Feature European Healthcare

Greek economic crisis: not a tragedy for health

BMJ 2012; 345 doi: http://dx.doi.org/10.1136/bmj.e7988 (Published 27 November 2012) Cite this as: BMJ 2012;345:e7988
  1. Lycourgos Liaropoulos, professor emeritus
  1. 1 University of Athens, Athens 15127, Greece
  1. lliaropo{at}nurs.uoa.gr

Despite the stories of doom, cuts to healthcare spending in Greece will not necessarily be all bad for patient care, argues Lycourgos Liaropoulos

In the past two years, I have been interviewed by the media in the United States, United Kingdom, Japan, Holland, and Greece. One persistent line of questioning has been whether Greeks are “dying on the street,” or getting “kicked out of hospitals.” Since horror stories increase newspaper circulation, the press has even discovered mothers who “were denied their babies after delivery until they paid the state hospital bill.”1 There is also talk of “dramatic rise in suicides.”2 An article in the Lancet last year, which referred to a deterioration of health status, was widely reproduced by the Greek press but criticised by the academic community as irrelevant because the evidence was dated.3 But as far as the actual effects on health that the article discussed, it is definitely too early to know.

The other reports are also exaggerated. The incident with the overzealous hospital administrator who demanded payment to hand over the baby has not been duplicated. There is anecdotal evidence of delays or shortages in particular hospitals at certain times, but no evidence of denial of services to patients. The economic crisis has limited some people’s use of health services, but there is no evidence that it has affected health.

Attempted suicides and demand for psychiatric help have indeed risen as Greece struggles to cope with the worst economic crisis since the second world war. Experts say the numbers are relatively low—less than 600 a year.4 But increases in suicides, attempted suicides, the use of antidepressant medication, and the need for psychiatric care nevertheless cause alarm in a nation not accustomed to the problem. Before the financial crisis began in 2009, Greece had the lowest suicide rate among countries in the Organisation for Economic Cooperation and Development (OECD)—2.8/100 000 inhabitants. This may be partly because of low reporting. According to the health ministry, there was a 40% rise in suicides in the first half of 2010. There are no reliable statistics for 2011, but experts say Greece’s suicide rate has probably doubled to about 5/100 000. That is still far below the 17.3/100 000 in Finland or the OECD average of 11.3/100 000.4

For a person who is on a low income and has no health insurance, Greece is still a better place to be sick than the United States. This is not to say that the situation won’t get worse. According to the latest figures from Eurostat, a statistics database run by the European Commission, Greece has the second highest share (20%) of people below the poverty line in Europe. If the depression persists, the better than average Greek health statistics of 2009 will undoubtedly get worse.

Economic woes

Since 2009, Greece has faced serious economic difficulties. The country is currently negotiating a second bailout of its ailing economy with the aim of getting debt down to 120% of gross domestic product (GDP) by 2020. So far Greece has received nearly €119bn (£96bn; $153bn) from the “Troika” —the International Monetary Fund, European Commission, and European Central Bank. Bailout conditions imposed by the Troika have unleashed an austerity programme on Greeks, including reforms to the health service to generate efficiencies and improve transparency.5 The health sector, which in 2009 spent close to 10% of GDP, must cut expenditure to 9% of GDP or €5bn by 2014.

Such a huge restructuring is bound to have serious repercussions, the exact nature of which is only now unfolding. Already, vital social services have been caught up in the massive spending cuts. The hot topic is the fate of unemployed people as they lose their health insurance and the ability of the public system to meet these new demands.6 Unemployment for all workers is currently at 25.4%, with 630 000 long term unemployed. The harsh austerity programme is also making itself felt in pensions and take home pay in both the public and private sectors.7

Unsurprisingly, public sentiment has been badly affected. Trust in government, the political parties, and public institutions has sharply declined. Support for the two centre-right and centre-left parties that have dominated Greek political life for 35 years has plummeted. Besides being implicated in serious corruption and mismanagement scandals of the past, both parties are heavily blamed for the crisis. But the finger of blame is also pointed at Europe.8

Crisis of management

But the scale of these cuts would be easier to absorb if the health service wasn’t so poorly managed. Instead of making across the board cuts, Greece should target excessive spending.

Until a few years ago, health expenditure was poorly accounted for in Greece. The country has only just adopted the System of Health Accounts (SHA), a reliable European standard for measuring health expenditure. The lack of dependable health expenditure data severely limited the country’s ability to detect weaknesses in its health policy; it hid the fact that the problem was not the size of health expenditure but how it was spent.

Health expenditure rose rapidly in the so called “happy decade” of 2000-09, but it did so in a grossly inefficient and provocatively corrupt health system. Construction of the SHA data now shows that money was concentrated on hospital care at the expense of prevention, long term care, home care, e-health, and efficient management methods. It also documents the wasteful use of high end technology. Greece tops the OECD countries for numbers of magnetic resonance and computed tomography scanning units (mostly private) and examinations per 100 population—1 in 10 Greeks is scanned each year.4 Drug costs more than doubled from 2005 to 2009, adding roughly €1bn a year to health costs. Interestingly, during that period the Ministry of Health systematically thwarted efforts to adopt the SHA. In fact, the National Statistical Service, the government general directorate that was replaced by the independent Greek Statistical Authority in 2010, did not publish any figures on health expenditure for 2008 and 2009. Even GDP figures were revised twice, drawing severe criticism in the press for methodological “leaps.”9

It’s the system not the money

Several characteristics make the Greek healthcare system particularly vulnerable to the economic crisis: the high prevalence of informal “under the counter” payments, the public health insurance system, and inefficient organisation and management. Successfully tackling these problems could provide the savings required for fiscal adjustment.

As public expenditure declined, private expenditure increased from 30% of total health expenditure in 2009 to 34% in 2011. Private spending has traditionally filled gaps in social insurance coverage—for example, dental (31%), long term, and private hospital care (18%); physician services (20%); and drugs (20%). It also covered organisational inadequacies through a culture of under the table payments, mostly to doctors, to gain access to needed quality care. These payments were estimated in 2005 at €2bn.10 As the crisis deepens, more people cannot afford the private payments. Although the effect of this on access and use of services is not yet known, public survey results reported in the press show that demand for public hospital and primary care has increased by 20%.

Public health insurance is the second systemic weakness. Funded by employment related contributions in the private sector and taxes in the public sector, it has been devastated by the depression. Although people remain covered for the first 18 months after losing their job, with 25% unemployment, many are without cover. There are reports of the church, non-governmental organisations, medical associations, and individual health providers rallying to help. The only solution to this problem is to abolish employer related insurance, revamp tax collection, and adopt tax funded national health insurance. However, although this is beginning to be discussed, it is unlikely to happen quickly.

The third systemic weakness is inefficient organisation resulting from cronyism, corruption, and political negligence, which the press often criticises. Lack of an organised primary care system, a referral system that gives control of beds to hospital doctors, and the absence of independent emergency departments make admission to the hospital a matter of private arrangement between patient and doctor, often aided by an under the table payment.10

Crisis as an opportunity

Some health costs cannot be reduced without severe consequences for the quantity and quality of care because prices are determined in international markets (drugs, supplies, energy etc). For example, medical supplies and drugs for inpatients were recently estimated at 29% of total hospital expenditure for 2010, falling only to 21% in 2011, despite serious efforts to reduce costs.11 Nevertheless, there remains plenty of scope for savings elsewhere.

Savings in excess of €1.3bn or 17% were realised between 2009 and 2011 in public and private hospital care. But public hospitals are still a major target in the effort to direct resources to better uses. Archaic procurement mechanisms and senseless legal procedures for tenders on hospital supplies and equipment, induced demand by medical practitioners, and the overuse of medical technology, usually associated with fraudulent behaviour, are areas where major savings can occur. Tools such as centralised electronic procurement, electronic prescribing, and utilisation control have also not yet been brought fully into play.

Restructuring and modernisation of public hospitals could also produce substantial savings and better quality of care. Greece has many old and small hospitals, often close to each other. Neighbouring hospitals face both staff shortages and low occupancy rates, and merging them would undoubtedly lead to better use of resources and improve the quality of care.12

In conclusion, the economic crisis does not need to hit patients hard. There are smart ways to make the savings required in the health sector and the economic crisis can be seen as an opportunity to improve the system.

Notes

Cite this as: BMJ 2012;345:e7988

Footnotes

  • Competing interests: The author has completed the ICMJE unified disclosure form at www.icmje.org/coi_disclosure.pdf (available on request from the corresponding author) and declares no support from any organisation for the submitted work; no financial relationships with any organisation that might have an interest in the submitted work in the previous three years; and no other relationships or activities that could appear to have influenced the submitted work.

  • Provenance and peer review: Commissioned; externally peer reviewed.

References