Providing health services involves putting together a considerable number of resources, principally human resources, physical capital and consumables.
Investment decisions and balancing the mix of these resources are critical to the performance of the health system. There are substantial differences in the levels of provision of resources between countries of the European Region, revealing the existing uncertainty as to what constitutes the more cost-effective mix of health system resources (which in turn is reflected in a high degree of variation in medical practice between and within countries). Private health expenditure as a percentage of GDP is shown in Fig. 39.
European Member States differ in the number and mix of beds, human resources and technology they use (Fig. 40). For instance, the number of doctors in western Europe ranges from 5.5 per 1000 population in Italy to 1.5 per 1000 in the United Kingdom, almost a four-fold difference. Similarly, the number of hospital beds varies from around 10 per 1000 population in France and Germany to 4 per 1000 in Portugal, Spain and the United Kingdom. These differences increase when we include eastern Europe. For instance, the average number of beds in the NIS is 14 per 1000 population. This higher number of beds, however, does not
Fig. 39. Private health expenditure as a percentage of GDP
necessarily reflect a larger hospital infrastructure, since in many cases the higher availability of beds is not accompanied by other facilities such as diagnostic equipment, drugs or even heating and food. This high level of provision is explained by a previously common practice in many CEE and NIS to allocate funds according to the number of beds and personnel. As explained above, however, many countries have reformed or are in the process of reforming their payment systems to address this perverse incentive.
Some countries, mainly in the CCEE and NIS, also face specific problems caused not only by an excessive number of hospital beds and personnel but also by inefficient infrastructures, old equipment and the impossibility of renewing (repairing or buying) material owing to a lack of investment policy. Most buildings and equipment have not been upgraded in the last 25 years. This, together with the very imbalanced mix of inputs and a lack of drugs and appliances, not only
Fig. 40. Physicians per 100 000 population
Upper quintile Second quintile Third quintile Fourth quintile Lower quintile No data
Upper quintile Second quintile Third quintile Fourth quintile Lower quintile No data
erodes quality of care but also contributes to low motivation and morale among health personnel.
Overall, there is a trend towards convergence in the level and composition of health system resources in the European Region. As noted above, there is a process of hospital restructuring aimed at closing beds and using the existing infrastructure more efficiently (in many countries hospital admissions have almost doubled while length of stay has halved) together with more day care. Other ways of improving the mix of health system inputs in many European countries are the widespread adoption of numerus claususin medical schools and changes in the skill mix of human resources, with higher priority given to primary care, nursing and public health professionals.
The main challenge to the further improvement of health systems seems to be in implementing new ways of working more attuned with the coming “knowledge society”. A new organizational culture is being formed, in less rigid labour
environments, that values information and understands how it supports all parts of the organization in improving performance and quality. Flexibility and improved management of the human capital are key elements for more effective recruitment and retention strategies. Adapting the education of professionals to these new considerations is therefore essential for many countries. Reform of medical education is a top consideration within the EU countries, which are progressing towards a unified core curriculum in key aspects. Reform has already started in many of the CCEE, and has received renewed emphasis in Kyrgyzstan and
Tajikistan. The Regional Office is piloting quality indicators in five medical schools in the Region.
Another way of balancing the mix of health resources is the establishment of national HTA agencies, in some instances with normative and regulatory power over the introduction of new technologies. Western Europe is witnessing a remarkable combination of country- and even region-specific HTA agencies.
Pharmaceuticals
Pharmaceutical policies in European countries aim at guaranteeing access to medicines of proven quality, safety and efficacy at a cost that society and the patient can afford, and to promote the rational use of drugs. Nevertheless, too
many patients in the European Region still do not benefit from existing
pharmacotherapy. This may be because patients (or the health care system) cannot afford the drug, or a wrong or unnecessary drug is prescribed, or a treatment is proposed that is too expensive, thus affecting outcome and consuming resources that could have been used better.
Expenditure on medicines in the European Region differs widely, from less than US $10 per head of population in several of the NIS to more than US $350 in some of the western European countries (Table 7). In most of the NIS, and to a lesser extent the CCEE, drug expenditure is privately financed, while in the western European countries it is largely publicly financed. Payment for drugs in the poorer countries in Europe constitutes a major household expenditure. Drug costs are an enormous share of overall expenditure on health in the NIS and many of the CCEE (often more than 30% and for some countries as high as 50–60%, compared to 10–20% in the western European countries). Access to essential drugs is thus a severe public health problem, and especially hits the poor. Poor quality and counterfeit products, as well as inappropriate prescribing and use of medicines, add to the problem.
Globalization of the economy, international trade agreements and intellectual property issues (TRIPS)84have an impact on access to medicines in the CCEE and NIS, especially HIV/AIDS medication. The safeguards built into the TRIPS agreement (parallel trade, compulsory licensing), together with agreements with drug companies on reduced prices and differential pricing, will need to be used to ensure patients have access to drug treatment.
Western European countries – and also the EU accession countries – are
experiencing a rapid growth in drug expenditure of between 5% and 20% a year, and patients do not always have immediate access to new drug treatment. Drug expenditure is rising faster than health care expenditure and the rate of inflation.
Increases are caused by higher prices and higher consumption linked to the ageing of the population, the introduction of expensive new medicines, and the
introduction of new drugs for conditions that could not previously be treated.
However, it is often not clear if these new medicines result in better health outcomes and improved quality of life. Many European countries are adopting
84 http://www.wto.org/english/tratop_e/trips_e/trips_e.htm, accessed 19 May 2002.
Expenditure Western Europe CCEE NIS Population
per person (millions)
(US $)
> 300 Austria, Belgium, 164
France, Germany, Iceland, Switzerland
200–300 Denmark, Finland, 163
Italy, Luxembourg, Netherlands, Norway, Portugal, Sweden, United Kingdom
100–200 Greece, Ireland, Czech Republic, 76
Spain Hungary, Slovenia
20–100 Bulgaria, Croatia, Russian Federation 280 Estonia, Latvia,
Lithuania,
The former Yugoslav Republic of Macedonia, Poland, Slovakia
10–20 Romania Armenia, Belarus, 109
Georgia, Kazakhstan, Ukraine
< 10 Albania Azerbaijan, 54
Kyrgyzstan,
Republic of Moldova, Tajikistan,
Turkmenistan, Uzbekistan
Sources: JACOBZONE, S.Pharmaceutical policies in OECD countries: reconciling social and industrial goals. Paris, Organisation for Economic Co-operation and Development, 2000; Health for all database, WHO Regional Office for Europe.
guidelines and procedures for evaluating the cost–effectiveness of medicines and their uses, in order to be able to make rational reimbursement decisions and ensure
“value for money”.
The EU accession process has important implications for pharmaceutical policies in the CCEE. Regulatory legislation and systems are already being harmonized, and intensive collaboration continues between the EU and the CCEE in this field.
Table 7. Estimated medicine expenditure by sub-regional groups of countries, 2000 or latest available year
There is a growing concern about the provision and financing of pharmaceuticals, as well as the future of the drug industry in the CCEE. Many of the CCEE already spend more than 2% of their GDP on drugs. Prescribing habits have been
changing, with a rapid move towards foreign drugs (at western European prices) without an increase in the drug budget. Policies on generic drugs need to be actively implemented to counter such trends, while ensuring access to proper drug treatment for patients in the CCEE.
Most countries in transition are preparing to upgrade the quality of domestically produced pharmaceuticals to meet international standards and thus ensure more acceptable levels of quality and safety. Nevertheless, a lack of or inappropriate regulatory guidance is sometimes detrimental to the smaller producers, while the larger companies focus on the more profitable products. This may reduce the availability of low-cost pharmaceuticals, as the alternative is often a more expensive imported drug. Adequate policy and guidance are required to ensure the successful transformation of local industries and to stimulate the production of a wide range of low-cost generic products.
Stewardship
The introduction of market incentives in different sub-sectors of the health system in European countries has been accompanied by an increase in the volume of regulation in terms both of new approaches to regulation and of the range of regulatory tools available. In European countries the need to strengthen the stewardship role of the state appeared with the introduction of new market mechanisms and the new balance between the state and market in health systems. Thus, policy-makers have sought to steer these market incentives to the achievement of social objectives. For instance, in the field of pharmaceuticals the increase in
entrepreneurial activity has been accompanied by an increase in regulatory efforts aimed at cost-containment. In parts of the Region, however, regulatory activity has been clearly insufficient. In the Russian Federation and some CEE countries, for example, entrepreneurial activity was increased too rapidly and with inadequate regulation. This has created problems with efficiency and equity, and there are real concerns about unbridled entrepreneurial freedom. It should be pointed out, however, that this has been due more to a lack of institutional capacity than to the particular organizational characteristics of the health system.
Evidence shows that what is required is a different and, in many instances, a strengthened role of the state in its regulatory functions and health policy
leadership. Although stewardship may also involve other agents such as professional organizations, the health ministry plays the central role in formulating and
implementing health policy. Stewardship is also about health intelligence, coupled with policy vision and regulatory influence. The political and technical ability to manage change, to collect and use appropriate information, to regulate the private sector and to negotiate with the key actors has been crucial to the success or failure of many health sector reforms in the Region. A good intelligence system combines information with an understanding of the need to be selective in the information it generates for policy-makers and users of the health system.
In 1984, the Member States of the WHO European Region adopted the first common health for all policy for Europe (revised in 1991 and again in 1998).
It was agreed that countries would develop, at national, regional and local levels, intersectoral policies for health based on the principles of equity in health and participation in decision-making. By 1990, half of the then Member States had developed policy documents, but in some instances they were rather vague and have never been translated into action; they often envisaged unrealistic targets and did not realistically consider budgetary constraints.
Experience in countries shows that public health policies have reached the political agenda in very different situations, at different times and in different political and economic climates. Member States show an increased attention to health
determinants. Finland and the Netherlands have made serious attempts to develop outcome-oriented policies, and in the United Kingdom the tackling of health inequalities ranks high on the agenda. Many countries in the Region have now adopted genuine health policies laying down medium- and long-term objectives and priorities. In some cases, these policies have been ratified by parliament, thereby gaining greater legitimacy and continuity. Even countries at lower levels of economic development, such as Kyrgyzstan, have taken innovative approaches to integrating health and development, indicating that such an approach can be useful in different economic and social circumstances.
Owing to the increase in research related to the extent and causes of inequities in health, the deteriorating health status in the CCEE countries, and the recognition by organizations such as WHO, the EU and the World Bank of the effect of
poverty on health, the determinants of health (including health systems) have received greater attention since the mid-1990s. Poverty reduction strategies are central to the health programme in Georgia. In Lithuania, the strong involvement of the Parliamentary Health Committee and the National Board of Health in organizing annual national health policy conferences has greatly facilitated the process of participatory decision-making and has kept the need for evidence-based decision-making high on the agenda. Health impact assessment also offers a way of linking the health sector with other sectors, and countries such as the Netherlands and Sweden have already gained valuable experience. (In the United Kingdom, health impact assessment is considered more a consultation process than a tool for evidence-based decision-making.)
Strong pressures for decentralization and the appearance of new interests groups have improved the channels of participation in decision-making, including the use of such modern technologies as the Internet. This has led to improvements in the information and knowledge base for health policy development, particularly as related to inequities. There are good examples whereby public health reporting seems to be influencing the decision-making process. There is an increasing demand from citizens, and particularly patients, to be involved in decisions concerning their own health and public health issues – from health policy choices to the assessment of outcomes. Since 1993, no fewer than 14 European countries have introduced patients’ charters or laws on patients’ rights. The WHO European Declaration on the Promotion of Patients’ Rights85was drawn up in 1994. The lack of knowledge among health professionals remains in some countries a significant obstacle to implementing legislation in this domain.
Strengthening health systems in Member States is an identified global priority for WHO in this biennium and the next, and is reflected in the Regional Office’s new country strategy.86The Regional Office aims at helping Member States understand how they can measure their own performance, identify the factors that determine performance, and improve their system to better respond to the needs of their population. The work of the European Observatory on Health Care Systems is proof of the Office’s effort to produce information and evidence on the links
85 A Declaration on the Promotion of Patients’ Right in Europe. Copenhagen, WHO Regional Office for Europe, 1994 (document EUR/ICP/HLE 121).
86 The WHO Regional Office for Europe’s country strategy: “matching services to new needs”. Copenhagen, WHO Regional Office for Europe, 2000 (document EUR/RC50/10).