Austerity and health care: Laying down the scalpel

AppId is over the quota
AppId is over the quota

CLINICAL trials are supposed to abide by the principle of primum non nocere (first, do no harm). If it becomes clear that some of the participants are being hurt by a novel treatment, the trial must be stopped. By that standard, argues David Stuckler of Oxford University, Europe’s experiment with slashing health-care spending in the wake of the financial crisis should not have been allowed to continue. Greece, one of the early subjects, cut health spending by a quarter in real terms between 2009 and 2012. The result, says Mr Stuckler, was a jump in HIV infections, rising infant mortality, patients left without medicines and a malaria epidemic.

The effects of austerity on health outcomes were not equally dire everywhere: slashed spending in Ireland, for example, led to longer waiting times to see a doctor but seems to have had little effect on either suicide or mortality rates. And not every country wielded the scalpel so ruthlessly—though many froze health-care budgets or capped the rate at which they rose. But even as health statisticians continue to debate the results of the experiment, it is finally drawing to a close.

According to figures published on June 30th by the OECD, a club of mostly rich nations, total spending on health care by its members has started to pick up again (see chart). There are wide variations. Health budgets remain below pre-crisis levels in many countries and are still falling in some of the beleaguered ones of southern Europe. But in Chile and Mexico spending has surged following reforms aimed at extending health care to everyone.

In America the OECD’s figures, which run only to 2012, show health-care spending still rising, though more slowly than before. More recent data seem to show a similar trend. This could be due to workers paying for more of their care in cash and the health reforms put in place by the president, Barack Obama, which aimed not only to extend coverage but to rein in costs.

Few cash-strapped governments chose to chop entire health services or to exclude large numbers of patients (though Spain cut off undocumented migrants). But several brought in or raised charges for drugs, hospital stays, ambulance rides and the like. Some introduced market-based reforms such as competition between clinics and linking providers’ fees to health outcomes; others merged or closed hospitals and beefed up cheaper outpatient care.

Reasonable though some of these policies sound, their inevitable effect was to cut health coverage, says Martin McKee of the London School of Hygiene and Tropical Medicine. Patients will be less likely to seek care if they face high fees or long waits, or must go to a distant clinic. Many of the measures were imposed by officials responsible for fiscal matters rather than health care. In Italy, for example, disease-prevention and health-promotion programmes were slashed—even though these tend to have particularly high returns. Some countries are likely to discover that, in seeking to balance their books as quickly as possible, they increased their future burden of ill health.

Cuts to public spending have also pushed more of the costs onto patients. The OECD calculates that since 2010 private health spending in member states has grown twice as fast as that from public sources. In South Korea, where health spending has grown by 6% annually since 2009, most of the extra cash has come from patients. In Ireland public health spending shrank by 5.6% in real terms over the same period, but private spending rose by 2.2%.

As health budgets start to rise again, some governments will find that the extra money goes further than it used to. The cannier ones used the crisis as leverage when renegotiating contracts with doctors, health-care providers and pharmaceutical firms. Many also started to push for greater use of generic drugs instead of pricier patented ones. Between 2008 and 2012 generics’ share of the drug market grew by 44% in Denmark, 60% in France and 100% in Spain. The OECD notes that almost two-thirds of its member states have seen spending on drugs fall in real terms since 2009.

Greece is one of those countries. But falling prices for their wares and a pile of unpaid bills have exhausted the drug firms’ patience with its government and disrupted the supplies of some products. Some Greeks say they are unable to get hold of the medications they need. For some of its subjects, the medical austerity experiment continues.

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From the print edition Jul 5th 2014