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

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.  What did we expect?
 What did we find?
 What lessons?

3. What did we expect?

4. Pathways to lower health outcomes and health system fiscal
pressure in an economic crisis: potentially vicious circles
Source:adaptedfromMusgrove1987

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. What did we find?

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. 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. -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. -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. 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. The crisis was not good for coverage
Exclude people? NO
Increase user
charges? NO
Streamline benefits
package? YES
Policy options for coverage:

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. 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. 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. 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. 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. What lessons?

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. Additional information

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. 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. 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. 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. 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