The major challenge facing health care delivery in Malta is ensuring the financial and operational sustainability of the system, according to a report by PricewaterhouseCoopers Malta.
National health insurance and private sector involvement may be possible solutions
The report, entitled Healthcare Delivery in Malta, says that a combination of demographic, economic, political and technological factors is pushing the heath care cost curve ever upwards.
“The challenge facing health care players is to bend this curve without compromising access to care or quality,” it says.
In 2010 total healthcare expenditure (including both capital and recurrent expenditure) exceeded €530 million. It is estimated that recurrent total expenditure (public and private) in 2010 was in the region of €495 million.
The report says that demographics are changing and countries, including Malta, are facing a population that is living longer and using more medical services as it ages.
“The cost of treating an ageing population was identified as the most difficult challenge facing health systems as the average cost of illness rises significantly per capita in higher age categories,” the report points out.
The report says that public financing is prevalent in the local health care scenario and there has been a consistent upward trend, in absolute terms, in health care expenditure.
It adds: “Sources of funding other than general taxation may need to be explored. National health insurance and private sector involvement may be possible solutions.”
The report says that in terms of private sector involvement, public private partnerships are emerging as a new and compelling model for health care funding, not just for the infrastructure but also for business operations and care delivery. A larger provider market could also help mitigate escalating costs as at present, there is very limited competition in terms of healthcare providers, PwC says.
“The challenge is to lower costs while improving quality without making undesirable tradeoffs. This is achieved by driving out existing inefficiencies and improving financial and operational performance.”
In 2010 Malta’s total health care expenditure in relation to GDP was 8.6 per cent. This compares well to the EU average of nine per cent. In that same year the ratio of health spending to GDP in the EU ranged from around 5.6 per cent in Cyprus and Romania to just below 12 per cent in the Netherlands.
Recurrent public health care expenditure increased from €230 million in 2006 to €330 million in 2010, which represents an increase of 44 per cent. A marked increase of 23 per cent in the recurrent health expenditure occurred in 2008 with the commissioning of Mater Dei hospital. In addition, over the five year period 2006 – 2010, the government invested a total of €243 million in capital expenditure. There has been a consistent upward trend in public healthcare expenditure on a per capita basis. In 2010, the government spent €1,150 on a per capita basis.
In terms of total healthcare expenditure, Malta spent on average €1,755 per capita in 2010. This spend per capita is in line with countries like Cyprus. In the same year, the EU average total health expenditure per capita was circa €2,200. Northern and Western European countries spend more than the EU average on a per capita basis.
There are 1,833 hospital beds in Malta, 1,748 in the public sector and 85 in the private sector and the approved 2012 estimate for recurrent expenditure within the Ministry of Health, the Elderly and Community Care increased by 11 per cent compared to 2011.
It is estimated that in Malta as much as 65 per cent of total healthcare expenditure is financed by the government. Countries that have a similar proportion of expenditure funded by the government are Slovakia, Portugal, Hungary and Ireland. Denmark has the highest public healthcare financing, at 85 per cent.
In Malta, public health expenditure is financed through general taxation. Across the EU, state healthcare is financed by both general government revenues and social contributions. Furthermore, the major source of private funding (93 per cent) is out-of-pocket expenditure. The remainder is financed through private health insurance (six per cent) and non-profit institutions (one per cent).
Private health insurance in Malta accounts for just over two per cent of total healthcare expenditure. Around 21 per cent of the population has some form of private health insurance, while 10 per cent are estimated to benefit from an extensive refund plan.
The report suggests the government should “promote and regulate” the buying of such insurance in order to encourage its use.
According to PwC, the private sector accounts for approximately two thirds of the workload in primary healthcare, while 65 per cent of total health expenditure is financed through general taxation. The rest is paid by private insurance and private clinics and hospitals.
Health insurance coverage is popular particularly with people falling within the 25 to 44 age bracket and is less affordable by the elderly.
The report highlights the importance of investing in health information technology (eHealth) saying a good managerial and technological support system can alleviate work pressures of this labour intensive industry.
It also refers to mobile healthcare (mHealth), saying: “Increasingly ubiquitous and powerful mobile technology holds the potential to address long-standing issues in healthcare provision. If the mobile revolution has the same effect in health care as it has had in other industries – music, banking – it will transform the way patients interact with their doctors and manage their health, and it will help to address the urgent need for health care that is better, faster, less expensive and more accessible.”
PwC says a regulatory reform driven by demographic changes and the need to address the public versus private balance of healthcare is essential as new ways are explored to control costs and change practitioners’ behaviour. Key stakeholders within the healthcare system, the report says, feel that there is the need for a more comprehensive and well-defined regulatory framework for practicing practitioners.
“Proactively managing chronic diseases reduces the dependence on more costly acute care services. This shift in focus requires greater collaboration among policymakers, providers and practitioners.
“It implies that the healthcare system is no longer limited to traditional providers such as hospitals and physicians, but is also open to new market participants such as health/wellness clinics, telecommunications and technology.”
The reports shows that in 2010 the Healthy Life Year Indicator showed that on average, men in Malta at the age of 65 are expected to live a further 12 years in a healthy condition while women are expected to live a further 11.9 years. The compares favourably to the EU average of 8.7 for men and 8.8 for women.
In 2010, coronary heart disease and stroke were the major cause of mortality and morbidity in Malta. This was followed by accidents for individuals under 65 while cancers accounted for 29 per cent of deaths.
Statistics show an upward trend of non-Maltese residents receiving healthcare services in Malta; the figure in 2010 was 20,400, which is 13 per cent higher than in 2009. PwC says that Malta’s accession to the EU, which implies providing free state health care to EU nationals visiting the country and requiring state healthcare services upon presentation of a European health insurance card, as well as an inflow of irregular migrants, have contributed to this increase.
Data shows that Malta registered an ALOS (Average Length of Stay) in hospitals of 6.5 days and 6.8 days in 2009 and 2010 respectively. In 2009 Malta was at par with Bulgaria Ireland and Slovenia. The Nordic countries, particularly Denmark and Sweden enjoyed a low ALOS (average of 3.5 days) while Finland, Germany and the Czech Republic had an ALOS of 10 days.
The number of operations per year in the public sector has nearly doubled over the period 1996 – 2011 from 22,708 in 1996 to 43,747 in 2011. A marked increase in the number of operations was registered with the opening of Mater Dei Hospital, the report points out.