Health system priorities when money is tight

 

 

 

 

We spend more on health now than ever before. Health spending represents 9% of OECD economies (2008) and exceeds 10% in seven OECD countries – the United States, France, Switzerland, Austria, Germany, Canada and Belgium. While the rate of increase slowed in the period 2003-2007, health spending growth has exceeded economic growth in almost all OECD countries in the past 15 years and could increase by a further 50 to 90% by 2050.

 

Background

 

Following the financial and economic crisis, many countries face budget deficits and need to constrain public spending to achieve broader macro-economic stability. As health is one of the largest components of public sector spending, improving the value from health spending will be a political priority. Ministers will discuss what they are doing in the short-term to constrain health spending, but and also what they can do to increase the efficiency of health systems in the long-run.

 

In previous economic downturns, many countries used policies such as tighter budget constraints for purchasers or providers, to decrease health spending. Reduced staffing levels and delays in new investments were used in almost every OECD country, while wage controls were commonplace. However, short-term policy responses to crises have often had long-term consequences for future health spending. For example, cutting health spending on prevention is likely to lead to higher health costs later. Governments need to ensure that the policy instruments they use to control public spending in the short-term do not damage their long-term goals of having more equitable, responsive, effective and efficient health systems.

 

Ministers will explore the many potentially useful tools for improving value for money, such as improved care coordination, better information technology, greater use of health technology assessment and improved pharmaceutical policies. Paying providers according to their success in meeting quality objectives – including greater use of evidence-based medicine and guidelines - appears to be effective. But it is important not to oversell these measures as a means to save money: in general, there is limited evidence that they reduce costs and often they require significant upfront investment. Their greatest achievement in the long run is likely to be delivering more health for roughly the same amount of money, a worthwhile success in itself.

 

Issues to be discussed

  • In times of budgetary restraint, how can governments continue to improve health outcomes and access to high quality of care?
  • What are the most promising directions for achieving improved health outcomes at lowest cost?