ECONOMIC GOVERNANCE: TOWARDS A MORE SUSTAINABLE HEALTHCARE IN EUROPE

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1 ECONOMIC GOVERNANCE: TOWARDS A MORE SUSTAINABLE HEALTHCARE IN EUROPE Summer 2013 In association with Media partner

2 This report reflects the conference rapporteur s understanding of the views expressed by participants. Moreover, these views are not necessarily those of the organisations that participants represent, nor of Friends of Europe, its Board of Trustees, members or partners. Reproduction in whole or in part is permitted, provided that full credit is given to Friends of Europe and that any such reproduction, whether in whole or in part, is not sold unless incorporated in other works. Rapporteur: Sebastian Moffett Publisher: Geert Cami Project Director: Nathalie Furrer Project Executive: Danuta Slusarska Project Assistant: Louise Smyth Photographer: Philippe Molitor Design and layout: Heini Järvinen

3 Table of contents Economic crisis: challenge or opportunity? 3 Greek drama 4 A widespread problem 6 Lack of political will and leadership 7 European Semester 10 What are the solutions? 11 Remaining uncertainties 13 Annex I Programme 15

4 2 Friends of Europe Life Quality Europe

5 Economic governance: Towards a more sustainable healthcare in Europe Summer Economic crisis: challenge or opportunity? Healthcare is one of people s central concerns and is becoming increasingly costly as Europe s population ages. At the same time, Europe s economic crisis has brought drastic cutbacks in public budgets. The healthcare sector has not been left unscathed and has seen a subsequent decline in per capita spending that has been unprecedented in the last 50 years. Despite the need to demonstrate value for money, not enough is known about how to deliver sustainable and cost-effective healthcare. There are big differences in the practice of healthcare in the European Union and there are no outstanding models that could be imitated. It s not a question of how much money we have left, as we were never as wealthy as we are now said Monika Kosinska, Secretary General of the European Public Health Alliance (EPHA). It s about how efficient we are with the money that we are using, and also how efficient our system is in delivering what it is supposed to do. It s not a question of how much money we have left, as we were never as wealthy as we are now. It s about how efficient we are with the money that we are using, and also how efficient our system is in delivering what it is supposed to do. Monika Kosinska, Secretary General of the European Public Health Alliance (EPHA) The increased demand for healthcare comes at a time of economic slowdown and national budget pressures. But that means leaders also have an opportunity to change things for the better, said Giles Merritt, Secretary General of Friends of Europe, who led the panel discussion.

6 4 Friends of Europe Life Quality Europe Healthcare is going to be at the centre of the discussion about how Europeans live their lives in the years to come, said Merritt. We need a radical rethink of healthcare systems that have developed a bit here and a bit there. Countries haven't learnt from each other. We need a radical rethink of healthcare systems that have developed a bit here and a bit there. Countries haven't learnt from each other. Giles Merritt, Secretary General of Friends of Europe Greek drama Europe s most dramatic example of a badly organised healthcare system is Greece. Before the crisis hit, Greece was spending roughly the EU average in terms of proportion of GDP on healthcare. However, this masked some severe imbalances. Primary health hardly existed, mental health was poorly managed and a lack of blood management means that Greece imports blood from Switzerland. Greek healthcare was not sustainable, even before the crisis, said Giulia Del Brenna, Member of the European Commission s Task Force for Greece, the crisis just revealed the problems.

7 Economic governance: Towards a more sustainable healthcare in Europe Summer The country also had a bizarre price structure for drugs, where the prices of patented drugs were low, while those of generic drugs were high. Greece was spending more per head on some medicines than anywhere else in the world, said Richard Torbett, Chief Economist at the European Federation of Pharmaceutical Industries and Associations (EFPIA). Greece s economy has declined by over a fifth since the crisis hit, leaving between 100,000 and one million people without access to healthcare anymore because of long-term unemployment. A troubling example of the effects of cutbacks is syringes, which the government used to supply to drug Greek healthcare was not sustainable, even before the crisis. The crisis just revealed the problems. Giulia Del Brenna, Member of the European Commission s Task Force for Greece

8 6 Friends of Europe Life Quality Europe addicts to stop them getting infected with HIV. Levels of infection among addicts increased tenfold over a year because this supply was stopped, said Del Brenna. Sacrifices are needed, she said. But collateral damage and this is an awful word to use, because this is far more than collateral damage has to be managed also for fiscal reasons as those infected will require costly treatment for years to come. That said, the Greek government s reforms could make its healthcare more sustainable in the long term. What has happened now can be an opportunity, said Del Brenna. A widespread problem Though Greece s problems are particularly dramatic, reforms are needed all over Europe. For a start, said Torbett, there are huge differences in access to medicine: poorer countries have the worst access, and there are big differences within states. Inequality is really quite astonishing in Europe today. There is almost a decade of difference in life expectancy between the worst and the best in Europe. Richard Torbett, Chief Economist at the European Federation of Pharmaceutical Industries and Associations (EFPIA) Inequality is really quite astonishing in Europe today, he said. There is almost a decade of difference in life expectancy between the worst and the best in Europe. There are currently around four people of working age for every elderly person in the EU. But that proportion will halve in the future meaning fewer people creating the wealth to provide healthcare, but more people demanding it.

9 Economic governance: Towards a more sustainable healthcare in Europe Summer Lack of political will and leadership However, the recent fiscal crises in EU states have shown politicians reluctant to take hard decisions needed to manage resources better, said Philippe De Backer, Substitute Member of the European Parliament Committee on Economic and Monetary Affairs. They have taken the easy way out, he said. They have not talked about long-term structural reform. What have they done? Raised taxes and made simple cuts. Politicians need to say that the way that we have been doing things is not going to suffice in order to remain competitive. It will require political leadership, and I am afraid it is political leadership that we are lacking today. Philippe De Backer MEP, Substitute Member of the European Parliament Committee on Economic and Monetary Affairs But the current system could soon become unsustainable, he said. In addition to the ageing population, a number of diseases are becoming chronic, requiring longer periods of treatment. Politicians need to say that the way that we have been doing things is not going to suffice in order to remain competitive, said De Backer. It will require political leadership, and I am afraid it is political leadership that we are lacking today.

10 8 Friends of Europe Life Quality Europe

11 Economic governance: Towards a more sustainable healthcare in Europe Summer

12 10 Friends of Europe Life Quality Europe We do not measure what we value, we value what we measure said Kosinska. The European social model relies on a social contract according to which the society agrees to pay taxes in return for a good quality and universal healthcare. This is not case at the moment and there is a big gap between what citizens want and the political decisions. European Semester The European Semester, an annual cycle of economic and budgetary coordination, has brought a new economic approach to healthcare systems and complicated the institutional framework. The Annual Growth Survey carried out by the European Commission in November 2012 included for the first time healthcare systems assessment and emphasised that building efficient healthcare is an integral part of economic recovery. The European semester has come out of the euro zone crisis and the frame of reference necessarily means that the primary focus is going to be one of cost efficiency, said Torbett. We really need to make sure that we re having an eye to some of those longer-term challenges.

13 Economic governance: Towards a more sustainable healthcare in Europe Summer The new EU economic governance has led to growing EU influence in healthcare, traditionally considered an issue of national competence. The negative consequence is that many member states play a blame game, said De Backer, using the fact that there is a lack of clarity in the institutional framework and the competences between member states and the EU. What are the solutions? The increasing burden of health-related costs requires hard choices over how healthcare will be paid for in future and to what extent it will be financed by public spending. Where should the line be drawn between public and private spending? asked Francesca Colombo, Senior Health Policy Analyst at the Organisation for Economic Co-operation and Development (OECD). Should the package covered be larger and larger or limited to essential services? There s also a need to find out how effectively money is spent on healthcare by looking at the micro-level treatments and examining how effectively they are being carried out under different systems. Too little is currently known

14 12 Friends of Europe Life Quality Europe about the quality of primary care, said Colombo. Better knowledge could prevent the unnecessary hospitalisation of people with disabilities, and could also help discover the best ways to deal with diabetes or heart attacks. If certain treatments such as spas can help people avoid becoming ill, then a line needs to be drawn between what counts as private responsibility and what should be financed publically. There are a number of questions that are now posed about where should be the responsibilities, said Colombo. Should the package covered be larger and larger or limited to essential services? Where should the line be drawn between public and private spending? Francesca Colombo, Senior Health Policy Analyst at the Organisation for Economic Co-operation and Development (OECD) Prevention is one key to making healthcare more sustainable, said Kosinska. Some of the recent increases in health spending are due to more expensive technology. Moreover, healthier lifestyles could help a lot. That means moving more, drinking less alcohol and not smoking. The Japanese are aware of this, which is why they sometimes perform exercises in the workplace something unimaginable to Europeans and Americans. We are sitting ourselves to death in Europe, she said. We need to talk about maintaining health rather than treating sickness.

15 Economic governance: Towards a more sustainable healthcare in Europe Summer Remaining uncertainties So far, however, little is known about what an ideal health system might look like. The pharmaceutical industry has looked for good evidence of best practices, said Torbett, but the evidence is extremely anecdotal. Given the amount of money that goes into healthcare, we are in a very weak position to identify smart healthcare, he said. There are a few clues about where to start looking. Australia has some very good indicators of quality of care, said Colombo. And Sweden s system had good outcomes with a level of spending that is high but not the highest in the OECD. One of Sweden s strong points is good local coordination between care for the elderly and the primary care sectors. Still, said Colombo: In no country can we say that a country is getting it correct in all aspects of the healthcare system.

16 14 Friends of Europe Life Quality Europe

17 Economic governance: Towards a more sustainable healthcare in Europe Summer Annex I Programme Welcome and registration of participants Café Crossfire Evening Debate Europe s economic crisis has revealed many structural problems in the healthcare sector and highlighted the need to demonstrate value for money. Given cutbacks in public budgets and a subsequent decline in per capita healthcare spending that has been unprecedented in the last 50 years, delivering sustainable and cost-effective healthcare is now a top priority for EU member states. In this context, the EU has for the first time included healthcare systems assessment in its Annual Growth Survey 2012, recognising that building efficient healthcare is an integral part of economic recovery. The European Semester, the new EU economic governance tool, has thus led to growing EU influence in healthcare, traditionally considered an issue of national competence. What benefits does the new economic approach to European healthcare promise and what role should the EU play? How can the need for costeffective spending be reconciled with maintaining a high standard of care? How can cuts be avoided in areas that promise quick savings, but that can deliver important returns on investment in the long term? And how can we involve all stakeholders in reforming healthcare systems in Europe? Francesca Colombo Philippe De Backer MEP Giulia Del Brenna Monika Kosinska Richard Torbett Senior Health Policy Analyst at the Organisation for Economic Co-operation and Development (OECD) Substitute Member of the European Parliament Committee on Economic and Monetary Affairs Member of the European Commission Task Force for Greece Secretary General of the European Public Health Alliance (EPHA) Chief Economist at the European Federation of Pharmaceutical Industries and Associations (EFPIA) Moderated by Giles Merritt, Secretary General of Friends of Europe Cocktail

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20 With the support of the Europe for Citizens programme of the European Union This project has been funded with the support of the European Commission. The Commission cannot be held responsible for any use which may be made of the information contained therein.

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