PharmExec Blog

Saving Greece's Healthcare System: A Harbinger for Europe?

A just-published report from the European taskforce trying to help Greece crawl out of its crisis makes clear just how significant a role health reform is supposed to play in restoring health to the economy. It is, in a very acute form, a harbinger of what is around the corner for the other countries of Europe. Reflector reports.

The ‘Taskforce for Greece’ was set up by the European Commission in July 2011 to support a wide range of structural reforms that the Greek government has agreed to in return for its international bail out. The taskforce has produced a summary of its activities just as 2012 is coming to an end, and health and pharmaceutical spending feature prominently.

The bottom line is that spending is going to be further squeezed to get maximum value from minimum input.

Reform is important because some 6% of GDP and more than 11% of all public expenditure was devoted to healthcare in 2009 — and improving the approach to public spending is at the heart of the bid to rescue Greece from catastrophe. “Healthcare reform is considered a crucial component of Greece’s efforts to increase the effectiveness and efficiency of public spending,” the taskforce report points out — adding “opportunities have been identified to reduce costs significantly, without compromising health-care quality.”

That golden mean of low costs and high quality is an elixir, a solution to all healthcare solutions everywhere, that has been sought in every country struggling with austerity over the last few years. What, then, is the recipe that may save healthcare in Greece, and may even save healthcare in Europe?

According to the taskforce report, Greece has requested technical assistance relating to efficient pricing of medicines, proper accounting and monitoring of expenditure (including e-prescription), setting up of the national organization for healthcare, modern procurement, invoicing and administration, and concentration and specialization of national health service hospitals and departments, while ensuring mobility of staff.

The much-vaunted Health Reform Steering Committee, bringing together Greek health ministry officials with representatives of the Commission taskforce and of Germany (delicately termed the ‘domain leader’), will now be responsible for developing, coordinating and monitoring the implementation of an agreed health reform plan, with monthly meetings to check on progress.

Meanwhile, the taskforce “is closely involved in the efforts of the Greek authorities to design a coherent system of pricing and reimbursement of pharmaceuticals” that will respect Greece’s commitments, as set out in the memorandum of understanding recently agreed with the international pharmaceutical industry.

So far, achievements include more coordination in the way that financing of the healthcare system is scrutinized. More effective implementation of controls on doctors has been made possible by wide use of e-prescriptions by prescribers and pharmacies — reducing the risk of reimbursement being paid for bogus prescriptions. And improved management of hospitals has included the reinforcement of central tenders and an increased use of generic medicines.

But the Commission admits that the work of the taskforce is “gathering momentum” — political shorthand for making a slow start. Greece “has made progress in commitments aimed at curbing healthcare expenditure”, the taskforce concedes. However, “the healthcare system has greatly suffered from financial uncertainty”, in terms of a decrease of social security contributions, accumulation of arrears, and uncertainty on overall budgets.

More detail on what has been done — and what needs to be done — is contained in the Commission’s review of the second economic adjustment programme for Greece, which has also just appeared. This too is a mixture of high ambition and harsh reality. It remarks that during most of this year, progress was slow because of successive election campaigns. It also notes “delays in policy implementation related to strong resistance by vested interests and lack of political will”. And little progress has been observed, it says, on the development of a promised code of good conduct between the government, pharmaceutical companies and physicians that would restrict promotional activities and forbid any direct sponsorship of specific physicians.

The review recognises however that some progress has been made. It salutes the system of electronic prescription of medicines that Greece now has in place as “one of the most advanced in Europe”, estimating that it has already permitted savings of about €30 million a month since early 2012.

The plan is that cost savings in pharmaceuticals spending will make up around two-thirds of the overall reductions in healthcare foreseen for 2013–14, through new incentives and obligations to use generic medicines, a revised and much less generous co-payment structure for medicines, the regular revision of drugs’ prices based on the three EU countries with the lowest prices, and the application of automatic claw-back mechanism to pharmaceutical producers. Drug firms will be expected to keep outpatient pharmaceutical expenditure within targets of €2,440 million in 2013 and €2 000 million in 2014. Reductions in hospitals’ expenditures, increase in co-payments in hospitals and a fee on prescriptions from 2014 onwards will also contribute to the expenditure reductions.

Greece’s case is extreme, and the taskforce is the sharpest weapon deployed so far in the EU’s attempts to improve the situation. But there is no mistaking the increasing attention being given to healthcare spending as a key factor in the economic equilibrium of all the EU member states.

The writing is on the wall for laxity of spending on healthcare systems. The drama currently being played out in Greece to cut spending on medicines and medical services is coming shortly to the rest of Europe.

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