Impact of crisis is starting to emerge on health spending in Europe

Posted on Wednesday, 26 September 2012

Health spending in Europe in 2010 fell for the first time in decades. This is one of the many findings in the "Health at a Glance: Europe 2012", a new joint report by the OECD and the European Commission. From an annual average growth rate of 4.6% between 2000 and 2009, health spending per person fell to -0.6% in 2010. This is the first time that health spending has fallen in Europe since 1975. In Ireland, health spending fell 7.9% in 2010, compared with an average annual growth rate of 6.5% between 2000 and 2009. 

Economic crisis and growing budgetary constraints

The economic crisis and growing budgetary constraints have put additional pressures on health systems in many European countries. Several countries that have been hardest hit by the crisis have taken a series of measures to reduce public spending on health. The report notes that it will be important to monitor closely the short and longer-term impact of these measures on the fundamental goals of access and quality of care.

  • In some countries hard hit by the economic crisis, the public coverage for certain services has been reduced in recent years, with a growing share of payments being transferred to households.
  • In Ireland, the share of public financing of health spending decreased by nearly 6 percentage points between 2008 and 2010, and stands now at 70%.
  • In Ireland, the share of out-of-pocket spending increased by 1.7 percentage points between 2008 and 2010, and is now 2.1 percentage points greater than in 2000.

Other key findings:

  • Governments, under pressure to protect funding for acute care, are cutting other expenditures such as public health and prevention programmes. In 2010, the expenditure was 3.2% less than the year before.  This means that on average across EU countries, only 3% of a shrinking health budget was allocated to prevention and public health programmes.  The report emphasises that spending on prevention now can be much more cost-effective than treating diseases in the future.
  • More than half of adults in the European Union are now overweight, and 17% are obese. Obesity rates have doubled since 1990 in many European countries, and now range from 8% in Romania and Switzerland to over 25% in Hungary and the United Kingdom.
  • Greece maintained the highest level of smoking around 2010, along with Bulgaria and Ireland, with close to 30% or more of the adult population smoking daily.
  • Investment in health infrastructure has also been put on hold in a number of countries, including Ireland. 
  • Ireland spent more on pharmaceuticals than any other European country on a per capita basis. This is 50% above the average across EU member states.
  • Duplicate markets, providing faster private-sector access to medical services where there are waiting times in public systems, are largest in Ireland (50%).
  • Growth in health spending per capita slowed or fell in real terms in 2010 in almost all European countries, In Ireland, cuts in government spending drove total health spending per capita down by nearly 8% in 2010, compared with an average growth rate of 6.5% per year between 2000 and 2009.
  • In Ireland, most of the reductions have been achieved through cuts in wages and a reduction in the number of healthcare workers as well as the fees paid to professionals and pharmaceutical companies.