How can health systems navigate through difficult economic times?

New report documents countries’ measures to respond

Copenhagen, 14 September 2009

The current economic crisis has already affected or threatened both the standards of living of millions of individuals and families in the WHO European Region and the revenue base for health and social protection schemes, states a new report released today at the annual session of the WHO European governing body, the WHO Regional Committee for Europe, in Copenhagen, Denmark.

The report, published by the WHO Regional Office for Europe, tracks the changes in public health policies and documents the efforts made by the countries in the WHO European Region to respond to the crisis, which is likely to trigger significant – both positive and negative – changes in social norms, lifestyles and health behaviour, as well as increasing inequities in health.

Tough budgetary constraints on governments

The analysis shows that the downward revisions of state budgets for 2009 can be expected to continue for 2010 budgets in many countries, inevitably affecting health spending. Belgium, the Czech Republic, Estonia, Latvia, Lithuania, Hungary, Portugal and Slovakia have already announced such revisions to adjust for lower-than-expected revenue. Budget adjustments are expected in Belarus, Bulgaria, Montenegro, the Republic of Moldova and Ukraine.

Before the crisis, some countries had planned to expand their 2009 health budgets – for example, by about 20% in Armenia – to improve social protection. Whether these increases can be sustained is now uncertain. Some western European countries are considering options for tackling declines in revenue and forecasted deficits, such as increasing state subsidies to social health insurance, distributing regional funding in new ways and containing the costs of health care. Austria and Germany, for example, have already introduced state subsidies to tackle growing social health insurance deficits.

The poor and the most vulnerable: likely to suffer most in crises

Evidence shows that a significant proportion of the population of the WHO European Region is already at risk of poverty: 16% of the population in the European Union (EU), for instance. Some countries have made special plans to protect the groups most affected by the crisis. For instance, Georgia has extended its medical assistance programme (a fully subsidized voucher for health insurance) to an additional 200 000 people below the poverty line, and in January 2009 Slovenia introduced state coverage of health insurance contributions for vulnerable groups.

The role of private funding in health care is also proving important. In Portugal, a political initiative has suggested decreasing user fees for emergency and hospital care. In most central and eastern European countries, however, calls on private funding are likely to increase. For instance, Estonia has introduced value-added tax (VAT) on pharmaceuticals; Hungary is considering raising VAT and excise taxes, and Croatia is planning increased user charges for pharmaceuticals.

Investing in the health workforce

Member States may not have yet felt the full effects of the current upheaval on their health workforces, as certain policies were implemented before the crisis. For example, Germany reported an overall increase in health professionals employed during 2008 (33 000 new employees, +3.2%), but this level of recruitment will face increasing pressure. The Regional Office report presents a mixed picture for salaries. Bulgaria and Hungary have frozen the salary levels of health professionals in state-owned hospitals, while Finland and Greece (following agreement with the trade unions) and Romania have increased the pay of health personnel, Slovenia is implementing a salary increase that was planned before the crisis, but this is now expected to put pressure on the health insurance budget.

Limited changes in health workers’ mobility have been observed and no clear statistics are available on the impact of the crisis on migration. Nevertheless, the current situation is deemed likely to trigger shifts in mobility and migration patterns, with workers (and their families) moving to countries where job prospects are brightest or returning home from those where job prospects have deteriorated.

Prices for medical services and medicines

In many places, the crisis has led to upward pressure on drug prices. Countries in the eastern part of the European Region have substantial concerns about increases in the prices of health services and pharmaceuticals. For instance, health-service prices increased by more than 30% in Ukraine during the first two months of 2009, compared with the same period in 2008; similar increases have been reported in Kazakhstan and the Republic of Moldova. In Lithuania, price rises have been linked to VAT increases.

Price increases are known to have a considerable effect on private health expenditure in many countries, including Albania, Armenia, Azerbaijan, Cyprus, Georgia, Greece, Kyrgyzstan, Tajikistan and Uzbekistan. They may deter patients from seeking necessary care as it becomes unaffordable. In the longer term, non-adherence to medical treatment could result in wider prevalence of disease, complications of chronic conditions and increased drug resistance in infectious diseases. As yet, only limited changes in health service utilization and medicine consumption have been observed. This is important since, in middle-income European countries, out-of-pocket payments for medicines for people with chronic conditions seems to be the biggest risk factor for experiencing health-care-related financial catastrophe.

Increases in the prices of essential commodities may force consumers to change their lifestyles in ways that may affect their health both positively and negatively. For example, increasing consumption of cheap fast food has been reported, but people in several countries also seem to have cut back on driving, turning instead to public transport and/or increased physical activity. Further, rising unemployment, the deterioration of living conditions and the additional stress caused by the crisis may lead to less healthy lifestyle choices or riskier behaviour, such as increased use of drugs and alcohol.

WHO European perspective

For the past decade, the WHO Regional Office for Europe has worked with Member States to improve their citizens’ health by building stronger health systems. This work has to continue despite the current economic downturn: short-term reactions and apparent current necessities should not be allowed to have an adverse effect on the health of the Region in the future.

“We know from past experience that, in times of crisis, health outcomes and the risk of health-related financial hardship may be affected by changes in the resources available for health systems – financial and human resources, drugs and medical devices, running costs and infrastructure – by changes in living conditions, lifestyles and consumer behaviour, and by changes in social norms and values,” says Dr Nata Menabde, Deputy Regional Director at the Regional Office. “Ideally the health system can and should do three things: (i) protect those most in need; (ii) concentrate on areas in which it is effective and adds value; and (iii) behave as an intelligent economic actor in terms of investment, expenditure and employment.”

“Difficult choices are being and will have to be made in terms of spending and priorities, but it is vitally important that, despite the current problems, the Region and Member States remain committed to the values and principles agreed in the 2008 Tallinn Charter: promoting ‘shared values of solidarity, equity and participation through health policies, resource allocation and other actions, ensuring due attention is paid to the needs of the poor and other vulnerable groups’,” adds Dr Menabde.

For more information, contact:

Press information:

Ms Liuba Negru
Press and Media Relations Officer
WHO Regional Office for Europe
Scherfigsvej 8, DK-2100 Copenhagen Ø, Denmark
Tel.: +45 39 17 13 44. Fax: +45 39 17 18 80