0 1 2 3 4 5 Bulgaria Switzerland Austria Belgium Cyprus CzechRepublic Denmark Estonia Germany Hungary Israel Malta Norway Poland Romania Slovakia Sweden Turkey Finland France Italy Latvia Lithuania Luxembourg Netherlands Portugal Slovenia Spain UK Croatia Greece Iceland Ireland Shading shows countries in which per capita public spending on health was higher in 2012 than in 2008 X shows countries in which health spending fell as a share of government spending, 2008-2011 Years x xx xx x xx xx xxx x
  9. 9. -3 -2 -1 0 1 2 3 Iceland Malta UK Bulgaria Romania CzechRepublic Estonia Italy Netherlands Israel Sweden EuropeanRegion Switzerland Belgium Cyprus France Luxembourg Hungary EU27 Croatia Turkey Germany Lithuania Austria Denmark Spain Poland Norway Finland Slovenia Slovakia Latvia Portugal Greece Ireland Change in public spending on health as % of general government spending: 2008-2011 Public spending on health fell disproportionately in some countries Percentagepoints Source: WHO NHA for EU28 and OECD countries in Europe
  10. 10. -100 -50 0 50 100 150 200 250 300 Finland Lithuania Germany Slovenia Croatia Bulgaria Austria Sweden Romania Switzerland Denmark EU27 CzechRepublic Cyprus France Poland Italy Latvia Malta Portugal Iceland Hungary Estonia Luxembourg Greece Ireland Netherlands Slovakia UK Belgium Norway Spain All income quintiles Poorest quintile Change in self-reported unmet need (cost reasons), 2008-2012 Unmet need fell Unmet need rose but the poorest had some protection Unmet need rose and the poorest were not sufficiently protected Source: Eurostat EU-SILC data showing % change 2008-2012 in the % of the population perceiving an unmet need for medical treatment due to cost %
  11. 11. It is possible to maintain public funding levels, make funding fairer and promote public health Being ‘prepared’ is important:  having countercyclical mechanisms in place But an effective response needs leadership:  commitment to public spending on health  being selective: targeting richer groups if necessary  enforcing collection  broadening the public revenue base  promoting public health taxes
  12. 12. The crisis was not good for coverage Exclude people? NO Increase user charges? NO Streamline benefits package? YES Policy options for coverage:
  13. 13. Coverage: policy responses 0 2 4 6 8 10 12 14 16 18 20 22 24 26 Reduced user charges (or increased protection) Ad hoc reduction in benefits Increased user charges Expanded population entitlement Restricted population entitlement HTA-based reduction in benefits Added new benefits Direct response Partial response Source: Thomson et al 2014; results across 47 countries in Europe
  14. 14. Weak coverage policy is a source of fiscal pressure for government and financial hardship for households:  means-tested entitlement without funding  employment-based entitlement Lack of coverage:  adds to pressure on publicly financed health services  may encourage non-cost-effective patterns of use  limits effective policy responses In an economic crisis, universal coverage is a much better starting point
  15. 15. Being ‘prepared’ is important:  having good coverage makes a difference But an effective response needs leadership:  commitment to protecting access  being selective  sequencing Access barriers have increased in spite of apparent awareness of need to protect access In an economic crisis, universal coverage is a much better starting point
  16. 16. Many countries tried to enhance value in public spending  cutting selectively: targeted price reductions  addressing waste: better procurement, prescribing and dispensing of drugs  investing more carefully  agreement and action on previously infeasible reforms  the low-hanging fruit were easier to pick…
  17. 17. Constraints include:  need for upfront investment  lack of information / capacity / time  pressure for short-term ‘savings’  opposition and sequencing  radical or sustained cuts There are limits to efficiency gains
  18. 18. What lessons?
  19. 19.  countries were resourceful in trying to maintain public spending on the health system  there are limits to efficiency gains  being ‘prepared’ makes a difference (especially universal coverage)  but the response is critical  being selective is important: blanket cuts do not promote health system goals  weak policy design is a source of fiscal pressure  effective responses need governance and leadership What lessons?
  20. 20. Additional information
  21. 21. WHO/Observatory survey methodology  two waves of a questionnaire sent to a network of health policy experts in 53 countries in WHO’s European Region  in each country two different experts were asked to describe the government’s response to the economic crisis with a focus on health policies  results received in 2011 and 2013  47 countries responded
  22. 22. Threats to health and health system performance through two pathways:  reduced household financial security  reduced government resources (fiscal pressure)  both can undermine access to health services The importance of the policy response:  social policy for financial security  fiscal policy for adequate social spending  health policy to protect access to health services Experience from previous crises
  23. 23. Policy options for public funding Cut spending to match revenue • Do nothing as government revenues fall • Target the health budget for cuts • Abolish pro-rich tax subsidies • Limit government exposure to employer contributions that favour the rich Find additional revenue • Reallocate across government • Deficit financing • Countercyclical mechanisms • Lift contribution rates / ceilings • Broaden public revenue base • New earmarking • New taxes Get more out of available resources • Enforce collection • Centralise collection
  24. 24. Coverage: policy responses Population • Countries with means-tested entitlement restricted entitlement • Countries often targeted more vulnerable people • Planned expansions were postponed User charges • Some countries increased user charges but protected access to primary care and drugs or access for poorer people • Some countries increased user charges across the board Benefits package • Ad hoc cuts were common • But some countries introduced or stepped up HTA • Savings from lower drug prices improved access Source: Thomson et al 2014; results across 47 countries in Europe
  25. 25. Planning, purchasing, delivery: policy responses No of countries Medical products: procurement and payment 38 Restructure health ministries, public health or purchasing bodies; reduce overheads; cut salaries 34 Promote public health (including increasing taxes) 28 Reform primary care 19 Restructure the hospital sector 19 Reduce hospital tariffs or budgets 18 Hospital payment methods 18 Reduce health sector worker pay 16 Abandon or stall hospital sector investment 13 Develop eHealth 11 Public health: lower funding or closing / merging bodies 6 Lower / higher funding for primary care 5 / 5 Primary care payment method 5 Skill mix 3 Source:Thomsonetal2014;resultsacross47countriesinEurope

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