The impact of the Financial Crisis on Health and Health Systems

What we do and don’t know?

www.healthobservatory.eu

Brussels, 21st February 2013Josep Figueras

Outline

0. What impact?• Health expenditure trends• Health system response• Health levels: from crisis & health system response

1. Protect the health budget: Health & Wealth?2. Raise extra statutory revenues: Sin taxes?3. Ration coverage: Shifting to private expenditure?4. Improve performance: Squeeze efficiency?5. Strengthen Prevention: Public Health & HiAP

Impact of austerity on growth?

• Fiscal multiplier: larger impact than thought

• Explains damaging impact of austerity

What is happening to health expenditure?

Source: Health at a Glance: Europe 2012 (based on OECD Health Data 2012; Eurostat Statistics Database: WHO Global Expenditure Database)

• Data quality• Timeliness

WealthHealth

Health Systems

1. Protect the health budget? ‘Health is Wealth’

Effects of ill health on economic growth

Direct contributionto the economy

Cost effectiveness

Figueras J, McKee M 2011

???

2. Raise extra statutory revenues?

Mladovsky P. Thomson S. Evetovits T. Cylus J. Karanikolos M. McKee M. Figueras J. 2012

SIN TAXES ??

• Effectiveness of sin taxes• Substitution• Income effects

• Feasibility of implementation • Subsidies

CY

BG

CH LV

EL

SK

PT

HU PL SI

ES LT

BE FI

AT

DE IT MT

EE

FR

RO IE SE

NL

UK

NO

CZ

DK

LU0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Public PHI OOP Other privateSo

urc

e: W

HO

201

0

Public / Private mix funding in the EU

7

3. Ration coverageShifting to private expenditure?

R. Busse

Coverage Dimensions

Population (breadth) coverage• Overall universal access maintained• Some exceptions CZ, HU & ES (migrants)

Service (benefits) coverage• Limited (explicit) rationing: specific services

IVF (DK, NL), Ambulance (FR, SI) GP Home Visits (RO) Dental care, Cosmetic Surgery, ...

• Significant (implicit) rationing Waiting lists increases in several countries

Cost (user charges) coverage • Increased user charges in 13 countries

New charges: EE, FR, IE, IT, LT, NL, PT, RO, ES Raising charges: CZ, DK, FI, FR, GR, IE, PT

• Services targeted Drugs (8) Hospital (5) Ambulatory (3) A&E (2)

• But decrease in some (vulnerable populations) AT, BE, GR, HU, IE, IT, LT

• Health Technology Assessment• Priority Setting / Benefit Packages• User charges evidence

• Cost control• Access / equity

4. Improve performanceSqueeze efficiency

• Restructuring care delivery Hospital closures, mergers,.. DK, GR, LT, PT, SI Shifting to outpatient settings IR,GR, LT Strengthen primary care LT,NL

• Restructuring Admin. SHI & MoH - 8 countries• Pharmaceuticals & medical devices -18 countries

Price reduction, procurement reforms Strengthening prescribing, promoting generics Positive lists, public awareness campaigns

Mladovsky P. Thomson S. Evetovits T. Cylus J. Karanikolos M. McKee M. Figueras J. 2012

• Reduced / freeze professional salaries & pensions CY, FR, GR, IE, LT, ROM EN, PT, SI

Hospital closures, mergers,.. DK, GR, LT, PT, SI

• Reform provider payment methods Reduce price for services EE, IE, RO, SI Introduce DRGs in BG, CZ Pay for Performance & Capitation in PHC

Mladovsky P. Thomson S. Evetovits T. Cylus J. Karanikolos M. McKee M. Figueras J. 2012

4. Improve performanceSqueeze efficiency

• Cost effectiveness• ICT, Ehealth• Integrated care• P4P, incentives• Skill mix

• Knowledge brokering • Evidence to policy

• Implementaiton

Outline

0. What impact?• Health expenditure trends• Health system response• Health levels: from crisis & health system response

1. Protect the health budget: Health & Wealth?2. Raise extra statutory revenues: Sin taxes?3. Ration coverage: Shifting to private expenditure?4. Improve performance: Squeeze efficiency?5. Strengthen prevention: Public Health & HiAP?

Concluding• Crisis an unprecedented opportunity for change• Yet ...

• Focus on cost containment regardless of efficiency• Not enough emphasis on long term structural reform• Public health: a missed opportunity• ‘Cutting the lower branches rather than pruning’

• Lessons• Fiscal and policy preparedness• Governance, vision and leadership• Political economy /implementation• Transparency, communication and involvement