Intended for healthcare professionals


Health services across Europe face cuts as debt crisis begins to bite

BMJ 2011; 343 doi: (Published 18 August 2011) Cite this as: BMJ 2011;343:d5266
  1. Muiris Houston1,
  2. Michael Day2,
  3. Maria de Lago3,
  4. John Zarocostas4
  1. 1Galway
  2. 2Rome
  3. 3Madrid
  4. 4Geneva

As the eurozone debt crisis spreads to Italy and Spain, BMJ correspondents investigate its effects on health services in four of the hardest hit countries

Health budget faces severe cuts in Ireland

Muiris Houston, Galway

Ireland was one of the first countries in the “eurozone,” the 17 European Union member states that have adopted the euro as their sole currency, to hit financial problems, leading to public sector cuts that have forced bed closures and a recruitment embargo on frontline posts.

After last year’s financial bail out by the International Monetary Fund and the European Central Bank, the Irish government no longer enjoys financial autonomy. On top of already stringent cuts to public services, at least €3.5bn (£3.1bn; $5bn) must be cut from next year’s budget. The health service budget is expected to be cut by up to €1bn in 2012.

But cost over-runs in excess of €200m in the first six months of this year have led to the recent closure of hospital beds. The Mid Western Regional Hospital in Limerick has already overspent by €21m this year and has closed 25 acute care hospital beds in response. The hospital has experienced a sharp rise in demand after the closure of a smaller acute hospital in the region two years ago. Almost 20% of patients were waiting between 12 and 24 hours to be admitted through the regional unit’s emergency department even before the latest cutbacks.

Although a general public service recruitment embargo has been in place for more than a year, the Health Service Executive (HSE) last week told unions that it was now “pausing” all recruitment. The decision means that around 1000 posts, which until now have been exempt from the government’s public sector recruitment freeze, can no longer be filled. These include frontline posts such as social workers, therapists, doctors, and nurses.

The HSE said, “This decision will be reviewed further in September when the July (financial) data are available. HSE will continue to process, screen, and panel applications for the posts as set out in our service plan. During this time arrangements are in place for exceptions to address critical service risk.”

The Irish Association for Emergency Medicine has criticised a decision to prohibit nationally the hiring of locum doctors after 15 August, warning of “unacceptably long delays in patients accessing care.” And the Irish Nurses and Midwives Organisation has said that there were 20% more patients on trolleys in emergency departments in the first six months of this year than in the same period last year.

Patients in Italy face extra treatment charges

Michael Day, Rome

Italy, which now finds itself at the centre of the eurozone debt crisis, has announced a €48bn austerity package to try to reduce debt and calm the markets.

As the eurozone’s third largest economy and the world’s sixth largest, it is too big to be bailed out by the EU’s European financial stability facility; and demands from other European countries, together with internal pressure, have seen ministers target public spending, including health funding, as a means of erasing its deficit by the end of 2013.

One study by the health economist Federico Spandonaro of the University of Rome Tor Vergata says that Italy can expect €10bn worth of cuts to health services, translating to €500 per family each year.

The most obvious effect has been new or increased healthcare charges. Patients now have to pay an extra €10 for medical consultations and more for prescribed tests and are charged €25 for non-emergency care at hospitals.

Dr Spandonaro noted that people in the poorer south of Italy will be hardest hit by these health charges, which will be levied regardless of a patient’s income. Most of Italy’s three million people who live in “absolute poverty,” according to the Italian National Institute of Statistics, live south of Rome. A freeze on recruitment of health staff has also been mooted.

But further savings have not been discounted. As the BMJ went to press, the finance minister, Giulio Tremonti, said that the details of the cuts package were “still being worked out.” This is partly due to the haste with which the Italian government has had to introduce the emergency budget. But it is also down to the changing financial and political landscape. Initial plans to delay the bulk of the cuts until a more politically expedient period—that is, after the next general election—are now being ditched. In addition, the European Central Bank is demanding extra sacrifices from Italy in exchange for shielding it from ongoing attacks by speculators.

The Federconsumatori campaigning group has estimated, however, that average Italian families will be nearly €1000 a year worse off when reduced tax breaks and benefits are also taken into account, making the cost of new health charges felt even more keenly.

And additional cuts to the budgets of local and regional authorities, which provide many of Italy’s social services, will put medical services under further pressure.

Suppliers and staff suffer under Spanish budgetary cuts

Maria de Lago, Madrid

The Spanish health service was already under strain even before economic jitters earlier this month prompted fears that the country would need a financial bail out. The health service has already undergone budgetary cuts, especially in the drugs and wages bills, and is now experiencing lengthened delays in payments to suppliers.

Since May the government of the central Castile-La Mancha region has been delaying the payment of £109m owed to pharmacists, who responded last week by going on strike. No payment scheduled has been agreed, but the regional government insists that it will honour its debts.

Spain’s regional governments manage health services within their boundaries and provide more than 85% of health resources. Regional health budgets for 2010 saw cuts of 1.13% on average, though this has risen to 4.11% this year, says the Spanish Federation of Associations for the Defence of the Public Health System.

“Subsequently, larger cuts have been approved in the regions that had local and regional elections [22 May this year], and more widespread reductions are expected after the next general election [20 November],” Marciano Sánchez Bayle, a spokesman for the federation, told the BMJ.

The Catalan government announced a 10% budget cut, which has resulted this month in the closure or reduction in opening times of 100 outpatient centres.

Budgetary cuts threaten to increase the health service’s debt, warns the federation. “Regions whose health budgets are under the average have remarkably increased their debt,” said Dr Sánchez Bayle. The Spanish public health system owes around £8.3bn to suppliers of drugs, materials, and health technology, and the average time it takes to pay suppliers has risen to around 400 days. Total health service debt to suppliers is estimated at around £13bn.

However, despite these problems the Spanish government insists that the health service is not suffering.

José Martínez Olmos, general secretary of health in the Spanish ministry of health, social policies, and equality said that savings were being made in non-critical areas and by increasing efficiency. For example, doctors are now being asked to prescribe generic active ingredients such as penicillin rather than brand name formulations, generating savings of more than £1.8m a year, said Mr Martínez Olmos.

Doctors, who are classed as civil servants, saw their income fall by around 5-7% in June 2010, when civil servants’ salaries were cut. This measure also affected nursing and administrative staff. Measures such as these to control the health budget have reduced health service expenses by almost 8%, Mr Martínez Olmos said.

Medical posts to be slashed and hospitals reorganised in Greek public health sector

John Zarocostas, Geneva

Large numbers of medical staff in the public health sector in Greece are expected to be made redundant and numerous care programmes are to be drastically curtailed, as a result of the new wave of tough fiscal austerity measures adopted by the Socialist government of George Papandreou in late June in a bid to avoid national bankruptcy.

“Many thousands of medical posts will go, and service programmes will also be cut,” Ilias Sioras, a cardiologist and president of the workers’ union at the Evangelismos Hospital, Athens, told the BMJ.

The deeply unpopular cutbacks in the public sector were agreed by Greece after consultations with the European Union and the International Monetary Fund, so that the country would get the next €12bn instalment of the €110bn bailout programme agreed in May 2010.

However, after the disarray in July when the government failed to secure agreement on measures to deal with the national debt, eurozone leaders and the International Monetary Fund agreed to lend Greece a further €109bn. The stringent terms include scrapping all temporary contracts in the public sector and replacement of only one in 10 retiring civil servants this year.

The Greek finance ministry said that between May 2010 and May 2011 there was a 15% cut in public sector wages, a 10% cut in public and private pensions, and a 10% cut in public sector employment, with a net reduction of more than 80 000 jobs.

The ministry estimated that health sector spending was reduced by 30% (year on year) in the first quarter of 2011, despite rises in the number of patients, and said that 10 hospitals out of 133 were being merged, with more mergers planned.

In addition, social spending on pensions and illness and pharmaceutical benefits fell by 9.6% or €3.4bn.

Andreas Loverdos, the health minister, has said that the dire situation in public health spending is exacerbated by the huge outlays for the care of uninsured immigrants, which accounts for more than 5% of the annual hospitals budget.

He told the World Health Assembly of the World Health Organization in May that the first priority in this period of economic crisis is the reorganisation of the public health system.

Mr Loverdos said that although Greece spends more than 10% of its gross domestic product on health, both in public and private expenditure, the services that Greek citizens receive are not those they should get. “This happens because the public health system is irrationally organised,” he said.

He added that the main targets now were to improve primary healthcare, restructure the hospital system, and impose spending cuts.


Cite this as: BMJ 2011;343:d5266