Alternative frameworks for cross-border health care The analytical chapters of this book correspond with the issues raised in the

Communication regarding Community action on health services and, in fact, these issues were later addressed in the Commission’s proposal. There are alternatives to the proposed frameworks, however, and these alternatives have implications regarding Member States’ responsibilities, quality, patient safety, entitlements and reimbursement issues.

The first alternative builds on the country of origin principle. The country of origin principle is a principle in the law of the EU for resolving conflict of laws between Member States. The country of origin principle states that, where an action or service is performed in a country other than the country of establishment, the applicable laws are those of the country of establishment.

Although not stipulated in the Treaty on the functioning of the European Union

2 A thorough analysis of the proposal is presented in Chapter 2.

Box 1.1 Main areas of uncertainty according to the the Commission’s Communication

• Shared values and principles for health services on which citizens should be able to rely throughout the EU.

• Minimum (practical) information and (legal) clarification requirements to enable cross-border health care.

• Identification of competent authorities and related responsibilities in various fields (quality, safety, redress, compensation).

• Safeguards for Member States receiving patients to be able to ensure a balanced medical and hospital service accessible to all.

• The impact of cross-border health care on accessibility, choice, quality and financial sustainability.

• Leverage of Member States to regulate and plan their health systems without creating unjustified barriers to free movement.

• Definition of health services and the link with related services (social services and long-term care).

Source: Commission of the European Communities, 2006a.

(TFEU) and its predecessors, the country of origin principle is a core principle of the free movement of goods and services and of European integration.

A frequently quoted ruling of the country of origin principle is the Cassis de Dijon case (C-120/78). The case concerned the sale in Germany by an importer of the liquor crème de cassis, a blackcurrant flavoured liqueur produced in France. The German Government had in place a law restricting to 25% the minimum amount of alcohol which should exist in certain products being sold as a liqueur. Therefore, the importer was told that the product could not be sold as they wished to sell it. The importer argued that this measure had an effect equivalent to a restriction on trade, which would be in breach of Article 28 of the Treaty of Rome. The major outcome of this case is the principle of mutual recognition: the court held that there are no valid reasons why a product that is lawfully marketed in one Member State should not be introduced in another Member State. To soften this wide opening of the gates for intra-Community trading, the court went on to provide four mandatory requirements which might be accepted as necessary for restricting trading, in addition to the fixed derogations of Article 30 of the Treaty establishing the European Community (TEC, EC Treaty).

The country of origin principle has far reaching consequences for cross-border health care. For example, a physician established in Member State A could deliver his services in Member State B. The country accountable for overseeing the physician would not be the Member State of treatment but the Member State of establishment. Under the country of origin principle, Member States would lose control over health care on their territory. At the same time, they would not have the means at their disposal to exert accountability in another Member State. This touches upon questions regarding quality and safety standards, tariffs, and the services included in the benefits package. Member States could also lose their ability to carry out any form of capacity planning.

The country of origin principle was one of the three pillars of the original proposal for a services directive. Launched on 13 January 2004 by the Internal Market and Services Directorate-General (DG-Market), the “Proposal for a Directive of the European Parliament and of the Council on services in the internal market” envisaged the realization of the internal market for services through a horizontal non-sectoral approach. Health services were included in the scope of the directive, while a specific article codified the European Court of Justice (ECJ) jurisprudence on the assumption of health care costs in another Member State. Following protest by Member States, the European Parliament voted on 16 February 2006 for the exclusion of health services from the scope of the directive (see Chapter 2).

A second alternative to the proposed directive was the inclusion of the ECJ rulings in the existing framework of the coordination of social systems. This system was established after the creation of the European Economic Community (EEC) when Council Regulation No. 1408/71 of 14 June 1971 “on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community system of coordination of social system” was introduced. The original purpose of the system was to facilitate and support the creation of a common European labour market. European workers seeking employment in another Member State should enjoy social security protection and, in principle, transferability of accrued entitlements or qualifying periods. The original scope was extended stepwise by including additional target groups and social benefits. For cross-border health care the European Health Insurance Card (EHIC) (formerly form E111) was included, along with a system for authorizing and reimbursing hospital cross-border health care.

Codifying some of the ECJ legislation by amending Council Regulation No. 1408/71 was a possible option, especially as far as issues regarding tariffs and pre-authorization of planned health care were concerned. However, not all the issues causing uncertainties could be tackled within the framework of Regulation 1408/71. The key principle of this regulation is coordination. This implies that no harmonization is intended and that the existing legislation within the Member States should not be affected by any amendment.

Issues of quality and safety, as well as patient information, however, can be tackled within the existing framework on a bilateral basis. Reports on Germany (Nebling & Schemken, 2006), Malta and the United Kingdom (Azzopardi Muscat et al., 2006), Belgium (Glinos, Baeten & Boffin, 2006) and France (Harant 2006) suggest that bilateral contracts exist between competent financing organizations and providers that specify – to a considerable level of detail – volume, quality and tariffs, along with other issues relating to cross-border health care, in order to avoid many of the uncertainties. While these are practical solutions, they may fall short as regards citizens’ expectations to exert their right to free movement of services in health care. The decision on bilateral contracts is not made by the patient but by the third-party payer.

Moreover, using Regulation 1408/71 as a framework for codifying ECJ rulings would reduce cross-border health care to mobility on the part of the patient, not taking into account aspects of cross-border collaboration between providers and financing institutions.

Meanwhile, Regulations 1408/71 and 574/72 have been replaced by Regulation 883/04 as amended by Regulation 988/2009 and the Implementing Regulation 987/2009. The new legislative package, referred to as “modernized coordination”,

has been in force since 1 May 2010. While the basic coordination principles have not changed compared with the previous coordination rules, the administrative processes have been improved in order to make citizens’ rights more effective.

In particular, electronic exchange of data will lead to more rapid and efficient decision-making and services will be more user friendly for citizens.

There is a third alternative to the pending proposed directive on the application of patients’ rights in cross-border health care. This alternative has been termed

“muddling through” (Busse & Wismar, 2002). If no agreement can be reached between the Member States and the European Parliament, the situation will not change. Parallel frameworks and rules applicable to cross-border health care will exist across Europe. The system originally established by Regulation 1408/71 will remain intact and, at the same time, the rulings of the ECJ will function as a different legal basis for cross-border health care. The development would be further driven by the jurisprudence of the ECJ.