Greece – The Impact of Austerity on Health and Health Care

Today’s Managing Health Care Costs Indicator is 13%

Click image to enlarge.  Source: OECD (see below)

Greece has been grabbing the headlines for months, as we’ve learned about widespread evasion of taxes, rampant government accounting fraud, shady bank deals to obscure the actual debt, and the threat of default which could throw the Eurozone into disarray and perhaps catapult the world into another severe recession.

Today, the New York Times has helped put a face on what austerity has meant for Greeks needing health care.   The Greeks have decreased their health care expenditures by 13%, from $19.5 to $17 billion.  They plan almost a billion more in cuts next year. 

The result isn’t a pretty picture.

  •        Diabetics running out of insulin
  •        Women with breast cancer waiting three months for surgery
  •        Cancer patients having to pay up front for chemotherapy drugs – if they can even find them. At last one global pharma company (Roche) is no longer selling its chemotherapy agents in Greece.
  •        Increasing rates of HIV infection and suicide
  •        Children going unvaccinated.

The Times referenced an article in Lancet in October, which cited 40% cuts in some hospital budgets , elimination of many addiction treatment programs, and a tenfold increase in attendance at street clinics run by Non Governmental Organizations.

I know the word on the street is that the Greeks have overspent for decades –and it’s time for them to start being responsible.  But reports from the Organization of Economic Cooperation and Development (OECD) demonstrate that many of these changes in the health care system are in the exact wrong direction.
Click image to enlarge. Source OECD

Greece historically spent substantially less on health care than other European nations, yet had pretty good outcomes.   Public spending on health care has actually been low (5.6% in 2006) – while out of pocket spending has represented a high portion of the total cost of health care (38%).  (OECD p 8)  So increasing out-of-pocket spending is not likely to help reform the Greek system.

The Greek health care system does have some substantial problems:

  • Too many physicians and too few nurses
  • Too many specialists and not enough generalists
  • Too few physicians in rural areas
  • Drug spending that is too high – with far too little generic substitution (a bit over a third in 2008  -while the rest of the OECD was close to half).
  •  Fragmented regulation – with multiple overlapping ministries with conflicting responsibilities
  • Fragmented financing – with hospitals getting some of their payment from insurance-type funds, and other payment directly from the government budget.
  • Informal payments – bribes – required for patients to get care.
  • Some National Health Services physicians work part-time, and divert patients to their private practices.
  •  Terrible data collection –making it difficult to assess program effectiveness.
  • Outmigration of physicians to other countries.
  •   Low immunization rates
  •  High smoking rates and low tobacco costs (due to low taxation)
  • High rates of use of MRI scans

The austerity spending limits WILL lower health care costs; there is no question about that.  It's likely to improve a few of Greece's problems, like overuse of brand name medications and high cost imaging. However, the price of lowering health care costs is likely to be worse health outcomes, growing disparities based on wealth, and higher future social burden from poor health.

Note public spending low compared to OECD countries, while private spending high. Click on image to enlarge. Source: OECD
A crisis might be a terrible thing to waste.  But the Greek health system (and Greek patients) doesn’t look likely to benefit from this one.