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Re-examining health systems financial sustainability in Europe. Utrecht, 25 th September 2007 Josep Figueras. Health Expenditure as % of GDP EU 15 plus selected countries (2004). Source:OECD Health Data (2006). Health Expenditure % GDP. Health Expenditure % GDP.

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Re examining health systems financial sustainability in europe
Re-examining health systems financial sustainability in Europe

  • Utrecht, 25th September 2007

  • Josep Figueras


Health expenditure as of gdp eu 15 plus selected countries 2004
Health Expenditure as % of GDP EU 15 plus selected countries (2004)

Source:OECD Health Data (2006)


Health expenditure gdp

Health Expenditure % GDP

Health Expenditure % GDP

Health system sustainability!

A high spending sector!

Cost containment!

Source: OECD Health Data (2005)


Sustainability against solidarity?

The end of the welfare State?


Addressing financial sustainability
Addressing financial sustainability

  • Reforming the funding of health care

  • Reforming the supply (payment & provision)

  • Strengthening public health (reducing demand)


Reforming the funding of health care
Reforming the funding of health care

  • Reform statutory (insurance or tax) funding

    • Stability of main systems: Bismark & Beveridge

    • Increase in tax component in SHI countries

  • Shift costs to patients: privatisation of funding

  • Introducing insurance competition


“In the longer term, America, like this adamantly pro-market newspaper, may have no choice other than to accept a more overtly European-stylesystem. In such a scheme, the government would pay for a mandate insurance system, but leave the provision of care to a mix of public and private providers.”

The Economist, January 28th 2006


“Rather than copying Europe’s distorting payroll taxes, pro-market newspaper, may have the basic insurance package would be paid for directly by government, though that cash might be raised by a “hypothecated” tax which would make the cost of health care more evident”

The Economist, January 28th 2006


Public expenditure as a % of total pro-market newspaper, may have

EU 15 (2003)

OECD Health Data, 2005


Concentration of total health expenditures france 2001
Concentration of total health expenditures, France 2001 pro-market newspaper, may have

Source : CNAMTS/EPAS


Insurance competition in theory it ought to work
Insurance competition pro-market newspaper, may have In Theory: it ought to work

  • Consumer freedom of choice

  • Market competition incentives: efficiency & quality

    • Insurers as ‘prudent buyers’

    • Cost-effective purchasing

    • Selective contracting

  • Without negative impact on equity & quality

    • Risk adjustment formula, open enrolment,…

Preconditions???


Insurance competition pro-market newspaper, may have In Practice: the evidence

  • Equity: risk selection

  • Efficiency; consider transaction costs

  • Efficiency; linked to active (strategic) purchasing

  • Implementation ability (regulatory, information,..)?


pro-market newspaper, may have Although elegant in theory, the implementation of the managed competition model in practice appears to be complex because it is hard to fulfill the necessary preconditions”

W Van de Ven (December 2006)


Addressing financial sustainability1
Addressing financial sustainability pro-market newspaper, may have

  • Reforming sources of funding

    • Reform main (SHI or tax) source of funding

    • Shift costs to patients: privatisation of funding

    • Introducing insurance competition

  • Reforming the supply (payment & provision)

  • Strengthening public health (reducing demand)


Reforming the supply payment
Reforming the supply (payment) pro-market newspaper, may have

  • From passive to active (strategic) purchasing?

  • Selective contracting / provider competition

  • Towards performance based payment systems

    • Case mix measures, DRGs


Paying doctors
Paying doctors pro-market newspaper, may have

“The only way to communicate with a doctor is to write it in the back of a cheque”

Bob Evans


Paying doctors1
Paying doctors pro-market newspaper, may have

“The only way to pay doctors is to change the system every three years, because by then they will have found ways to get round it to their own advantage”

Bob Evans


Reforming the supply provision
Reforming the supply (provision) pro-market newspaper, may have

  • Health care substitution

  • Cost effective capital investment

  • Increasing consumer choice

  • Primary care at the driving seat

  • Setting priorities / limiting package of care

  • Evidence base medicine / HTA agencies


Addressing financial sustainability2
Addressing financial sustainability pro-market newspaper, may have

  • Reforming sources of funding

  • Reforming the supply (payment & provision)

  • Strengthening public health (reducing demand)


Strengthening public health the ultimate demand reduction strategy
Strengthening public health pro-market newspaper, may have The ultimate demand reduction strategy

  • Prevention is (often) better than cure

    • Cost effectiveness of public health interventions

  • Stepping up public health policies in the EU

    • Health in All Policies: Finland presidency (2006)

    • Wanless reports (2002, 2004) in the UK

    • Public health bills: France (2003), Sweden (2002) Netherlands (2007?)

    • Smoking bans: Ireland, Spain, UK, Belgium…


Re examining financial sustainability
Re-examining financial sustainability pro-market newspaper, may have

  • Sustainability as willingness to pay

  • Consider financial versus social sustainability

  • An ageing crisis?

  • “It’s the economy stupid”

  • The contribution of health to the economy

  • Investing in health: health systems and public health


Solidarity vs sustainability
Solidarity vs sustainability pro-market newspaper, may have

  • Solidarity: key in European policy

  • WHO, EU, Council of Europe

  • Health as a human right


Sustainability as willingness to pay
Sustainability as pro-market newspaper, may have willingness to pay

  • Citizens may be willing to pay more through statutory sources particularly when earmarked for health?

  • Health expenditure as a luxury good?

  • Solidarity a central goal in European systems

  • Disconnect between population views & politicians?


Financial vs social sustainability
Financial (vs Social) sustainability pro-market newspaper, may have

  • Health and social cohesion

    • Coverage of minority groups

  • Economic impact of reduced solidarity


An ageing crisis
An ageing crisis? pro-market newspaper, may have

  • Health expenditure incurred at the end of life

  • Longer (and healthier?) life expectancy

    • Compression of morbidity

  • Late retirement

    • Increasing labour market participation

    • Drawing less from the health services


It s the economy stupid
“It’s the economy stupid !!” pro-market newspaper, may have

  • Health expenditure as percentage of GDP

  • Addressing sluggish economic (GDP) growth

  • The Lisbon agenda: global competitiveness

  • Emphasis on measures to increase productivity


Source: The Contribution of Health to the Economy Surke, Mckee et al 2005


The contribution of health to the economy the evidence
The contribution of health to the economy: pro-market newspaper, may have The evidence

  • Cost of illness

  • Wages and earnings

  • Hours worked

  • Labour force participation

  • Early retirement

  • Labour supply by relatives of those in poor health

  • Personal investment in education

  • Propensity to save


6. Investing in health systems pro-market newspaper, may have

A conducting framework

Health Systems

Impact on the economy

Impact on Health

Economic growth

Health

Wealth

WHO EURO Ministerial Conference

Tallinn Summer 2008


“However beautiful the strategy, you should occasionally look at the results”

Winston Churchill


6. Investing in health systems look at the results”

A conducting framework

Health Systems

Performance

  • Transparency

  • Accountability

Health

Wealth

WHO EURO Ministerial Conference

Tallinn Summer 2008


In sum
In sum…. look at the results”

  • Limited scope of funding reforms

  • Increased emphasis on reform of supply

    • Cost effectiveness rather than cost containment

  • Strengthen public health measures

  • Increased willingness to pay

  • Investing in health systems (productive sector) leading to economic growth

  • But…. demonstrating performance


www.observatory.dk look at the results”


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