The Performance of the Greek NHS and the Economic Adjustment Programme. Babis Economou Assistant Professor, Panteion University

Transcription

1 The Performance of the Greek NHS and the Economic Adjustment Programme Babis Economou Assistant Professor, Panteion University

2 The Structure of the Presentation The performance of the Greek NHS The Relation Between the Organisational Structure and the Performance of the Greek NHS The Impact of the Economic Adjustment Programme

3 1. The Performance of the Greek NHS Health outcomes in Greece compare favourably in international comparison The population s health status as measured by internationally comparable indicators is better on the whole than the EU average

4 Life Expectancy and HLE at birth 2007

5 Mortality rates from all causes of death 2008

6 Infant mortality rates 2008 and decline rates

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8 Per capita health expenditure 2008

9 Average length of stay in hospital for all causes 2000 and 2008

10 so where is the problem? Despite these fairly favourable outcomes, the health care system is seen as not working well by the population

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14 In addition, the NHS faced an erosion in its effectiveness Whilst in 1990 the NHS had ranked between 3 rd 5 th among OECD countries, in 2006 had fallen to between 12 th 18 th place, depending on whether the resources available for health care are measured by the level of spending per capita or proxied by the number of medical personnel. Whilst in 1990 using the health care resources as efficiently as the best performing countries would have increased LE between 0.8 and 0.9 year, the gap widened to between 1.7 and 3 years in 2006

15 Change in health outcome and expenditure

16 Potential efficiency gains 2007

17 Increase in LE over was lower than the increase which could be achieved while holding spending constant

18 Comparison of the increase in spending per capita over and the increase needed for if countries wanted to improve the health status of the population by the same amount they did over the period

19 Potential public spending savings as a result of efficiency gains

20 Health services responsiveness 2001

21 Source: Health Consumer Powerhouse

22 Consequently Although the health status of the Greek population is comparable to that of the OECD and EU countries and the level of aggregate health spending is in line with per capita income citizens satisfaction from health services is low and the NHS efficiency is declining and is behind the level it could have been achieved.

23 2. The organisation of the health care system impairs its efficiency The fragmented structure of the health care system is a source of inefficiency Control over public health spending is steeped in bureaucracy Deficiencies in the public system boost private spending which poses problems of fairness and contributes to the development of informal payments

24 2 a. The fragmented structure of the NHS is a source of inefficiency Absence of a clear regulatory model: mixture of public and private services and funding (a Bismarckian model, superimposed by a Beveridgian model, undermined by private practices) Different ministries involved in administering the supply of public health services Serious gaps in statistical information Medical demography unsatisfactorily managed Deficient allocation of health resources

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26 User information on quality and prices of health services

27 Practising physicians per 1000 population

28 Nurses and caring personnel per population, 2008

29 Ratio of nurses to physicians, 2008

30 Pharmaceutical expenditure, outpatient visits expenditure and diagnostic tests expenditure

31 Expenditure on pharmaceuticals per capita and as a share of GDP, 2008

32 Average annual real growth in pharmaceuticals expenditure compared to total health expenditure,

33 Setting of priorities

34 2 b. Control over public health spending is steeped in bureaucracy The MoH sets most of the fees and wages for public sector medical services and determines staffing levels Financial administration of hospitals and health centres is strictly regulated and the MoH gives hospitals very little leeway in management and organisation Regionalisation was not fully implemented

35 Remuneration of specialists 2006

36 Remuneration of nursing personnel 2007 Source: OECD Health Data 2009, OECD (

37 Density and compensation levels of physicians 2006

38 Providers' incentive to raise the volume of care

39 Decentralisation in health policy, budget and management decision making

40 2 c. Deficiencies in the public system boost private spending which

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42 Household health expenditure as % of household total expenditure ,7 4,8 5,1 5,7 6,8 7,

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44 Annual average growth of real per capita health expenditure

45 Number of MRI units and CT scanners 2008

46 Number of MRI and CT exams 2008

47 poses problems of fairness and contributes to the development of informal payments 36% of those treated in public hospitals have at least one informal payment to a hospital doctor and the average amount paid is about 1170 about 1081 is the annual average out of pocket payment of every Greek citizen for health care households with low incomes (up to 1100 ) pay annually at least one salary for health services pensioners pay about 9% of their pension for health services low income pensioners give about 18% of their income (or 2.5 pensions) for health services

48 Proportion of households with catastrophic expenditures vs share of out-of-pocket payment in total health expenditures

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54 3. The Impact of the Economic Adjustment Programme

55 The sovereign debt crisis in Greece chronology of events 15/1/2010: Government submits the SP, projecting a government deficit of 8.7% of GDP in 2010, and correction of the excessive deficit by The debt ratio was projected to peak at 121% of GDP in /2/2010: 2-year bond spreads reach 347 basis points; 10-years bond spreads reach 270 basis points. 2/2/2010: Greece announces additional measures: freezing wages and raising excises. 16/2/2010: Council adopts (i) a Decision, in view of the excessive deficit correction in Greece by 2012, (ii) a Recommendation with a view to ending the inconsistency with the broad guidelines of the economic policies, and (iii) an Opinion on the SP. 3/3/2010: Greece announces new deficit reducing measures of over 2% of GDP, including: increase in the VAT rates and other indirect taxes, cut in the wage bill, reduction in allowances, partial cancellation of the Easter, summer and Christmas bonuses, of civil servants. 8/4/2010: 2-year bond spreads reach 652 basis points; 10-years bond spreads reach 430 basis points.

56 23/4/2010: Greece requests financial assistance from the euro-area Member States and the IMF. 27/4/2010: 2-year bond spreads reach 1552 basis points; 10-years bond spreads reach 755 basis points. 2/5/2010: Greece, the Commission, the ECB and IMF announce an agreement on a three-year programme of economic and financial policies. 6/5/2010: The Greek Parliament votes to accept a series of policy measures included in the programme of economic and financial policies, including an increase in VAT and excises, as well as further reductions in public sector wages and pensions. 7/5/2010: 2-year bond spreads reach 1739 basis points; 10-years bond spreads reach 1287 basis points. 7/5/2010: The Council adopts a Decision according to Articles 126(9) and 136 of the Treaty including the main conditions to be respected by Greece in the context of the financial assistance programme. 9-10/5/2010: IMF executive board approves the Stand-by arrangement (SBA). The Council and the EU Member States endorse a financial stabilization mechanism. 18/5/2010: The euro-area Member States disburse the first instalment (EUR 14.5 billion) of a pooled loan to Greece.

57 Reviews of the EAP

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64 The character of the measures adopted The measures adopted largely belong to the immediate effect category, which focus on increase of: taxation (mostly indirect) reduction of the labour cost in the public sector curtailment of the Public Investment Programme. This approach: distorts domestic demand and productive activity deteriorates the living and working conditions of low income groups does not address long term structural problems The government was unable to implement structural reforms in order to: clamp down on tax and social security contribution evasion deal with the grey economy collect receivables control the operating cost of state institutions timely monitor the execution of the budget and to avoid divergence

65 Health sector reform initiatives after Memorandum: The crisis as an opportunity? Main objectives: To achieve substantial cost savings Reduction in SSFs expenditure for drugs: 1.4 bln or 0.6% of GDP Savings in hospital health procurement: 0.7 bln or 0.3% of GDP Public health expenditure not to exceed 6% of GDP To improve management (projected savings in 2011 of 0.5% of GDP) Hospitals Supplies Drugs Health funds

66 New legislation passed Law 3863/2010 for the New Social Insurance System foresees: The separation of health funds from the administration of pensions Bringing all health-related activities under the MoHSS The establishment of the Health Benefit Coordination Council to simplify the overly fragmented system establishes criteria and terms for the conclusions of contracts by social security funds with all healthcare providerswith the aim of achieving reduction in spending initiates joint purchase of medical services and goods to achieve substantial expenditure reduction (of at least 25% compared to 2010) through price-volume agreements.

67 Law 3868/2010 for Upgrading the Health System Mandatory all day functioning of public hospitals (afternoon shift) in order to develop and improve health care services and increase revenue: The afternoon surgeries provide medical interventions beyond diagnostic and therapeutic medical actions. The all day operation of hospitals is estimated to create additional revenues of about 20 million Euros for 2010 and 80 million Euros for Untill now, the all-day functioning of hospitals has been extended to 65 (out of 131 hospitals).

68 Law 3892/2010 for the Electronic Registration and Issuance of Prescriptions All physicians associated with the social security institutions, doctors of public health service units as well as pharmacists are required to register the e-prescription system and enter the required prescription electronically. An insured person in need of a prescription visits his/her authorized doctor, as usual. The doctor logs onto the website, enters the prescription(s), which can then be picked up at a pharmacist registered with The pharmacist scans the medication as evidence he/she filled the prescription with the proper drug and dosage. At the end of the month, the pharmacist sends a statement or invoice for reimbursement.

69 Law 3918/2011 on Structural Changes of the Health System The healthcare sectors of all major social insurance funds (IKA, OGA, OAEE, Public Sector) form a single healthcare insurance fund (EOPYY) which will henceforth act as a unique buyer of medicines and health care services for all those insured, thus acquiring higher bargaining power against suppliers. Procurement of health supplies will be planned at a regional level via the development of Regional Programmes for Goods and Services. These Programmes have to be adopted by the Co-ordination Committee for Procurement (CCP), which is responsible to assign a contracting authority and the tender mechanism for each type of procurement. CCP has the possibility to select as contracting authority a company or a private agency, achieving economies of scale and overall efficiency. Easing population-based restrictions, increasing opening hours, allowing new pharmacists to form partnerships with incumbents, reduce the effective profit margin for pharmacies through a system of rebates, moves the responsibility of pricing medicines to EOF and all other aspects of pharmaceutical policy to the Ministry of Health, in order to rationalise licensing, pricing and reimbursement systems for medicines.

70 Other measures adopted Governance - monitoring greater budgetary and operational oversight of health care spending by the Finance Minister, publication of audited accounts data on expenditure pending payment (arrears) of the State and hospitals monthly, 30 days after the end of each month, to be provided by the Ministry of Finance arrears to be reported to Parliament as they develop (currently they are revealed only about every three or four years, when governments tend to turn over, and no aggressive policy response is discernible) use of e-prescribing for all medical acts (medicines, referrals, diagnostics, surgery) in all NHS facilities The Ministry of Health established a web-based platform (esy.net) for gathering and assessing monthly data from NHS s hospitals. By mid- February, more than 80 out of 130 NHS hospitals are publishing detailed financial accounts, including the payment obligations generated in 2011 Price Monitoring Tool: already includes 18,000 items and is constantly updated and enriched through the collection and analysis of tenders and technical specifications published by hospitals

71 Financing Raising health taxes such as on consumption of alcohol and tobacco Increasing copayments for outpatients and diagnostic services from 3 to 5 for every visit in hospitals and health centres: additional revenue of 30 million Use of capitation payment of physician, to all contracts between social security funds and the doctors they contract. The new payment mechanism starts for each new contract renewed in 2011 and for all contracts from It defines a minimum number of patients per doctor, on the basis of the experience of other EU Member States Re-pricing of per diem hospital reimbursement and fees per case (which have not been readjusted since 1998) by the Central Health Council in order to reflect current market prices, which is expected to increase hospital revenues by about 30% Reforming financing system: Government defines a hospital casebased costing system (DRGs) to be used for budgeting purposes from 2013.

72 Hospitals Computerisation, integration and consolidation of hospitals' IT systems and centralisation of information Upgrading hospital budgeting systems Reforming the accounting (double-entry accrual accounting) system Use of the uniform coding system and a common registry for medical supplies developed by the Health Procurement Commission (EPY) and the National Centre for Medical Technology for the purpose of procuring medical supplies The government placed accounting firms in state hospitals to improve their financial management A collection mechanism has already been set up that gathers financial (based on cash flows) and operational data for hospitals on a monthly basis.

73 Pharmaceuticals favoring more use of generic medicines and prescribing by active substance: at least 50% of drugs used by hospitals, by the end of 2011 removing restrictions to trade in the pharmacy profession the government has reduced procurement prices of pharmaceuticals by 20 percent by implementing price caps for approved drugs lists defining and applying hospital packing, imposing a limitation of medicines with the same drastic substance, enforcing the obligatory application of prescription per individual patient and establishing tenders for the supply of pharmaceutical products based on the drastic substance the National Organisation for Medicines (EOF) is currently working on the development of a list of hospital drug substances, based on which the Health Procurement Committee will contract unified tenders an updated price list, a "positive list" of reimbursed medicines based on new reference prices and negative list of prescribed drugs are launched defining (through EOF) and publishing prescription guidelines for physicians on the basis of international prescription guidelines a yearly report on medicine prescription is published and feedback is provided to each physician on a regular basis: analysis of prescription behaviour with reference to the most costly and mostly used medicines.

74 Task forces Independent task force of health policy experts that will produce, by end of 2011, a detailed blue print for an overall reform of the health system. The report will include policy recommendations and provide quantitative targets, consistent with the objective to keep public expenditure on health as a proportion of GDP constant at or below 6 percent. On the basis of this report, the government will adopt an action plan, including a timetable for reform implementation. A second task force has been established with the aim to make proposals for: implementing joint management / joint operation between small scale hospitals and big hospitals within the same district and health region revising the activity of small hospitals in a move towards specialisation in areas such as rehabilitation or cancer treatment where relevant in districts with more than one hospital (excluding university hospitals) use a joint management / joint operation system

75 Thank you for your attention