A Sustainable Health System II

A sustainable health system (II)
Madrid 17 July 2012
Crculo de Empresarios
Index
1.
2.
Executive summary Key structural factors 2.1 The architecture of national health care systems 2.2 The National Health System (NHS) Coverage of the system Architecture of the NHS Provision of services
5 9 9 12 15 19 24 31 31 32 33 38 42 45 45 51 51 52 53 56 56 59 59 63 63 66 68 71 73 77
3.
Key financial factors of the NHS 3.1 The level of health care expenditure 3.2 The evolution of health care expenditure Outlook and determining factors for growth of health care spending Growth in health care spending in Spain 3.3 Decentralization
4.
Key impact factors 4.1 Restrictions on resources and services of the system 4.2 Reforms on supply side Decentralization Incentives Market mechanisms 4.3 Reforms on demand side Co-payment or ticket moderator Other co-responsibility formulae 4.4 The impact of reforms on the growth of health care spending
5.
Proposals by Crculo de Empresarios Governance of the NHS Supply Demand
6. 7. 8.
Appendices Bibliography Recent publications by Crculo de Empresarios
1. Executive summary
The provision of health coverage under universal conditions has been one of the great achievements of the National Health System (NHS) and has been a determining factor in the favorable evolution of Spain in recent decades. Crculo de Empresarios believes it is essential to guarantee the existence of an NHS which has enabled access by the population to a wide range of health services under fair conditions. To do so, its sustainability must be ensured, which involves considering certain structural, financial and impact key factors of health policies on the budget.
In regard to structural key factors, Spain has an integrated public model: the funding, purchase and provision of health care are essentially public. The public insurance and universal coverage models are not always in line with this integrated scheme. The NHS reaches a degree of universality similar to that of other OECD countries with different models. The NHS is perceived as a cornerstone of the welfare state and is positively valued, although the need for change has become evident. The system is valued more for medical care than in terms of user participation.
Crculo de Empresarios believes that one must emphasize that other public and universal systems within the OECD include mechanisms of co-responsibility of demand (users) and of supply (professionals and businesses), enable the user to choose (occasionally, at a price) and resort to formulae of involving competition and risk transfer to the private sector. These formulae are perfectly compatible with a public and universal model. In addition, despite the existence of a universal NHS, about 20% of the total Spanish cost on health care is directly assumed by the citizens, aside from insurance policies (public and private) and copayment schemes.
Universal coverage is linked to a benefits portfolio. In Spain there are geographical differences between the benefits resulting from the various interpretations of the items in the common services portfolio and the creation of complementary portfolios. Criteria of necessity or utility have not always prevailed in the introduction of treatments, nor has there been a systematic and transparent policy of underfunding thereof based on cost-effectiveness.
Once the transfer of health services to the Autonomous Communities was completed in 2002, the coordination has been articulated by way of the Inter-territorial Council for the National Health System, where decisions are taken by consensus, resulting in a governance of the system with ample room for improvement and economic effects which, in the opinion of Crculo de Empresarios, are undesirable.
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Key structural factors
HNS services are free of charge at the point of provision, and are provided at two care levels (primary and hospital & specialized). This is a model geared for the treatment of acute cases, when a system geared for chronic cases is required as, very gradually, some Autonomous Communities are beginning to consider.
Most of the NHS service suppliers belong to the public sector and the prevalent governance model is that of direct management or similar. Indirect management forms are also used by way of agreements. The Autonomous Communities have been gradually introducing new health care formulae which, whilst maintaining the public nature of the system, are seeking new levels of efficiency, funding or risk transfer to the private sector. But the new forms of management, still a minority, are not articulated on the basis of a national policy of analysis and comparison of results and encouragement of new formulae, over and above the legal framework allowing for their development.
The sustainability of the NHS requires certain financial key factors to be considered. The NHS makes the financial effort which pertains to Spain in terms of GDP per inhabitant, but between 2000 and 2009 the real public health expenditure per inhabitant experience a cumulative increase of 42%. Additionally, according to the IMF, in 2030 the health expenditure in terms of percentage of GDP in Spain will be 1.6pp above that of 2010 (this would mean that the net present value of the increase in health care expenditure would account for over 50% of the current GDP). On its part, the Spanish government expects an increase between 2010 and 2050 of 1.2 points, taking into account the impact of the recent reform contained in RDL 6/2012. In light of such data, the health care system will present in the future a more important budgetary challenge than that, for instance, presented by pension. All the foregoing, without taking into account the budgetary restrictions to which Spain is currently subject.
The determining factors on the growth in the cost of health care are associated with all system participants. Aging is not the only or the most important, determining factor in health care cost, so that the health care policy must ensure, in the opinion of Crculo de Empresarios, that every participant therein contributes towards its cost containment: 44% of public health care expenditure goes towards personnel costs and 25.5% towards pharmaceutical products via prescriptions (19%) or hospital dispensation (6.5%). Between 2002 and 2009 hospital and specialized services have gone from 53.4% to 55.9% of total cost. Primary health services accounted in 2009 for 14.9% of expenditure, having slightly reduced their share of the overall cost. Prevention and public health activities merely account for 1.5% of the public health expenditure and their weight has hardly changed in the last decade. This evolution is not, in the opinion of Crculo de Empresarios consistent with the factors which determine health care cost.
Additionally, there are substantial differences in expenditure by inhabitant among Autonomous Communities due to disparities in public funding, different preferences among users between public and private services, and various options of the governments in regard to public, agreed or private provision of services. Attention must also be paid to the different speeds at which this expenditure is adjusted among Autonomous Communities. The impact of the budgetary adjustment on equal access to health services must be watched over from a geographical perspective.
As for the health care key factors which have an impact on the sustainability of NHS expenditure, available evidence suggests that measures design to introduce competition and user choice (supply measures) are the ones which have the most impact on containment of health care cost, ahead of budget ceilings and the improvement in public management and coordination and demand rationalization measures. But, in particular, the evidence indicates that the most effective reforms are those which combine all instruments (budgetary, coordination and management, and supply and demand).
Crculo de Empresarios proposes a number of initiatives designed to improve the system. As for the public management, it suggests an improvement in NHS governance by means of centralized accountability of a decentralized system, the improvement of availability of public information on the NHS and the inter-operability of regional information systems. Moreover, it advises the encouragement of assessment mechanisms and the integration into one single independent body of the central government network of institutions and the Autonomous Communities, currently devoted to the assessment of health care technologies.
As for supply, greater autonomy and accountability for the managers, the flexibilization of the statutory condition of health care personnel and the encouragement of integration between health care levels and hospitals are all advocated. The importance of the introduction of competition and guaranteed user choice are also emphasized, so that patients are treated more like customers than as users.
Lastly, in terms of demand, the use of the system must be rationalized by means of user co-responsibility for health care costs. This can be achieved by implementing joint payment systems (co-payment) or via the promotion of preventive health campaigns. Finally, Crculo de Empresarios estimates that the generation of revenues not strictly associated with basic health care should be encouraged.
Some of the foregoing considerations are shared by a large part of NHS experts and analysts. The recent health care reform has made inroads, within the competency limits of the government and financial conditioning, in some of these.
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Key structural factors
In any event, Crculo de Empresarios believes that the problem is not just one of diagnosis but of governance of the NHS. The aim is therefore not whether competencies pertain to one or another agent, but that decisions affecting the whole can be taken by a majority. In order to reform, indeed, a diagnosis is required. But in order to implement, an improvement in the rules of governance becomes necessary. In this regard, Crculo de Empresarios believes that the governance of the system should be examined closely, not in terms of centralization of competencies but in terms of the enforceability of the decisions made by a majority of its participants.
2. Structural key factors

2.1. The architecture of the national health systems Health systems in the OECD exhibit different kinds of architecture, but in most cases they have a common foundation: universal and equal access to health care benefits. This is also the model of the General Health Care Law of 1986.
Indeed, health care systems fulfill, at least, three basic functions:
That of financier, assuming the costs of coverage of the health care benefits in exchange for tax revenue, social security contributions or premiums, depending on the model.
That of purchasing entities, which acquire medical and hospital services on behalf of their users1, to provide the agreed health care benefits.
That of the health care providers, with contracts with the purchasing entities that pay them for the services offered to the users.
In OECD health care systems in general, the funding function is public, whereas others have different configurations. In Spain, there is an integrated public model where both the funding for the provision of health care and the purchase and provision of health care services are of an essentially public nature.
Public insurance and universal coverage models are always based on this integrated scheme. There are models which, on the basis of public funding, rely more on competition and the users choice and others which rely on public control and management (table 1).
1 The nature of health care prevents the patient from evaluating the care received. Health care meets the characteristics of what are known as
credence goods whose quality is difficult to determine with any accuracy. These are goods where the offerors are, in turn, experts which determine the needs of the consumers. Despite the fact that the performance of the service is observable, users are not always able to establish the need for the service, nor reliably assess performance and cost thereof. This circumstance can give rise to opportunist behaviors by the suppliers.
Key Financial Factors of the NHS
Table 1 Health care models They rely on market mechanisms for service provision Private insurance for basic coverage Public insurance for basic coverage Private insurance beyond basic coverage and some restrictions Little private insurance beyond basic coverage with no restrictions Germany The Netherlands Slovakia Switzerland Australia Belgium Canada France Austria Czech Republic Greece Japan Korea Luxembourg Rely on mainly public services and insurance Broad range of suppliers and no access filters With access filters Limited choice of suppliers and relaxed budgetary restriction Broad range of choice of suppliers and strict budgetary restriction Iceland Sweden Turkey Denmark Finland Mexico Portugal Spain Hungry Ireland Italy New Zeeland Norway Poland United Kingdom
Among the first, there are countries such as the Netherlands, where private insurers perform the purchase function (box 1). In other cases, private insurers are the ones who provide benefits above and beyond the basic package. Among those which resort to public insurance for purchase duties, and rely on market mechanisms for provision of services, some have access filters2 (France or Canada) and some have not (Austria or Japan).
Box 1: The Dutch system and user choice Following the reforms of 2006, the Netherlands combine an obligatory insurance system with a patient-based insurance market. The government defines a minimum health care package and a standard
2 The role of the filter for access to health care benefits refers to the primary care physician having to refer the patient to the hospital or specialist.
In other cases, this obligation does not exist but is carries financial preference. For example, if a specialist is consulted without having been referred by the primary care physician, the co-payment is higher.
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insurance premium. In order to guarantee universality, all individuals are obliged to be insured by the basic package. They pay a lump sum premium to their insurance company of choice and their employer withholds social security contributions from the salary. Lower income insured parties receive government subsidies.
The insurance companies are private and the insured party has freedom of choice (a change after one year is allowed). These must accept all residents in their coverage area. In order to compensate insurance companies for not being able to select the risk to be covered, compensations are established by means of the Health Care Insurance Fund. The insurance companies send the premiums charged to this Fund, which also receives salary contributions. Then the premiums (and contributions) are redistributed among the insurance companies according to the original decisions made by the consumers, adjusted by criteria of joint and several liability, risk, etc.
Insurance companies compete on nominal premiums for the basic package (this cannot be altered), volume discounts (10% maximum) for groups of insured individuals, or lower premiums if the insured party becomes co-responsible for the costs generated over and above a given amount.
The basic health care package is covered by the private insurer. Additional public funding guarantees universality and a safety net for illegal immigrants. Complementary health care by means of private insurance, is voluntary, with no public support and risk is freely covered or not by the insurance company. Most of the population purchases complementary insurance policies from the insurers, providing the minimum legal coverage.
Registration with a primary health care physician is obligatory, who controls the costs by limiting referrals to specialists. A medical referral must be obtained before consulting a specialist, except in acute conditions such as trauma or myocardial infarction.
Over 90% of the hospitals are privately owned and managed, but not for profit. The TreatmentDiagnosis Combination payment system is used, which links prices to real costs and enables the insurance companies to negotiate the prices of hospital services.
The models which have been articulated on the basis of public control span from those without access filters and broad user choice mechanisms (Sweden) to those which do use filters to access health care services. Among the latter, some countries are subject to a lax budgetary restriction and offer a limited choice of suppliers (Denmark or, to date, Spain) and others maintain the ability to choose among suppliers, but with strict budgetary restriction (United Kingdom).
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The OECD points out that there is no evidence of superiority of any of these systems in terms of cost and health care results, since there is remarkable diversity in each of the groups (see other models in Appendix). The National Health System compares satisfactorily with these systems as is shown in Table 2.
It is important to underline that universality, equal access and public nature are only one part of the system configuration. The Co-responsibility of users (and their ability to choose), of the supply industry and health care professionals, or the introduction of competition, among other formulae, are perfectly compatible with a universal and public model, as can be seen in other countries.
Table 2 Comparison of National Health Systems
Spain
France
The Netherlands 12% 84.7% 6% (2007) 4,914 2.9 (2008) 8.4 (2008) 11 11.3 78.5 82.7 3.8 8.5 (2005)
Japan 8.5% (2008) 80.8% (2008) 15.8% (2008) 2,878 (2008) 2.2 (2008) 9.5 (2008) 43.1 (2008) 97.3 (2008) 79.6 86.4 2.4 5
United Kingdom 9.80% 84.1% 10.50% 3,487 2.7 (2010) 9.5 (2010) 5.9 (2010) 8.3 (2010) 78.3 82.5 4.6 8
Sweden 10% 81.50% 16.70% 3,722 3.7 (2008) 11 (2008) ----79.5 (2010) 83.5 (2010) 2.5 5.4
Funding Total health care expenditure (% GDP) 9.5% 11.0% Total public health care expenditure (% total health care expenditure) 73.6% 77.9% Total private health care expenditure (% total health care expenditure) 20.1% 7.30% $ per person (US $ PPP) 3,067 3,978 Process results Practicing physicians (per 1000 inhabitants) 3.5 3.3 Nurses (per 1000 inhabitants) 4.9 8.2 MRI scans (per million inhabitants) 10 7 (2010) CT scans (per million inhabitants) 15.1 11.8 (2010) Health results Life expectancy Men 78.6 78 (2010) Women 84.9 85 (2010) Child mortality rates (per 1,000 live newborns) 3.3 3.3 (2010) Maternal mortality rates (per 100,000 live newborns) 3.4 10(2005Note: Figures for 2009 unless otherwise indicated * MRI scans in hospitals only included and does not take into account those carried out in private clinics Source: CIVITAS, OMS and OCDE
2.2 The National Health System (SNS) The SNS3 offers universal coverage funded by taxes since 1999, with mostly public health care. Services are free of charge at the point of provision, although certain formulae of co-payment have been introduced in the pharmaceutical area. Of the 9.5 percentage points of the GDP which accounts for the Spanish health care spending in 2009, 7 (73.6%) pertain to public spending, almost entirely funded by taxes (graph 1).
3 Its basic legal framework is set forth in General Health Care Law 14/1986 of 25 April, and Law 16/2003 of 28 of May, on the coherence and
quality of the NHS, and subsequent reforms, such as Royal Decree Law 6/2012, of 20 April, on urgent measures to guarantee the sustainability of the National Health System and improve the quality and safety of the benefits provided (RDL 6/2012).
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Graph 1 Unit cost by type of funding in 2009 6.2 5.5 84.7 The Netherlands 10.5 1.1 84.1 United Kingdom 16.7 81.5 Sweden 15.8 2.4 80.8 Japan 7.3 13.3 77.8 France 19.7 1.0 77.9 Italy 13.1 9.3 76.9 Germany 12.3 11.0 75.0 Ireland 19.0 2.1 74.7 Finland 20.1 5.4 73.6 Spain 27.7 72.1 OECD 27.2 4.9 65.1 Portugal 30.5 8.8 59.7 Switzerland 47.8 4.0 48.3 Mexico 12.3 32.8 47.7 USA 34.0 18.6 47.4 Chile Public Administrations Private Sector Private Insurance Private Source: OECD
Other
The percentage of expenditure pertaining to private insurance is on the increase and is currently slightly above 5%. Expenses met directly by citizens aside from public or private schemes account for one fifth of the total amount of health care expenditure, above that in other European countries, despite co-payment being used to a lesser extent in Spain than in such countries (of the 20.1 points of direct payments made by households in Spain, only 1pp pertains to co-payment in 2009).
In those countries in which households pay for a larger share of overall health care costs by direct payment aside from public or private insurance schemes, health care cost per inhabitant tends to be lower (graph 2). Indeed, the users, once insured, are able to modify their behavior patterns. That is, they are able to consume more health care services than those which they would consume if they had to pay directly for them4.
4 This is the problem known as moral risk, common to other sectors of insurance.
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Graph 2 Private health care ex penses (pay ments from households in addition to insurance) a nd hea lth care per inhabitant in 2009 . % of private hea lth care cost over private overall total health care cost Health care c ost per inhabitant (PPP USD) 60.0 50 .0 40 .0 30 .0 20 .0 10 .0 0 .0 MEX = MEX CHI = CHI GRE =GRE COR = KOR ISR = ISR POR = POR ELVQ = SLO POL = POL TUR = TUR HUN = HUN EST = EST CHE = CZC ELVN = SLO ITA = ITA ESP = SPA AUS = AUS JAP = JAP FIN = FIN NZL = NZL SUE = SWE BEL = BEL SUI = SWI RU = RU ISL = ICE IRL = IR E FRA = FRA CAN = CAN LUX = LUX ALE = GER HOL = N ET DIN = D EN NOR = NOR EEUU = USA AUT = AUT Source: O ECD
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In Spain, the perception of the NHS as a basic component of the welfare state is deep-rooted among the citizens. The general view held by users on the health care system is that it works although, as the Economic and Social Council points out, there is an awareness of the need to address changes5 (box 2).
Box 2: Perception of the National Health System

The data from the Ministry of Health indicate that user perception of the NHS remains at high levels of satisfaction, especially in matters of medical care.
User perception of health care system % of satisfied persons (unless otherwise indicated) Health care received in medical practice: family practice Health care received in medical practice: specialist physician Health care received in medical practice: specialist physician (men) Health care receiving in E.R. Health care received in hospital admission Satisfaction* with awareness of medical history and follow-up of health problems in Primary Care center (women) Satisfaction* with information received on health condition in specialist consultation *(1-10) Source: Ministry of Health 2005 83.6 71.2 73.3 77.8 85.8 7.1 6.9 2006 84.0 81.6 83.8 77.0 83.4 7.0 6.9 2007 81.2 81.5 79.4 84.6 7.0 6.9 2008 84.9 81.8 81.7 75.2 85.6 7.0 6.9 2009 86.1 82.1 83.4 77.7 87.5 7.1 7.0 2010 86.4 81.5 79.9 77.8 85.7 7.3 7.1
The Swedish consulting group Health Consumer Powerhouse has prepared an Index of European Health Care Consumers, which examines the rights, participation and access by users to the health care system.
Spains position in the European Health Care Consumer Index, 2012 On 34 countries Position Index 2012 Global Subcategories: 1. Patient rights and participation 2. Accessibility 3. Results 4. Prevention 5. Access to medication and technology Source: Health Consumer Powerhouse 24 28 33 11 16 13
In 2012, according to this source, the Spanish system ranked 24th among the 34 European countries analyzed (22nd position in 2009). Spanish health care falls behind in terms of transparency and patient participation. In terms of waiting lists, Spain is the second before last, only preceded by Norway and on a par with Sweden. As for patient rights, the results are likewise not positive: Spain is the fifth from the last. Spain fares better in the three more medical categories: 11th in results, 16th in prevention and 13th in access to medication and technology.
System coverage General Health Care Law 14/1986 establishes the right to health care for all Spanish citizens and non-Spanish citizens residing in the national territory. It also sets forth that access and health care
5 See CES, 2010 or Health Care Barometer CIS-Ministry of Health
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services shall be provided under equal conditions. However, system coverage presented a few omissions6, which have been addressed in the recent reform.
Universal coverage health care models aim to prevent the potential exclusion of high risk and low income groups, which might have problems when accessing health care. The insurer is unaware of the health risk of the insured party and, without public intervention, may elect to penalize or to exclude such groups by allocating a high risk to them and considering that their coverage is not profitable7.
Almost all countries within the OECD offer universal coverage of the cost of a basic package of health care services (consultation to primary care physicians and specialists, tests and examinations, and therapeutic and surgical procedures). Generally, dental care and the supply of medications are covered in part, although these must be acquired separately in some countries. There are four countries which have no universal coverage: Chile, Mexico, Turkey and the US (graph 3).
Graph 3 Degree of universa lity of medical insuranc e in main OECD countr ies % of populat ion covered Denmark 100.0 Finland 100.0 Greece 100 .0 Ireland 100.0 Israe l 100.0 Italy 100 .0 Japan 100.0 Norway 100.0 Portu gal 100 .0 Swe den 100.0 Sw itzerland 100 .0 United Kingdom 100 .0 Ge rmany 89.2 10.8 Fra nce 9 9.9 Belgium 99.5 Austria 99.0 The Netherla nds 98.8 Pola nd 97 .6 U SA 26.4 54 .9 Turkey 80.8 Mex i co 74.0 Chile 73 .5 Public coverage Primary c overage by private medical insura n ce Source: O ECD
The trend towards universality of most OECD countries, which determines its largely public funding, is based on reasons of equality, but also of efficiency: that is to say, the recognition that the cost for a society of a lack of health care go well beyond the cost of health care (box 3).
6 According to the General Provisions of RDL 16/2012, the flawed transposition of Directive 2004/38/EC on the right of European citizens to freely
circulate and reside within the EU, which in section 7 sets forth the conditions which must be met for a citizen to reside in a country other than his own for more than three months, has prevented the billing to the source country for health care provided for some 700,000 foreigners per year.
7 This is the problem known as adverse selection, common to other areas of insurance.
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Box 3: The cost of a lack of health care
The lack of health care carries both an individual and a social cost. Health care, as education, forms part of human capital which, in turn, determines an economys capacity for growth. In this regard, health care expenditure is, to a large extent, an investment which generates significant returns, as shown herebelow by the estimates of the Milken Institute referring to the US. Health care cost is not the main cost arising from lack of health.
Total c ost of chronic diseases , US 2003 Total cost of treatments: 277,000 Total economic losses: 1,047,000 Heart attack 13,000 22,000 Diabetes 27,000 105,000 Lung diseases 45,000 94,000 Heart diseases 65,000 105,000 Mental conditions 46,000 171,000 High blood pressure 33,000 280,000 Cancer 48,000 271,000 Billions of dollars Source: Milken Institute
The conclusions reached in a study carried out by researchers at Oxford University 8 indicate that cardiovascular diseases accounted in 2003 for a cost in Spain of almost 7 billion, and 169 billion in the whole of the EU, of which only 62% pertains to health care. Of the 7 billion of estimated cost in Spain, 4 billion pertain to health care costs incurred in the treatment of diseases, whereas the remaining 3 billion are distributed between productivity losses due to disease or early mortality and care provided to cardiovascular patients by relatives and friends.
On the other hand, universal coverage is related to the definition of the services portfolio. The regulation of the catalog of NHS services 9, until the recent reform, has been based on the establishment of a broad common portfolio of services, with equal access to all, irrespective of the
8 See Economic burden of cardiovascular diseases in the enlarged European Union Jos Leal, Ramon Luengo-Fernndez, Alastair Gray, Sophie
Petersen, and Mike Rayner. European Heart Journal (2006) 27, 1610-1619. 9 Royal Decree 63/1995, of 20 January, on Regulation of Health Care Benefits in the National Health System, which establishes the health care services provided by the NHS with public funding, health care for which payment is to be claimed to third parties obliged to assume payment and health care services which are not funded with public funds, and Royal Decree 1030/2006, of 15 September, which reviews the portfolio of common services of the NHS and additionally considers a portfolio of complementary services established by the Autonomous Communities.
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place of residence, including public health. In Spain there has been no active and systematic underfunding policy for treatments or technologies based on cost-effectiveness thereof10.
Autonomous Communities may establish their portfolios of additional services, which have led to a proliferation of rules to extend the common NHS portfolio. After a few years, differences between benefits provided by the Autonomous Communities have become evident, resulting from:
The interpretations made of the items contained in the common services portfolio which are often not precisely defined. Therefore, significant differences are arising between diagnosis/treatment procedures of conditions and use of new technologies, both between Autonomous Communities and between the various health areas within one same Community.
The creation of additional portfolios by the Autonomous Communities: as the CES points out11, the absence of basic and clear rules established from the start in regard to approval and funding of services, added to their high political value, has encouraged emulation between autonomous health care services when defining their offering. As a result thereof, not always have criteria of need or therapeutic utility prevailed when introducing some treatments which, subsequently, have been assumed by other autonomous communities.
The recent reform establishes a common portfolio which includes the free basic services of the NHS throughout the national territory, the additional portfolio subject to co-payment, the additional portfolio of the Autonomous Communities to be covered by their own budgets (for which they must prove financial coverage capacity), and the complementary set of services which includes those which are not NHS services and must be paid directly by the users. Likewise, it establishes general guidelines for listing and delisting of services and benefits, and the criteria to be applied, as well as the institutions taking part in the procedure, all outstanding subsequent regulatory development.
Architecture of the NHS The transfer of health care competencies to the Autonomous Communities was completed in 2002. The Autonomous Communities administer 91% of the public consolidated
10 The recent announcement of discontinued funding of 456 pharmaceutical products as of 1 August which will mean, according to the Ministry of
Health, a savings of 456 million euros, was preceded by two other underfunding initiatives between 1993 and 1995. According to the Ministry, these medications belong to therapeutic groups which at least three Autonomous Communities, in the working groups created for this purpose, considered eligible for discontinued funding. Physicians may continue to prescribe such medications, but the patient must assume the full cost thereof. Likewise, it was pointed out that the PDR has not been updated for years. 11 See CES 2010
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health care cost which, on average, accounts for one third of the total budget. Health Care abroad, the general bases and coordination of health care and legislation of pharmaceutical products12 remain the exclusive competencies of the State. Thus, the Ministry of Health has competencies in the regulation of pharmaceutical products and the guarantee of equal access to health care se4rvices throughout the national territory. The NHS coordination is articulated by the Inter-territorial Council for the National Health System (CISNS)13, chaired by the Health Minister and made up of 17 health secretaries of the Autonomous Communities. The decisions of the CISNS are arrived at by consensus and summarized in series of recommendations, as they affect competencies transferred to the Autonomous Communities. One of the most common criticisms made to the system is, precisely, its improbable governance and the economic cost14 involved. Thus, the distribution of competencies between central and autonomous administration and the use of consensus as a decision-making procedure, hinder the evolution of the system 15. The difficulty in reaching agreements by consensus generates three problems: slowness, lack of specificity of measures agreed and, very often, lack of compliance follow-up. The difficulties in reaching agreements in the methods of calculating waiting lists, vaccination schedules, co-payment or many other areas, are well known, as is their lack of efficacy in preventing the deficit in the health care system. As the Social and Economic Council pointed out in 2010; The organization of the public health system on the basis of the so-called National Health System did not, however, imply the creation of an institutional architecture in accordance with the governance needs of the new model () It lacks a proprietary legal personality on which to base the system, beyond a series of initiatives undertaken by the different health services and agreements reached in the Inter-
12 The General Health Care Law also created, as a technical-scientific body to support to System, the Carlos III Health Institute, which performs
its duties along with the CISNS, and in collaboration with other Public Administrations.
13 The CISNS, according to the definition contained in section 69 of the Law on NHS coherence and quality is the "permanent body for
coordination, cooperation, communication and information on the health services, with each other and the State Administration, aiming to promote the coherence of the National Health System via the effective guarantee of the rights of the citizens throughout the entire State Territory.
14 Freire & Repullo state: "An example of the cost of non-coordination is the cost of purchase of goods and services. Back in the 2003 report, the
Court of Auditors made a highly critical reference to such problems in regard to the purchase of medications and pharmaceutical products in 15 NHS hospitals. A recent study analyzed 70 tenders sent out over 3 years for the purchase of skin staplers in public hospitals, where prices ranged between 4 and 10 euros, and what is most surprising is the lack of a relationship between the sales volume for each tender and the unit price. The same degree of variability was found in regard to the purchase of a particular medication (ribavirin). Given that chapter II (on current costs of goods and services) accounts for 25% of the hospital budget, the authors of the report believe that by improving and coordinating purchasing systems, savings of 5% (400 million euros) could be achieved. Other works have also commented on this variability in prices (pacemakers between 1,682 and 3,209 euros), and propose efficiency gains by improving public information and purchasing mechanisms. The centralization of hospital purchase is established in Royal Decree Law 6/2012.
15 This issue, for instance, has been one of the keys in the process of construction of the European Union, applying formulae such as majorities
adapted to the type of decision made and others designed to prevent institutional paralysis.
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territorial Council of the NHS. The latter is, in essence, its only visible body, although it lacks its own organization which is permanent and separate from the Ministry of Health"16. In general, the Autonomous Communities have elected to create a health authority (the regional department/office of health, which regulates and plans) and a regional health service which provides health care and is responsible for the operational management of the network of services and the coordination of health benefits, in accordance with the structure defined by the Department. The Department of each Community defines the territorial organization of its health care services: the basic areas of health care and the competencies of each.
Health Care Areas. The most commonly found configuration is one management for primary health care and another for specialist care (outpatient and hospital), in each health care area, although Autonomous Communities are increasingly resorting to single area management units for both primary and specialist health care. Each health care catchment area includes a population of between 200,000 and 250,000 inhabitants.
The basic health care units are the smallest units within the organizational structure of health care. They are usually organized around a single Primary Health Care team which is the entry level into the system. The system offers two health care levels:
Primary health care, geared towards a generalist or global view of health, acting as a filter for user access, other than the emergency departments, to other health care levels. Spain is one of the few countries in the zone where primary health care professionals, with some exceptions, are salaried employees of the Administration. The primary health care network is entirely public. Most of the private health care17 in Spain is of an outpatient nature. In the public
sector, hospital expenditure is 2.5 times more than that of outpatient care providers, according to the Annual Report of the SNS 2010, whereas in the private sector hospital expenditure is only one fifth of that spent on outpatient services.
16 As for the dynamics of the Inter-territorial Council of the NHS, Repullo & Freire (2008) state that, following the attempt of the Law of
Coherence and Quality to improve the governance of the system, serious dysfunctions began to become evident: thus, on 3 December 2003 the first resistance took place within the inter-territorial Council (socialist members against PP minister), followed by other stands of resistance in 2004 (on 16 June and 22 September by PP members against minister from PSOE), which mark a period of structural conflict of this NHS governance body; in the 20 meetings held from January 2002 to March 2007,and following the repercussion thereof in the media, 7 of these took place normally, 3 were blocked and the 10 remaining exhibited evident political differences, with separate press conferences and a tendency to exhibit party confrontation, which led to an exaggerated public display of divergences which were not as marked in the meeting itself. 17 See Do we spend too much or do we spend poorly? by Juan Sim Miana or Primary health care expense in Spain: insufficient to offer attractive services for patients and professionals. Report SESPAS 2012, Juan Sim & Juan Grvas.
20
In this regard, as the report points out, it must be considered that whilst primary health care in the public system is mainly provided in the health centers of the National Health System, in the private sector it is the dentists and specialized medicine clinics the ones that generate 80.3% of the overall expenditure of providers of outpatient services.
Specialist and hospital health care absorb 55.9% of public health care expenditure, and is focused on health recovery. The patient receives care during the acute phases of a disease, and exhibits a tendency towards technification by means of using increasingly complex and sophisticated therapies.
Approximately 40% of hospitals belong to the NHS. The rest are privately owned, although several of them make up a network of hospitals for public use and hospitals with replacement agreements and receive public funding for this activity, so that around 40% of Spanish private hospital admissions are charged to the NHS.
70% of beds functionally depend on the public sector. 40% of total beds available are concentrated in high technology hospitals with more than 500 beds. All Autonomous Communities have at least one of these centers.
The growing technological sophistication of hospital health care requires the benefit of economies of scale to achieve high levels of efficiency (as well as quality and safety). According to various experts18, the establishment of reference centers for more complex specialties which provide service to other hospitals that do not have such specialties, should be the norm, but is not always the case.
In addition, the management of Centers overall is highly centralized in the health Departments and Autonomous health services, with a significant restriction on the powers of the managers who are unable to decide on matters such as human resources management. Health care management jobs are not always separate from the political cycle.
This structure has led to a lack of coordination and to a distance between the two health care levels, as well as an absence of co-responsibility in the management of resources between primary and hospital care.
18 The volume of activity, both by unit and by professional, increases the efficacy and safety of results in certain units. For example, it is estimated
that for health care provided in cardiac units to be of quality, safe and efficient, cardiovascular surgery units must be available only in those hospitals which carry out at least 400 annual percutaneous coronary interventions. In addition, at least 600 major cardiac surgery operations should be carried out in each year each year. Report from the Spanish Cardiology Society (SEC), the Spanish Thoracic-Cardiovascular Surgery Society (SECTCV) and the Spanish Association of Cardiology Nursing (AEEC).
21
Finally, the model of health care management, focused on acute patients, is not developing in line with a population with increasingly chronic conditions. The aging population (16.5% are over 65 in Spain, INE Base 2010) means greater dependency and an increase in chronic pathologies, also affected by the addition of new diagnostic and therapeutic techniques which render chronic hitherto mortal conditions.
Box 4: The strategy of chronic patients in the Basque Country
The number of chronic patients over the age of 65 will grow from 344,000 in 2011 to 602,000 in 2040 in the Basque Country. As chronic conditions increase, so does the cost thereof increase for the health care system.
Average estimated cost of chronic patients for the Basque health care system Average yearly cost 25,000 20,000 15,000 10,000 5,000 1,426 2,538 4,181 6,586 9,485 12,621 15,261 17,496 22,605 No. Chronic conditions Source: Osakeditza
Chronic patients account for 70% of Basque health care expenditure. Specifically, they account for 84% of total revenues recorded in Osakidetza, 75% of primary care prescriptions, 63% of specialist consultations and 58% of primary health care consultations.
The chronic patient strategy (EC) of the Basque Health Service addresses 14 strategic projects: stratification of the population (according to health care required in the coming year); prevention and promotion actions; patient self-care and education; the creation of a Network of Activated and Connected Patients via new Web 2.0 technologies and Associations of Chronic Patients; unified medical histories; integrated clinical care; development of hospitals for sub-acute patients; development of advanced nursing competencies, for chronic patient care; overall patient assessment (health and social issues); renewal of the health care service purchasing process, based on population logic, to share responsibility on results and identify efficiencies; distance service provision (e.g., encouragement of telephone health care provision, with some 6000 consultations per month and a 90% rate of resolution, among other initiatives); development of the electronic pharmacy and prescription; creation of the Research Center for Chronic Conditions and, finally, innovation
22
from clinical professionals (encouraging innovative ideas from professionals in order to improve the quality of primary health care, health care processes and daily practice).
Provision of services Most of NHS service providers belong to the public sector and the predominant governance model is that of direct management or similar. The main tool used in this model is that of the program-contract. There are no penalties established for non-compliance of targets, and risk is not usually transferred to suppliers.
There are other forms of health care provision management, which may also be considered to be direct management, using independent legal entities separate from the regional health department: the foundations in Galicia or, to a lesser extent, in Madrid; or the public corporations in Andalusia or, to a lesser extent, in Catalonia. Such formulae operate under private law and have their own equity (and possibility of acquiring debt) and greater management autonomy 19.
Other forms of indirect management or subcontracting are also used, such as the provision of additional diagnostic tests and outpatient procedures, by third party agreement. The public system subcontracts to private hospitals the provision of specialist health care services: for instance, high resolution diagnosis or outpatient surgical procedures as part of managing waiting lists; home provision of respiratory therapies, dialysis or rehabilitation; or one-off third party agreements to provide health care to a population sector by means of private hospitals (Madrid Fundacin Jimnez Daz , Vigo Povisa or several hospitals in Catalonia). Third party agreements account for 10.5% of public health care expenditure and are being affected by the current budgetary adjustment situation.
But the landscape in matters of health care management is not a static scenario. The Autonomous Communities have gradually introduced new health care management formulae which, while maintaining the public nature of the system, offer greater levels of efficiency, funding or even transfer of risk from autonomous health care systems to the private sector. The risk transferred is quite varied: it can be that inherent to health insurance activity, technological risk or that pertaining to the design, construction or maintenance of hospitals, for example20.
Some Autonomous Communities have resorted to administrative concessions for the provision of health care to an entire basic health area (Catalonia, Valencia or Madrid).
19 This is an issue addressed prior to the completion of the health care transfers to the Autonomous Communities in 2002, as proven by the fact
that the last strategic plan of the Insalud considered the transformation of hospitals into Public Health Care Foundations to provide them with greater autonomy. 20 In addition, in line with the precedents applied in European countries such as Italy or the United Kingdom on shared risk in the acquisition of medication (payment is subject to clinical results or cost effectiveness), there have been some recent initiatives in Autonomous Communities such as Andalusia or Catalonia which have sought to transfer the risk to suppliers.
23
In Catalonia, the new formulae of health care management, for instance, include associative based entities (or EBAS, as of the Spanish). These are comprised of health care professionals hired by the Catalan Health Care Service to provide health care services in Exchange for capitated financing. They purchase the Specialist Health Care services and can share in a part of the savings obtained in accordance with agreed standards.
In Valencia21 or Madrid22 the health care within a catchment area was decided to be entrusted to a Temporary Union of Companies. Similar to the EBAS, this entails the private management of health care in exchange for capitated payment, but is attached to an investment made in infrastructures by the concession holder.
Box 5: the Alzira Model
The Valencian government opened the Hospital de La Ribera in 1999. This is the first Spanish public hospital built and managed under the administrative concession modality. In 2003 the concession went on to include, in addition to provision of specialist care in the hospital, the primary health care services for the municipality of La Ribera. This is the first time that the concession of the entire management of the public health care service has been done in Europe. The four main characteristics of the Alzira model are:
1. Public funding via capitated payment. The Administration pays the concession holding company a fixed and predefined annual amount per inhabitant. The concession holder assumes the specialist health care of the health care department for a yearly amount, but the citizens have the change to choose the health center: the concession holder must pay for health care services provided to the citizens assigned to its catchment area at other centers at 100% of the average cost in the Valencian Community, but if a citizen from another catchment area should decide to go to the hospital built and managed by the concession holder, the hospital shall only be paid 80% of the average cost. In this way, the citizen has the freedom of choice of hospital, and the money follows the patient.
2. Public Ownership: the center subject to concession is a public hospital, belonging to the network of public hospitals. The initial investment for construction and equipment pertains to the concession holder. The hospital shall be owned by the Generalitat (Valencian Autonomous Community Government) at the end of the concession. The concession holder undertakes to deliver, at the end of the concession period, all assets in perfect condition. Throughout the concession, the concession holder undertakes to make certain investments, by presenting five year plans.
21 The model began with the concession of the construction and specialist health care in the Hospital de la Ribera in 1999 which, as of 2003 began
to also offer primary health care to a population of some 260,000 inhabitants. In 2006 the model spread to Torrevieja, in 2008 to Denia, in 2009 to Manises and in 2010 to Vinalop. 22 In Madrid the concessional model for health care services has been applied to the Hospital Infanta Elena (2007), Hospital de Torrejn (2011) and to the Hospitals underway in Mstoles and Collado Villalba.
24
3. Public Control: the concession holder is subject to the clauses set forth in the specifications. The Administration has the power to control and inspect, as well as regulatory and disciplinary powers. The Administration has permanent control over the concession holder via the commissioner of the Health Care Department, with a statutory or civil servant status, appointed by the Department he represents.
4. Private Service Provision: The awardee of the concession is a Temporary Union of Companies (UTE) of which Adeslas (Grupo Agbar) is the majority shareholder, with 51% of shares. The concession holder cannot obtain a return over and above 7.5%. In the event this percentage is exceeded, the surplus is used towards making investments in the Department. The concession holder assumes the cost of statutory personnel dependent on the Administration, which is billed at total cost plus Social Security. The towns of Alzira and Sueca has a medical specialty center which was taken over by the hospital, including its personnel. Most of the physicians decided to form part of the company structure and entered into employment contracts. By contrast, a high percentage of nursing professionals decided to keep their status as statutory, albeit forming part of the hospital staff.
This public-private collaboration helps to boost choice and competition. For instance, under the abovementioned Alzira model, over 2000 beds are currently managed.
Furthermore, this is not limited to hospital centers, but can be applied to other areas such as the Central Clinical Laboratory of Madrid23 or the project of the Radiotherapeutic Oncology of Gran Canaria.
Table 3 With clinical management Building+Equipment+Maintenance + Non-medical services + High technology + Specialist health care + Primary health care + Social and health care
23 This is located within the Hospital Infanta Sofa in San Sebastin de los Reyes and also provides service to five other Public hospitals and their
primary care catchment areas. It provides coverage (along with its six peripheral laboratories) to over 1,100,000 citizens in areas of clinical analysis, biochemical analysis, hematology, genetics, microbiology, etc.
25
Table 3 Some Administrative concessions in Spain No clinical mgmt.
Baix LLobregat
Source: Ribera Salud
Majadahonda
Burgos
Valde moro, Torrejn, Mstoles , Collado-Villalba
Alzira, Torrev ie ja, Denia, Manises, Elche
Manises
In Autonomous Communities such as Madrid, 7 hospitals have also elected to resort to private funding of public infrastructures (PFI)24, frequently used in transport infrastructures, with no provision of health care by the concession holder. The concession holder designs, builds, funds and operates the hospital in all aspects other than the health care services provided therein. The autonomous region health care department leases the hospital from the concession holding company for a prolonged period, after which the hospital can become owned by the regional health care system. The provision of health care continues to be the responsibility of the public health service personnel, and the concession holder, in addition to building and maintaining the hospital, is the holder of the concessions of the non-health care activities carried out therein: car park management, security services, cleaning, food and beverage or waste disposal, among others.
In Murcia or the Canary Islands? (Balearic Islands?? Segn la table debera ser las islas Baleares no Canarias), the public-private collaboration takes place in the technological field. Siemens was awarded in 2010 the concession for the provision, renovation and maintenance of clinical equipment of the hospitals of Cartagena and Mar Menor for a 15 year period for 132 million. In the Balearics, the
24 This model, frequently used in the United Kingdom, enables politicians to implement new infrastructures without incurring in direct
expenditure and without acquiring debt, at least at the start, as is also the case with other transport infrastructures funde d via PFI. See Pablo Vzquez, 2006.
26
Son Espases Hospital awarded in 2010 the respiratory care equipment (3.8 million) and image diagnosis and treatment equipment (26 million) to General Electric Healthcare Espaa for 7 years.
In summary, the new management methods, although still a minority, are being tried out in many Autonomous Communities, but are mostly due to autonomous community initiatives, which are not articulated by a national policy of analysis and comparison of results and encouragement of the best formulae, beyond the establishment of the legal framework 25 to develop them.
On their part, voluntary private insurance policies play a relatively lesser, albeit increasingly relevant, part in the Spanish health care system. They are independent from the public system and of an additional nature.
The non-profit private sector is present in the health care provision for occupational accidents and professional diseases. Such contingencies are covered by a series of mutual insurance companies, funded by the National Social Security Treasury, mostly by means of company contributions.
There is one notable exception: the three mutual insurance companies MUFACE (Mutualidad General de Funcionarios Civiles del Estado), MUGEJU (Mutualidad General Judicial) and ISFAS (Instituto Social de las Fuerzas Armadas) exclusively provide insurance coverage to civil servants and their beneficiaries (4.8% of the population). They are financed by a mixed system of salary contributions and taxes. Civil servants are the only group which can waive coverage of the National Health System, electing fully private health care services, which is an option chosen, for instance, by 85% of the MUFACE mutualists. MUFACE, with 1,083 million euros, accounts for 67% of these mutual insurance premiums in 2011 and the amount of claims paid to the insurance companies was of 1,042 million26.
25 Law 15/1997 of 25 April, on establishment of new forms of management of the National Health Care System, allowing health care services to be
provided by legal entities other than the State. 26 The MUFACE premium in 2008 was of 657 euros per annum compared to an expenditure of 1,189 euros of the SNS, excluding medications.
27
3. Key financial factors of the NHS

The forecast increases in health care expenditure pose a significant challenge to economies like the Spanish one, subject to tight budgetary restrictions and highly leveraged. For this reason, health care reforms are a very significant part of the fiscal consolidation process, and that UE regulations require Stability Programs to be presented by countries subject to excessive deficit procedures to explicitly spell out the health care expenditure expected in the long term.
3.1 The level of health care expenditure The overall health care expenditure, public and private, in percentage of GDP in Spain is similar to that of Italy (9.5%), the United Kingdom (9.6%), and the OECD (9.6%). On its part, Spanish public health care expenditure in 2009 was of 7% of GDP, compared to the average of 6.9% of the OECD (graph 4).
Graph 4 Public and health care expenditure % of GDP per inhabitant Public health care expenditure per inhab. Private health care expenditure % of GDP per inhabitant Private health care expenditure per inhab. EN ESTA TABLA, EN LOS NMEROS, HAY QUE CAMBIAR LAS , POR PUNTOS . Y LOS PUNTOS . POR COMAS ,
28
Overall health care expenditure per inhabitant in Spain in 2009 ((3,067 US dollars in PPP) is lower than the OECD average (3,233). Public health care expenditure per inhabitant in Spain is of 2,260 US$/PPP compared to 2,354 of the OECD average.
Nevertheless, one of the main determining factors of the health care expenditure is citizen income: health care consumption grows with user income. Therefore, Spains position can be more clearly perceived if the GDP levels per inhabitant are considered (graph 5).
Graph 5 Health care ex penditure and GD P per inhabitant Health care expenditure per inhabitant ($ PPP) EEUU = USA NOR = NOR LUX = LUX SUI = SWI HOL = N ET DIN = D EN CAN = CAN AUSTRI = AUS ALEM = G ER BEL = BEL IRL = IR E AUSTRA = AUS FRA = FRA SUE = SWE RU = UK ISL = ICE ESP = SPA ITA = ITA FIN = FIN NZL = NZL JPN = JAP GRE =GRE ESLN = SLO
29
POR = POR ISR = ISR ESLQ = SLO V COR = KOR CHE = CZC POL = POL HUN = HUN CHL = CHI EST = EST RU = RU MEX = MEX TUR = TUR SA = SA BRA = BRA CHIN = CHI INDI = IND INDO = INDO 15,000 30,000 45,000 60,000 75,000 90,000 GDP per inhabitant ($ PPP) Source: OECD
Consequently, it cannot be concluded that the NHS is making a substantially different effort to that pertaining to Spain in terms of GDP per inhabitant, irrespective of the fact that public health consumes many more resources.
3.2 Evolution of health care expenditure In Spain, between 2000 and 2009, the cumulative growth of real public health care per inhabitant was of 42%. In terms of average annual growth, Spain has experienced a trend in its health care expenditure per inhabitant similar to that of the OECD average. However, its GDP per inhabitant grew by considerably less that the OECD average (graph 6).
30
Graph 6 Evolution of the real health care per inhabitant Cumulative growth (Base 2000 PPP $) 170.0% 160.0% 150.0% 140.0% 130.0% 120.0% 110.0% 100.0% France Japan The Netherlands Spain Sweden United Kingdom (Base 2000 PPP $) Source: OECD and own preparation
Average annual growth 2000-2009 in % Portugal 1.5 0.5 Italy 1.6 -0.2 Switzerland 2.0 0.7 Germany 2.0 0.6 France 2.2 0.5 Japan 1.1 2.8 Hungary 2.8 2.2 USA 3.3 0.6 Denmark 3.3 0.1 Sweden 3.4 1.1 OECD 4.0 1.6 Spain 4.0 0.8 Belgium 4.0 0.7 The Netherlands 4.4 1.6 United Kingdom 4.8 1.0 Ireland 6.1 1.1 Greece 6.9 3.9 Poland 7.3 3.9 Average rate of real growth in health care expenditure per inhabitant Average real growth rate of GDP per inhabitant
Outlook and determining factors for growth in health care expenditure There are various projections on the future of health care expenditure (table 4).
Table 4 Projections on the increase of health care expenditure as % of GDP Body EC OECD Period 2007-2060 2005-2050 Countries European Union OECD Central scenario 1.5pp Confidence interva l 0.7-2.4pp 2.0-3.9pp Central scenario (Spa in) 1.6 pp Confidence interva l(Spa in) 1.0-2.6pp 2.3-4.1pp Source: Hernndez de Cos & Moral-Benito and update of the Stability Program 2012
IMF 2010-2050 Advanced 3.0pp 2.1-4.1pp 1.6pp 0.8-2.4pp
Scenario Stability Program 2012 1.2pp -
IMF forecasts, for instance, show more budgetary impact on national health systems than on pension systems in the coming decades (table 5). In 2030 the cost health care as a percentage of GDP in Spain will be 1.6pp higher than in 2010. The growth is much lower than that expected in the United Kingdom, Portugal and, above all, the US (5.1pp, which is three times the growth of the share of the GDP in Spain represented by health care cost).
The net present value of this variation in the period 2010-2050 is equal to half the current GDP in Spain, a significant amount which in the US accounts for no less than 164% of the GDP, or 113% of GDP in the United Kingdom.
Table 5 Structural fisca l indicators % GD P, unless othe rwise indicated Variat ion in cost of pensions 2010-2030 Net present value of the Variat ion in the c ost Net present value of the variation in c ost of pensions 2010-2050 France Germany Greece Italy The Netherla nds Portuga l Spain United Kingdom United States 0.1 1.1 0.3 -1.6 2.4 0.7 0.5 0.4 1.7 -0.7 30.4 21.0 -33.7 58.5 21.4 33.6 12.7 37.9 of health care 2010-2030* 1.5 0.9 3.2 0.6 2.6 3.5 1.6 3.3 5.1 variation in the cost of health care 2010-2050* 43.8 28.1 106.9 18.8 79.3 116.5 51.5 113.3 164.5 Gross funding needs 2012 18.2 8.9 28.7 14.9 26.7 20.9 14.8 25.8
31
* The forecast health care expenditure does not include the recent reforms (or reform plans) Source: IMF
On its part, in the update of 2012 National Stability Program, the Spanish governments forecast growth in public health care cost expressed as a percentage of GDP between 2010 and 2050 is of 1.2 points, below that of 1.6pp of the IMF. The forecasts made by the Spanish Government take into account the impact of the recent reform contained in RDL 6/2012 (box 6).
Box 6: The Health Care reform (RDL 6/2012) in the Update of the Stability Program 2012
The Central Government has taken a number of steps affecting the sustainability of public health care managed by the Autonomous Communities, with savings which could amount to 7,267 million euros per annum.
Among these are the rationalization in the demand for medications, with an overall increase in the percentage of co-payment in the purchase of pharmaceutical products according to income level, the control of the number of prescriptions per patient, and the introduction of co-payment for the first time among pensioners, likewise according to income levels and with a fixed monthly limit, excluding the long term unemployed and those receiving non-contributory pensions.
In addition, a centralized purchase platform is created (the State will purchase directly from Autonomous Communities suppliers), with the ensuing savings for prompt payment. Of note are also the energy efficiency plans and application of new information technology and communications applications; the restrictions on the access to certain services by non-residents and the prevention of the fraudulent obtention of the health card to prevent health care tourism; and the implementation of a new single health card for the whole of the country. Finally, the portfolio of services will be organized, establishing one which is basic, common and free of charge, and one of additional services where users will pay for a share of the cost, and another portfolio of additional services to be decided by the Communities, which will assume the cost of the latter.
Estimate hea lth care savings on an annua l basis in mill ions of euros Measures Reform of NHS insura nce, cit izens from other countries Organization of NHS serv ice portfolio Improvement in the effic iency of the heal th care offering Rationalization of the de mand for pharmaceutical products: Prescript ion of generic drugs , modification of reference prices Organization of Health Care human resourc es Rest of measures Total Source: Hea lth Ministry 3,550 500 100 7,267
Estimated savings 917 700 1,500
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In addition, the Health Care Guarantee Fund is created as a compensation fund for the Autonomous Communities spending more than the amount estimated in provision of health care for foreigners in the country entitled to health care in their countries of origin, patients referred between Autonomous Communities and care provided to patients when moving within the NHS territory. Other measures include the rationalization of the pharmaceutical supplies (the application of reference prices to equivalent therapeutic groups, the additional encouragement of use of generic drugs, or the withdrawal of funding from drugs with low therapeutic value or very low market prices, except for those in the lowest income brackets; and the organization of human resources in the health care area, improving mobility and establishing a catalog of conversion levels in professional categories.
According to available literature, the factors which determine the growth in health care expenditure have to do with new health care technologies, new health care usage habits, population aging, level of income and growing expectations regarding health care.
Technological innovation is the most important factor determining health care cost. It accounts for between half and three quarters of all the growth in health care expenditure, although its effect is not always the same: it can also contribute to the reduction in cost by introducing efficiency gains in the system or the improvement in the state of health of patients which avoids the need for a longer and more costly health care process.
Table 6 Main applications of the Technological Innovations in health care Enables the personalized and individualized tracking of each patient according to genetic Personalized medicine profile, identifying conditions prior to onset, and providing early treatment Improves diagnosis of diseases . Main development: integration of PET and CT systems to Imaging Diagnostics provide more accurate methods of identifying and classifying tumors Enables development of more effective materials to prevent, predict, diagnose and treat Nanomedicine prevalent and very costly diseases: cancer, myocardial infarction, diabetes, Parkinson or Alzheimer Priority area in the European Union, Japan and the US. Main lines of research: Third generation biomaterials: the bodys own genes control tissue repair Implants which can cope with mechanical functions immediately after having been implanted Intelligent materials for controlled release of dr ugs, able to react to metabolic Biomaterials changes and adapt dosage in real time to condition of patient Heart prostheses manufactured from stem cells Biocompatible microelectrical systems enabling the application of implantable sensors/activators (diabetes, Parkinson or epilepsy) Biocompatible artificial blood of a transgenic or chemical origin as a temporary resource in the event of large blood loss Program for Overall New models of care based on a system of continued and coordinated services, Chronic Disease encouraging patient involvement in disease management Management Enables interconnection with professionals with different centers, provision of better Telemedicine diagnoses and treatments and patient follow -up without requiring such frequent physical presence in health care centers Shortens post-surgical period and hospital stay, reducing health care costs and waiting Minimally invasive lists surgery (MIS) USA: 10% of 15 million surgical procedures each year are performed using these
33
Information systems Source: PwC, 2010
techniques and the use thereof is widespread in general surgery, gynecology, plastic surgery, chest surgery and vascular surgery Europe: less widespread, but it is estimated than in 5 years time 25% of procedures will be performed with MIS. Important inroads are being made in brain, heart and abdominal surgery. These allow the proper use of information within the health care environment. They help information exchange among professionals. They speed up medical practice. They help to improve the quality of diagnoses and enable better treatment of diseases, which provides equal treatment of patients and improved efficiency in the use of resources.
The contribution of the aging of the population to the growth in health care costs, according to the various analyses and projections27, is relatively small in comparison with the costs derived from technological progress: between 10 and 30% of the expected increase in such costs. Estimates made in this area are being adjusted in light of new evidence such as that of compression of morbidity, that is, greater life expectancy but shorter life periods with poor health 28; health care usage rate, which are lower among the very elderly, and the possibility of healthier aging as certain lifestyles change.
That is to say, an increase in the cost used to promote interventions in the health care system such as the control of chronic diseases or early prevention may have a significant effect on the reduction of future health care costs, thus contributing towards the sustainability of the system. Investments made in these health care means are financially necessary in order to achieve the viability of the system in the long term. The fact that health care costs increase with age does not mean that, inevitable, aging populations should generate unfeasible costs.
Citizen expectations are based to a large extent on better access to information. Their expectations exert a pressure on health care managers and professionals to open up the access to the latest technologies even if, on occasions, these do not provide benefits which justify the incremental cost.
Income in absolute terms or by inhabitant is associated to growth in health care expenditure. As such, the OECD estimated that 2.3pp of the growth of 3.6% of the public health care expenditure per inhabitant in OECD countries between 1984 and 2001 was due to the income factor. There is currently no unanimity with
27 Health systems, health and wealth: Assessing the case for investing in health systems (Josep Figueras, Martin McKee, Suszy Lessof, Antonio
Duran, Nata Menabde, 2008).

28 The evidence suggests that the health care cost depends to a larger extent on proximity to death that on age. The evidence from
several countries is that there may be a process of compression of morbidity as a result of healthier lifestyles and more accessible and effective medical treatments.
34
regard to the consideration of health care as normal goods (its demand grows at the same rate as income) o as luxury goods (its demand grows proportionally more than income). In any event, in Spain the cost of health care per inhabitant has been increasingly proportionally more than the GDP per inhabitant.
Finally, the prices of health care supplies also tend to be associated with the upward trend in expenditure in this area: pharmaceutical products, capital investments or, specifically, employee remuneration. Salaries are particularly important is a sector which largely continues to rely on human resources. Productivity growth in the health care sector is lower than in other sectors and salaries tend to increase more than productivity, leading to an increase in its weight in the GDP29.
In summary, irrespective of the greater or lesser relative impact of such factors, it is important to underline that, to a certain extent, these are not exogenous. In other words, the factors determining the growth in health care cost are associated with all participants in the system (citizens, industry, health care professionals and managers), and therefore health care policy must ensure that every one of them contributes to its containment.
The growth of health care expenditure in Spain The items which explain the development in health care cost are, according to the economic breakdown of cost, personnel costs and, according to functional classification, hospital and specialist care and pharmaceutical care.
44% of public health care expenditure is used to meet personnel costs and 25.5% to pharmaceutical products via medical prescriptions (19%) or hospital dispensation (6.5%). Both expenditure items accounted in 2009 for 69.5% of health care cost (graph 7).
29 This circumstance is usually explained by resorting to models such as that of the imbalanced growth of Baumol, thus known as the
Baumol disease.
35
Graph 7 Components of Spanish health care expenditure as % of total Personnel remuneration Hospital and specialist services Primary health services Prevention and public health Pharmacy The dotted line represents an expenditure item in economic breakdown and the continuous lines the breakdown by function This is why the sum of both percentages exceeds 100% Source: Public Health Care Statistics of Ministry of Health and own preparation
ES NECESARIO MODIFICAR LAS COMAS , DE LAS CIFRAS POR PUNTOS . EN LOS NMEROS DE ESTA TABLA. Personnel costs: in 2010 583,000 employees worked in the NHS (graph 8): 58% as health care personnel in hospitals and 11% as health care workers in primary health care centers. The remaining 30% was non- health care personnel.
Graph 8 Number of NHS employees and % variation rates in NHS employment and personnel cost Year on year variation in total wages bill Year on year variation in NHS employment
36
Total employed EPA (Active Population Poll) Source: INE
ES NECESARIO MODIFICAR LAS COMAS , DE LAS CIFRAS POR PUNTOS . EN LOS NMEROS DE ESTA TABLA. TAMBIN HAY QUE MODIFICAR LOS . POR ,
Between 2000 and 2010 the total wages bill of the NHS has grown by an average of 8.9% compared to the average staff growth of 3.3%.
This increase in personnel has not gone hand in hand with a more flexible public employee legislation, which impairs effective management of human resources. This impairment is due to the allocation of permanent positions, the rigidity of working schedules and the lack of alignment between incentives for health care personnel and the health care objectives of the system, as well as the vulnerability of health care managers to the political cycle.
Thus, for example, PWC30 quotes the case of Catalonia where, since 1981, the construction of hospitals under the traditional system had not been encouraged in order to promote independent management and labor personnel in the new institutions.
Pharmaceutical expense: During the period 2005-2009 the pharmaceutical expense has dropped by two points, reaching 19.2% of overall cost. In 2011 the public expenditure on prescriptions amounted to 11,136.4 million euros, of which 80% pertains to pensioners.
The pharmaceutical expenditure control policies, directed specifically to the drugs provided via medical prescription, have meant a significant reduction in the growth rates of pharmacy costs (graph 9).
30 Ten hot topics in Spanish Health Care for 2012. Two simultaneous agendas: cuts and reforms (PwC, 2012).
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Graph 9 Annual average growth in pharmaceut ical c ost per inha bitant 2000-2009 Ireland O ECD Japan Spain Portugal Switzerland Italy -0.5 0.0 5 .0 10 .0 15 .0 Year on year variat ion rate in pharmaceutic al cost in NHS Source: Ministry of Health
The application of measures since 2010 to reduce pharmaceutical expenditure has led to a drop in prescription cost of 10.9% in 2011 over that of 2009. In spite of the increase in the number of prescriptions, the reduction in the average cost per prescription has led to an overall drop in the cost (table 6).
Table 6 Evolut ion of public pharmaceutica l cost (pharmacy outlets) Cumulat ive Cumulat ive December 2011 December 2009 Expenditure ( millions of 11,136.4 12,505.7 euros) Prescript ions (millions) 973.2 934.0 Average cost per 11.4 13.4 prescript ion Source: Ministry of Health, Social Services and Equality % var iation 2011/09 -10.9 4.2 -14.6
Spain is approximately 50% below the Eurozone average in terms of copayment per inhabitant and percentage of pharmaceutical public expenditure. The average co-payment per prescription billed (57.7 million) was of 83 cents of a euro in 2010, the lowest amount in the last decade.
In 2010, the total revenue collection of Spain by way of beneficiary contributions through purchase of medications in pharmacy outlets amounted to 790.9 million euros, which is 6.48% of the public pharmaceutical cost of that year.
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Graph 10 Co-payment / Public pharmaceut ical cost in Eurozone c ountries, 2009 % Estonia 54.2 Finland 42.1 Slovenia 39.3 Slovak ia 38 .9 France 25 .0 Belgium 17 .3 Austria 14.7 Eurozone 12.0 Ireland 9 .6 Italy 7 .0 Spain 6 .3 Germany 5.1 The Netherla nds 0 .8 Source: Farmaindustria
The savings in public pharmaceutical expense can be obtained directly via copayment, as well as indirectly, by encouraging co-responsibility in the use of medications. In fact, at MUFACE pensioners pay 30% of medications and the pharmaceutical expense is 25% lower.
The use of policies of containment of pharmaceutical cost, mainly by means of price intervention and the promotion of generic drugs, is immediately reflected in the CPI (graph 11).
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Graph 11 CPI. Genera l index and hea lth care indexes Base 2011 General Index Medic ine (Gr oup) Medica l serv ices and s imilar (Heading) Medications, other pharmaceutical products and therapeutic material (Heading) Yearly average Source: INE
Expenditure in primary & hospital care and prevention: Hospital and specialist services appear to be the most dynamic in terms of evolution of their share of public health care expenditure, having experienced an increase of 2.5pp, going from 53.4% to 55.9% of overall cost. Primary health care services accounted in 2009 for 14.9% of the expenditure, having slightly reduced its share of the total cost. Prevention and public health activities merely account for 1.5% of public health care expenditure and the share thereof has hardly varied over the last decade.
This evolution is not in line with the factors determining health care expenditure and the fact that the effect of such factors can be restricted. The impact of the cost of the aging of the population can be limited by promoting certain habits, the increasing prevalence of chronic patients can be dealt with in a more cost effective way, via primary health care to reduce hospital care, for example. In this regard, initiatives such the aforementioned chronic patient strategy of Osakidetza becomes relevant.
3.3 Decentralization
There are much greater differences in health care expenditure per inhabitant among Autonomous Communities than those based on any reasonable index of need or cost per inhabitant, according to FBBVA-IVIE31 (graph 12). It is likely that such health care services are not provided to the same levels among Autonomous Communities.
31 Territorial differences in the Spanish public sector Fundacin BBVA-IVIE, 2011.
40
Graph 12 Public health care expenditure (average 20 00-2008 in euros as of 2008 ) Total Autonomous Communities. Source: FBBVA -iViE
ES NECESARIO MODIFICAR LOS PUNTOS . DE LAS CIFRAS POR COMAS , EN LOS NMEROS DE ESTA TABLA.
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However, as this same study points out, funding is not the only factor affecting diversity in health care expenditure, as there are different citizen demand orientations in each region in regard to public and private service, as well as different options from the government in regard to the public, public-private or private provision of services. Thus, in Extremadura and Navarre, which have the highest rate of public health care expenditure per inhabitant, public coverage is almost total. On the other hand, in the Balearic Islands, Catalonia, the Community of Madrid and the Basque Country, the mixed public-private coverage accounts for a greater share (graph 13).
Graph 13 Health care coverage model by Autonomous Community, 2006 Public Mixed Private
Source: FBBVA IVIE
ES NECESARIO MODIFICAR LAS COMAS , DE LAS CIFRAS POR PUNTOS . EN LOS NMEROS DE ESTA TABLA. In addition to the variation in public health care expenditure per inhabitant, it is worth highlighting the varying speed at which this expenditure is adjusted. For example, the Canary Islands and La Rioja are the Autonomous Communities which respectively most reduced and increased their health care costs per inhabitant in 2011. They are, however, far from enjoying the largest health care budget per inhabitant as is the case of the Canary Islands (the Autonomous Community which reduces the most) and the lowest in La Rioja (the one which increases the most) (Graph 14). The development of public health care expenditure per inhabitant cannot be independent from non-health care issues.
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Un sistema sanitario sostenible (il)
Graph 14 Budgets per protected indiv idua l and incre ases * Estimate made on the basis of population in the short term, 2010-2020, INE Source: own preparation based on Resource Statistics of the NHS from the Ministry of Health
ES NECESARIO MODIFICAR LAS COMAS , DE LAS CIFRAS POR PUNTOS . EN LOS NMEROS DE ESTA TABLA. ES NECESARIO MODIFICAR LOS PUNTOS . DE LAS CIFRAS POR COMAS , EN LOS NMEROS DE ESTA TABLA.
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Key impact factors
4. Key impact factors

When determining the list of reforms to be made to the NHS it is useful to refer to the whole of health care policies available and the impact thereof based on existing studies on the matter. In this area we have the studies carried out by the OECD 32 (2006 & 2009) and, more recently, those published by the IMF33 in 2012 on the impact of health care policies on the control of the rising health care expenditure.
4.1 Restriction on system resources and services These are policies designed to limit supplies and services of the system and control the price (supplies) or cost (output). For example, the budgetary ceilings and supervision of budgetary execution by central government, human resources policies, the listing (or delisting) of funded drugs and services and price setting. Among such policies are the following:
Budgetary ceilings and supervision of compliance therewith by central government
Recent NHS records, with a cumulative mismatch which the official records estimate to be of 16,000 million euros, and protracted delays (in terms of time and amount) in supplier payments, highlight the laxity of the budgetary restriction in the system over the last few years. Transfers made to the Autonomous Communities are not final, so that the autonomous governments are free to allocate costs but accountability has not been in place from a fiscal discipline perspective.
The reinforcement of budgetary discipline mechanisms 34, within the framework of European fiscal governance reform, helps oversee the budget targets of the Autonomous Communities by the central government, by establishing a set of fiscal rules and tracking mechanisms of a coercive nature. However, the way in which the various Autonomous
32 Organization for Economic Cooperation and Development (OECD), 2006, Projecting OECD Health and Long-Term Care Expenditures: What
Are the Main Drivers? Economics Department Working Paper No. 477 (Paris) y 2009 Achieving Better Value for Money in Health Care. 33 Containing Public Health Spending: Lessons from Experiences of Advanced Economies, by Tyson, Kashiwase, Soto, and Clements, in The Economics of Public Health Care Reform in Advanced and Emerging Economies, edited by Benedict Clements, David Coady, and Sanjeev Gupta and published by IMF on the 25th of April of 2012
34 Reform of section 165 of the Constitution (2011) and Organic Law on Budgetary Stability and Financial Sustainability (2012).
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Communities manage to achieve such targets may lead to greater regional disparities in the access of public health care services.
The evidence
35
in OECD countries suggests that fiscal regulations are a useful tool when
seeking to moderate growth in health care spending. The impact of fiscal regulations on moderation of health care spending is significant, especially when combined with central government supervision.
However, the effect of spending ceilings in matters of equality is not innocuous and, in and of themselves, budgetary cuts do not necessarily generate greater efficiency. In order to do so, they must go hand in hand with other measures. Thus, for instance, budgetary ceilings led to longer waiting lists in Sweden, Canada or the United Kingdom in past episodes of tight fiscal adjustment. This obviously poses problems of equality, as it is the lower income households who cannot access private health care to reduce waiting times.
Therefore, the adjustment of health care spending must go hand in hand with greater central budgetary supervision, as well as with policies which encourage system efficiency and mitigate the impact thereof on equal access.
Establishment of health care priorities: the management of the catalog of health care services
The active management (with regular, systematic and transparent exclusions and inclusions) of the catalog of health care services and drugs, by adding and removing items selectively and based on evidence, improves efficiency without affecting system performance. For this reason, several countries are moving towards selective funding of medical services, medication and technologies.
However, Health Technology Assessment (HTS) is more useful as a long term strategy to improve efficiency, than as a tool for fiscal consolidation in the short term. Therefore, countries with HTS programs are better equipped to make informed decisions in times of crisis.
Specifically, active management of the service portfolio requires the application of clinical effectiveness criteria (in preventive, diagnostic and therapeutic interventions, and in pharmaceutical products, apparatuses and other medical technology); cost effectiveness
35 Containing Public Health Spending: Lessons from Experiences of Advanced Economies, by Tylor, Kashwase, Soto and Clements.
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Key impact factors
criteria; and divestment criteria. It is paramount that the procedure is transparent and regular.
One of the examples frequently cited in this matter is that of the United Kingdom. Since 1999 the UK has had an independent body, the National Institute of Clinical Excellence (NICE) in charge of financially evaluating both the services, technologies and drugs, and system performance.
The NICE, comprised of health care professionals, patients and researchers, draws up recommendations for the health care areas in regard to including or excluding therapies in their publicly funded portfolio of services. The process of drawing up such recommendations is transparent. Assessments are based Quality-Adjusted Life Year (QALY) criteria. The approval barrier ranges between 20,000 and 30,000 pounds per QALY.
Royal Decree Law 6/2012 establishes that the Spanish Network of Health Care Technology and Services Assessment of the NHS will participate in the assessment of the contents of the common portfolio of health care services. The common portfolio shall be agreed by the Inter-territorial Council of the NHS and shall be approved by Royal Decree. The modifications made thereon shall be carried out by order of the Ministry of Health, previously agreed by the Inter-territorial council of the NHS, by means of a procedure which shall be governed by regulations and which will consider clinical effectiveness, cost-effectiveness and the budgetary and organizational impact, among others.
Likewise, chronic patient management measures must be included health care priorities, by integrating health care levels or classifying the patients in order to allocate them to the most cost effective health care. In this case, it is worth mentioning the strategy of dealing with the challenge of chronicity developed in the Basque Country, where 70% of health care spending pertains to chronic patients.
Price and supply controls
Price controls, of their own accord, seem not to lead to great moderation in the increase of health care spending in the long term in OECD countries.
In the pharmaceutical area, prices are negotiated on the market, where the purchase power of the Public Administrations prevails. The benefits are offset by the increase in prescriptions (very significant in Spain) or by the introduction of
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new drugs. Therefore, these measures go hand in hand with others 36 designed to encourage rational prescription by professionals, or the encouragement of the use of generic drugs. In matters of pharmaceutical spending, between 2001 and 2012 many rules have been issued designed to contain pharmaceutical spending, via price control 37. In the recent reform, the system of reference prices for setting maximum prices of medications to be funded is maintained, and the system of selected prices is added.
In salary matters, several countries, Spain among them, have resorted to salary cuts (5% in 2010), wage-freezing for health care professionals (2010), or of the staff (staff turnover rate of 10% in NHS). However, these policies may lead to wage imbalances between countries, emigration of health care personnel, and scarcity of human resources particularly if, as is the case in Spain, the cost of health care staff is relatively low.
Supplier and user rationing
Health care systems also resort to more heterodox measures: payments due to suppliers or user waiting lists for access to health care services.
The estimated percentage of the debt owed to health suppliers over the overall health care budget is of approximately 20% for all Autonomous Communities. The average payment period for the NHS was of 525 days in December 2011, 135 days more than in 2010. In the prices offered, suppliers take into account the estimated cost of having to finance such extended periods, thus increasing the bill for the NHS. In cases in which this is unfeasible, they either carry the cost or cease supplying the system. This situation has only eventually been stopped by the intervention of the central government via the Supplier Payment Plan.
In the EU, several measures to manage waiting lists have been put into practice: guaranteed or maximum periods in which care is received (Sweden, Denmark, Finland, United Kingdom, the Netherlands), improvement of waiting list
36 RDL 6/2012 also establishes as a general rules the prescription by active principle. Price control is complemented by a new drug catalog
updating system, which seeks to remove obsolete or therapeutical ineffective drugs and to add innovative products and other measures related to the information systems on the use of drugs and on the presentation thereof.
37 Reductions in the prices of generic drugs included in the Pricing System of 30%, obligatory discounts of 7.5% to the NHS in sales of
medications excluded from the pricing system, discount in the prices of health care products of 7.5% in general (of 20% on absorbents), a deduction of 15% on the price of medications with no generic version, but not added to the price reference system, generalization of prescriptions by active principle in the recent reform of the Spanish health care system.
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Key impact factors
information systems (Ireland, Netherlands, Sweden Finland, United Kingdom), results measurement systems (Ireland, United Kingdom) or establishment of priorities according to type of patient (Ireland, United Kingdom, Italy, the Netherlands).
For reducing waiting times there are also public sector and private sector collaborations, so that the first subcontracts services from the second (used practically in all Spanish Autonomous Communities) or the use of the health care system of other countries (as is the case in the Netherlands).
In Spain, maximum waiting times are regulated, albeit with significant disparities between Autonomous Communities. Thus, for instance, maximum waiting times for a consultation range from 15 days in Castilla la Mancha to 60 days in Andalusia, Cantabria, Extremadura and the Balearics. In the case of surgical procedures, this variation ranges between 60 days in Valencia and 180 in Cantabria, Extremadura and Galicia (graph 15).
Graph 15 Maximum waiting times In days Surgical procedure Consultations Diagnostic procedures Source: Fundacin Alternativas
The data on waiting lists for surgical procedures of the NHS, at December 2911, indicate that the average waiting time has increased by 8 days over that of December 2010 and that the total number of patients on the waiting list has increased by 17%. Patients who must wait for more than six months, which did not exceed 5% in July 2011, accounted for 9.97% at the end of the year. The data do not include the Community of Madrid, excluded from the national count in 2005 for not using the counting methods agreed between all Communities (table 7).
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Table 7 Situation of the surgical procedure waiting list at the NHS Data at 31 December 2011 Distribution by Specialty Total patients on structural waiting list (*) General and Digestive Surgery Gynecology Ophthalmology ENT Orthopedic surgery Urology Heart surgery Angiology / Vascular surgery Maxillofacial surgery Pediatric surgery Plastic surgery Chest surgery Neurosurgery Dermatology Total 87,152 22,566 92,541 32,921 126,688 31,789 2,886 11,085 6,664 11,623 13,786 1,208 7,719 9,581 459,885
Difference over December 2010 14,095 1,045 12,266 3,377 26,367 3,784 294 10 608 1,389 1,275 99 1,478 60 67,813
Percentage N patients per over 6 months 1000 inhab.
Average waiting time (days) 71 56 64 68 83 63 67 82 82 84 98 95 90 42 73
2.22 0.57 2.36 0.84 3.22 0.81 0.07 0.28 0.17 0.30 0.35 0.03 0.20 0.24 11.71
7.83 3.27 12.34 7.02 13.46 4.95 2.08 17.22 7.85 7.51 11.97 14.32 9.56 0.13 9.97
Difference over December 2010 7 -0 6 3 11 4 3 15 4 9 10 18 12 -4 8
(*) Data missing from one health care service/in another health care service the number of patients by specialty has been estimated. Source: Waiting List Information System of the NHS
Both forms of rationing lead to imbalances which are not accumulated indefinitely. They must necessarily be adjusted in the medium term and thus are not worth considering for prospective analysis.
In any event, a lesson is indeed learned: health care systems, if their financial imbalances are not corrected, are implicitly self-regulating via loss of quality (for instance, the increase in waiting times) or via non-payments to suppliers.
4.2 Reforms on the supply side
Decentralization The evidence indicates that the decentralization of health care systems helps to contain spending growth, if government supervision of budgetary matters is maintained. Otherwise, the contribution of decentralization to cost containment is much lower.
In Canada and Sweden the decentralization of health care competencies went hand in hand with measures designed to reinforce accountability in order to ensure compliance with budgetary ceilings. As a result, these countries tend to show a lower growth in health care spending than those which have not had central supervision, such as Spain.
Incentives
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Key impact factors
The means of remuneration of health care suppliers is one of the major determining factors of microeconomic efficiency of health care spending. There are different ways to remunerate physicians, hospitals and other suppliers: salaries, budgets and case-based payment, by capitation, by diagnostic groups or by service.
One of the most recurring formulae is the establishment of incentives systems which distinguish between centers and professionals. These incentives plans consist of:
To link remuneration to results obtained. Target linked variable remuneration increases over fixed remuneration.
To grant more management independence to the professionals in order to encourage more responsibility for results and involvement of the professionals in center management.
There are many examples of reforms implemented along these lines, covering different levels of health care:
In the United Kingdom, hospitals have become foundations with their own legal personality and management autonomy, at their own risk: they must meet certain quality targets, and are remunerated on the basis of such targets.
Also in the United Kingdom, but in the area of primary health care, a policy of payment on performance was introduced for primary care physicians who, by contract, were allocated incentives based on parameters such as health care quality, organization, patient satisfaction and others.
In 2008 in France, the management autonomy of health care centers was strengthened, by establishing strict performance measurement mechanisms and assessment committees. The director is the main person responsible for management, supported by a team made up of physicians and organization professionals. The team draws of the Medical Project. Compliance with such a project is assessed by means of strict performance measurement mechanisms and result assessment committees, and incentives schemes are associated with achievement of set targets.
In Sweden mechanisms have been established to incentivize efficiency at health care centers via three-year contracts, which define the degree of activity that each supplier must provide, as well as associated remuneration. Hospitals receive bonuses or penalties of up to 2% of the annual budget according to achievement or not of certain quality objectives.
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In Spain, the teams and, occasionally, individual professionals, can receive economic incentives for meeting certain strategic targets (for example, the rational prescription of drugs, the use of generic drugs or the reduction in waiting times); however, the amount of such incentives is insignificant in relation to total remuneration.
Market mechanisms In accordance with the estimates mentioned, the possibility of choosing between insurers and health care providers, is the main factor determining the moderation in the growth of health care spending in the long term.
For this reason, in addition to its potential role in service provision, purchasing management or insurance coverage offers potential efficiency gains by introducing competition. In an environment in which there are no possibilities for risk selection, and in which the basket of basic health care services is defined by the Public Administrations, the purchasing entities may compete in quality to attract patients in exchange for a risk-adjusted equivalent premium which is publicly funded. On the other hand, the effective competition in the health care sector requires that the users have choice, which in turn ensures system transparency. In this regard, the distinction between the financier (public) , the insurer and the provider, the competition between public and private agents for the purchase and provision of health care and user choice offers different combinations which are capable of generating efficiency gains (table 8).
Table 8 Citizen Comparison between centers (health care results) Free choice of insurance company Free purchase of additional insurance policies Free choice of physician and center
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Key impact factors
Planning and financing Central Administration Taxes Definition of Service Portfolio Areas of Health/reference Quality Standards Reference Centers Auditing Certification of Insurance Companies Insurance Universal insurance Private insurance companies Public insurance company Free concurrence Provision Public provision Private provision Source: Bamberg Foundation
Autonomous Administration
Management formulae such as that of the Alzira model (concession of the overall health care services primary, hospital and specialist of a catchment area in exchange for capitation payment) contribute towards the sustainability of the public health care system. These collaboration models bring about benefits for the Public Administration, the professionals and the citizens. A cost of at least 25% less than the average for public management cost is obtained via such concessions, according to Valencian authorities and Ribera Salud. From the professionals perspective, this model supports management of competencies and recognizes and rewards professional careers. For citizens, this model means greater accessibility, reducing the waiting lists and more hours of health care, as well as a more personal treatment. In fact, users in most cases are not aware whether the provision is public or private. In a survey carried out at the Hospital de la Ribera 94% of patients had no knowledge of the existing management system.
In the case of Associative Based Entities (EBAS) in Catalonia, the models efficiency is shown in the comparison of average costs in primary health care: 459 euros/inhabitant/year in Catalonia (data published by CatSalut for 2008) compared to 329 euros/inhabitant/year in the 10 EBAS in 2009. The average for such centers is of around 130 euros per inhabitant/year, below the Catalan average (SESPAS Report 2012).
However, public-private collaboration also entails some risk. For instance, it may stand as barrier for collaboration between health care levels when these are managed by different agents; the design should therefore be meticulous and all due precautions must be taken to ensure the quality obtained and to manage problems of political interference between suppliers and, above all, to contribute towards the alignment of objectives of all health care levels.
There are several experiences at a European level focused on increasing the transparency and public nature of the performance of health care provision centers (hospitals, primary health care centers, etc.) and their professionals, which have yielded very positive results. For example:
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In Sweden each year a benchmark of hospitals is drawn up, including measures of clinical quality, patient satisfaction, waiting times and efficiency, and a performance comparison by region is made public.
In Germany, hospitals report a wide range of quality indicators to an independent agency and, since 2007, a part thereof is made public. On the basis of this information, Internet tools have been developed to enable patients to compare the performance of each hospital in the different diseases or procedures and provide visibility for the buyers on provider performance.
The provision of more information to the users seems to be associated to greater containment in the increase of health care spending, when the information is on insurance companies. In any event, the impact of these measures on the moderation of the increase in spending is greater when certain key decisions (for instance, contents of basic service portfolio) are decided by the government and cannot be modified by the insurer.
The information on suppliers does not seem to have an effect on expenditure containment in the long term. In theory the availability of more information should lead users to the most efficient suppliers. However, this information is difficult to assess for the user 38, who occasionally consumes them. Moreover, users may tend to choose high cost services insofar as they do not pay for them in full and fail to ascertain whether the incremental cost is fair in relation to the increased therapeutic benefit. In any event, as stated in the studies cited, that if the dissemination of information on provider results is not associated to containment of health care spending throughout OECD countries, this dissemination must be taken into account for reasons of quality transparency and the systems ability to respond to user needs.
Hence the importance of competition in the purchasing role (acquisition of health care by the insured party) and not only in terms of provision of services.
4.3 Reforms on the demand side
"Co-payment or ticket moderator method This is a frequently used mechanism in countries in our area, both in health care and pharmaceuticals: the 16 countries appearing in the table below apply it to the pharmaceutical sector.
38 As has already been mentioned, this circumstance is due to the fact that health care responds to the so-called credence goods.
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Key impact factors
Only Spain, Denmark and the United Kingdom have implemented co-payment beyond pharmaceutical services. The data shows that only 9 of the 16 countries use it in primary health care. However, the question arises as to whether the application of charges to users in primary specialist outpatient care might deteriorate health care results and lead to an increase in cost in other areas (in emergencies, for example).
Table 9 Co-payment in Europe Primary health care x x x No No x x No No No No x x x No
Specia lists
Hospital care x x x No No x x x x x x x x No No x
Emerge ncy services x x x No No x x x x x x No x x No x
Pharmace uticals x x x x x x x x x x x x x x x x
Germany x Austria x Belgium x Denmark No Spain No Finland x France x Greece No Netherlands x Ireland No Italy x Luxembourg x Norway x Portuga l x United No Kingdom Sweden x x Source: I ES E Business School-University of Navarra
Co-payment places a greater financial burden on households, and is not necessary innocuous if applied selectively: it may discourage necessary demand for health care and lead to minor cases becoming serious and end up in the emergency service, the most costly health care level. We would therefore go from an inefficient system due to excess consumption of health care services to another situation of inefficiency due to insufficient consumption thereof. This may, at least in part, offset the potential efficiency gains resulting from the correction of unnecessary consumption.
In this regard the evidence suggests that certain groups, such as pensioners and lower income households, are particularly sensitive to co-payment, even under a limited scope. In addition, we have observed that the demand for high value services falls as much as that of lower value services, where a reduction in demand of the latter is less likely to generate inefficiencies due to lack of use.
Therefore, charges placed on the user selectively the selective co-payment on services of lesser therapeutic value or with exemptions or ceilings for lower income households or regular health care users (chronic patients), have more probabilities of generating net efficiency gains. However, it may not be technically feasible to identify the low value services and for administrative costs arising from the implementation of the system to be high and able to partially offset efficiency gains. For this reason, system costs must also form part of the analysis.
There are several co-payment modalities: there are different population groups (children, pensioners, chronic patients or low income) or health care levels (primary, specialist, hospitals, emergency and pharmaceutical services), treatments or products. They can be in the form of a fixed
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feed (i.e. one euro per prescription) or a percentage of cost. A cap may or may not be set. These different features, and in particular the preferential treatment to certain population groups, significantly affect its revenue generating capacity.
But the essential purpose of co-payment is not so much the revenue as the rationalization of the demand, understood as the efficient moderation of consumption of health care, by means of patient co-responsibility. Moreover, co-payment has proven to improve care quality, such as reducing waiting lists.
In any event, the effect of co-payment on the reduction of health care spending in the long term, seems to be smaller than in the short term. The effects on demand rationalization are lessened over time. In this regard, selective co-payment may be a suitable strategy to contain spending in the short term, but it the question arises whether to entrust the necessary cost containment in the long term to demand instruments.
The recently approved reform in Spain addresses selective co-payment, although only in regard to pharmaceutical services (considering the possibility of introducing it into the common portfolio of additional health care services, or even charging for all services included in the additional portfolio). The reform replaces the pharmaceutical co-payment table according to age (with a limited predicament in other countries in the area) by co-payment according to income.
Pensioners will pay 10% of the amount of the prescription (with a cap of 8 euros a month for those with income below 18,000 euros, of 18 euros for those with incomes between 18,000 and 100,000 euros) and of 60 euros a month for those whose income exceeds the last amount). In the case of employed workers, co-payment shall continue to be of 40% for those earning less than 18,000 euros, of 50% for those earning between 18,000 and 100,000 euros, and of 60% for incomes above 100,000 euros. The free dispensation of medication has been eliminated, except for specific cases such as those with social integration income and non-contributory pensions, or long term unemployed.
The co-payment plan established in the reform requires a segmentation of the population according to income, which is a difficult procedure to manage. On the other hand, the establishment of a fee per prescription, as in Catalonia, entails lower administration costs and is less complex.
Other co-responsibility formulae There are other measures designed to raise the awareness of citizens, and of the professionals themselves, of the cost of the health system. Thus, for example, some regions of Spain (Madrid or
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Key impact factors
Andalusia) already issue the so-called shadow bills. These reflect the cost of the service received by the patient and is sent to his address, albeit only for information purposes, as it is not payable.
The emphasis on preventive care is very important. Health care spending and matters are determined by factors beyond the cost in curative health care, such as the income and behavior of users. But the expenditure on preventive health and strategies aiming to render citizens coresponsible for their physical condition must play an increasing role. Governments may contribute to better health results (campaigns on anti-smoking, alcohol or obesity) but the market mechanisms may also play a part: to link co-payment or insurance premiums to medical check-ups may help drive the preventive aspect of heath care.
4.4 The impact of the reforms on the growth in health care spending The IMF uses a number of indicators prepared by the OECD, representing the various health care policies (use of fiscal ceilings for health care budgets, degree of decentralization of the health care policy, competition between insurers, etc.), which it groups into different categories (budgetary ceilings, improvement in public management, supply mechanisms and demand mechanisms).
Then it goes on to determine the impact that variations in these indexes have had on the moderation of health care cost in the past in the OECD. This allows it to estimate the effects of, for example, a change of index of one point in the budget ceiling over health care cost containment.
The variable which represents the forecast growth in health care is the Excess Cost Growth Growth (ECG) in public health care on the GDP. In other words, the difference between the growth in health care cost per inhabitant and the GDP per inhabitant forecast up to 2030, once the demographic impact has been corrected39. Without new economic policy measures (the last reform is not included in the forecasts) the ECG for Spain would be of 0.6 points. The IMF estimate therefore enables the different health care policies to be ranked according to impact on the moderation of the cost of health care cost. The main conclusions reached for the entire OECD area are:
The most effective reforms combine all instruments (budgetary, coordination and management, supply and demand).
39 That is, it isolates part of the difference between growth in health care cost per inhabitant and GDP per inhabitant arising from demographic
aging.
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The main potential source of moderation of health care cost growth is, by far, the promotion of market mechanisms. The improvement in the mechanisms of coordination and public management and the use of budgetary ceilings have also proven to be useful tools, whereas the demand management instruments will contribute the least towards the moderation of the ECG care cost over the next two decades.
Graph 16 Effect of reforms on Excess Cost Growth ( ECG) -0.1 -0.2 -0.3 -0.4 -0.5 -0 .6 Budgetary ceiling -0 .24 Fiscal rules -0 .03 Public mana gement and coordinat ion -0.3 Decentralization -0.36 Market mec hanis ms (supply reforms) -0 .50 Choice of insurer -0.22 Reforms of dema nd -0 .1 *Excess cost growth = growth in health cost per inhab GDP growth per inhab. (corrected by geographical variations). Source: IMF
The impact on the reduction of ECG of budgetary instruments as well as decentralization (public management and coordination) is significantly increased if central government supervision on the accounts of the regions is reinforced.
Among market mechanisms, the increase in the user range of choice of insurance companies, the competition between the latter, greater use of private provision of health care and greater competition among suppliers, are particularly important to moderate cost growth. Some reforms such as transferring to the level of the insurer the ability to make key decisions on the health system (for example, on the formation of the services portfolio) do not result in any cost savings.
Price controls seem to be the least effective tools for containing the growth of health care cost in the long term. Suppliers have mechanisms to deal with this such as redirecting the users towards higher priced services or products.
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5. Proposals from Crculo de Empresarios

Crculo de Empresarios believes it is essential to preserve a National Health System which guarantees universality of a set of basic and publicly defined services, under equal conditions for all citizens. For this reason it already dedicated in 2006 a Working Document to A sustainable health care system.
Currently Spain is undergoing an unprecedented budgetary adjustment process, with an accumulated health care deficit of some 16,000 million euros, a recent reform of the health care system to ensures sustainability, and some health care growth estimates in the long term which highlight that the increase in the impact of health care on public finances shall be presumably higher to that of the pensions system.
In this regard, Crculo de Empresarios estimates that one of the lessons which can be learned from the evolution of the NHS in recent years is that it always ends up adapting to its financial restriction, even though it may do so in a more or less orthodox manner. Hence, the issue is not so much whether the system adjusts since it always does but how it adjusts.
Another lesson which Crculo de Empresarios wishes to underline is that the best health care policy is that which renders the system participants co-responsible for its sustainability (users, medical professionals, supply companies and health care managers).
In light of such reflections, Crculo de Empresarios believes there are a number of initiatives worth considering:
Governance of the NHS Ensure the centralized accountability in a decentralized system. Centralized supervision requires, as a first step, the existence of public, transparent and yearly assessment of the NHS. In addition, the system must react to this assessment by establishing, by means of a decision making mechanism that is more operative than consensus, strategies and binding targets.
Likewise, an effective compliance tracking mechanism is required to ensure decisions are followed. This requires some type of penalization for those in breach, beginning with public denouncement of violations, whereas others could be viewed as coercive penalties.
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Proposals from Crculo de Empresarios
The Inter-territorial Council of the NHS cannot, under its current configuration, carry out such tasks in a satisfactory manner. Hence the urgency of its reform. It does not necessarily mean that central government recovers health care competencies, but that there is a governing body with executive power which can implement joint decisions.
The Inter-territorial Council of the NHS must evolve into a body of similar characteristics. Its decision-making mechanism must move away from consensus in favor of a system of greater or lesser majorities according to the issue and the weighted vote. It seems paradoxical, in the opinion of Crculo de Empresarios, that widespread formulae throughout the European Union cannot be used in the governance of the NHS.
Crculo de Empresarios estimates that an executive Inter-territorial Council of the NHS must drive, as the case may be, in collaboration with the Inter-territorial Council of Fiscal and Financial Policy, the evolution of the National Health System in areas such as:
The evolution of the differences in public health care spending per inhabitant between Autonomous Communities, in the face of budgetary adjustment.
The deployment of large hospital infrastructures. The transparent and systematic management of the portfolio of health care services and funded medications (additions and withdrawals and budgetary impact).
The assessment of public-private collaboration experiences in the various Autonomous Communities and, as the case may be, the extension thereof to all other Autonomous Communities.
Personnel policy (mobility, incentives, professional categories and flexibility). The integration of health care levels and the orientation of the system towards chronic diseases.
Only an executive Inter-territorial Council of the NHS would be able to lead the transition towards an NHS oriented to chronic patients, with co-responsibility mechanisms for all participants (users, health care professionals, companies and managers) and apply the best experiences in public-private collaboration to the system as a whole.
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An improvement in the public availability of NHS statistical information and/or the use thereof and the interoperability of the information systems used by the Autonomous Communities.
The recent health care reform has led to the creation of a State Register of Health Care Professionals, a tool which is vital for human resources management, hitherto non-existent, which highlights the room for improvement which exists in common information systems.
The statistical comparability between Autonomous Communities, health care levels and centers must be improved. The users of the various Autonomous Communities must be aware of how their Community is performing compared to others in terms of quality, accessibility and cost of service. Synthetic information must be available to the taxpayer/user and analytical information for the managers and experts.
Likewise, the interoperability of the information systems of the Autonomous Communities must be ensured, in order to help drive the different initiatives of an administrative nature (health care cards, co-payment and other) and a health care nature (e-health).
To boost assessment mechanisms, ensuring their homogeneity via a centralized and independent body providing services to the Central Administration and the Autonomous Communities, instead of a network of agencies or bodies, in two main areas: development of assessment of health care technologies enabling an active management (with inclusions and exclusions) of the portfolio of health care services and a clinical definition thereof which is accurate and enables a reduction in the variability of interpretations and therefore, health care practices among Autonomous Communities, and performance assessment of units and centers, and the methodology required to assess health care managers and professionals and align system objectives.
The most straightforward way of ensuing homogeneity is centralization in an independent agency providing service in both areas to the autonomous and State health services, and which is functionally independent from either. It must be set up with existing resources and thus contribute to the required fiscal adjustment. There is little sense in a health care technology assessment of one Autonomous Community should differ from another, in the opinion of Crculo de Empresarios.
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Supply On the side of the supply, Crculo de Empresarios, in line with available evidence, believes there is considerable potential to gain efficiency in the following fronts:
Autonomy and accountability of managers. Crculo de Empresarios believes that substantial progress must be made in the autonomy of managers of health care centers in the planning and management of human resources, among other areas. Performance assessment of health care personnel only makes sense if the manager himself is also assessed and incentivized in terms of his own performance. The professionalization of health care managers must be fostered, and an effort must be made to ensure that their permanence is unconnected to the political cycle.
A more flexible approach to the statutory condition of NHS personnel would not only help the activity of the current system managers but would also help reduce entry barriers for new operators. One of the largest potential sources of system efficiency is its exposure to competition and, for this to become operational, it must include both public and private operators.
Crculo de Empresarios believes that the efficiency gains arising from a more flexible personnel policy in terms of allocation and motivation of human resources (homogeneous definition of professional categories, greater share of performance-based remuneration, incentives in terms of training and geographical and functional mobility) must be used in part to boost a more flexible approach to the statutory system of health care personnel. It leads to a situation where professionals receive a significant share of the gains obtained. The process would be much more easily managed by an NHS Inter-territorial Council with executive powers.
Strategies of integration among health care areas (primary and secondary) must be encouraged, so that the target is the patient and not the service. In this regard, policies of promotion of primary health care physicians as managers (and, as the case may be, purchasers), on behalf of the patient, of health care services, are worth considering.
Introduction of competition and user choice. A public system with universal coverage allows for several different configurations, although the role of financiers and the establishment of the basic rules of the system (e.g. the definition of the basic basket of services) must necessarily remain in public hands. The use of public-private collaboration is unequal throughout the Autonomous Communities and, surprisingly, there has not been much interest shown by the Public Administrations in publicizing comparative assessments and improvement proposals.
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In accordance with available evidence, competition between health care providers and insurers, which act as purchasers on behalf of the users, contributes, if designed appropriately, to considerably contain the increase in health care costs.
Additionally, the various schemes for introduction of competition can help integrate health care networks and for the public insurer to have cost and quality provision benchmarks by different types of agents.
On the other hand, patients demand more participation in the system. User choice and competition would lead to them being treated more as clients than users.
The system must guarantee transparency, so that citizens receive all the information relative to health care provided in a simple way, enabling them to compare professionals or centers, thus guaranteeing a free and informed choice.
Demand
Co-responsibility: In order to increase co-responsibility among citizens Crculo de Empresarios believes that additional funding mechanisms must be established by the users, both of health care and pharmaceutical services. Selective health care co-payment is a measure used in almost all countries in our region, although there are different modalities of this method. It can be applied to certain health care services or levels (for instance, penalizing the overuse of the emergency services by way of primary health care, as in Italy) and to different amounts, depending on the administration cost of the instrument.
Crculo de Empresarios believes that the universality of the health care system is not synonymous with it being free of charge. The system must evolve toward the incorporation of co-payment in other areas beyond the pharmaceutical, such as hospital stays, which are used frequently in countries in our region, and applied selective so as not to affect the most vulnerable segments of the population.
Other alternatives for penalizing misuse of the system may also be worth considering, such as payments for failure of patients to turn up at appointments.
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Prevention: Lastly, health care prevention and promotion must be developed. The citizen must be made aware of the cost of health care so that, in addition to controlling the demand he makes on health care services, he adopts healthy lifestyle habits (exercise, diet, regular check-ups, etc.). As is the case in some countries (i.e. the United Kingdom), patients who, once treated, fail to follow the guidelines recommended by professionals, should be penalized.
Generation of new revenue: Crculo de Empresarios believes that the NHS must encourage the generation of revenue by charging fees for administrative procedures, services or functions not strictly associated with the basic, common or additional health care service (that is, free of charge or associated with co-payment) to the extent possible and without it having an adverse effect on user access to other health care services..
Crculo de Empresarios has noticed that a large share of the public debate is focused on the extension and design of co-payment mechanisms. Nevertheless, it wishes to emphasize the fact that in the long term the benefits for containment of increasing costs will also stem from reforms made in the areas of competition and user choice, within a public health system of universal coverage. In order to tackle the changes on the supply side in an orderly fashion, the governance of the system must be improved.
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6. APPENDICES
6.1 Health systems Japan Access
Universal coverage for residents. Three insurance options. All citizens obliged to have insurance. Employer insurance: for companies between 5 and 300 employees. The cost is shared equally between worker and employer. Co-payment = 20% in hospital and 30% in outpatient care SME employees: covered by the government. Civil servants and teachers: covered by mutual insurance group with no public aid. National Health Insurance: workers not covered by employer insurance .Co-payment = 30% Pensioner Insurance: the elderly and disabled =10%
United Kingdom
Universal coverage and access to legal residents of UK, EU and citizens of countries with reciprocity agreements.
France
Universal health care coverage: combination between private and public insurance Obligatory public universal insurance, funded by the government. Covers most services. Co-payment: 20% for hospital, 30% for outpatient services + copayment per consultation with a limit of 50 euros per annum (copayments usually refunded by complementary insurance) Additional private insurance (covers only 92% of residents), funded equally by employers and employees. Government pays additional insurance for whoever cannot afford it Those not covered (0.4%) such as unemployed: universal health care coverage (covers residents in France for a period over 3 months and automatic universal public insurance). Patients may choose physicians and to consult specialists directly if they accept lower refund levels.
Sweden
Universal coverage and access
Health care provided mostly at health centers. Patient can choose physician and request treatment anywhere in the country
Funding
By government, entrepreneurs and beneficiaries, Costs controlled by government Co-payment between 10 & 30%. Reduced to 1% over and above a monthly amount Premiums according to income
Mainly via general taxation (76%) + national insurance contributions (19%) and user charges (5%). Rest: direct payments and premiums from those who have private complementary insurance Few co-payments and with exemptions (dentistry and some medications)
The Parliament approves the annual health care Budget, funded by means of taxes and salary contributions
Via provincial and municipal taxes + national government contributions
Co-payment + refund Reduced co-payments and with a limit of 900 Swedish kr. per year in health care and of 1800 in medications Public and private non-profit hospitals: providing a wide range of services. Private nonprofit hospitals focus on minor surgical procedures. Most beds (65%) are in public hospitals. Decentralized system: provision by provincial councils and municipal administrations. Central Government establishes guidelines.
Service provision
Via mainly private non-profit institutions,
Primary health care physician = filter to specialists. Most have a contract and are paid by local entities (salary, capitation and payment per service)
Latest advancements
technological
Maximum waiting time: 18 weeks Patients can choose primary health care physician and specialist. No filter Quality: NICE for costeffectiveness assessment and Commission for Health Improvement
Source: CIVITAS
Physicians and professionals: they work as independent professionals and are paid on payment per service
Maximum guaranteed waiting time: 90 days as of requirement for care is determined. If this deadline is exceeded: the care required is provided elsewhere, at the expense of the provincial council Provincial councils own the emergency hospitals, but can subcontract the health care services (10% are private)
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6.2 Services added to the basic portfolio by the Autonomous Communities

Services added to the basic portfolio of Primary Health Care Dental health for children under 16 years. Dental health for the mentally disabled. Podiatry services for diabetics. Control of diabetic retinopathy. Oral anti-coagulant treatment. Health check-ups for the over 65s. Minor surgical procedures. Care of disabled carers. Management of nursing cases. Physiotherapy in center and home. Care for child obesity Care for attention deficit disorder Care for patients with muscle-skeletal conditions Care for adult patients with bronchial asthma Care for patients with ischemic cardiopathy Care for carers Detection and treatment of anxiety disorders Dentistry program for children aged 6 to 16 since 2005 Oral anticoagulant medication in Primary Health Care Advanced individual and group intervention and support to stop smoking Child Dental Program Broadening of the portfolio of dental care. Detection and treatment of domestic gender violence. Continuity of home care services Services added to the basic portfolio of Hospital Health Care Certain medications excluded from funding under Royal Decree 1663/1998 when prescribed by physicians registered with the Public Health Care System of Andalusia. Ortho-prosthetics. No contribution provided that the sale price is the same or lower to the maximum amount included in the General Catalog of Ortho-Prosthetics Sex change surgery if reports justifying need and amount of procedures are available.
Andalusia
Asturias
Aragn Balearics
Canary Islands
Transportation services under decree 40/2004 of 13 April. Pharmaceutical services under Decree 26/2008 of 19 September regulating prescription and dispensation in health care services in the Balearic Islands of post-coital interception medication Oxygen provision at patients home. Provision and payment of ortho-prosthetic apparatuses and wheelchairs, as well as organization and payment of surgical procedures, consultations and treatments in private centers.
Cantabria No Castilla-La Mancha Dental care Podiatry Ophthalmological check-ups Castilla y Len Care for carers Care for teenagers Care for children with asthma Anti-smoking care Care for dementia Gender violence Prevention activities Broadened dental care Menopausal urinary incontinence Consultations for Young adults in situ Ultrasounds in primary health care Catalonia Dental care since beginning of reform
Valencian Community
Extremadura Galicia Madrid
Navarra La Rioja
Ortho-prosthetics Home respiratory therapy Complex product treatments Medical transportation The portfolio of common services and those of specific services in Ortho-prosthetic services the community is contained in the following Internet address: Home oxygen therapy www.san.gva.es/cas/ciud/homeciud Non-medical treatments and diets Refund of expenses for emergency, immediate and vital care provided outside the NHS Children dental plan Dental plan for the mentally disabled Dental plan for pregnant women Dentistry (fillings and teeth cleaning) The primary care portfolio of services of the Community of Madrid includes all activities regarding promotion of health, health education, disease prevention, health care, maintenance and recovery of health, as well as physical rehabilitation and social work as included under Royal Decree 10030/2006 of 15 September which establishes the portfolio of common services of the NHS in Appendix II Children dental program (6 to 18 years) Medication to help stop smoking Anticoagulation Telecardio Smoking: prevention and treatment
Fuente: PriceWaterhouse Coopers (2012)
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Bibliography
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Asociacin Econmica de la Salud (AES, 2012) La sanidad pblica ante la crisis. Recomendaciones para una actuacin pblica sensata y responsable. [Public health in the face of the crisis: Recommendations for a sensible and responsible public action]. Documento de debate AES, January 2012.
Caizares, A. y A. Santos (2011) Gestin de listas de espera en el Sistema Nacional de Salud. Una breve aproximacin a su anlisis [Management of waiting lists in the National Health System. A brief approximation to its analysis] Fundacin Alternativas. Working Paper 174/2011.
Cawston, T., A. Haldenby y N. Seddon (2012) Healthy competition. Reform, February 2012.
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Eurohealth Observer (2012) Health policy in the financial crisis. Eurohealth incorporating Euro Observer, vol. 18, no. 1, 2012.
Garicano, L. (2010) Sanidad in La ley de economa sostenible y las reformas estructurales. 25 propuestas. [The Law of sustainable economy and structural reforms. 25 proposals]. 2010 from FEDEA.
Figueras, J., M. McKee, S. Lessof, A. Duran, N. Menabde (2008) Health systems, health and wealth: Assessing the case for investing in health systems.
Fundacin Bamberg & Accenture (2011) El Modelo de Futuro de Gestin de la Salud. Propuestas para un Debate. [The Future Model of Health Care Management. Proposals for a Debate]. XXV Anniversary of the General Health Care Law - 25 April 2011. Edited and drafted by Ignacio Para Rodriguez-Santana.
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Garca Armesto, S., B. Abada Taira, A. Durn y E. Bernal Delgado (2010) Health Systems in Transition. Espaa: Anlisis del sistema sanitario 2010. Resumen y conclusiones. [Spain: Analysis of the health care system 2010. Summary and conclusions]. Observatorio Europeo de Sistemas y Polticas de Salud, 2010.
Health Consumer Powerhouse (2012) Euro Health Consumer Index 2012 report.
Instituto para el Desarrollo e Integracin de la Sanidad -IDIS- (2012) Primer Barmetro de la Sanidad privada. [First barometer of private health care]. Madrid, April 2012.
Instituto para el Desarrollo e Integracin de la Sanidad -IDIS- (2012) Informe IDIS. Sanidad privada, aportando valor. Anlisis de situacin 2012.[IDIS Report. Private health care, adding value. Analysis of the situation 2012]
Instituto para el Desarrollo e Integracin de la Sanidad -IDIS- (2012) Sanidad Privada, aportando valor. Deuda pblica con el sector sanitario privado. [Private Health care, adding value. Public Debt with the private health care sector].
Leal, J., R. Luengo-Fernndez, A. Gray, S. Petersen, & M. Rayner, (2006) Economic burden o f cardiovascular diseases in the enlarged European Union. European Heart Journal 27, 1610-1619.
Mackinsey & Company & FEDEA (2009) Impulsar un cambio posible en el sistema sanitario. [Driving a possible change in the health care system].
Mas, N., L. Cirera y G. Violas (2011) Los sistemas de copago en Europa, Estados Unidos y Canad: implicaciones para el caso espaol [Co-payment systems in Europe, the United States and Canada: implications for the Spanish case] Document de Investigacin, IESE Business School University of Navarre, November 2011.
Ministerio de Sanidad (2012) Sistema Nacional de Salud. Espaa 2010.
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OCDE (2010) Session 1: Health System Priorities when Money is tight. OECD Health Ministerial Meeting (7-8 Oct.).
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Perona Larraz, J.L. (2007) Mitos y paradojas de la sanidad en Espaa. Una visin crtica. [Myths and paradoxes of health care in Spain]. Ed. Crculo de la Sanidad, 2007.
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8. Recent publications by Crculo de Empresarios

XXVIII Edicin del Libro Marrn, The future of the euro, July 2012.
Documents Crculo de Empresarios, General State Budget 2012: emergency consolidation as a first step, March/April 2012.
Joint document Crculo de Empresarios-Cepyme on the SMEs as a key to recover growth and employment, February 2012.
Yearbook 2010 Intemationalization of the Spanish corporation, Wharton School & Crculo de Empresarios, January 2012.
Documents Crculo de Empresarios, A program of adjustment and growth for the next legislature, October/November 2011. XXVII Edicin del Libro Marrn, How to reform Territorial Administrations, September 2011.
Documents Crculo de Empresarios, The SMEs: the key to recovering growth and employment, July/September 2011.
As est la economa [The state of the economy]... monthly publications from February 2011 to June 2012.
Economic considerations of Crculo de Empresarios, number 5, June 2011, Spain: still waiting for recovery.
Documents Crculo de Empresarios, Territorial administrations: proposals for the improvement of efficiency and market unity, March/April 2011.
Ideas on the table 2, The rescues of two Eurozone economies: Greece and Ireland February 2011.
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Proposals by Crculo de Empresarios Governance of the NHS Supply Demand

Appendices Bibliography Recent publications by Crculo de Empresarios