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Social Policy in European Countries

Austerity: Compromising Universalism in Healthcare?

February 21, 2020

Any changes in the scope of collectively provided services and the conditions establishing entitlement to them can significantly alter the contours of universalism and the underlying pattern of solidarity. Italy, Spain, Portugal, and Greece have had universal healthcare systems in place since the late 1970s-early 1980s. But the latter two countries stand out for their “incomplete” universalism, as a mixed type of care sustaining inequalities in service provision persisted until lately. This combines a national health system with social health insurance coverage for distinct social groups and high out-of-pocket spending. The financial crisis took a heavy toll on all four healthcare systems, most profoundly and for a longer time span in Greece.

Have the crisis and austerity set the four healthcare systems on a path towards a noticeable transformation in the scope and content of universalism? The short answer is that so far the evidence does not point towards this direction in an unequivocal way. In the last decade, an array of similar policies was implemented in all four countries, such as rising cost sharing (mostly for pharmaceuticals), changes in the range of provisions, and reduced material and human resources. However, the extent to which these measures have shifted the cost of care to the patients and increased inequality in access to services varies considerably among the four countries. Moreover, in Greece and Portugal, which faced the most serious sovereign debt crisis (and came under bailout programs), a confluence of external and internal pressures catalyzed significant changes aimed at tackling system fragmentation, improving transparency, and promoting the equalization of provisions, albeit of a leaner basket of publicly provided services.

Declining public expenditure and unmet need

At the height of the crisis (2008-2013) per capita public health expenditure (measured in Purchasing Power Standards for reasons of comparability, and at constant 2010 prices) plummeted drastically (by about 30%) in Greece. It dropped by 12% in Portugal, 8% in Italy, and 3% in Spain. Subsequently, it almost stagnated in Greece and Italy, but resumed a moderate upward trend in Spain and Portugal. However, in all four countries the gap vis-à-vis the EU15 average (that is, of the 15 member countries before the EU’s eastern enlargement) widened. In 2017 per capita public health spending in Greece dropped to as low as a third of the EU15 average and to a half of it in Portugal. It stood closer to this average in Spain and Italy. Conversely, particularly since 2013, private spending has been on the rise in all four countries, recently covering between 40% (in Greece) and 24% (in Spain) of total health expenditure.

Greece exhibits by far the highest rates of unmet need for medical care due mostly to unaffordable healthcare costs. In this country, even middle-income households, particularly those with children and elderly people, face financial barriers to healthcare. Hence, the risk for private payments to be “catastrophic” for the household budget remains high. In Spain and Italy, increasing waiting times for specialist treatment and hospital care during the crisis constitute the main impediment affecting people’s satisfaction with different healthcare levels. Nevertheless, the prevalence of unmet need has stayed lowest in Spain. However, in these two countries there are considerable regional disparities in the distribution of health resources. This is starkly evident in Italy, with southern regions lacking sufficient resources compared to northern/central regions.

In Greece (and to some extent in Portugal too) reforms embracing thresholds to and stricter monitoring of physicians’ activities (such as limits in the number of referrals for diagnostic/laboratory tests, ceilings on the monthly amount of prescribed drugs, etc.) make the system more transparent and contribute to cost containment. But at the same time, they impact upon system permeability and navigation. This is compounded by the still (more or less) fragmented care pathways between primary and specialty hospital care in these two countries. Moreover, in all four countries comparatively high prevalence of avoidable hospital admissions for some chronic diseases (like diabetes, hypertension, asthma, and others) reflects inefficiencies in the prevention-primary care interface, with adverse implications for equity.

Points of concern

Some foremost points of concern are the following. First, adherence of health policies to squeezed public sector resources is here to stay. This is reflected in the steady rise of per capita private health spending, and the rather slow increase in (or stagnation of) public spending. Second, eligibility of coverage remains comprehensive in principle, but in practice access is a challenge for a number of vulnerable groups (due to varying combinations of reasons - such as unaffordable cost, long waiting times, distance, etc. - in each country). Third, private health insurance (on an occupational or voluntary basis) is expanding: between 2005 and 2015, it has almost doubled in Spain and rose noticeably in Portugal. It is also on the increase in Italy, while in Greece the crisis stalled an incipient upward trend. But in this latter country, out-of-pocket payments are steadily high. So far, private health insurance is sought mostly for speedier access to specialist care and covers mainly employees of some large enterprises.

How this trend will unfold in the future and the likelihood of its compromising universal coverage very much depend on a number of factors, such as policies redrawing the public-private mix, workers’ preferences, taxation policies, etc. If occupational health insurance becomes comprehensive (i.e. covers the majority of the working population and is closely regulated, as happens for instance in some North European countries), it may sustain equality in access. It can lift some pressure on public finances but at the same time maintain universal coverage. Yet, if occupational insurance covers only some (privileged) groups of the working population, it can potentially transform solidarity into an occupational-mutualist type that could eventually erode universalism.

Finally, in the foreseeable future, the public system will be further challenged by a raft of serious financial strains accompanying the rapid technological advances in the health sector and the growing need for both “upstream” preventive services (on account of which all four countries underperform) and “downstream” social (but mostly long-term) care services due to population ageing. These may act as further triggers for rearranging the public-private interface, shifting the dynamics of social solidarity in healthcare.

Maria Petmesidou, Democritus University of Thrace, Greece <marpetm@otenet.gr>
Ana Guillén, University of Oviedo, Spain <aguillen@uniovi.es>
Emmanuele Pavolini, University of Macerata, Italy <emmanuele.pavolini@unimc.it>

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