Healthcare and EU enlargement Sept03

The founders of the EU dreamt of a single market for goods, services and labour based on competition and diversity that can offer the European consumer choice, quality, prompt delivery and low, stable prices.


Today, 50 years after the birth of the EU, European Citizens do not have a:


1) Choice of doctor, hospital or treatment;

2) Quality of treatment that is the same throughout the EU;

3) Prompt delivery as patients have to wait long for consultation and even longer for operations

4) Low stable prices as health costs vary substantially from one member state to another


A universal EU health care system, offering almost 500 million EU citizens in 25 countries, is a challenge for all stakeholders. How should such a pan-EU health system be funded based on state, private and individual contributions? How can we reform supply and modernise delivery of health care?


Consumerism and the increasing expectations of patients, fuelled by the internet, media, pharmaceutical companies and health promoting agencies, increase the pressure for all countries to deliver similar services. The challenge is compounded by the demographic changes with an increase in people living with chronic diseases together with the poorer health status of people in some of the accession countries.


How will Member states with well funded health systems cope with increased demand as patients waiting for treatment in their own countries, especially the elderly, seek treatment across national frontiers? How will accession countries be affected if health professionals seek better prospects elsewhere? Is there an opportunity for accession countries to utilise its health professionals to offer health delivery for patients from the more affluent EU Member States? Can this be done through both public and private hospitals and clinics? Will private health insurers seize such opportunity to invest in the accession countries?


Spending on national health delivery, as a % of GDP, is different amongst the 15 EU Member States and the difference is significant if we include the accession countries. Health expenditure is financed by direct taxation, national social insurance contributions and employer/employee contributions to private insurance schemes. Differences in charge systems for visits to doctors, ownership of pharmacies and financial incentives for co-existence of private and public provision of health delivery highlight significant differences in the quality of healthcare systems found in the existing EU states.


Prices for prescription medicines in each EU country are negotiated by industry with governments based on the level of national health budgets, estimated sales volume and consequent government expenditure, per capita income and the cost of living. On such calculations, the prices of prescription medicines are much lower in Spain, Greece, Portugal than in the UK and Nordic countries. Such huge price differences have led to “parallel” trade that has generated instant and substantial profits for numerous newly established traders. Profits from parallel trade, secured by such traders, diminish profits for pharmaceutical manufacturers who invest in research and development. Furthermore, such parallel trade has forced manufacturers to apply supply quotas for full-line wholesalers that undermine an uninterrupted supply of essential medicines right down to the patients. 


How will the healthcare systems in the 10 accession countries respond to the high expectations of today’s patients? Is it possible for the enlarged EU to establish a liberal free-market oriented system of ownership of the distribution and dispensing of medicaments that will encourage competition and greater choice for patients? Should the EU adopt a common ex-industry price for prescription medicines with differential re-imbursement schemes for each Member State to eliminate the parallel traders?


Pharmaceutical manufacturers should be encouraged to register their prescription medicines through the European Medical Evaluation Agency (EMEA). Such registered products, with multilingual insert leaflets in the packaging, could be marketed throughout the EU at a common ex-industry price to wholesalers. The wholesalers, using this cost price, would then be free to price and distribute to hospitals, pharmacists, doctors and others. Each national government, based on their negotiated re-imbursement scheme with the manufacturer, would determine how to charge the patient and reimburse the retail pharmacist, the hospital or the doctor. Such a scheme was successfully used when East Germany’s healthcare programme was integrated into its Federal health system.


EU Commissioners Likanen and Byrne have set up a small group of decision makers, called the “G 10” to discuss innovation and provision of medicines in the EU. Their Recommendation VI is that “Price regulation applies only to medicines purchased and reimbursed by Member States, allowing full competition for all other medicines, including OTC products.”


This is an acceptable proposition as it enables manufacturers to launch any new medicine, irrespective of re-imbursement status, immediately after the grant of marketing authorisation. It encourages price competition for non-reimbursed medicines that may be covered by national or private insurance schemes thereby meeting the EU internal market and competition policies.


The enlarged EU faces the challenge of helping the accession countries to upgrade and connect their health systems with those in the existing Member States. This requires investment in manpower, infrastructure and training of medical personnel from surgeons to technicians. EU citizens dream of an EU Health Card that will give them ready access to equivalent health services in every Member State. This requires trans-national compatibility of computer systems and the willingness on the part of each Member State to harmonise both cost and delivery time of treatment. How long will the enlarged EU take to achieve this? It is a question that cannot be answered today!