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OECD report

Economic crisis forces EU healthcare budget cuts

The financial crisis has put a squeeze on health budgets across Europe. Photo: Flickr / Images_Of_Money
Health expenditure dropped by 0.6% across Europe in 2010
Health expenditure at 9% of GDP in Europe, down from 2009 peak of 9.2%

Healthcare expenditure has dropped across the European Union during the global financial crisis, according to figures released by the Organisation for Economic Co-operation and Development.

According to a report, “Health at a Glance Europe 2012”, annual per-capita health expenditure dropped by 0.6% on average in real terms in 2010, the latest year for which figures are available.

While countries including Germany, Malta and Romania managed to increase their healthcare budgets by modest sums, Ireland were forced to slash their spending by 7.9%, and Estonia and Greece were not far behind with cuts of 7.3% and 6.7% respectively.

In the UK, healthcare expenditure dropped by 0.5% in 2010, after an average annual growth rate of 4.6% over the previous ten years.

The OECD say that in 2010, EU member states spent an average of 9% of their GDP on health, a significant rise from 7.3% in 2000, but down from the 2009 peak of 9.2%.

The budget cuts have taken different forms in different countries: Ireland has cut wages and staffing levels, as well as fees paid to professionals and pharmaceutical companies, while other countries have put a halt to infrastructure investment, or found efficiency gains by merging hospitals or placing a greater concentration on outpatient care.

In non-EU member state Iceland, which was forced to cut its per-capita healthcare expenditure by 7.1% in 2009-10, outpatient expenditure rose by 3.2%, while inpatient expenditure dropped by 3.1% from 2000-2010.

In some countries, cuts in public sector healthcare financing has led to increases in out-of-pocket private funding. In Iceland, out-of-pocket spending increased by 2.2% between 2008 and 2010, and in Ireland, the figure has increased by 1.7% in the same period.

However, public funding remains the dominant form of health expenditure in the EU; 73% of healthcare was funded publicly, on average, in member states.

The report notes that the economic crisis has had a “significant” effect on pharmaceutical spending, which grew by an average of 3.2% per year from 2000-09, but dropped to 0% growth in the region in 2009-10.

Lithuania, Portugal, and the Czech Republic cut their expenditure on pharmaceutical budgets by 4.6%, 3.3%, and 1.8% respectively.

Many EU countries were attempting to curtail their pharmaceutical expenditure – which reached €190 billion, 1.6% of the EU’s GDP – even before the crisis, through price and volume controls, as well as policies targeting specific products and renegotiations with pharmaceutical firms.

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