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The ‘European’ health sector – a myth?

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Default profile picture Morag Young

Caught between a rise in costs and reforms, health systems are suffering. On the brink of enlargement, does the EU have the means to help its Eastern neighbours?

While Western European societies are in good health and their life expectancy is growing, models for disease protection are affected by internal and external problems. What diagnosis can be made for European health systems in the face of globalisation and European enlargement? Are European health systems really following the path of liberalisation? Is harmonisation of disease protection possible within the EU?

The cost of health care in European countries is still increasing: it borders on 11% of GDP in Germany and Switzerland in second position behind the United States (1). The increase in costs can be explained firstly through medical progress and the use of costly new technology. Citizens are also increasingly demanding in the face of medical progress and take advantage of the medical care available more often. As the European population is ageing, there is a risk that these costs will continue to rise. Moreover, the medical profession is characterised by an intensive workforce which means a high level of remuneration.

Performance criteria

So, what are governments doing to control health spending? The most natural solution is to influence prices by reducing medical personnel numbers and the number of beds in hospitals. The second solution is to set a ceiling on health spending in hospital premises. Finally, privatising some areas of health care would allow the more solvent to benefit from private (mutual) insurance and therefore relieve public repayment of health insurance. On an EU level, public health is not one of the shared competencies of the Member States but there is co-operation in terms of policies for prevention.

Nevertheless, globalisation and budgetary constraints (the Stability Pact) are such that European health systems follow a similar path through the markets and competition (between insurers). And yet, the liberalisation of European health systems must be qualified because the logic of treatment dominates and doctors are still far from being treatment entrepreneurs. Rather, the public is faced with competition surrounded by public powers.

With the reunification of Europe, health creates further questions: the countries of Central and Eastern Europe (CEEC) have made enormous progress in terms of health care since the Semachko system and they have referred to the performance criteria since they entered the market economy. Nevertheless, Socialist ‘path dependency’ (2) is still manifest: it is difficult to leave the Semachko system (3) behind when for 50 years it backed up health care in the CEEC. Bureaucracy, corruption, the Mafia and the weakness of the key social players can hold up health care reform. The infant mortality rate (evidence of a country’s good health) still seems high for some countries (4); salaries for medical professionals and the amount of GDP granted to health care is weak in comparison with the current 15 Member States. Moreover, how can health systems be reformed if the State is withdrawing in some of these countries?

Impoverishment of health insurance

Faced with health system reforms in the CEC, new ‘policy-making’ is being outlined. The EU is participating in this through European programmes – notably PHARE (5) – but it is influencing Central European countries health agendas less than other international organisations. At the beginning of the transition one of these organisations, the World Bank, tried to establish a system of targeted allowances to further access to care. Therefore, a health allowance is distributed to the poorest categories of the population as the middle classes and the elite take advantage of health care less often. However, there is a risk that this type of Manichean scheme in the end will lead to the impoverishment of basic health insurance because only the poor benefit. The middle classes that have to take on the financing (through taxes) of such schemes are liable to say that they no longer want to contribute as they are not directed concerned.

Faced with this rather liberal solution, what alternatives is the EU proposing to improve the health care system of its future Members? In fact, the major difficulty comes from the lack of coherence in terms of health policy within the 15 Member States. Europe’s health sector does not have the will to put more investment into this domain and for the moment it only has a few strings to its bow.

(1) Système de santé: la rationalité économique à l’ordre du jour,, E Docteur and H Oxley, Directorate for Employment, Labour and Social Affairs, OECD, 19th September 2003.

(2) B. Palier, G Bonoli: Phénomène de path dependency et réforme des systèmes de protection social. Revues française de sciences politiques. Vol. 49, No.3, June 1999.

(3) This is the Soviet health system, universal and financed by the State budget. See too the interview in this issue.

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Translated from L’Europe de la santé : un mythe ?