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
What did we expect?
What did we find?
What lessons?
What did we expect?
Pathways to lower health outcomes and health system fiscal
pressure in an economic crisis: potentially vicious circles
Sourc
e: adapte
d fro
m M
usgro
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987
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
What did we find?
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…
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
Bu
lgaria
Sw
itze
rla
nd
Austr
ia
Be
lgiu
m
Cypru
s
Czech
Re
pu
blic
De
nm
ark
Esto
nia
Ge
rma
ny
Hu
ng
ary
Isra
el
Ma
lta
No
rwa
y
Po
land
Ro
ma
nia
Slo
va
kia
Sw
ed
en
Tu
rke
y
Fin
lan
d
Fra
nce
Ita
ly
La
tvia
Lith
ua
nia
Luxem
bourg
Ne
the
rla
nd
s
Port
ugal
Slo
ve
nia
Spain
UK
Cro
atia
Gre
ece
Ice
lan
d
Ire
lan
d
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
Ye
ars
x
x x
x x
x
x x
x x
x x x
x
-3
-2
-1
0
1
2
3
Icela
nd
Ma
lta
UK
Bulg
aria
Ro
ma
nia
Czech
Re
pu
blic
Esto
nia
Ita
ly
Ne
the
rla
nd
s
Isra
el
Sw
ed
en
Eu
rop
ea
n R
eg
ion
Sw
itze
rla
nd
Be
lgiu
m
Cypru
s
Fra
nce
Lu
xe
mb
ou
rg
Hu
ng
ary
EU
27
Cro
atia
Tu
rke
y
Ge
rma
ny
Lith
ua
nia
Au
str
ia
De
nm
ark
Spain
Po
land
No
rwa
y
Fin
lan
d
Slo
ve
nia
Slo
va
kia
La
tvia
Po
rtu
ga
l
Gre
ece
Ire
lan
d
Change in public spending on health as % of
general government spending: 2008-2011
Public spending on health fell
disproportionately in some countries
Pe
rce
nta
ge
po
ints
Source: WHO NHA for EU28 and OECD countries in Europe
-100
-50
0
50
100
150
200
250
300
Fin
lan
d
Lith
ua
nia
Ge
rma
ny
Slo
ve
nia
Cro
atia
Bu
lgaria
Au
str
ia
Sw
ed
en
Ro
ma
nia
Sw
itze
rla
nd
De
nm
ark
EU
27
Czech
Re
pu
blic
Cypru
s
Fra
nce
Po
land
Ita
ly
La
tvia
Ma
lta
Po
rtu
ga
l
Ice
lan
d
Hu
ng
ary
Esto
nia
Lu
xe
mb
ou
rg
Gre
ece
Ire
lan
d
Ne
the
rla
nd
s
Slo
va
kia
UK
Be
lgiu
m
No
rwa
y
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
%
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
The crisis was not good for coverage
Exclude people? NO
Increase user
charges? NO
Streamline benefits
package? YES
Policy options for coverage:
Coverage: policy responses
0
2
4
6
8
10
12
14
16
18
20
22
24
26
Reduceduser charges(or increasedprotection)
Ad hocreduction in
benefits
Increaseduser charges
Expandedpopulationentitlement
Restrictedpopulationentitlement
HTA-basedreduction in
benefits
Added newbenefits
Direct response Partial response
Source: Thomson et al 2014; results across 47 countries in Europe
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
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
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…
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
What lessons?
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?
Additional information
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
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
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
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
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
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