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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 social and health departments of the five provincial administrations (Provincial State Offices) provide guidance to municipal and private health care providers, and also play a supervisory role. However, according to the Primary Health Care Act of 1972, responsibilities for the provision of health care lie with the municipalities (348 at the beginning of 2009) and for such scope each municipality must have a health centre providing primary health services. Also social care is delegated to the municipal level.

The municipal health care system provides primary and specialised health care, the latter being regulated by the Act on Specialised Medical Care. Primary care is provided through health centres that control municipal hospitals and health stations. Modalities for delivery are determined by each municipality and may range from the direct employment of health specialists in the health centres to contracting out the provision of services to private providers/non-profit organisations or reliance on private companies for the hiring of the professionals working in the health centres. For primary and, in particular, for secondary care, aggregation processes have also occurred. While primary care is usually provided by individual municipalities or federations of municipalities through joint health centres, specialised services are organised by 20 federations of municipalities corresponding to 20 hospital districts, with a catchment population varying from 65,000 to 1.4 million inhabitants. Hospital districts are financed and managed by the member municipalities (the number of members per district varies between 6 and 58) and are grouped into five tertiary care regions around university-level teaching hospitals.

In addition to the municipal health care system, two others exist: (i) a private health care system, common in urban areas and paid for by users, with upfront payments, and by public funds, through the National Health Insurance (NHI) system; and (ii) an occupational health care system, derived from the obligation of employers to provide employees with first-aid and preventive health services, and later developed, especially within big and medium-sized firms, into a more comprehensive service inclusive of curative outpatient care, financially supported through the compulsory payments of both employers (contributing two thirds) and employees (contributing one third) to the NHI Income Insurance pool. In the autonomous region of Åland Islands the regional government bears responsibility for the provision of health care.

As a statutory scheme, NHI covers all citizens: it is run by the Social Insurance Institution under the authority of the Parliament and is funded by employers, the insured (through income-based insurance fees) and the state.

Delivery of the services Theoretically, it is possible to choose between three health systems but in practice, the private system requires a payment and the occupational system is for employed people only. Thus, the majority of the population is covered by the municipal system where patients have to refer to the health centre of the municipality they belong to; within the centre they may be able to choose a physician. Among the services provided by the centres are: outpatient medical care, in-patient care, preventive services, dental care, maternity care, juvenile health care, school health care, emergency care, care for elderly, family planning, rehabilitation and occupational health care. No package of benefits exists. Some of these services are free of charge, others require the payment of user charges. Access to care at the hospital districts requires a referral from a licensed physician, either working in the health centre, being private or providing occupational health services.

The municipal health system and the high level of autonomy of municipalities in arranging the services imply geographical inequalities in the way services are delivered across the country.

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Finance and health care expenditure In 2005, municipalities financed 40% of total health care costs; 21% was funded by the state, 17% by NHI and 22% by private sources (Magnussen J. et al., 2009).

Municipal funding is generated through taxes, and in particular through a municipal income tax ranging from 16% to 21% of taxable income, depending on the municipality, and a real estate tax. In addition, municipalities receive subsidies from the central government covering about 25-30% of their expenditure on health services, and charge users of services with user fees. At the central level, funds are raised mainly through taxation (income tax, VAT, corporate tax, etc). Private expenditure is mainly composed of upfront payments.

Both private and occupational health care are partially funded by NHI. NHI funding covers also outpatient drugs, allowances (sickness and maternity leave) and transport costs of the insured. Voluntary health insurances are taken to cover upfront payments.


- Vuorenkoski L. (2008), Finland: Health System Review. Health Systems in Transition, 2008;

10(4): 1–168, European Observatory on Health Systems and Policies;

- Kivelä S. and Vidlund M. (2010), Annual National Report 2010 – Pensions, Health and Long-term Care: Finland. ASISP: Analytical support on the Socio-Economic Impact of Social Protection Reforms.

- Magnussen J. et al. (2009), Nordic health care systems: recent reforms and current policy challenges, Open University Press, European Observatory on Health Systems and Policies FRANCE Main characteristics of the French health care system ►Centralised, although structured at the territorial (regional and departmental) level, with a few functions held by local authorities especially in the support of the elderly and the disabled ►Providing universal coverage on the basis of resident status through statutory health insurance and, for the poorest, universal medical coverage ►Mainly (for three quarters) public financing of health care – out of incomebased contribution and taxation ►Mixed service provision – public and private Structure of the system The health care system is organised on a local as well as a national level, with financial responsibilities delegated to the health insurance/social security system. Health policy and regulation is mainly under the responsibility of the state and of the Statutory Health Insurance (SHI). The Administration of Health and Social Affairs and its four directorates fall under the responsibility of various ministries, namely, the Ministry of Health Youth, Sports and Associations is responsible for health policy and management of resources for health care supply, while responsibility for financial matters and supervision of SHI is shared with the Ministry of Finance, Public Accounts, Civil Service and State Reforms and the Ministry of Labour, Solidarity and Public Services. Other responsibilities at the central level include: quality of care regulation; allocation of budgeted expenditure; medical education; endorsement of agreements concluded between SHI and unions; price setting for medical procedures and drugs. Since 2009 and the introduction of the Hospital, Patients, Health and Territories Act, the Administration of Health and Social Affairs is represented at the regional level by regional health agencies (agences régionales de santé - ARS). ARS are responsible for health care planning, delivery and finance at the regional and departmental level. They are subsidiaries of the state, while retaining their autonomy. The intermediate body between the state and the ARS is the National Council for the Governance of Regional Health Agencies.

At the department level, the ARS work through local delegations.

Regional authorities, through the Surveillance Council, headed by the regional prefect, approve the budget and the expenses of the ARS and may also intervene in the main regional capacity planning tool, i.e. the regional strategic health plan or PRS.

Commissions including representatives of the local governments play an advisory role to the ARS; general councils at the department level are involved in the planning of health and social care services for the elderly and disabled. In particular, the following health and social services are under the responsibility of the general council, at departmental level: (i) health and social care institutions and services for elderly and disabled people; (ii) financial support of those with low income or fragile categories, including with regard to the funding of home assistance and long-term care; (iii) child protection through the management of mother and child health centres; (iv) disease prevention; and (v) public health and hygiene.

The SHI is composed of several health schemes, the main ones being: (i) the general scheme covering employees in industry and commerce and their families (some 87% of the population) and universal health coverage beneficiaries (some 2% of the population), i.e. the poorest, regardless of their employment status; (ii) the agricultural scheme for farmers, agricultural employees and their families (some 6% of the population); and (iii) the scheme for self-employed individuals and professionals (some 5% of the population). Each scheme has a national insurance fund, structured at the territorial level; for example, the general scheme is composed of regional and local funds with different reimbursement responsibilities. One common federation at the negotiation level represents the three main schemes with service providers. Each individual belongs to only one of the existing schemes.

Delivery of services The delivery of health care is through public and private providers. Primary care is mainly delivered in ambulatory settings where self-employed professionals practice. These professionals do not necessarily play a gate-keeping role, although incentives have been created to try to encourage this habit. Secondary care can be delivered both at the ambulatory level or in hospitals; hospitals may be publicly owned or may belong to non-profit or profit-making organisations, although the state maintains a monitoring role, including within private hospitals as they have to comply with quality standards and be certified on a regular basis.

Public hospitals are autonomous entities, independently managing their budget;

the hospital director bears executive responsibilities while the hospital administrative board, that may be composed of representatives of the state, local authorities, hospital staff etc., maintains only a strategy setting and monitoring role.

Providers are paid out of the SHI or directly by patients who are later reimbursed on the basis of statutory tariffs agreed through negotiation and approved by the state. The SHI covers, on average, 75% of a basic benefit package, the rest being either covered by private health insurance or upfront payments.

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Finance and health care expenditure Responsibility for health financing is with the SHI that funded some three quarters of total health expenditure in 2007. The rest was covered through complementary sources such as state funds (5%), voluntary health insurance (13%, corresponding to a coverage of some 88% of the population), and upfront payments (7%). SHI resources come mainly from income-based contributions by employers and employees and, to a lesser extent, from contributions of the pharmaceutical industry, profit of companies having a turnover over a certain level, state budget, and the National Solidarity Fund for Autonomy dedicated to health and social services for the elderly and the disabled. This last category of services is also funded through the financial contributions of local authorities and general councils.


Chevreul K. et al. (2010), France: Health system review. Health Systems in Transition, 2010;

12(6): 1– 291, European Observatory on Health Systems and Policies.

GERMANY Main characteristics of the German health care system ►Decentralised, with several competences delegated to state level (Länder) and an important role played by civil society organisations (sickness funds and doctors’ associations) ►Providing universal coverage through statutory and private health insurance ►Health expenditure is mostly funded through public funds – out of social insurance contributions and taxation, and complemented by private payments.

►Mixed service provision – public and private Structure of the system At the central level, the Federal Assembly, the Federal Council and the Federal Ministry of Health are responsible for legislative and supervisory functions. The federal legal framework regulates governance, services to be provided and the funding mechanisms of the health system. Policy-making for health care is shared between the federal government, the Länder, and a large number of civil society organisations.

These organisations are self-governing bodies representing the various existing sickness funds and the doctors’ associations, i.e. the payers and the providers.

Delivery of health care is determined to an important extent through joint committees of these organisations at the federal and regional level. These joint committees are governed at the federal level by the Joint Federal Committee (Gemeinsamer Bundesausschuss or G-BA) whose decisions establish: which services are paid for by the statutory health insurance; standard requirements for implementation of the federal laws, in terms of service provision; and the adoption of quality management measures.

The 16 Länder are responsible for ensuring hospital care. In particular, the states’ health care responsibilities include hospital planning, hospital financing investments, disease and drug abuse prevention, and vaccination. They are also responsible for medical education and for ensuring public health services such as the prevention of transmissible diseases or environmental hygiene, although these tasks have mostly been delegated to the local level (municipalities). Public health activities are coordinated across Länder through the Working Group of Senior Health Officials and the Conference of Health Ministers; additionally, Länder share joint institutions, for example for the training of health physicians.

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