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«The management of health systems in the EU Member States - The role of local and regional authorities The study was written by Progress Consulting ...»

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The dimensions to be considered for a classification are obviously determined by the scope of the classification itself; since funding and provider/payer modalities are both strictly linked to the financial sustainability of health systems, they have been given high relevance, especially in light of the current financial and economic downturn, the related need to improve the efficiency and effectiveness of expenditure, and the projected further increase of public spending on health.20 However, the last Joint EPC/EC Report on health systems highlighted how the understanding of drivers of health expenditure and of the overall performance also requires an understanding of the organisational features of the health systems. In particular, ‘Levels of health spending are the result of the interaction between demand side factors and supply side factors and the way health services are funded and delivered i.e. the organisational features of health systems.’ (Council of the European Union, 2010a) Recognising that little information was, in fact, available on organisational and institutional features of health systems, in 2008, the OECD undertook a survey to collect information across its member countries (Paris, Devaux and Wei, 2010). On the basis of that information, the OECD subsequently identified clusters of countries sharing similar institutions (Joumard et al., 2010) even though from an efficiency perspective, such clustering did not highlight ‘larger differences within each institutional group than between institutional groups, which suggests that there is no type of health system that performs better than another.’ (Council of the European Union, 2010a) According to EC forecasts, on the basis of a reference scenario, in 2060 there will be an ‘average growth in public health care spending of 1.7% of GDP in the EU27 Member States, which equals approximately 25% of the initial (2007) level. The relative percentage increase varies considerably across countries, from 11% in Sweden and 15% in France to as much as 45% in Slovakia and 71% in Malta. The relative increase is on average slightly higher in the EU12 (30%) than in the EU15 countries (23%)’ (European Commission, DG Economic and Financial Affairs, 2010, where the assumptions made for the ‘reference scenario’ are also explained).

On the supply side, other relevant information related to the ownership, management and financing of health care facilities, or ‘hospital governance’, was compiled on a comparative basis across Europe by Hope and Dexia.21 This analysis, with only an informative scope and refraining from drawing conclusions on the performance of hospital systems, investigated an area that is very important in terms of institutional settings and modalities for the delivery of health care services, since hospitals purchase goods (medicines, medical devices) or services (health professionals), make investments, and, not least, are significantly involved in the testing, development or deployment of ICT applications for health.

Section 3.1 briefly reports on the classifications mentioned above.

In section 3.2, the focus is on those elements of the above classifications that are of some interest for the scope of this study, i.e. outlining a classification of health management systems that highlights the role of local and regional authorities within the systems.

3.1 Some main existing models or classifications 3.1.1 Health care funding With regard to the way health care systems are financed, there are three main

models (Busse et al., 2007):

–  –  –

The Beveridge model relates to public tax-financed systems, i.e. funding is by means of fiscal tools. This model is also referred to as National Health System and usually provides universal coverage.

–  –  –

common in central and eastern European Data sources: OECD (2010); Thomson S. et al. (2009) for Malta countries before reforms were implemented in the early nineties (Hope and Dexia, 2009).

The Bismarck model implies that the funding of the health care system is through compulsory social security contributions, usually by employers and employees. It is also referred to as Social Health Insurance System.

In the mixed model, private funding from voluntary insurance schemes or upfront payments is significant. This model is also referred to as the Private Health Insurance System.

Data on the predominant system of health care financing by country is provided in Chart 1.

3.1.2 Public/private financing and type of health care providers Another classification by Docteur and Oxley (2003) and the OECD (2004) is based on the criteria of public or private financing, and the prevailing contractual relationships between health care service providers and payers.

According to this classification, health care systems are classified as either a (European Commission, DG Economic and Financial Affairs, 2010):

(i) public-integrated model, (ii) public-contract model, or, (iii) private insurance/provider model.

The public-integrated model implies public financing and public health care providers, i.e. health care professionals, are for the most part public sector employees. The public-contract model combines public financing, either through taxation or social security funds, with private health care providers. The private insurance/provider model refers to private insurance entities contracting private health care providers.

3.1.3 Institutional features of health systems On the basis of the information gathered through a survey across its member countries (Paris, Devaux and Wei, 2010), the OECD first defined a set of indicators to assess health care system performance and then outlined six groups of countries sharing similar institutional features (Joumard et al., 2010). This classification is largely based on the level of reliance of the systems on market mechanisms for the regulation of the demand and supply of health services,


(i) Group 1 includes countries relying heavily on market mechanisms for both the regulation of insurance coverage and the provision of services: private providers therefore play an important role in health care.

(ii) Groups 2 and 3 include countries with basic insurance coverage and heavy reliance on market mechanisms for the provision of services.

Private providers thus still play an important role. In group 2, services beyond the basic package are mostly covered by private health insurance, while in group 3 over-the-basic coverage is limited.

(iii) Group 4 includes countries with limited private supply but wide choice of providers.

–  –  –

As a general conclusion of this cluster analysis, it is noted by the authors that ‘Most decentralised countries tend to regulate health care resources and/or prices more than the OECD average. A high degree of decentralisation is often associated with a relatively weak consistency of responsibility assignments across levels of governments, suggesting that overlap in responsibilities for health care management tends to be present in decentralised systems.’ (Joumard et al., 2010) 3.1.4 Hospital governance An analysis of the hospital sector across Europe by Hope and Dexia22 provides comparable information on hospital governance, on the basis of which a

classification of hospital management systems has been derived in terms of:

–  –  –

Decentralisation of hospital management systems implies the transfer of power, at different levels, from the State to regional or local authorities; where this transfer has not occurred, a centralised management of the hospital sector prevails; ‘deconcentration’, on the other hand, implies that the management is still controlled at the central level but is operated at the territorial level through local or regional ‘agencies’ or branches of the central administration.

A general conclusion by the authors is that ‘the more a health system is decentralised, the more the hospital system is as well’ (Hope and Dexia, 2009).

According to their report, decentralised hospital management is found in the federal MS (Austria, Belgium and Germany), in the Scandinavian countries (Denmark, Finland and Sweden), and in Italy and Spain, as well as in several central and eastern countries; the United Kingdom also has different hospital Hope and Dexia (2009) systems managed at the level of its four constituency nations. ‘Deconcentrated’ systems are found in Bulgaria, France, Greece and Portugal, the rest of the countries being characterised by centralised systems.

–  –  –

(*) Based on data from OECD (2010), and Thomson S. et al. (2009) for Malta (**) Source: Joumard et al., 2010. Only showing those OECD member countries belonging to the EU (***) Source: Hope and Dexia, 2009

3.2 Methodological approach Existing typologies do not highlight the role of local and regional authorities within health management systems or consider such a role only with respect to one criterion, as in the case of the hospital management classification.

In particular, by looking at the funding mechanisms no information is given on the territorial organisation of healthcare systems, since health systems relying on public taxation, for example, may be highly decentralised (Finland) or centralised (Malta). The type of funding and of service provider also do not disclose information on the institutional settings of health management systems as public providers may be within centralised (Cyprus) or decentralised systems (Italy). Additionally, few systems are solely based on one of these types of relationship, a mixed public/private provision of services being present in several countries, regardless of the source of funding.

‘Decentralisation’ and ‘delegation’ are only two of the indicators used by the OECD in its clustering exercise highlighting the institutional features of health management systems with respect to performance, and are not steering ones, since in the same group both centralised and decentralised health management systems may be found (for example, in group 6, are included both Ireland and Italy, characterised, respectively, by a centralised and decentralised management). Additionally, they only refer to the decision-making autonomy by sub-national governments in key health care spending issues.

On the other hand, there seems, in fact, to be a correlation between the types of hospital governance and the level of decentralisation of health management systems.

In line with the scope of this report, the proposed typology builds on a number of dimensions directly or indirectly correlated to the above classifications but all characterised by a clearly distinguishable regional and/or local contribution.

3.2.1 Criteria considered The following criteria have been considered for outlining a typology of European health management systems with respect to their territorial


1. Presence/absence of health funding responsibility by LRAs (sources:

various, as outlined in the inventory of this report) and level of health funding at the sub-national level, as a percentage of total sub-national public sector expenditure (source: Council of European Municipalities and Regions & Dexia, 2009).

2. Presence/absence of power/responsibility by LRAs with regard to the following functions: health-related legislation, planning of health care

services, and delivery (implementation) of health care services (sources:

various, as outlined in the inventory of this report)

3. Ownership and/or management of health care facilities, in particular hospitals, by LRAs (sources: various, as outlined in the inventory of this report, with particular reference to Hope & Dexia, 2009, and to the hospital country profiles published online by Hope).

Since the information gathered through the OECD survey and the indicators built on this information refer to OECD member countries, OECD data has only been used for double-checking purposes with respect to available countries.

Criterion 1: health funding by LRAs Public spending by LRAs for health care delivery is an indicator of active involvement in the functioning of health management systems; in those cases where funding is generated locally through taxes or other levies, the funding role also presumably points to a level of autonomy with regard to spending. Beside responsibility for funding, the level of funding is also considered.

–  –  –

Through the inventory, evidence for funding responsibility was found for 19 countries. All countries but one generate revenue directly, mostly through taxation.23 The level of funding is shown in Chart 2, where the OECD classification of the functions of government is used and ‘health’ includes ‘medical products, appliances and equipment, outpatient, hospital and public health service, R&D related to health’ (Oireachtas Library & Research Service, 2010).

Criterion 2: power and responsibility by LRAs with regard to health-related legislative, planning, and implementation functions The presence/absence of power and responsibility with regard to the mentioned functions is evidently and directly linked to the level of decentralisation of health management systems.

In the case of France, funding responsibility seems to be limited to the health care of the elderly and the disabled; while in Germany and Hungary the funding seems limited to capital investments for hospitals.

The inventory provides the following evidence:

LRAs legislate on health-related matters in only three countries:Austria, Italy and Spain.

Policy development or planning is undertaken by LRAs in 16 countries.

LRAs have direct implementation tasks of one type or another, and at different levels, in 22 countries.

Criterion 3: ownership and management of health care facilities by LRAs The transfer of power in the hospital system from the central to the local level is a move towards decentralisation. Several central and eastern European countries underwent this process in the early 2000s, such as the Slovak Republic and Romania. Ownership usually implies funding responsibilities and, in most cases, management functions that may be implemented directly by LRAs or contracted out to service providers.

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