Communication from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions - The future of health care and care for the elderly: guaranteeing accessibility, quality and financial viability
Date: 2001-12-05
Institutions: European Commission
Subjects: elderly person, health care, health care system, new technology, report, therapeutics

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 05.12.2001
COM (2001) 723 final

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE
EUROPEAN PARLIAMENT, THE ECONOMIC AND SOCIAL COMMITTEE
AND THE COMMITTEE OF THE REGIONS

The future of health care and care for the elderly: guaranteeing accessibility, quality
and financial viability

TABLE OF CONTENTS

Introduction.................................................................................................................................3

Common issues ...........................................................................................................................4

1

2

3

The impact of demographic ageing on health care systems and expenditure...............4

The growth of new technologies and treatment............................................................6

Improved wellbeing and a better standard of living .....................................................7

The diversity of national systems and the contribution of Community policies ........................7

1

2

The diversity of national systems .................................................................................8

The contribution of Community policies......................................................................8

Three long-term objectives: accessibility, quality, viability.......................................................9

1

2

3

Accessibility..................................................................................................................9

Quality ........................................................................................................................10

Financial viability .......................................................................................................11

Annex 1: the contribution of Community policies ...................................................................15

Annex 2: Health care systems and health policies within the Union........................................18

2

Introduction

For Europeans, a high level of protection against the risk of illness and dependence is
a vital asset that must be preserved and adapted to the concerns of the modern world,
particularly demographic ageing.

This  prompted  the  Lisbon  European  Council  of  March  2000  to  stress  that  social
protection systems needed to be reformed  in order to be able  to  continue to provide
good  quality  health  services.  Subsequently,  in  June  2001,  the  Göteborg  European
Council called on the Council, “in conformity with the  open method of coordination
and  on  the  basis  of  a  joint  report  of  the  Social  Protection  Committee  and  the
Economic  Policy  Committee  (...)  to  prepare  a  progress  report  for  the  Spring  2002
European  Council  on  guidelines  in  the  field  of  health  and  care  for  the  elderly.  The
results  of  the  work  will  be  integrated  into  the  Broad  Economic  Policy  Guidelines”.
(§ 43)

Accordingly,  and  in  the  spirit  of  the  conclusions  of  the  Lisbon  European  Council,
which define the open method of coordination as being based on partnerships between
different  actors,  within  their  respective  powers,  the  Commission  hopes  that  this
communication  will  contribute  to  achieving  the  task  conferred  upon  it  by  the
Göteborg European Council.

The EU has an overall health situation and health care systems among the best in the
world. The widespread extension of cover against sickness and invalidity, along with
other  factors  such  as  the  rise  in  the  per  capita  standard  of  living,  improved  living
conditions and  better  lifestyles, not to  mention better health education, is one of the
main  reasons  for  this.1.  It  is  what  has  made  it  possible  to  shield  people  from  the
financial consequences of ill-health and at the same time to sustain the rapid, ongoing
progress  in  medicine  and  treatments.  It  therefore  represents  an  essential  part  of  the
operation of health systems in general and the substantial share it represents in overall
health expenditure makes this branch of social protection the largest behind retirement
and survivors’ pensions.

Total health care spending rose from around 5% of GDP in 1970 to over 8% in 1998,
with  most  of  this  increase  occurring  before  1990.  Public  health  care  spending
followed  the  same  trend,  growing  faster  than  GDP  from  1970  to  1990  (rising  from
3.9% of GDP to some 6%), and at a slightly lower rate since 1990, in particular as a
result of efforts to rein in public spending in all Member States. Since 1999, however,
health  expenditure  has  returned  to  a  level  of  growth  higher  than  GDP  in  several
countries2.

1

2

The overall performance of health care provision does not depend directly on the  volume of
expenditure on health and therefore on the care system. While in Germany, for instance, this
expenditure  care  amounted  to  more  than  10%  of  GDP  in  1999  (the  highest  in  the  European
Union) compared with 7% in Spain, people in Germany can expect to live two years less than
people in Spain; life expectancy in Germany is lower than that of British men and equal to that
of  British  women,  although  the  United  Kingdom  spends  considerably  less  on  health  care
(6.8% of GDP).
See graph 1, Annex 3.

3

                                                
Health care systems in the European Union face the challenge of attaining at the same
time the three-fold objective of access to health care for all, a high level of quality in
health care and ensuring the financial viability of health care systems.

COMMON ISSUES

1

The  impact  of  demographic  ageing  on  health  care  systems  and
expenditure

The ageing of the population involves two aspects:

(cid:1)  People live longer3. Since 1970, life expectancy at birth has risen by 5.5 years for
women  and  almost  five  years  for  men.  Despite  substantial  differences  —  men  in
Sweden and women in France had a life  expectancy  three  years  higher  than  their
Finnish and Irish counterparts in 1997 — average life expectancy in the EU is one
of the highest in the world and is continuing to rise. In 2000, it was 74.7 years for
men born in that year and 81.1 years for women: in 2050, according to Eurostat’s
base  scenario,  it  will  be  79.7  and  85.1  years  respectively.  This  higher  life
expectancy at birth also means higher life expectancy in “good health” and in the
absence of disability.

(cid:1)  There  are  more  elderly  people.  The  share  of  the  total  European  population  older
than 65  is set to increase —  from 16.1%  in 2000  to  22% by  2025  and  27.5%  by
2050; the share of the population aged over 80 years (3.6% in 2000) is expected to
reach 6% by 2025 and 10% by 20504.

While  these  trends  are  difficult  to  ascertain  with  accuracy,  they  may  have  major
consequences  on  developments  in  health  care  systems.  The  fact  is  that  per  capita
health expenditure increases sharply  after the age of 65 and even more sharply  after
the age of 80.  Old  people’s  greater  morbidity  (often  as  a  result  of  a  combination  of
illnesses), the seriousness and more chronic nature of age-related diseases, which can
lead to dependence on others, are just some of the factors that explain this distribution
of expenditure by age group. The health information system envisaged in the proposal
pending  for  a  public  health  action  programme  will  enhance  knowledge  on  these
issues.

It is nevertheless difficult to predict the state of health that old people will experience
in the future, or the life expectancy “in good health” of the generations due to turn 60
in  around  2030.  The  first  difficulty  is  that  health  care  expenditure  is  concentrated
during the last  year of life, whatever  age the  person  is, and that  intensive care costs
during this  last  year of life  are  lower  if  the  person  is  very  old.  Moreover,  improved
standards of living and better education (which, alongside the health system,  are  the
main determinants of health) may help to improve the overall health of the population
by  encouraging  people  to  adopt  healthier  lifestyles  and  a  prevention-based  attitude.
This could postpone the age at which health care consumption increases, and reduce
the  risk  of  high  dependence  among  the  oldest  people.  But,  conversely,  these  older

3

4

See graph 2, Annex 3.
See graph 3, Annex 3.

4

                                                
persons,  more  accustomed  to  a  high  level  of  health  care,  may  demand  the  latest
treatments, which are probably more costly.

It  is  also  clear  that  the  increase  in  the  numbers  of  elderly  people  will  increase  the
pressure on the public sector for long-term care. Age-related illnesses, which may be
serious enough to make sufferers completely dependent on others, require long-term
care  (outpatient  care,  in  long-stay  units  or  in  psychiatric  units).  Such  care  is  not  a
matter  for  the  “conventional”  health  system,  but  for  the  medical-social  sector.  The
increase  in  the  number  of  smaller  and  more  unstable  family  structures  could
undermine the family networks of solidarity and make the provision of health and care
within  families  more  difficult  to  continue.  Consequently,  if  the  number  of  people
requiring long-term care increases, and given the rise in employment rate for women
(the  primary  informal  care  providers),  specific  measures  will  have  to  be  taken.  The
factors  related  to  how  provision  is  organised  are  thus  crucially  important  in  this
context.

This nature of the effects of ageing is reflected in the estimates of its impact on public
expenditure carried out by the Economic Policy Committee of the European Union by
national correspondents in the working party on ageing, using a simple methodology
but one which is not without its uncertainties5:

(cid:1)  If the basic scenarios showing population trends are confirmed, public expenditure
on health care could increase for the period 2000-2050 by between 0.7 GDP points
(low  hypothesis  for  DK)  and  2.3  GDP  points  (IRL).  While  public  health
expenditure  in  2000  ranged  from  4.6%  (UK  and  FIN)  to  6.2%  of  GDP  (F),  the
same range is expected to be 5.6% (UK and NL) to 8.2% (IRL) of GDP in 2050.
Expenditure  on  the 0-64 year  age  group in  all  countries is expected to  rise  (from
0.2  to  0.7  GDP  points).  The  overall  rise  for  most  Member  States  for  this  half
century ranges from 1 to 1.5 GDP points, not a substantial increase  in relation to
the level reached today, and only three Member States are expected to record a rise
of over 2 GDP points (D, IRL and A).

(cid:1)  The  impact  of  demographic  trends  on  long-term  care  (according  to  the  same
scenarios), would be greater in countries which already have structured methods of
covering  costs  and  consequently  high  levels  of  expenditure  even  now  (between
1.5%  and  3%  of  GDP).  Sweden,  Finland,  Denmark,  the  Netherlands,  which  fall
into  this  group,  would  thus  see  demographic  ageing  generate  a  spontaneous
increase in long-term care expenditure of approximately 1.7-2.5 GDP points, i.e. an
almost twofold increase. Six other countries - which, with the exception of the UK,
all spent less than 1% of GDP on this care - would record more moderate increases
(between  0.2  and  1  GDP  point).  However,  these  countries  could  experience
changes in their cost coverage structure with a move towards greater formalisation
driven by the increase in the population  groups concerned and  by social changes,
which  could  generate  a  rise  in  the  proportion  this  care  represents  in  public
expenditure  and  GDP.  These  foreseeable  trends  would  bring  the  need  to  define

5

The structure of  expenditure  on  health  care  and  long-term  care  by  age  group  was  combined
with  demographic  projections  in  order  to  arrive  at  estimated  future  public  expenditure.  As
shown  in  the  working  party  report,  it  is  thus  more  of  a  “snapshot”  of  the  incidence  of
demographic trends than of “actual” public expenditure.

5

                                                
appropriate  funding  arrangements  within  the  sickness-invalidity  branch,  or
specifically (creating a specific “dependence” risk, sharing of expenditure between
the  health  care  and  the  social  assistance  systems,  use  of  private  insurance
schemes).

Overall,  the  “spontaneous”  effects  of  demographic  ageing  could  increase  the
proportion  of  public  expenditure  on  health  and  long-term  care  from  1.7  to  almost  4
GDP  points,  i.e.  a  level  of  public  expenditure  representing  between  7.5%  (low
hypothesis for I) and 12.1% of GDP (high hypothesis for S), compared with 5.5% (I)
and 8.8% (S) of GDP in 2000.

Generally speaking, developments in health care and long-term care of this kind raise
the question of human resources, inasmuch as this care is per se labour-intensive in
skilled  manpower.  Yet,  the  need  to  recruit  people  would  come  at  a  time  when  the
number of people in work is stabilising or falling, and when the “health-social” sector
is  already  experiencing  a  growth  in  employment  which  is  well  above  average:
between 1995 and 2000 in the Union, overall employment rose by 6.8%, but the same
increase was 12.6% in the “health-social” sector6.

2

The growth of new technologies and treatment

Developments  in  medical  technology  —  whether  the  use  of  miniature  robots  for
surgery,  genetic  therapies,  growing  replacement  organs  and  tissues,  new  medicinal
substances — constitute the second issue as regards the national systems, particularly
as regards health care7.

Technical  progress  will  bring  us  new  products  and  treatments  involving  more  R&D
and technology. Whilst this may lead to productivity gains, e.g. shorter hospital stays
for  a  given  disease,  or  reducing  the  risks  of  serious  illness  by  means  of  preventive
treatment,  any  increase  in  the  effectiveness  of  treatments  is  likely  to  offer  the
feasibility  of  treating  new  diseases  but  at  the  same  time  lead  to  greater  intensity  of
treatment and thus higher overall spending.

In  fact,  supply  and  demand  will  contribute  to  this  higher  spending.  Health  is  an
atypical  economic  sector,  because  the  supply  side  —  i.e.  doctors  —  largely
determines  the  demand,  sometimes  to  the  detriment  of  systematic  evaluation  of  the
real  health  benefits  of  innovations  and  their  cost  to  the  general  public.  Today’s
patients  are,  moreover,  better  educated  and  informed  than  ever  before  and  are
demanding  the  very  latest  molecules  and  treatments,  or  products  such  as  food
supplements which are supposed or claimed to be beneficial to health. They thus exert
a pressure on doctors which is particularly keenly felt in countries where patients are
free to ‘shop around’ for health care. This pressure on the demand side has a specific,
measurable  impact  for  medicines,  as  the  most  recently  developed  molecules  are
almost invariably the most expensive.

6

7

2001 Labour Force Survey, distribution of employment by sector of activity.
The  projections  by  the  EU’s  Economic  Policy  Committee  take  account  of  the  effect  of
technologies  and  their  developments  indirectly  through  a  range  of  different  hypothetical
patterns of per capita cost trends.

6

                                                
Technical  progress  thus  raises  the  question  of  funding  and  of  who  is  to  bear  the
burden  of  expenditure,  for  it  could  have  the  same  -  or  even  greater  -  effect  as
demographic  ageing.  In  a  context  of  prudent  budget  management,  clear,  transparent
and  effective  evaluation  mechanisms  must  be  developed,  as  this  is  the  only  way  to
guarantee accessibility to these new products and treatments.

However, they should take more into account the specific needs of people above 65
years of age, who still make for a fraction of patients entered into clinical trials.

New information technologies allow for collaborative work of health professionals on
a European-wide basis and thus open fresh opportunities to improve assessments.

3

Improved wellbeing and a better standard of living

Demand and supply of health care is heavily dependent on the standard of living and
the level of education. This also determines the lifestyles adopted by people. Thus, for
half a century, it has been observed that the demand for health care tends to increase
more than proportionally to the per capita income.

This has three main consequences.

(cid:1)  Patients  are  better  educated  and  are  able  to  adopt  healthier  lifestyles  and  a
prevention-based attitude which in the long run makes it possible to avoid the use
of  intensive  and  costly  care.  Health  care  systems  are  thus  prompted  to  increase
their drive on the education and prevention side within the overall context of public
health policy.

the  new 

information 

(cid:1)  In  addition,  patients  expect  ever  better  quality  and  efficiency  from  health  care
systems.  The  spread  of 
technologies  offers  greater
opportunities  for  seeking  medical  information,  but  also  of  locating  services  (e.g.
health  counselling)  and  obtaining  products,  with  the  risks  such  practices  may
involve.  The  fact  that  it  is  now  easier  to  access  information  —  irrespective  of
quality — also makes it easier for people to make comparisons with procedures in
other countries. As a result, there is greater mobility of people, goods and services
across national borders. This has  a direct impact on the way in which health care
systems  operate,  both  in  terms  of  what  they  supply  and  with  regard  to  how  they
cover their costs.

(cid:1)  Lastly, health care consumers feel that they need to be considered as fully-fledged
partners  and  players  in  health  care  systems,  not  only  by  health  professionals  but
also by the public  authorities. This can be seen from the emergence of  “patients’
charters” in hospitals and the consolidation of patients’ rights in national law. They
also expect greater transparency on the performance and quality of care services.

THE DIVERSITY OF NATIONAL SYSTEMS AND THE CONTRIBUTION OF
COMMUNITY POLICIES

While  the  organisation  of  health  care  systems,  their  funding  and  planning  as  a
function  of  the  needs  of  the  population  are  a  matter  for  the  Member  States,  this
responsibility  is  pursued  increasingly  in  a  general  framework  on  which  many

7

Community  policies  have  a  bearing8,  a  situation  which  is  an  argument  for
strengthening European cooperation.

1

The diversity of national systems

The  diversity  of  funding  9  and  organisational  arrangements  is  one  of  the  main
characteristics  of  health  care  systems  in  Europe  and  sets  the  context  for  reform  for
adjusting to ageing and the other factors whereby expenditure on health care and on
care for the elderly evolves.

It is nevertheless clear that public-sector funding makes up a significant proportion of
health  expenditure  in  all  the  EU  Member  States:  this  proportion  being  lowest  in
Greece although it still represents 56% in that country, and rising to nearly 84% in the
United Kingdom. There are two aspects to this diversity:

(cid:1)  Some  systems —  essentially  those  that  constitute  a national  health system  — are
financed through tax  revenue; in some countries  (NL,  P,  S  UK,  DK,  IRL)  this  is
their sole source of  financing.  Other  systems are financed through  social  security
contributions, although there is evidence of a trend towards reducing the proportion
of such contributions in favour of tax revenue (as in France and Germany).

(cid:1)  The  second  aspect  of  diversity,  unrelated  to  the  first,  is  the  way  in  which  the
financial burden is shared by the public authorities and private individuals: i.e. the
share  of  overall  health  expenditure  borne  by  households  and,  in  certain  cases,
covered by voluntary supplementary insurance. It accounts for between a fifth and
a quarter of overall expenditure in most Member States, but less than 5% in the UK
and Luxembourg, and as much as 42% in Italy and Portugal.

However, the consumers’ share of the costs often varies according to the type of care
provided.  While  the  bulk  of  the  cost  of  hospital  care  is  often  covered  by  basic
insurance,  this  is  not  the  case  for  medication,  dental  care,  or  optical  appliances,  to
mention  only  the  most  common  types  of  care.  The  fact  that  consumers  have  to
shoulder part of the cost of financing health care is often justified by the endeavour to
make people more aware of the cost of health care. However, this also strengthens the
role of supplementary insurance in making health care more accessible, including for
the  most  deprived  members  of  society,  for  whom  arrangements  must  be  found  for
bearing the supplementary costs involved.

2

The contribution of Community policies

Three policies are particularly relevant as regards adaptations and reform.

(cid:1)  The public health policy and the promotion of a high level of human health (Article
152 of the Treaty). The Commission communication on the “health strategy of the
European  Community”  (COM(2000)  285  final)  emphasised  that  health  services
must meet the population’s  needs  and  concerns, in a  context characterised by  the
challenge of ageing and the growth of new medical techniques, as well as the more

8

9

See Annex 1.
See graph 4, Annex 3.

8

                                                
international dimension of health care (contagious diseases, environmental health,
increased mobility of persons, services and goods).

(cid:1)  Improving  the  quality  and  viability  of  public  funds.  Health  care  accounts  for  a
large  proportion  of  public  spending,  which  means  that  this  sector  is  vital  for  the
implementation  of  quality  and  viability  strategies,  which  must  respect  the
principles  laid  down  in  the  Broad  Economic  Policy  Guidelines  for  2001
(“promoting  the  accumulation  of  physical  and  human  resources”  and  “improving
the effectiveness of expenditure through institutional and structural reforms”).

(cid:1)  The growing impact of the internal market. Organising and funding social security
systems  is  the  responsibility  of  the  Member  States.  Under  the  oft-reiterated
jurisprudence of the European Court  of  Justice10,  while Community  law  does not
impinge  on  the  responsibility  of  the  Member  States  when  it  comes  to  organising
their social security system, the Member States must respect Community law in the
exercise of this responsibility11.

Since  1999,  and  following  the  communication  from  the  Commission  entitled  “A
concerted strategy  for modernising social protection”  (COM(99)347  final)  European
cooperation  on  social  protection  has  been  increasing,  with  the  participation  of  the
players  concerned.  In  its  conclusions  of  29 November  1999  the  Council  makes
guaranteeing a high and sustainable level of health protection one of the four priority
objectives  of  European  cooperation  in  the  field  of  social  protection,  reiterating  that
Community  action  must  be  supported  and  the  reform  drive  by  the  Member  States
encouraged as part of their national priorities.

THREE LONG-TERM OBJECTIVES: ACCESSIBILITY, QUALITY, VIABILITY

1

Accessibility

For Europeans, access to health care is a fundamental right and an essential element of
human dignity; it must therefore be guaranteed for all. The European Union’s Charter
of  Fundamental  Rights  states  that  “everyone  has  the  right  of  access  to  preventive
health  care  and  the  right  to  benefit  from  medical  treatment”12  and  that  “the  Union
recognises and respects the entitlement to social security benefits and social services
providing  protection  in  cases  such  as  maternity,  illness,  industrial  accident,
dependency or old age”.13

Under  the  Council  Recommendation  of  27 July  1992  on  the  convergence  of  social
protection objectives and policies14, access to health care and the grant of replacement
income at a sufficient level for people who have been obliged to interrupt their work
for health reasons are established as key objectives of social protection systems.

10

11

12

13

14

Judgements  of  7  February  1984,  Duphar  and  others  C-238/82,  ECR  p  523,  point  16;  of  17
June  1997,  Sodemare  and  others  C-70/95,  ECR  p.I-3395,  point  27;  and  of  28  April  1998,
Kohll, C-158/96, ECR p.I-1931 point 17
Cases C-157/99 (Smits/Peerbooms) and C-368/98 (Vanbraeckel)
Article 33.
Article 32.
92/442/EEC, OJ No L245 of 26/08/1992, p. 0049-0052.

9

                                                
However, mortality rates show that in all the Member States there is sometimes a very
close link between people’s health and their position in society15. This is a reflection
of  low  income  levels,  which  mean  that  some  people  restrict  their  consumption  of
health products; this is particularly true when a large share of the cost has to be borne
by patients, as in the case of dental or optical care, or when patients have to pay all or
part  of  the  cost  of  the  services  concerned  themselves  and  seek  reimbursement
afterwards. However, the link between health and social position also reflects several
other factors, e.g. living and housing conditions, job quality, standards of education,
lifestyle and eating habits.

The  issues  of  access  to  health  care  for  disadvantaged  groups  and  for  the  poorest
members of society, and of the linkage between the health care system and the other
players in the fight against exclusion are therefore recognised as part of the “common
objectives” adopted by the European Council in Nice with a view to combating social
exclusion.  The  joint  report  to  evaluate  the  national  action  plans  for  social  inclusion
describes three broad categories of measures in this area:

(cid:1)  Measures  to  develop  disease  prevention  and  promote  health  education  which,
although they do not relate exclusively to the most vulnerable in society, can make
it  possible  to  reach  them  more  easily.  Examples  are  measures  relating  to  mother
and child care, medical care at school and medical care at work.

(cid:1)  Measures to improve access to care by providing less expensive and even free care
for those in low-income brackets but also by improving the coordination of social
services and health services.

(cid:1)  Measures  aimed  at  disadvantaged  groups,  e.g.  the  mentally  ill,  migrants,  the

homeless, alcoholics, drug-addicts and prostitutes.

2

Quality

Good quality health care is an essential  requirement  for  all  Europeans.  It  is  a  major
public health objective.

Moreover, the significant share of the cost of care which comes from public funding
gives  this  quality  requirement  a  second  dimension,  namely  how  to  achieve  an
optimum  balance  (which  is  acceptable  without  jeopardising  the  public  health
objective) between the health benefits and the cost of medication and treatment. The
development of information resources accessible to the public, the growing impact of
the  internal  market  and  increased  mobility,  give  this  quality  issue  a  cross-border
dimension hitherto unknown.

But ascertaining quality  in this way is  made  particularly complex and tricky  by two
factors:

(cid:1)  The diversity of patterns of provision.  For instance, there were 465 hospital beds
per 100 000 inhabitants in Denmark in 1997, compared with 708 in Germany and

15

The mortality ratio of male manual and non-manual workers between 45 and 59 years of age
ranges  from  1.71  in  France  to  1.33  in  Denmark  [Inégalités  sociales  de  santé,  Inserm-La
Découverte, 2000].

10

                                                
877 in France. In 1999, the ratio of doctors per head of population ranged from 226
doctors/100 000 inhabitants in Ireland to almost 405 doctors/100 000 inhabitants in
Belgium. In 1997, there were 46.4 pharmacists (working in dispensaries) in France
compared with only 17.5 in the Netherlands16. The variation is even more marked
in  long-term  care  structures,  depending  on  the  extent  to  which  cost  coverage  is
institutionalised.  However,  the  structure  and  level  of  health  care  is  often  the
decisive factor in determining demand for health care (and consequently the level
of expenditure).

(cid:1)  The  heterogeneousness  of  medical  treatment.  This  is  the  case,  for  instance,  with
regard to childbirth. The perinatal mortality rates in France and the Netherlands are
fairly  similar  (8.2%  and  8.4%  respectively  in  1996);  yet,  while  in  France  most
children are born in a hospital, almost a third of births in the Netherlands take place
at home (although hospital births have become much more common in the last 30
years).  It  is  therefore  difficult  to  draw  the  a  priori  conclusion  that  one  of  these
methods  is  “better”.  There  can  also  be  regional  differences  within  the  same
country, not only with regard to the methods or protocols adopted but also in terms
of  the  apparent  efficiency  of  health  care  services  or  techniques  (which  can,  for
example, be measured in terms of the post-operative mortality rate).

There  have  been  many  studies  which  show  that  quality  improvement  policies,
particularly  in  hospitals  (which  are  the  main  recipients  of  health  care  expenditure),
make  it  possible  to  reduce  the  costs  resulting  from  poor  quality  care17.  In  order  to
explain  and  remedy  these  variations  and  thus  improve  the  overall  quality  of  health
care,  action  must  be  taken  to  evaluate  costs  and  performance,  conduct  surveys  on
patient  satisfaction,  and  evaluate  and  grant  accreditation  to  health  care  services18.
Such  steps  must  involve  all  the  partners  concerned  (supervisory  authorities,  health
care professionals, “disbursing” agencies and supplementary insurance agencies).

Comparative  analysis  of  health  care  systems  and  medical  treatment,  making  it
possible to identify “best practice”, will therefore be particularly useful in improving
the quality of health care systems and optimising the use of resources in the context of
social protection. The future public health action programme, now being examined by
the  Council  and  the  European  Parliament,  will  help  to  promote  quality  and  "best
practice" in health care systems.

3

Financial viability

A certain level of financing is required to ensure the availability of high-quality health
care  that  keeps  pace  with  scientific  and  technical  progress  and  is  accessible  to  the
population at large.

16

17

18

Eurostat data, in Key Data on Health 2000.
Report  by  the  French  Health  Accreditation  and  Evaluation  Agency  (ANAES)  Le  coût  de  la
qualité  et  de  la  non-qualité  à  l'hôpital  —  (The  cost  of  quality  and  poor  quality  in  hospital)
(September 1998).
See,  for  example  “A  First  Class  Service:  Quality  in  the  new  NHS”  (UK),  which  makes
provision for the creation of a “National Institute for Clinical Excellence”; implementation of
the French Health Accreditation and Evaluation Agency (F).

11

                                                
The  pressures  on  the  unit  costs  of  care  and  on  the  demand  for  health  care  make
themselves felt irrespective of the way in which health care systems are organised, but
the effect they have depends on the nature of the systems in question. In the case of
health care systems that take the form of “national health services”, it is theoretically
easier to control expenditure (which is naturally budget expenditure) but the pressure
of demand results in longer waiting lists19 which can show that the supply of health
care is inadequate. When it comes to insurance-based systems, where the health care
providers  are  often  independent  of  the  “financing  entity”,  a  rise  in  demand  and/or
costs leads to an increase in expenditure, which can become unsustainable in the long
term  for  public  financing.  All  that  the  authorities  can  do  in  such  a  situation  is  to
increase tax revenue or take steps to control expenditure, which are often opposed by
the  professions  concerned  and,  above  all,  involve  the  problem  of  deciding  which
needs should be met.

Up until 1999 at least, a substantial slowdown in the rate of increase in expenditure in
relation  to  the  growth  of  GDP  was  observed  in  this  context.  However,  since  1999
health expenditure has overtaken the rate of growth of GDP in many countries. Many
reforms  have  been  introduced  since  the  early  1990s20.  These  reforms  have
traditionally  involved  two  methods,  either  separately  or  sometimes  in  combination,
and implemented to a greater or lesser extent according to the specific situation:

(cid:1)  Regulation of demand, which can be achieved by increasing (tax or social security)
contributions  or  by  ensuring  that  the  final  consumer  bears  an  increasingly  large
share of the costs (through de-listing or co-payments).

(cid:1)  Regulation of supply, which can take place at macro-economic level (particularly
by  determining  budgets  or  resource  envelopes  for  health  care  providers)  or  be
achieved by seeking to improve the efficiency of supply at micro-economic level:
this  is  the  objective  of  the  measures  introduced  to  create  a  competitive  market
among  the  bodies  responsible  for  financing  and/or  providing  health  care
(Germany)  or  to  create  a  contractual  relationship  between  “buyers”  and
“providers” of health care (UK).

The point is to be able to distinguish between the economic  and structural effects of
these measures, i.e. their ability to ensure that spending develops at a sustainable pace
without  compromising  the  quality  and  effectiveness  of  the  health  care  system.
Exchanges of experience which would make it possible to keep track of the policies
introduced over several years would be a useful way of comparing health care systems
and encouraging progress.

A  different  kind  of  challenge  is  faced  by  most  of  the  candidate  countries  in  this
regard. Many have made an effort to overhaul both the structure of their health care
systems  and  the  methods  used  to  finance  them,  particularly  as  regards  the  balance
between public and private financing, in order to improve the efficiency and quality of
the service they provide. However, the success of reforms of this kind depends largely

19

20

The  “NHS  High-Level  Performance  Framework”  (UK)  includes  an  indicator  measuring  the
length of waiting lists (“percentage of those on waiting list waiting 12 months or more”).
See Annex 2 for an overview of health care systems and recent reforms.

12

                                                
on whether the financial viability of health care systems, which, in turn, depends on
economic reform and a successful transition to a market economy.

13

CONCLUSIONS

The systems of health care in the European Union and the candidate countries face the
challenge  of  attaining  simultaneously  the  three-fold  objective  of  access  to  care  for
everyone,  a  high  level  of  quality  in  the  care  provided  and  the  financial  viability  of
health care systems.

1. Accessibility

2. Improvement of quality

3. Financial viability

1. 

2. 

3. 

Ensure  that  everyone  has  access  to  good  quality  health  care.  The  elderly
require  long-term  care,  which  presents  a  special  challenge  both  in  terms  of
financing  and  as  regards  making  the  necessary  adjustments  on  the  supply
side, particularly as regards institutionalisation of long-term care.

Improve the transparency and quality of health care systems, particularly by
developing  ways  of  evaluating  medical  treatment,  health  care  products  and
the structure of health care systems.

Continue the reforms already introduced so that spending evolves at a viable
pace, as part of policies that seek to improve the quality of public financing
and ensure that adequate financing is provided for health care.

If these objectives  are  to  be  attained,  it  is  essential  that  all  the  players  of  the  health
systems  cooperate,  be  they  local  authorities,  health  care  professionals,  social
protection  bodies,  supplementary 
their
representatives.  This  is  often  a  difficult  task,  given  the  different  and  sometimes
conflicting interests and viewpoints of those involved.

insurance  companies,  consumers  or 

14

Annex 1: the contribution of Community policies

FREE MOVEMENT OF GOODS (ARTICLE 28)

Health  products  are  goods,  the  free  movement  of  which  may  be  restricted  only  for
overriding reasons of public interest resulting from the need to protect public health or
preserve  the  financial  equilibrium  of  health  care  schemes,  which  is  considered
essential to the maintenance of high-quality health care. Such restrictions, particularly
the refusal to reimburse the cost of a health care product purchased in a Member State
other than the one in which the person concerned has health insurance cover, must be
well-founded and in proportion to the desired objective.

FREE MOVEMENT OF PERSONS (ARTICLES 18, 39, 42 AND 43)

In  order  to  promote  the  right  to  the  free  movement  of  persons,  Regulation  1408/71
coordinates  the  statutory  social  security  systems  in  the  Member  States,  including
health  care  schemes.  Moreover,  with  regard  to  the  free  movement  of  employed  and
self-employed persons, which also applies to the health care sector, a large number of
directives  make  provision  for  mutual  recognition  of  qualifications  for  doctors  and
other  health  care  professionals  by  laying  down  the  essential  requirements  for  initial
training in such areas.

FREE MOVEMENT OF SERVICES (ARTICLES 49 AND 50).

The Court  of  Justice  has  ruled that inpatient and  outpatient  health  care  constitutes  a
service. This means that the cross-border provision of such services may be restricted
only for overriding reasons of public interest resulting from the need to protect public
health  or  preserve  the  financial  equilibrium  of  health  care  schemes,  which  is
considered essential to the maintenance of high-quality health care. Such restrictions,
particularly the refusal to reimburse the cost of  a health care product purchased in  a
Member State other than the one in which the person concerned has health insurance
cover, must be well-founded and in proportion to the desired objective.

FUNCTIONING OF THE INTERNAL MARKET (ARTICLE 95)

The  Treaty  lays  down  the  rules  for  the  approximation  of  the  laws,  regulations  and
administrative  provisions  that  relate  to  the  establishment  and  functioning  of  the
internal market, particularly with regard to health products (pharmaceutical products,
medical devices) and supplementary health insurance.

COMPETITION (ARTICLES 85 AND 86)

The  health  insurance  funds  and  the  bodies  that  help  manage  the  provision  of  social
security services in the  public  sector  fulfil  a  purely  social  function  if  their  activities
are based on the principle of national solidarity, if they are non-profit making and if
the  services  they  provide  are  defined  by  law  and  are  independent  of  the  level  of
contributions.  Hence,  their  activities  are  not  of  an  economic  nature  and  the  bodies
responsible  for  such  activities  therefore  do  not  constitute  undertakings  within  the

15

meaning of Articles 85 and 86 of the Treaty21. However, if activities in the health care
sector can be described as economic activities within the meaning of the Treaty, these
rules should be applied.

COORDINATION OF ECONOMIC POLICIES (ARTICLE 99)

The economic and budgetary effects of an ageing population are examined as part of
the  multilateral  monitoring  procedure.  In  this  context,  the  Broad  Economic  Policy
Guidelines  for  2001,  adopted  at  the  Göteborg  European  Council  on  15  June  2001,
stress that  “Member States need to develop  comprehensive  strategies  for  addressing
the  economic  and  budgetary  challenges  posed  by  ageing  populations.  Strategy
measures might include reform of pension and health care systems, and care for the
elderly”.  The work  on  the  economic  and  budgetary  aspects  of  ageing  populations  is
being supported by the Economic Policy Committee.

COOPERATION BETWEEN THE MEMBER STATES AND COORDINATION OF ACTION ON
SOCIAL PROTECTION (ARTICLE 140)

Article  2  of  the  Treaty  states  that  “The  Community  shall  have  as  its  task,  by
establishing  a  common  market  and  an  economic  and  monetary  union  and  by
implementing  common  policies  …  to  promote  throughout  the  Community  …a  high
level of employment  and  of  social  protection  …”  In  this  regard,  the  Communication
from  the  Commission  “A  concerted  strategy  for  modernising  social  protection”
(COM(99)347  final)  makes  guaranteeing  a  high  and  sustainable  level  of  health
protection one of the four priority objectives of European cooperation in the field of
social protection. In its conclusions of 29 November 1999, the Council approved the
objectives contained in the Communication and requested that European cooperation
be developed in this field, where health care systems and their methods of financing
are a matter for national governments.

PUBLIC HEALTH (ARTICLE 152)

The  Treaty  stipulates  that  the  objective  of  ensuring  a  high  level  of  human  health
protection  must  be  incorporated  in  the  definition  and  implementation  of  all
Community policies and activities. With regard to public health, the Community's role
is  to  complement  national  policies,  to  encourage  cooperation  between  the  Member
States and to lend support to their action when it comes to improving public health,
preventing  human  disease  and  reducing  risks  to  human  health.  The  Commission
Communication on the Community's health strategy22 describes how the Community
intends to respond to the main challenges facing  care systems  and cater for people's
concern for effective protection of their health. A new Community Action Programme
will support this strategy over the period 2001-2006. Community action in the field of
public  health  shall  fully  respect  the  responsibilities  of  the  Member  States  for  the
organisations and delivery of health services and medical care.

RESEARCH AND TECHNOLOGICAL DEVELOPMENT (TITLE XVIII)

21

22

Joined cases C-159/91 and C-160/91 (Poucet and Pistre).
COM (2000) 285 final of 22 May 2000

16

                                                
One  of  the  23  key  actions  of  the  Fifth  RTD  Framework  Programme  focuses  on  the
medical  and  social  challenges  posed  by  an  ageing  population  and  the  disabilities
associated  with old age. One of the  research  areas targeted  by this  key  action  is  the
effective  and  efficient  delivery  of  health  and  social  care  services  to  older  people,
including  comparative  research  on  the  financing  of  long-term  care  and  pensions.
Furthermore,  the  4th  and  5th  FPs  have  supported  the  development  of  electronic  tools
for  clinical  trial  management  and  remote  data  entry,  for  literature  review  and
guideline development as well as for quality assurance. Research on the adaptation of
these  products  to  the  special  needs  of  the  elderly  are  being  taken  up  in  the  5th
Framework Programme.

17

Annex 2: Health care systems and health policies within the Union

Total

Public

General government
expenditure

Social security

Private

Out-of-pocket

Private health
insurance

Recent trends

health expenditure

expenditure

expenditure

expenditure

expenditure

A

B

D

DK

E

EL

F

FIN

I

IRL

L

NL

P

8.2

8.8

10.3

8.4

7

8.4

9.3

6.8

7.9

6.8

6.1

8.7

7.7

72.1

71.3

75.8

82.2

76.8

56.3

76.2

75.7

76.8

72.3

92.9

68.5

66.9

39.4

n/a

8.4

100

88.3

n/a

3.3

80.2

99.9

91

11.5

6

n/a

16.6

n/a

12.8

16.2

n/a

n/a

10.1

20

24.1

11.4

7.1

8

n/a

7.1

n/a

7.1

1.6

n/a

n/a

12.6

2.6

n/a

8.3

n/a

No overall fixed health care budget

Budget set annually by Government

No overall fixed health care budget

Budget  negotiated  annually  and  set  by  central  and  local
governments

Budget set annually

Budget set annually

Target  budget  set  by  Parliament  since  constitutional
reform  in  1996;"Universal  Health  Coverage"  for  low-
income households

No overall fixed health care budget

Budget set annually

Expenditure is cash-limited and set by Government

Target budget since 1994

17.5

Target budget set for a 4-years period

n/a

Budget set annually on an historical basis

27.9

28.7

24.2

17.8

23.2

43.7

23.8

24.3

27.7

23.2

7.1

31.5

33.1

60.6

n/a

91.6

0

11.7

n/a

96.7

19.8

0.1

9

88.5

94

n/a

18

S

UK

7.9

6.9

83.8

83.3

n/a

88.2

n/a

11.8

16.2

16.7

n/a

11.2

n/a

3.4

No overall fixed health care budget

Expenditure is cash-limited and set by Government

as  %  of  GDP  (1999  data.
1998 for D.S.UK.IRL.E.EL)

as  %  of  total  health
expenditure  (1999  data.
1998 
for
P.S.IRL.E.EL.D)

as  %  of  public  expenditure
on  health  (1999  data  for
A.DK.F.FIN.I.L;1998 
for
D.E.IRL.NL.UK)

of 

as  % 
public
expenditure  on  health
(1999 
for
A.DK.F.FIN.I.L;1998
for D.E.IRL.NL)

data 

as  %  of  total  health
expenditure

as  %  of  total  health
(1999
expenditure 
data 
for
A.DK.F.FIN.I.L.UK;
1998 for D.IRL.NL)

as  %  of  total  health  expenditure  (1999  data  for  B.DK.F.FIN.UK;1998  for
IRL.NL.D)

Source:  OECD  Health  Data  2001,  Health  care  &  Cost  Containment 

in 

the  EU,  edited  by  Elias  Mossialos  &  Julian  Le  Grand,  Ashgate,  1999

19

Organisation

Recent trends and reforms

Contracted services

Integrated services

Hospitals

Doctors

Pharmaceutical products

Most
count
ries

Co-payments; prospective budget setting; development
of activity-based funding

Co-payments; restriction on the number of doctors Co-payments;  price  controls;  positive  and  negative

lists of products;

BE

All services

Prospective budgets for hotel and biology costs

Fee for service; free choice of doctor

Expenditure targets

DK Most hospitals,  GPs  and  specialists
dentists,

hospitals, 

outside 
pharmacies

Some counties hospitals

Prospective budgets

Fee for service and capitation

Expenditure targets; reference prices

DE

All services

Prospective budgets

Fee  for  service;  free  choice  among  sickness  funds
doctors; indicative budget

Reference prices

GR

ES

Pharmacies,  private  hospitals,  most
dentists, private doctors

Doctors and hospitals

Prospective budgets

Fee for service (private doctors) and salary (NHS)

Specialist  doctors,  hospitals,  60%
of GPs

Pharmacies,  dentists  and
private hospitals

Prospective  budgets  combined  with  activity-based
payments

Salary payment or capitation

Fixed budget; ceilings on promotion expenditures

FR

All services

Prospective global budgets, with phasing-in of activity-
based payment

Fee  for  service;  free  choice  of  doctor;  expenditure
global 
targets;  non-binding  medical  guidelines
(RMO)

Expenditure  targets;  revenue  target  for  companies;
taxes  on  promotion  expenditure;  development  of
generics; practice guidelines

IE

Private hospitals, GPs, pharmacies Public hospitals, specialists Prospective  budgets  and  diagnosis-related  group

measures

Capitation  plus 
service);referral; indicative budget

for  service 

fee 

(for  special

IT

Private 
specialists, pharmacies

hospitals,  GPs 

and

Public hospitals, specialists activity-based payment

Salary  payment  or  capitation,  plus  fee-for-service
(for special services);referral

Fixed budget; reference prices

LU

All services

NL

All services

Prospective  budgets  combined  with  activity-based
payments

Fee for service; free choice of doctor

Prospective functional budgets based on activities

Capitation  (low  income)  or  fee  for  service  (high Pharmacists paid on a flat rate; reference prices

20

AT

All services

Prospective  budgets  combined  with  activity-based
payments

Fee-for-service  combined  with  capitation;  free
choice among sickness funds doctors

income);referral; prescription auditing;

PT

FI

SE

Private  hospitals,  doctors  in  rural
areas,  pharmacies,  most  dentists,
labs

some 

GPs, 
public hospitals

specialists,

Prospective global budgets based on activities

Salary; referral

Hospitals, 
outpatient care

pharmacies, 

private

Health centres

Purchasing of packages of hospital services, phasing-in
of DRG-based prices

Salary payment or capitation; referral

Hospitals, 
hospitals, dentists

pharmacies, 

private

Health centres, pharmacies,
dentists

Prospective  payments  based  on  DRGs,  complemented
by price, volume and quality controls

Salary payment; fee for service for private doctors Reference prices; taxes on promotion expenditure

Fixed budgets (fundholding GPs);salary payment or
capitation 
referral;
prescription auditing;

first-contract  doctors; 

for 

Pharmacists paid on a flat rate; promotion of generics;
profit control; ceilings on promotion expenditures

UK Public hospitals, GPs, most dentists,

Community care services Activity-related  annual  contracts  between  purchaser

pharmacies

and provider

Source: Health care & Cost Containment in the EU, op.cit.; European Commission

21

Figure 1: Total expenditure on health
as a % of GDP

7,7 7,7 7,9 8 8,3 8,4 8,6 8,7

10,3

9,3

6,8 6,8 6,9 7

6

12

10

8

6

4

2

0

L

UK

E

P

A

EL

NL

D

1998 data - Source: OECD Health Data 

Figure 2: A rising life expectancy at birth

90,0

85,0

80,0

75,0

70,0

65,0

1960

1970

1980

1990

2000

2010

2020

2030

2040

2050

Source: Eurostat

M ales

Fem ales

22

Figure 3: The ageing EU population

Source: Eurostat, population structure indicators (1960-1990), baseline scenario 
projection (2000-2050)

30

25

20

15

10

5

0

1960

1970

1980

1990

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

Proportion of population aged 65 years and more

Proportion of population aged 80 years and more

Figure 4: Public expenditure on health

100

90

80

70

60

50

20

15

10

5

0

EL P NL B A IT FI D F E IRL DK UK S L
Public
expenditure
as % of total health expenditure (left scale)

Public
expenditure
on health as % of all public
expenditure (right scale)

Source: OECD Health Data 2001

23