Address by Yves Leterme to European Regional Committee of WHO

Ministers, Regional Director, Ladies and Gentlemen,

Five years after the economic crisis first struck, we are still on the edge of a precipice in Europe.  Unemployment is over 10%.  Youth unemployment is double, triple even five times the average, and long-term unemployment has taken root.  We make little progress in solving the banking and sovereign debt crisis.  Europe cannot expect to be rescued economically by the rest of the world, each region of which faces its own problems: America is heading towards a fiscal cliff that risks derailing the economy; China and India – the world’s engines of growth in the past decade – have slowed. Brazil is flat. Economic growth in Europe might struggle above 1% in 2012; we cannot expect much better than that.

This is the background to your discussions this week on how to improve health systems, as indeed it is to all the work we do at the OECD on health system performance.  For most countries in the European region, the chances of significant increases in health spending in the next five years are low.  For some, the picture is even bleaker: further cuts in spending will be inevitable, with all the pain and hardship that this inevitably brings.

We must deliver greater value for money in health spending.  Of course, this is desirable whatever the state of the economy, but it is so much more important when money is tight.  All countries can do better in getting value for money.  Does anyone here seriously deny that health systems are not riddled with inefficiency – spending too much on some things, too little on others, and badly on many? Our work at the OECD shows that countries differ enormously in how well they spend whatever money they can afford. Some countries get far more health for their money than others.

Alas, it is far easier to say that ‘we need more value for money’ than it is actually to deliver such results.  We all know how hard it is to design health policies that are politically feasible and yet which don’t have unintended side effects. 

This, I hope you agree, is where International Organisations – such as the OECD and the WHO – can help.  We do not presume to tell you what to do, but we can play a big role in helping you to identify where your system is underperforming compared to others. We can provide examples of good practice to inspire changes in your own systems.

It is in that spirit that I welcome the signing today of our Joint Action Plan, identifying the areas in which OECD and WHO-European Region will co-operate in the next few years. 

We are not the same. The OECD is primarily an economic organisation – it was no accident that I started today by describing the economic situation that we face.  We are specialists in the economics of health.  We are interested in the allocation of health resources; in improving the productivity of the health workforce; in providing appropriate incentives so that payment systems reflect the real cost of resources and promote greater efficiency; and  so on.  We in no way presume to have the depth of medical knowledge, and indeed understanding of how health is generated ‘on the ground’ than does the WHO. 

The guiding principle of the Joint Action Plan that we will sign today is that by working together, we can be more persuasive than if we act separately. There are many areas mentioned in the plan, illustrating that co-operation is already tight.  Among them, let me highlight three areas where I think that the work we have been doing together is of particular importance.

        1) Stressing the role of public health

European countries still spend only around 3% of their health budgets on prevention, despite all the evidence that such spending provides better value for money than much spending on secondary or tertiary care. WHO-European Region has a proud tradition of emphasising the value of public health spending, shown not least by the prominence given to the issue in the Tallinn Charter. 

We at the OECD have been working hard to make the economic case for investment in prevention.  We published our report on Obesity and the economics of prevention: Fit not Fat two years ago, and are currently preparing a similar analysis of ‘what works’ in tackling harmful use of alcohol.  The combination of our number-crunching, technical analysis to give evidence that will withstand the scrutiny of the most sceptical controller of public budgets, and WHO-Europe’s understanding of how prevention fits into the wider health system, and how it can be delivered in practice, is potentially very powerful. I hope further work together in this area will be convincing.

        2) Fiscal sustainability of health spending.

Secondly, I draw your attention to our new ‘Joint Network on the Fiscal Sustainability of Health Spending’.  This brings together Ministry of Finance officials responsible for health budgets together with their Ministry of Health colleagues to discuss issues of common interest.  In some of your countries, relations between ministries of finance and ministries of health are close and cordial.  In many, sadly, they are not: officials do not always appreciate the objectives and constraints of each other.  We hope this dialogue can be improved by discussing issues together.

For example:

• how rapidly will health spending grow in the future?
• is it possible to create additional ‘fiscal space’ to allow for health spending?
• what might be the effects of changing the way in which we finance health spending?
• how should we budget health spending – what are the advantages and disadvantages of ‘hard’ budget constraints?

WHO-European region and the OECD co-hosted a regional event of this network in Estonia recently, which was by all accounts a great success.  A shared appreciation of the challenges facing health systems between Ministries of Health and Ministries of Finance is needed now more than ever, and I trust that this collaboration is just the start of our joint work in this area.

        3) Data collection

Health data is in high demand – there were well over a quarter of a million downloads of health data from our website in 2011, and our statistical publications on health regularly top the OECD ‘best sellers’ list.  But we are well aware that with the WHO and Eurostat, data users have a choice of 3 different sources.  Slightly different definitions, leading to different figures being reported, undermine the confidence in health statistics.  Who should they trust? Different organisations collecting the same data from countries adds to the burden of report imposed on countries.  By working together to collect data jointly, we deliver a better product, at lower cost to countries.  We are therefore delighted with the success of the data collection of non-monetary statistics that we do jointly with WHO Europe and EUROSTAT, and look forward to extending it in the future.

Ladies and gentlemen, I started today with some depressing thoughts about the state of our economies.  At the OECD we are convinced that the only way to get our economies back on track is to be radical, and to think of new approaches to economic growth.  We must Go Green!; Go Social!, and Go Structural!  Sustainable growth in the future cannot be from carbon-generating feeding of consumerism.  Health already accounts for nearly 10% of GDP, and growth and jobs can be generated from expanding health services.  But we can only justify this if health systems deliver value. 

If we combine an understanding of the subtleties of health care provision that is characteristic of the work of the WHO, with the economic rigour that we apply at the OECD, we can make a compelling case for health in general and for appropriate reform of health care.  That is what we hope to achieve with our Joint Action Plan. I hope that it responds to your wishes.

Thank you.