1 Available online at Health Policy 88 (2008) Private health expenditure in the Greek health care system: Where truth ends and the myth begins Olga Siskou a,, Daphne Kaitelidou a,b, Vasiliki Papakonstantinou a, Lycourgos Liaropoulos a a Center for Health Services Management and Evaluation, Faculty of Nursing, University of Athens, 123 Papadiamantopoulou Street, Athens, Greece b Open University of Cyprus, Greece Abstract Greece today has the most privatized health care system among EU countries. Given the country s universal coverage by a public system this may be called the Greek paradox. The Objective of this paper is to analyze private health payments by provider and type of service in order to bring to light the reasons for and the nature of the extraordinary private expenditure in Greece. Methods: We used a randomized countrywide sample of 1616 households. Regression analysis was used to determine the extent to which social and economic household characteristics influence the frequency of use of certain health services and the size of household payments for such services. In all statistical analyses we used the p < 0.05 level of significance. Results: Out of the total private household health expenditure (D 6141 million), 66% is for outpatient services, with the largest share for dental services, absorbing 31.1% (D 1912 million or 1.5% of GDP) of the total out-of-pocket health expenditure. Rural dwellers seek private outpatient care more often, because of the understaffed public primary facilities. The hospital sector absorbs less than 15% (or D 884 million) of household private health expenditure. A significant part (20%) of hospital care financed privately concerns informal payments within public hospitals, an amount almost equal with formal payments in the form of cost sharing. Admissions to private hospitals are only 16% of total admissions. Our results indicate that this is a result of the political emphasis in public hospitals and of the considerably high cost of private hospital care. Conclusions: The rise in private health expenditure and the development of the private sector during the last 20 years in Greece is associated with public under financing. The gap was filled by the private sector through increased investment, mostly in upgraded amenities and new technology. Today, the complementary nature of private care in Greece is no longer disputed, but is a matter of serious concern, as it undermines the constitutionally guaranteed free access and equitable distribution of health resources Elsevier Ireland Ltd. All rights reserved. Keywords: Private health expenditure; Out-of-pocket payments; Informal payments; Greece 1. Introduction Corresponding author. Tel.: ; fax: address: (O. Siskou). In 1983 Greece instituted a national health system in which Government must, under the Constitution, guarantee that all citizens enjoy the benefits of a /$ see front matter 2008 Elsevier Ireland Ltd. All rights reserved. doi: /j.healthpol
2 O. Siskou et al. / Health Policy 88 (2008) Table 1 Private health expenditure as % of total health expenditure in 2004, in EU-19 Austria 24.4 Belgium 26.2 Czech Republic 10.8 Denmark 15.7 Finland 22.8 France 20.6 Germany 23.1 Hungary 29.5 Ireland 21.8 Italy 24.2 Luxembourg 9.4 Poland 31.4 Portugal 28.4 Slovak Republic 26.2 Spain 29.1 Sweden 15.4 United Kingdom 13.7 Netherlands n/a Average 22 Greece 47.2 a Source: OECD Health Data Base a Figure represents data before the 2006 GDP revision. complete range of services of high quality free at the point of service (The Greek Constitution, 1975). On the demand side, the country has universal mandatory coverage by a public insurance system and a low level of cost-sharing arrangements . Not surprisingly, it has been called the Greek paradox, that Greece has the most privatized health care system among EU countries. In 2004, 47.2% of total health expenditure was funded privately. By comparison, private expenditure in the other EU (19) countries (Table 1), was less than half for the same year . The rise in private health expenditure and the development of the private sector during the last 20 years in Greece took place at a time of public under financing. The gap was filled by private investment, which increased from D 33 million in 1998 to D 438 million in 2004 . At the same time, rising disposable incomes and the mobilization of private health insurance  led more households to look for privately paid services in order to meet unsatisfied demand . The Greek health system is characterized as a dual system. The supply side is largely organized along the Beveridge 1 lines, with state-provided hospital care and a network of rural health centers covering almost one third of the population. On the demand side, the system functions mainly along the Bismarck 2 lines with health insurance provided by 39 health funds covering the entire population. This, however, is a rather schematic description which does not portray the true picture. The lack of a credible public primary health care system, leads people to seek services in the private sector . With 4.9 doctors/1000 pop and 1.2 dentists/1000 pop, Greece has almost twice the number of medical practitioners compared with other EU countries (3.26/1000 pop and 0.68/1000 pop, respectively). On the supply side, the private sector covers an increasingly large part of the population health needs, but the increasing number of doctors in private practice leads to induced demand, for medical and pharmaceutical care [6,2]. Although accurate data do not exist (Greece has not yet adopted the OECD System of Health Accounts [7,8]), various estimates put private sector participation at nearly 30% of hospital care and close to 50% of medical services. On the demand side, recent estimates show roughly equal proportions of funding from public and private sources. This dependence on private financing is a major source of inequity in the system, and, as shown in a previous paper, it is also a source of corruption . In this paper we will investigate the exact nature of private health expenditure, its root causes, and its effects 1.1. Historical evolution When a democratic government returned to Greece in 1974, health care reform was the major social issue in the agenda leading to the establishment of a National Health System (NHS), in As a result of the political shift to the left in 1981, the government increased spending on health during the 1980s, in order to make up for under financing in previous decades. The increase 3 in public spending was financed 1 Modeled after Britain s NHS, care is provided by public hospitals and health centers funded by public funds. 2 The Bismarck model is based on mandatory Social Insurance funded by employer employee contributions. 3 In Table 2 we see that public expenditure increased sevenfold between 1980 and The nominal increase in later periods is considerably lower.
3 284 O. Siskou et al. / Health Policy 88 (2008) Table 2 Main sources of financing for health care in Greece (million D and % of total health expenditure), Million D % THE Million D % THE Million D % THE Million D % THE State Budget (taxation) Social insurance Total public Private insurance Out-of-pocket and other Total private THE: total health expenditure. Sources: OECD Health Data, 2006, Social Budgets of various years. Fig. 1. Total and private health expenditure as % of GDP, Greece and OECD countries. Source: OECD Health Data, out of income taxation and indirect taxes on goods and services (general and hypothecated), which represent the largest proportion (58.4% of total tax revenue) . In 1990 more than 60% of public financing came from tax revenues and less than 40% from social security, financed by compulsory employer and employee contributions . The composition of public health expenditure over the last 25 years is shown in Table 2. The dependence on tax revenues to finance public expenditure reflects large government subsidies to public hospitals. This is to keep administered prices low, in order to alleviate pressures on social security, control inflation, and discourage the private hospital sector. 4 4 The balance between taxation and social security contributions changed only in 1992, when official public hospital per diem charges [12,13]. Until today, periodic hospital debt settlements fill the gap between rates paid by Social Security and the actual cost of services 5 . Total health expenditure (THE) in Greece increased steadily during the last 15 years, from 7.4% of GDP in 1990 to almost 10% in 2004 . Between 1990 and 2000, Greece experienced a much larger increase in spending than other OECD European countries, where health care expenditure remained fairly stable. Public expenditure over the last 25 years was were almost doubled. As a result, social insurance financing in 1994 rose to 53%. 5 In 1997 the hospital deficit settled by tax revenues had reached D 578 million. Another debt settlement was made in 2001 when the deficit had exceeded D 939million. In 2007, the deficit is estimated at D 1.3 billion.
4 O. Siskou et al. / Health Policy 88 (2008) directed more at increasing employment and salaries and less at service quality and infrastructure development. As a consequence, satisfaction with the public health system has deteriorated [15 18] and, not surprisingly, private expenditure increased rapidly (Fig. 1) and is currently almost half of total health expenditure and the highest in Europe . Almost all private expenditure is out-of-pocket payments, as private health insurance accounts for only 2% of total health expenditure [2,3]. It includes formal cost-sharing arrangements, direct payments, and informal payments, with the latter two representing the highest proportion of out-of-pocket payments among EU countries. User charges for NHS services are low, limited mostly to pharmaceuticals, where copayments vary from 0-25% depending on the severity, the chronic nature of the disease and ability to pay [1,10] Objective of the paper The objective of this paper is to analyze the magnitude and the reasons for private payments in the health care sector in Greece. Private payments are generally attributed to shortfalls in the public sector . We, will, therefore, also attempt to shed light on the health needs that the public system does not meet qualitatively and/or quantitatively and on the geographical imbalances of services provision. These aspects are addressed by provisional results from the European Health Survey SHARE  and the National Statistical Service Household Budget Surveys (various years). Although both of these sources provide useful insight, our objective is to offer further information on aspects of private expenditure which have not been analyzed yet in Greece. 2. Materials and methods This paper draws from a study designed to analyze informal payments in the Greek health care sector , using a randomized countrywide sample of 1616 households. The survey methodology was that of interviews with a specially designed questionnaire developed by specialists in the areas of health systems and health economics. The questionnaire contained three main parts: (a) the frequency of use and the magnitude of net payments 6 for outpatient services (e.g. dental care, internal medicine, surgeons etc) for each member of the household during the last 12 months. (b) Questions on admission procedures and size of net payments (direct and informal) for in-hospital care in the last 12 months. (c) The demographic and socioeconomic characteristics of the household. Data recording was with the help of the SPSS statistical package. The descriptive statistics (and socioeconomic characteristics) of the sample households are shown in Table 3. We used the Student t-test to check whether mean values of continuous variables between two groups varied significantly, after the necessary checks for the normality of the distribution with the Kolmogorov Smirnov test. Where the normality assumption did not hold, we used the non-parametric Mann Whitney test. To test for the independence between two categorical variables we used the Pearson χ 2 test. We used linear regression analysis to determine the extent to which social and economic household characteristics had an influence on the frequency of use of certain health services and the size of household payments for such services. The hypotheses tested appear in Table 4. The influence of these characteristics in some choices (e.g. hospitalization in private hospital) was investigated with the use of logistic regression. In all statistical analyses we used the p < 0.05 level of significance. In the Tables 7 and 8 we show the final results of the linear or logistic regressions carried out Variations in service utilization and expenditure are often attributed to factors other than actual need . Such factors are (a) demographic, such as population aging [22,23], (b) socioeconomic and economic, such as the educational level and income [24,25], and (c) the organizational and structural characteristics of the health system. The manner in which such factors impact on utilization and expenditure are often analyzed with the help of models. For example, the behavioral model includes three types of variables: predisposing variables, such as demographic and social, enabling variables such as system organization and other economic factors, and health needs . 6 Net payments are the remaining amount of money paid after reimbursement by social and private insurance.
5 286 O. Siskou et al. / Health Policy 88 (2008) Table 3 Socioeconomic profile of respondents No. of families % Cumulative total % Urbanization of place of residence a Rural area Rurban area Urban area without University Hospital Urban area with University Hospital Thessalonica Athens Number of family members member members members members Sum 4738 Net monthly family income (D ) Less than More than Educational status of the family head b Lower Middle Higher a Rural area: population <2000 residents; rurban area: population ,000 residents; urban area: population >10,000 residents. b Lower: none primary school (0 6 years); middle: high school, senior high or technical institutes (9 14 years); higher: university or colleges (>14 years). The problems of memory recall in dealing with past expenditure are a major drawback of telephone surveys [27,28]. It is, therefore, dangerous to extrapolate our findings to the whole population. In order to arrive at a satisfactory approximation, we made the assumption that memory recall does not vary among the various health service and health professional categories studied. In other words, we assume that memory lapse is the same in each expenditure category, i.e. between payments to medical doctors and surgeons. Under this assumption, we were able to utilize the results of the Household Budget Survey (2005) for the broad categories (Pharmaceutical & Therapeutic Appliance, Medical Care, Dental Care, Paramedical Services and Inpatient Care). The 2005 Household Budget Survey included a countrywide sample of 6555 households, which were previously asked to record all medical expenditures, eliminating thus the problem of memory recall. We therefore can use the national sample to apply the percentage distribution resulting from our questionnaire to arrive at detailed expenditure breakdown estimates by service and professional specialty, included in our questionnaire. 3. Results 3.1. The distribution of household expenditure by type of care The distribution of private health expenditure is shown in Table 5. Out of the total household health expenditure, approximately 66% (the sum of dental, medical, and paramedical services shown in Table 5) is for outpatient services, with the largest share for dental services, absorbing 31.1% of total household health expenditure (D 1912 million or 0.96% of GDP 7 ). This percentage is considerably larger than in the 23 7 The GDP, after the second revision that took place in 2008, was estimated to 198,609 million euros for the year 2005.
6 O. Siskou et al. / Health Policy 88 (2008) Table 4 Multivariate analyses that were performed Dependent variables Independent variables Hypotheses investigated: dependent/independent variables (1) Frequency of visiting private doctors (for outpatient (a) Urbanization of place of residence rural 1/a, b, c, e services) by major specialty area (reference category) Internal medicine Urban area specialties/obstetricians gynecologists/other surgical specialties/dentists orthodontists (2) Size of payment for private outpatient care by major Urban area without University Hospital 2/a, b, c, e specialty Internal medicine specialties/obstetricians gynecologists/other surgical specialties/dentists orthodontists (3) Probability of hospitalization in private hospital Urban area with University Hospital 3/a, b, c, d, e Thessalonica Athens (4) Total gross a amount paid annually by family for 4/a, b, c, d, e healthcare (b) Net monthly family income (D ) Less than 1000(reference category) More than 4000 (c) Educational status of the family head Lower (reference category) Middle Higher (d) Coverage from private health insurance (0 = no, 1 = yes) (e) Number of family members 1 member (reference category) 2 members 3 members 4 members+ a Gross payment is the amount paid as a whole before reimbursement by social and private insurance. OECD Europe countries with available data (0.34% of GDP for 2005). Even in the US, with a system considerably more privatized, and with 50 million uninsured, the corresponding percentage is only 0.7% of GDP. Private household health expenditure for other medical services was estimated at 23% (D 1430 million), or 0.72% of GDP. This percentage is larger than in other OECD (Europe 23) countries (0.31% of GDP for 2005), but much smaller than in the US (2.2%) . Concerning the distribution of payments by medical specialty (Table 5), we note that payments to gynecologists obstetricians exceed that of other surgical specialties. Household expenditure for pharmaceuticals and hospital care is much more in line with other OECD countries, amounting to 0.54% and 0.44% of GDP respectively, or 17.5% and 14.4% of total household health expenditure (Table 5). In money terms, household expenditure for inpatient care is D 884 million. It is remarkable that 20% of the amount going to hospital care concerns informal payments 8 within public hospitals (Table 5). This amount is almost equal to formal 8 As informal payments we defined all payments (extra fees and gratuities) to doctors for services which are theoretically provided free-of-charge.
7 288 O. Siskou et al. / Health Policy 88 (2008) Table 5 Distribution of household payments for health services million D, 2005 Total health expenditure (%) 1. Pharmaceuticals Therapeutic appliance Medical care Medical care expenditure (%) 3.1 Internal medicine specialists Gynecologists obstetricians Surgical specialists Others Paramedical services Dental care Inpatient care Inpatient care expenditure (%) 6.1 Informal payments in public hospitals Private nursing assistants Public hospitals charges Per diem fees in private hospitals Physician payments in private hospitals Cardiac surgeons Gynecologists obstetricians Other surgical specialists Internal medicine specialists Anesthesiologists Total Source: Household Budget Survey and authors estimations. payments in the form of cost sharing. According to our findings, 36% of those treated in public hospitals had at least one informal payment to a hospital doctor. However, although, informal payments are at the center of public discourse, they account for just 2.9% of total household health expenditure. Finally, we should note that 4% of hospital payments are to privately paid non-professional exclusive nurses. Unknown in most European countries, this term indicates a nurse employed by the patient to offer nursing care exclusively to him. As in the UK hospitals, where a number of RNs are employed by the patients to cover special health needs, there is always a consensus between the hospital nursing service and physicians . Although they fill a need in understaffed hospitals , one cannot overlook the fact that these nurses often lack formal training and operate outside normal nursing procedures. Moreover, it is remarkable that none of the socioeconomic characteristics were found to be related either with the probability or with the size of payments to exclusive nurses. In Table 5, we see that 55% of funds paid by households for hospital care are payments to private hospitals. These payments are almost equally divided between payments to hospital fees and to doctors working in private hospitals. Concerning the distribution of payments by medical specialty in private hospitals, we note that payments to cardiac surgeons exceed that of other surgical specialties. This is mainly due to the fact that the reimbursement of D 8804 by social security for public and private hospitals alike does not seem to cover the true cost charged for such operations. We found that patients paid an additional D 5000 for each surgery (N = 8, mean = D 5336 min = 875 max = 8000 median = 6000 S.D. = 2963 S.E. = 1120). 9 In the majority of these cases, these payments are informal, implying tax evasion by cardiac surgeons of 85% of total income. We should note, however, that informal complementary payments to surgeons also include additional payments to anesthetists, a fact which partly explains the low payments reported for anesthesia. 9 Despite the small number of heart operations, we observe that the number reported in our sample of 4,738 is remarkably close to the national rate for heart surgery (20,000 for a population of 11,100,000 people).
8 O. Siskou et al. / Health Policy 88 (2008) Table 6 Visits per family to private doctors dentists by major specialty Specialties N Mean Min Max S.D. Internal medicine Dentists orthodontists Obstetricians gynecologists Other surgical specialties The reasons behind private health expenditure Our study confirms previous research findings [30 33], which report a positive relationship between household private expenditure and private health insurance coverage (b = 283.4, p = 0.043) and net family monthly income (b = 135.7, p = 0.072). Our findings go further in investigating the factors responsible for the use of services from the private sector and the corresponding payments Outpatient care According to our results, 42% of the sample households (N = 677) reported visiting at least one health professional on a private basis during the last year. A previous study among 873 people insured with the Public Social Security Administration found that 40.4% of those asked had visited a private doctor at least once in the last 12 months . Table 6 shows the distribution of family visits per major specialty. Among our households reporting at least one medical visit in the public or private sector, the odds of visiting a doctor privately is 1.5 (OR = 1.5, CI = , p = 0.005) and 1.8 (OR = 1.8, CI = , p = 0.000) times greater for the families whose main earner is of higher or medium educational level 10 compared to the families headed by a person with elementary education. Concerning the frequency of visiting doctors privately by place of residence, Table 7 shows that rural dwellers tend to seek private care more often. Also, families headed by persons with lower education tend to visit doctors in surgical specialties privately more often. This is somewhat at odds with earlier findings [35,24,36], that families of low educational status use specialist doctors less frequently. Also, such families are less well informed and less likely to seek care by 10 Educational level is somewhat related to family income (Pearson χ 2 = 288, p = 0,000). Table 7 Variables associated with frequency of private doctor visits, by major specialty Specialties/independent variables β p-value Internal medicine Educational status of family head Urbanization of place of residence Number of family members Obstetricians gynecologists Urbanization of place of residence Net monthly family income Educational status of the family head Other surgical specialties Educational status of the family head Urbanization of place of residence Dentists orthodontists Number of family members general practitioners rather than visiting surgical specialties on their own self diagnosis. Table 8 shows that the size of payments to surgeons and dentists is not related to the socioeconomic characteristics of the family. Moreover, the size of payments to obstetricians gynecologists is related with residence, in the sense that families in rural areas pay more money to obstetricians gynecologists relative to those living in urban areas Hospital care Our findings show that almost one in four families (23.4%) had at least one admission to a hospital during the last year. Of the 405 families reporting a total of 569 hospital admissions, the vast majority had only one admission (Table 9). The majority (81%) of admissions were in a public hospital, and from the remaining, 16% Table 8 Variables associated with the amount paid to doctors on a private basis β p-value Internal medicine Educational status of family head Number of family members Obstetricians gynecologists Educational status of family head Urbanization of place of residence Dentists orthodontists Urbanization of place of residence
9 290 O. Siskou et al. / Health Policy 88 (2008) Table 9 Distribution of hospital admissions (A) Number of admissions (B) Number of families reported at least one admission C = A B % Cumulative total % Total were admitted to private hospitals in Greece and 3% sought care in hospitals abroad. The low number of admissions to private hospitals (16%), is close to that (18%) reported by the National Statistical Service, and is probably due to the considerably high cost of private hospital care. Our results show that family disposable income is highly correlated with the probability of admission to a private hospital. Of the families reporting at least one hospital admission, the odds of seeking care in a private hospital is 3.5 (OR = 3.57, 95% CI = , p = 0.008) and 3 (OR = 3, 95% CI = , p = 0.004) times greater for families with a monthly income of D and D , respectively, compared to those with a monthly income below D The odds of treatment in a private hospital is 2.2 times greater for families covered by private health insurance compared to those without (OR = 2.207, 95% CI = , p = 0.02). Such families, however, are only a small part of the total number. Our findings show that only 9% of those interviewed had private health insurance. 11 Even out of this small number, the majority had coverage only for basic hospital care, with yearly premiums not exceeding D 900. Our findings show, therefore, that only a relatively small share of the population can access private hospital care. Of the total of those treated in private hospitals, 64% were surgical cases, while the corresponding percentage for those entering public hospitals was 44%. One reason, for this difference might be the high quality of surgical services standards provided by a few prestigious private hospitals in which the freedom to choose a particular surgeon is much higher than in the public 11 Higher percentages of coverage by private health insurance reported in other studies include the total of life and health contracts. sector. Moreover, the probability of waiting for surgery in high-profile public hospitals often forces patients to seek alternative care in the private sector . 4. Conclusions The high rate of utilization of private health services in Greece seems to be due to the problematic organizational characteristics of the health system. Insufficient public funding and the corresponding deficiencies of primary health care services [4,37,38] in a way force households to look for care in the private sector. This is apparent from our study results (Table 6), which give evidence contrary to some hitherto held tenets of conventional wisdom in Greece: (i) The frequency of visiting a private doctor in rural areas is higher than in urban areas. This is probably related to the serious shortcomings of rural health centers in both the internal medicine and surgical specialties. According to evidence from previous research, the lack of doctors in these facilities is as much as 50% of legal requirements . This is a significant (and surprising) result, since we would expect the income and education effect, which is stronger in urban areas, to give us the opposite results. (ii) Families headed by a person with lower education tend to visit doctors in surgical specialties privately more often. This finding may be explained by the fact that economically active persons with lower education tend to be employed more at menial jobs, and are insured by the Social Security Administration (IKA), the health services of which are characterized by a low level of public satisfaction. Workers at menial jobs are also probably more prone to accidents, or other problems