Transcript Re-examining health systems financial sustainability in Europe

Re-examining health systems
financial sustainability in Europe
Utrecht, 25th September 2007
Josep Figueras
www.observatory.dk
Health Expenditure as % of GDP
EU 15 plus selected countries (2004)
15
US
11,6
Switzerland
10,9
Germany
10,5
France
Portugal
10
Belgium
9,9
9,8
Greece
9,6
Austria
Norway
9,2
Sweden
9,1
Netherlands
8,9
Denmark
8,9
8,8
Italy
8,3
United Kingdom
8,1
Spain
8
Luxembourg
7,5
Finland
7,1
Ireland
9,4
EU 15 average
0
2
www.observatory.dk
Source:OECD Health Data (2006)
4
6
8
10
12
14
16
Health Expenditure % GDP
15
14
Belgium
Health Expenditure % GDP
13
Canada
France
12
Germany
11
10
Ireland
9
Italy
8
7
Netherlands
6
Norway
5
4
Spain
3
2
Switzerland
1
United Kingdom
0
1955
1960
1965
1970
www.observatory.dk
Source: OECD Health Data (2005)
1975
1980
1985
1990
1995
2000
2005 United States
Sustainability against solidarity?
www.observatory.dk
Addressing financial sustainability
• Reforming the funding of health care
• Reforming the supply (payment & provision)
• Strengthening public health (reducing demand)
www.observatory.dk
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
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“In the longer term, America, like this adamantly
pro-market newspaper, may have no choice other
than to accept a more overtly European-style
system. 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
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“Rather than copying Europe’s distorting payroll
taxes, 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
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Public expenditure as a % of total
EU 15 (2003)
Luxembourg
Sweden
Denamark
UK
Germany
Ireland
Finland
France
Italy
Belgium
Spain
Portugal
Austria
Netherlands
Greece
EU 15 average
62
51
75
0
OECD Health Data, 2005
www.observatory.dk
85
83
83
78
78
77
76
75
74
71
70
68
90
25
50
75
100
Concentration of total health
expenditures, France 2001
100%
100%
90%
100%
98%
80%
90%
78%
70%
60%
64%
50%
70%
40%
30%
51%
20%
20%
10%
10%
5%
0%
% of people
Source : CNAMTS/EPAS
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% of expenses
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Insurance competition
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,…
www.observatory.dk
Insurance competition
In Practice: the evidence
• Equity: risk selection
• Efficiency; consider transaction costs
• Efficiency; linked to active (strategic) purchasing
• Implementation ability (regulatory, information,..)?
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“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)
www.observatory.dk
Addressing financial sustainability
• 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)
www.observatory.dk
Reforming the supply (payment)
• From passive to active (strategic) purchasing?
• Selective contracting / provider competition
• Towards performance based payment systems
– Case mix measures, DRGs
www.observatory.dk
Paying doctors
“The only way to communicate with a
doctor is to write it in the back of a
cheque”
Bob Evans
www.observatory.dk
Paying doctors
“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
www.observatory.dk
Reforming the supply (provision)
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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
www.observatory.dk
Addressing financial sustainability
• Reforming sources of funding
• Reforming the supply (payment & provision)
• Strengthening public health (reducing demand)
www.observatory.dk
Strengthening public health
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…
www.observatory.dk
Re-examining financial sustainability
1.
2.
3.
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5.
6.
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
www.observatory.dk
Solidarity vs sustainability
• Solidarity: key in European policy
• WHO, EU, Council of Europe
• Health as a human right
www.observatory.dk
1. Sustainability as willingness to pay
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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?
www.observatory.dk
2. Financial (vs Social) sustainability
•
Health and social cohesion
• Coverage of minority groups
• Economic impact of reduced solidarity
www.observatory.dk
3. An ageing crisis?
• 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
www.observatory.dk
4. “It’s the economy stupid !!”
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Health expenditure as percentage of GDP
Addressing sluggish economic (GDP) growth
The Lisbon agenda: global competitiveness
Emphasis on measures to increase productivity
www.observatory.dk
5. The contribution of health to the economy
“Health is Wealth”
Source: The Contribution
of Health to the Economy
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Surke, Mckee et al 2005
The contribution of health to the economy:
The evidence
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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
www.observatory.dk
6. Investing in health systems
A conducting framework
Health Systems
Impact on Health
Health
Impact on the
economy
Economic
growth
Wealth
WHO EURO Ministerial Conference
www.observatory.dkTallinn Summer 2008
“However beautiful
the strategy, you
should occasionally
look at the results”
Winston Churchill
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6. Investing in health systems
A conducting framework
Health Systems
Performance
•Transparency
•Accountability
Health
Wealth
WHO EURO Ministerial Conference
www.observatory.dkTallinn Summer 2008
In sum….
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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
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