Financing health systems in times of global economic crisis

The global economy is currently experiencing its deepest and most widespread recession since World War II. In times of crisis health systems can and should continue to provide essential care for all, adding value to human capital and wealth formation and behaving as a wise economic actor to contribute to the overall recovery.

Despite increased public interventions to support economic activity (such as investment programmes and measures to stimulate consumption), the global economy remains weak and vulnerable to further shocks, although from previsions published by the Commission last September we find the first traces of economic recovery.

Looking ahead, the economic outlook is uncertain and the increasing public debt may significantly constrain public finances for years to come. Evidence of the consequences of the crisis on health is scarce, and indeed it may take quite a while before they become apparent. However, the crisis is likely to trigger significant – both positive and negative – changes in social norms, lifestyles and health and healthcare-seeking behaviours, and as such to increase health inequities.

A whole session titled Health In Times Of Global Economic Crisis: Implications For The WHO European Region was devoted to this topical subject at the 59th regional committee meeting of WHO Europe which I attended in Copenhagen between September 14 and 17.

A paper monitoring and assessing the impact of the ongoing financial and economic crisis on health systems and the health of populations in the WHO European region was presented for further discussion at this meeting.

It included the interpretation of the outcome of the high-level conference organised jointly by the regional office and the government of Norway and held in Oslo on April 1 and 2, 2009 and of the Tallinn Charter published in June 2008. Health leaders present in Oslo were unanimous in advocating the protection of health budgets.

This is needed to be able to address public health threats effectively, widen access to essential health services, reduce inequalities in health and improve the performance and efficiency of health systems. The Maltese government agrees with this proposal and although over the past year the country faced a number of economic difficulties, spending on medicinals in­creased by €11 million, while €3.5 million extra was invested in H1N1 influenza prevention.

In this paper and the panel discussion that took place during this session, several experiences of different countries describing and analysing special measures implemented to combat this crisis in order to maintain and improve the sustainability of health systems of the nations in the region were illustrated.

An overarching concern was that most of the current information and monitoring systems available were insufficient to meet policy-makers’ needs, but it was clear that reduced resources would mean increased challenges to health services.

However, these impacts are not inevitable, and most countries including Malta had acted quickly to protect and maintain their health budgets.

The panel discussion was moderated by the director of the European Observatory on Health Systems and Policies.

Panelists included the Parliamentary State Secretary of the German Federal Ministry of Health who described how measures in Germany targeted those most in need and included lowering the health insurance contribution rate; the introduction of an employment programme for health workers and the upgrading of hospitals.

The chief medical officer of the United Kingdom Department of Health stated the measures which needed to be taken in health had already been under way.

However, due to the crisis these were being stepped up; these involved initiatives to respond better to rising public expectations, meeting the needs of an aging population and the further unravelling of the reform on the primary care gatekeeper system to reduce costs arising from excessive use of hospitals. Malta will soon be embarking on the ambitious primary care reform. This project will be in synchrony with this UK gatekeeper policy being adopted.

The chief medical officer and director-general of the Danish National Board of Health said that investment in the health sector was part of the solution, not part of the problem. Consequently, the health budget had been increased by three per cent per annum for the present year and the coming two years. Protecting budgets and focusing on core values in the health sector provided a good point of departure.

The deputy Minister of Health and Social Development of the Russian Federation also said that her country had increased funding in 2009 by eight per cent, a figure that was due to rise again for 2010. The Minister of Social Affairs of Estonia announced that measures taken in his country to help finance healthcare included the increase of the value added tax (VAT) on medical supplies and excise duties on alcohol and tobacco.

The session was wrapped up by the comments of the Lead Health Policy Adviser of the World Bank who advised countries not to make health workers redundant, not to increase co-payments and payroll taxes and not to cut public spending. Instead, national authorities should focus on the most vulnerable and provide protection against catastrophic risks.

This article tries to impress upon the reader that all EU countries are in the same boat. In times of crises, the grass always looks greener on the other side. Like all EU governments, the Maltese government has continuously invested in the health sector during this past year irrespective of the financial situation of the country. New staff is continuously being employed and encouraged to take up a health profession. Health was and will always remain a top priority for the government and we will ensure that adequate funding is found to keep up our commitments in this area.

The health impacts of the economic will not be fully felt until the end of 2009, when 2010 budgets would be discussed and resources for health put under severe pressure.

However, while the crisis was a major socioeconomic challenge for all countries, limited resources could serve as an incentive for agreement among stakeholders on much-needed reforms and cost-effective measures: the crisis could be a window for change and modernisation.

Dr Cassar is Parliamentary Secretary for Health.