Healthcare Europa estimates that countries with a total population of 215m are serious about structural reform which will favour private operators and insurers in Europe over the next decade. Here we look at what is happening across Europe. The follow on article looks at reform trajectory in no less than 20 European countries and at where it creates opportunities for the private sector.
Often, people claim that Beveridge systems, where healthcare is delivered by an NHS, (as in Spain, Italy, Poland and the UK) are converging with Bismarckian systems (Germany, France, Netherlands) where individuals pay into a statutory insurer and can then chose doctors and hospitals. There is truth in this. NHS systems are giving the public a wider choice and are increasingly looking to private providers to cut queues or provide services. Meanwhile, Bismarckian systems in France and Germany are trying to lessen patient choice and to promote the role of the family doctor as gatekeeper.
There is a simpler truth. All European governments are wrestling with same big issues. For the public sector these are : How do we ensure that staff work hard for the allotted number of hours ? How do we set up meaningful pricing and accounting systems ? How do we cut acute hospital beds ? How do we build ambulatory outpatient services ? How do we build effective gatekeeping primary care structures ?
For the private sector these are : How do we avoid private players maximising profits at the expense of quality ?
For the care of the elderly these are : How do we keep costs down given the grey population explosion of the next 30 years ? How do we avoid expensive acute episodes (accidents and falls) ? How do get individuals and families to pay their share of costs ? How do we control the cost of care homes beds ? Put it another way : all healthcare ministries across Europe are keen to identify ways of cutting costs and reducing the power of incumbent professions. The left favours solutions within the public sector, whilst the right looks to creating more of a free market including the private sector or (in France) to a controlled expansion of private providers.
But healthcare reform is such an emotive issue that only governments with majorities or a strong national consensus can really hope to make serious structural reforms.
Electorates across Europe will not agree to the privatisation of hospitals, are strongly opposed to hospital closures and oppose any increase in out of pocket payment or restrictions in the basic care package. They want unlimited, free-at-point-of-service healthcare and will only grudgingly accept the idea that they should pay for care in homes or homecare. This remains the case in countries such as Romania, Bulgaria and Greece which face huge problems and have very poor public healthcare services.
In these countries an honest, “tough love” policy would be to explain to the electorate that they can have a smaller range of basic services free of charge and will then have to pay extra. But citizens prefer to hold on to an illusory larger thing which is actually worth very little, rather than have a small thing which is worth having.
In the face of such resistance in countries like Bulgaria, Romania and possibly Hungary, there is no clear reform path – simply gibbering incoherence.
Often, looming healthcare deficits do not seem to have moved governments away from immobility, even though voters have responded to the crisis by electing the right in a string of elections in the UK, Sweden, Hungary, Poland, Czech Rep, Slovakia and Bulgaria.
National healthcare reform is also next to impossible where responsibility has been delegated to individual regions. Germany has been in a messy stalemate for years, whilst in Sweden, Switzerland, Italy and Spain healthcare is decided by around 20 elected regional/cantonal or county assemblies in each country. The Czech regions are all ruled by the left, although the central government is rightist, making coherent healthcare reform difficult.
Some of these regions are free market reform pioneers such as Madrid, Valencia (Spain), Stockholm, Halland (Sweden) and Lombardy (Italy).
The recession has led to some cuts in public healthcare expenditure, but, in general, it has not been badly hit compared to other sectors, including care. Where cuts have been made, they have been visited mainly on pharmaceutical expenditure and the amount spent on private sector healthcare. Over the last year, the private healthcare sector has proved to be a major victim of the recession in PIIGS countries, facing longer delays in payment and cut budgets.
To some extent, reform is defined by the government in power. The left is only in power in Portugal, Norway, Spain and Greece. Apart from Norway, these are all lame dog governments which lack credibility.
They continue to not make any changes which would give private providers and insurers a wider role. Note, however, that they sometimes have been prepared to take radical action – in Spain public sector nurses and doctors saw their pay cut by 5%, for example.
There are, however, strongly reformist governments which are trying to create more of a market in healthcare services and to liberalise whole sectors. Here the main examples are France, Poland, Slovakia the UK and Hungary. The momentum has slowed in Sweden, Finland and the Netherlands, although we can expect further progress towards market economies in these countries. Ireland is also likely to embark on radical reform.
Added together, these countries have 215m people, so the opportunity in Europe is larger than might at first sight appear.