1. The document discusses the impact of the financial crisis in EU countries on health systems and health spending. It provides data showing total health expenditure as a percentage of GDP across EU countries from 1975 to 2010. 2. It then summarizes the response of health systems which included cuts to health budgets in most countries, increases in cost-sharing and private funding, and prioritizing services for vulnerable groups. Some countries protected health budgets. 3. The conclusion is that short-term cost containment does not equal efficiency, and sustainability requires investments to improve performance through measures like healthcare reform, pharmaceutical policies, and evidence-based medicine.

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 isn't working in Europe.
It's not going to work here”.
Mitt Romney 22 September 2011
The European social model
The Lifestyle Superpower
Based on I. Kickbush

4. Economic recession
“Those of us who have looked to the
self-interest of lending institutions to
protect shareholder's 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 2008
bites” – BBC Mar 2009
From Stuckler D. & McKee M.

7. Health impact?
Lessons from previous crises
Sources: NYT Oct 1930; AP 1932; WP 1930
Source: 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 Mortality
Stuckler, 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 Denmark
Mladowsky, P, Srivastava, D Cylus J, KaranikolosM,
Thompson S & McKee M Forthcoming, 2011

12. 1. Protect the health budget
Health Impact on Economic Productivity
Health Systems
Demonstrate 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 investment
Mladowsky, 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

16. 3. Rationing Health Services
Coverage dimensions
16
R. Busse

17. 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. Belgium
Mladowsky, P, Srivastava, D Cylus J, KaranikolosM,
Thompson S & McKee M Forthcoming, 2011

18. 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, 2007
100%
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

19. The well-known 20/80 distribution –
actually the 5/50 or 10/70 problem
100%
5
90%
5 How can we predict
5 who these 5 or 10% are?
5
80%
10
53,2
70%
10
60%
10
50%
40% 15,6
30%
8,8
50
20% 5,6
6,9
10%
4
2,5
3,4
0%
% of population % of expenditure

20. 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

21. 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 poverty
Mladowsky, P, Srivastava, D Cylus J, KaranikolosM,
Thompson S & McKee M Forthcoming, 2011

22. 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

23. 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 prices
Mladowsky, P, Srivastava, D Cylus J, KaranikolosM,
Thompson S & McKee M Forthcoming, 2011

24. 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

25. 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

26. 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

27. 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

28. Short-term solutions are important to keep
the system running during crisis, but…
…aim for sustainable efficiency gains!

30. Bridging the gap between
evidence and policy-making
www.healthobservatory.eu