Scenarios for Health Policy and Funding In Europe

1. Introduction

In the decade 1993-2003 health funding saw real terms growth across the OECD area. Only in Finland did the health share of GDP fall during this decade (Table 1). This period of relatively rapid growth is highly likely to have brought on a phase of cost containment through pressure on funders ability to pay — but this time there was additional pressure from changing perceptions of the longer term pressures on health services. The concerns are no longer just about the supply side and short term cost containment — they have shifted towards a new set of concerns about the future demand for health. Future demography has for long been presented as a nightmare with rising support costs for more elderly people: but in addition there are new and unsettling concerns about lifestyle changes which affect all age groups.
The key variable is policy — whether health services can break away from provider capture with its commitment to big ticket, hospital services and make use of the new more accessible technology in prevention and care. The future of health services will not be determined mainly by impersonal forces of demography and changing disease patterns from outside the health service — they will depend on whether health services can develop a creative and flexible response to new problems. The new feature of the last decade has been the very strong gains from using competition and choice in a number of countries. They have been particularly effective in insurance based Bismarck systems where it is possible to have independence of the funder from the provider. The internal market has on the whole worked better in such systems than it has in the more centralized tax funded systems. Can health care grasp the opportunity to use new kinds of small ticket technology and new approaches to patient care involving much better communication? The future of health services depends on whether we can break away from old patterns and unleash the forces of innovation and quality improvement which are there in health services.

Table 1: Health Spending as% of GDP
Source: OECD

2. The Technology Factor

Technology is usually presented as a given emerging from outside the health system. Both corporations and universities have a vested interest in the romantic view of technology — that it emerges from the heroic and selfless quest for innovation. Innovation emerges from pure research, science and technology all of which are dynamic but dynamic because of the intellectual quest rather than because of crudely commercial considerations.
Technology is not the product of pure technical factors — the technological investments made reflect the interplay of power and professional forces. And interests. In markets driven by consumers the tendency is for the market to expand and cheapen technology. The outlook is very different when public sector producers control the funding. The technology developed will have few if any financial or market constraints.
The main features of this technology environment are:
• technology which requires highly qualified staffing to operate and interpret the results. In mass markets technology becomes simpler and usable by a wide range of users. In health this is rarely the case.
• Clinical governance standards which mandate the use of expensive technology.
• Risk assessment which stresses the gains to the use of high tech equipment.
Low levels of capacity use which are brought about in part by the limited availability of specialist staff and the high capital and labour costs also reduce customer ability to pay. Thus the situation often offers the combinations of limitation on access leading to waiting times and low capacity use. Typically the utilization rate on public sector MRI scanners is about half of that on privately owned ones.
The new development in the last ten years has been the emergence of more technology for primary care and local pharmacies. This provides an instructive contrast to big ticket technology for secondary care. There are a variety of new local diagnostics and treatments including:
• Cholesterol testing.
• Diabetes monitors.
• Smaller X rays and Ultrasound linked together with PACS.
• Nicotine replacement Therapies.
• IT/Communication systems
New methods of treating venous ulcers with Doppler assessment and the four layer bandage. These offer much more diagnostic and treatment capability in primary care.
It is ten year since Regina Herzlinger’s powerful work ‘Market Driven health Care’ was published. She saw America and other developed nations as being at the start of a healthcare revolution.
“These dramatic developments in medical technology enable the decentralization of powerful, therapeutic, diagnostic and monitoring services. Services available only at vast, costly hard to reach hospitals will instead be provided by inexpensive, easy to access clinics, physicians offices, ambulances and helicopters. The most important feature of this newly formed landscape will be better health for all of us.”
Ten years on most of Europe indeed most of the developed world is still waiting. The picture is highly patchy between systems and between specialities. There has been some progress in developing new kinds of care but the vast majority of patients are still being treated in the old systems. Health care in Europe remains a state funded industry which continues to churn out services to fit providers rather than consumers. The medical service mountain is less visible than the farm surpluses of wine lakes and butter mountains produced by the former EU agricultural policy but fundamentally the economic incentives are the same — to extract the maximum benefit from producer subsidy rather than to provide the services chosen by consumers.
Spending on innovative programmes on care pathways E health and new accessible services can be estimated at 5-7% in the UK and Germany 1-3% in France and Italy. And up to 20% in Scandinavia. Where are the islands of progress? The main success areas have been.

Nick Bosanquet: Professor of Health Policy, Imperial College.

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