EUROPEAN PAPERS ON THE NEW WELFARE

Health Care System in the Industrialised Countries and the Role of Private Insurance

5. Private health expenditure

As we have seen, in Europe health care is mainly state-run, while in the United States the public programs Medicare and Medicaid in 2003 financed only 44% of the overall health care expenditure of the country. In Europe, however, in the dynamics of private spending there is no rule of thumb. In some countries, because of the wide scope of state-run programs, private spending had no chance to grow, while other countries experienced just the opposite.
Up to the Eighties private spending tended to decline, because of the gradual increase in the number of people covered by state-run programs, with the subsequent rise in costs borne by the State. Afterwards, expenditure has shown different trends, mainly because health care policies have been dishomogeneous and reforms have been carried out at different times and in different ways. Notably, in Italy the pressing need to restore public finance soundness led, in the early 1990s, to an increase in the cost sharing by citizens.

Table 3: Private expenditure on the total health expenditure
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Source: OECD: Health data 2005; (1) 2002 figures; (2) Estimated on current public expenditure.

‘Out-of-pocket’ spending accounts for a significant share of private expenditure but its incidence varies in the most advanced countries and has a quite wide dispersion, averaging 20%. In Western Europe, contributions by citizens are rather high, for example, in Spain (23.7%) and in Italy (20.7%), whereas US citizens finance 14.1% of the total expenditure directly.
It is interesting to note that in the last few years out-of-pocket spending has remained mostly unchanged. This indicates that it has not been used as leverage by policy makers to reduce the financial burden on the State. Notably, tickets on medications have basically been the same since 1980, with fluctuations only in the short-term due to changes in the health care policy of governments, but they have not shown any upward trend.

Table 4: Out-of-pocket expenditure on total expenditure
zanette-tabella-4_eng.gif
Source: OECD.
Note: Data for Belgium, Norway, Portugal and Sweden are not available.


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