Health policy responses to the financial crisis in Europe

Key messages

• Economic shocks present policy-makers with three main challenges:
• • Health systems require predictable sources of revenue. Sudden interruptions to public revenue streams can make it difficult to maintain necessary levels of health care.
  • Cuts to public spending on health made in response to an economic shock typically come at a time when health systems may require more, not fewer, resources – for example, to address the adverse health effects of unemployment.
  • Arbitrary cuts to essential services may further destabilize the health system if they erode financial protection, equitable access to care and the quality of care provided, increasing costs in the longer term. In addition to introducing new inefficiencies, cuts across the board are unlikely to address existing inefficiencies, potentially exacerbating the fiscal constraint.
• The response to the crisis across the European Region varied across health systems. Some countries introduced no new policies, while others introduced many. Some health systems were better prepared than others due to fiscal measures they had taken before the crisis, such as accumulating financial reserves. There were many instances in which policies planned before 2008 were implemented with greater intensity or speed as they became more urgent or politically feasible in face of the crisis. There were also cases where planned reforms were slowed down or abandoned in response to the crisis.
• European Region countries employed a mix of policy tools in response to the financial crisis. Some of the policy responses were positive, suggesting that some countries have used the crisis to increase efficiency. The breadth and scope of statutory coverage was largely unaffected and in some cases benefits were expanded for low-income groups. However, some countries reduced the depth of coverage by increasing user charges for essential services, which is a cause for concern. Little was done to increase efficiency through policies to improve public health.
• Policies to secure financial sustainability in the face of the financial crisis, and to improve the health sector’s fiscal preparedness for financial crises, should be consistent with the fundamental goals of the health system.
• To risk over-simplifying, policy tools likely to promote health system goals include: risk pooling; strategic purchasing; health technology assessment; controlled investment; public health measures; price reductions for pharmaceuticals combined with rational prescribing and dispensing; shifting from inpatient to day-case or ambulatory care; integration and coordination of primary care and secondary care, and of health and social care; reducing administrative costs while maintaining capacity to manage the health system; fiscal policies to expand the public revenue base; and counter-cyclical measures, including subsidies, to protect access and financial protection, especially among poorer people and regular users of health care.
• Policy tools that risk undermining health system goals include: reducing the scope of essential services covered; reducing population coverage; increases in waiting times for essential services; user charges for essential services; and attrition of health workers caused by reductions in salaries.
• Where the short-term situation compels governments to cut public spending on health, the policy emphasis should be on cutting wisely to minimize adverse effects on health system performance, enhancing value and facilitating efficiency-enhancing reforms in the longer run.