Health

Economic Survey - Belgium 2005: Constraining public health expenditure growth

 

Ongoing reforms will be required to contain growth in healthcare expenditures

Growth in healthcare expenditures represents a significant risk to the sustainability of public finances. Following pressures that built up in recent years when restrictions were imposed to contain expenditure growth and in response to concerns about equitable access to healthcare, the government lifted the budget limit on real growth in public healthcare outlays to an annual average rate of 4.5% over 2003-07. Cutting that growth rate to 2.8% on average over 2008-30, as estimated in the HFC projections, is likely to be a major challenge. There are a number of measures that are being implemented to restrain growth in healthcare expenditures, mainly by increasing efficiency, including: Diagnosis Related Group arrangements for hospital financing; incentives to develop a gatekeeper role for general practitioners; incentives for the development of a centralised electronic medical file for patients; benchmarking of prescription behaviour and medical practice; and increasing incentives for the use of generic drugs when they are medically equivalent substitutes for formerly patented drugs. The government should pursue these reforms more vigorously by: not reimbursing medical expenses for patients not referred by a gatekeeper; ensuring that complete and up-to-date electronic medical files are available for consultation by medical practitioners for all patients; and by not reimbursing the difference in price between registered and generic drugs. The latter measure should not be too harmful to incentives to develop new medicines given that Belgium is also liberalising licensing policies for new drugs. If it proves not to be possible to restrain growth in healthcare expenditures to the extent assumed, the government will need to consider the extent to which it responds by reducing its share of total healthcare expenditures as opposed to increasing taxes and/or reducing other expenditures.

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