By Pedro Lichtinger, President, European Pharmaceutical Operations
Over the coming decades, Europe has to face the fact that spending on healthcare systems will increase. Changing demographics and advances in medical science will inevitably impact upon healthcare spending.
An ageing population will undoubtedly make the largest bite into the budgets of Europe’s governments. According to the European Commission, while the EU’s overall population will fall only slightly by 2050, its working population will fall steeply – a trend likely to kick in as soon as 2010. This means that for roughly the same size population (a little short of 500 million) there will be 58 million more people aged over 65, double the proportion today.
Medical advances – in biopharmaceuticals, diagnostics and developing more targeted therapies – will sustain the transformation of healthcare. What was impossible a decade ago is reality now, fuelled by new complex medicines, costly procedures and high-tech devices. Put bluntly though, these all cost more money.
Providing well-functioning, forward-looking healthcare systems may seem costly, but this is a responsibility that any government should be happy to shoulder. Economically it makes sense too. How do we shift the paradigm so that spending on healthcare is seen as an investment – an investment in people’s productivity, economic wealth and prosperity, and economic opportunity? Helping people stay healthy is a moral obligation, even as it reaps economic and social dividends far beyond the individual patient. Former EU Parliament President, Pat Cox’s recent report ‘Financing Sustainable Healthcare in Europe’ highlighted studies showing that healthier individuals have higher earnings, while better health increases both the number of hours worked and the probability that a person will be employed.
Additionally, Europe’s ageing society poses challenges that need to be addressed. Governments have finally recognised that current pension frameworks are unsustainable. Left unchanged, the ratio of workers (the funders of pension systems) to pensioners will decrease from 4:1 to 2:1. The best way to tackle this shift will be to extend working life. Only a few years ago, retiring below the age of 60 was normal in Italy, France and several other countries. Today, as a result of governments pushing through difficult reforms, the retirement age is rising across Europe. But pushing back the age of retirement will never be accepted if we don’t ensure that people are healthy enough to work to a later age. This is another reason why good healthcare is so important and a basic foundation for a broader array of social and economic reforms .
Preventing diseases and treating them earlier are other ways in which the cost if ill health to society could be reduced. For example, the International Diabetes Federation (IDF) estimates that around half of all people with diabetes in Europe are unaware of their condition. Not only that, but the medical costs of a treating a person with diabetes induced end-stage kidney disease are three to four times higher than those of a person with diabetes and no complications. While this shows that money, and lives, can be saved by more emphasis on prevention, diabetes is not the only disease where this principle applies, as the European Parliament recently reminded us when passing its resolution on action to tackle cardiovascular disease.
Even if healthcare spending shouldn’t be seen as a mere cost, the problem of financial deficits within healthcare remains. So the question arises how best do we manage this?
Just as household spending costs have shifted over the years (for example the proportion of spending on food in the UK dropped from 21% 25 years ago to 16% in 2005 ), in the same manner, spending on healthcare could also be expected to shift. This is not a bad thing per se – however, the fact that in Europe, much of this money is from public coffers means that there will inevitably be a budgetary and political impact elsewhere.
A government with a spending level of over half of national GDP, such as France, will not have room to spend much more. Given that such spending ceilings are unlikely to be breached, this leaves stark choices. Either governments make room for more healthcare spending by reducing budgets elsewhere, or people pay privately. The former has a limit, while the latter presents the dilemma of how to share the burden.
Another thought evolves around the democratic empowerment of citizens around health issues. Indeed, I am actually always surprised to note the existing lack of a democratic voice here.
In all European countries, leaders dream of transferring healthcare decision making to autonomous bodies. However, as the experience of NICE in the UK illustrates, determining patients’ access to new medicines based on cost effectiveness also presents problems and challenges. The reality is that, more often than not, political decisions have to be made in the face of uncertainty. The democratic voice is not just stifled by opacity and uncertainty though, but also by apathy: in the French Parliament, for example, it is quite striking to see that any agricultural bill attracts far more attention than the annual vote on the healthcare budget. It is then all the more surprising that Europe has chosen to rely on a public system, as this would seem to imply a democratic decision-making process.
This relative lack of democratic involvement is bound to change in the future. More and more often people will question and challenge public decisions and, as a result, health will become an even more important subject in the next fifty years as the old assumptions about healthcare lose their grip.
But democratic debates dwell on information. People want more information about healthcare and how decisions are likely to impact them and their family. The symptoms of this are beginning to show – Europeans are already seeking more information on the quality of their hospitals, the effectiveness of various treatments and the usage of new medicines. The question facing Europe’s decision makers is: do we just stand on the sidelines and watch, or do we take action to embrace the change?