Spain’s deep crisis continues

Cuts in pharmaceuticals spending, doctors’ jobs threats, A&E closures, non-payments to medical suppliers – can a new government save their country and its NHS by massive stringency and tax hikes? Our correspondent Dr Eduardo de la Sota Guimón reports.

Photo: Spain’s deep crisis continues

The Spanish National Health System (NHS) must ensure equal access to healthcare services for all citizens. The service is publicly funded and structured into two healthcare levels: primary and specialist. The NHS is decentralised, providing Autonomous Communities (ACs) with funds from general taxation to provide the same basic services, to which they may chose to add (non-NHS funded) techniques, technologies or procedures.

Public health expenditure in Spain (including long-term care) accounts for about 72% of Spain’s total health expenditure. Healthcare accounts for 8.4% of the GDP – about the same figure as the Spain’s global Budget Deficit for 2011 i.e. 8.5% of GDP. Public and private healthcare expenditure in Spain account for 6.0% and 2.4% of GDP, respectively. The huge deficit in the country’s Public Healthcare System, coupled with the current Spanish public deficit crisis has pushed the Ministry of Health to adopt spending cuts – and further cuts are expected.

As said, Spain’s healthcare system is decentralised and the Ministry of Health has very little room for margin other than cutting back on pharmaceuticals, so the adopted measures focused mainly on these – in agreement with the Autonomous Regions through the Inter-territorial Council on Healthcare.

Cuts already made:

Drug prices – With the massive use of generics, revision of certain drug discounts applied between pharmacists, pharmaceuticals and distributors, changes to the way drug prices are set and revised and with more than one revision per year now permitted. Certain ACs (e.g. Castilla La Mancha) stopped paying pharmacists a few months ago, putting the situation in permanent conflict since 2011. Co-payment – Already approved in Catalonia (the most advanced NHS region) consists of a €1 payment for each prescription (called ‘moderator ticket’), to save the region €100 million annually. This co-payment will probably soon extend to other
regions, although almost nobody ‘dares’ mention it. As published RTRS, medical suppliers have not been paid for about two years, and Catalonia doctors have been told to accept pay and bonus cuts for 1,500 medical residents or lose their jobs. In recent months, the Catalonia government also shut down some clinics and emergency units.

Last September, the residents staged marches through Catalan’s capital, Barcelona, draped banners around hospitals and doctors’ unions threatened to strike. However, many senior doctors are afraid to fuss and possibly lose jobs when one in five Spaniards are unemployed. ‘All of this due to years of mismanagement by politicians! The money has run out,’ said one doctor, who remains anonymous. As in many developed countries, Spain has a growing aged population on state pensions, while smaller families fail to add funding.
Unlike other countries with public healthcare, complaints about long waits to see doctors were rare, but some Catalonia patients must now wait and doctors warn of a decline in quality care.

Delayed payment, central buying, rationalised services. 

The time of delay varies from 45 days in Euskadi and Navarra (richest regions), up to 750 days in Andalucía and Castilla La Mancha. A centralised purchasing of products and services to providers is difficult to achieve, especially in a decentralised system, but will be implemented for sure. Ambulatory and surgery waiting lists are increasing rapidly, and certain services (ambulatory) are not provided over weekends. Emergency services are overloaded in many places.

Increase in financing 

In parallel, the Ministry is expected to agree to a increasing public financing of the NHS by 1% from the current 5.7% to 6.7%, probably through fiscal revenue from tobacco and alcohol taxes, although it remains to be seen whether the Ministry of Economic Affairs will or can accept further spending hikes. In March 2012, the ‘healthcare cent’ was established by the Castilla León Region, north of Madrid; this is 5.6 cents in a euro per litre of petrol. Roche, the multinational pharmaceutical firm, says this region is more than 900 days behind in bill payments, raising fears in the area that Roche could start withholding drugs for some hospitals, as it did in very financially troubled Greece.

What can the new government do?

In November 2011, the conservative Popular Party, led by Mariano Rajoy, won a parliamentary majority in the elections. As recently pointed out in the New York Times, new Prime Minister Rajoy benefits from having a freshly elected, single-party majority behind him, which his current counterparts in Greece and Italy have lacked. Spain is facing the risk of another recession and the magnitude of the euro debt crisis has made even supporters of the Popular Party question whether a centre-right government can deliver the swift turnaround that financial markets are demanding. On December 30, PM Rajoy announced an austerity package
consisting of $7.8 billion in tax hikes and $11.5 billion in spending cuts, in an effort to close a budget deficit expected to reach 8.5% of the GDP in 2012 – 2.5 percentage points above the government’s target. On March 15 the new PM decided to reach a 5.3% of GDP deficit by the end of 2012, and 3% by the end of 2013.

Clearly, the shortcut measures aim to be constant and aggressive. In January 2012, in an attempt to solve the problem of regional debt, Spain’s central government moved to shore up the finances of its 17 regional governments - some having trouble paying their bills - while taking steps to tighten control over their spending. Budget Minister Cristóbal Montoro said that the government would create a credit line and advance about $10 billion to the regions, money they were not scheduled to receive until later in the year.

The regions needed the cash to pay suppliers, many of them small businesses that had not been paid in months, even years. Education and healthcare have been particularly problematic because those costs have been growing. At the same time, some main sources of financing – taxes on real estate sales and building permit fees – have dried up with the collapse of the housing boom. For that reason, some regions may actually want the central government to take back some responsibilities, as was suggested in July by officials from the regions of Murcia, Valencia and Aragón. Nevertheless, the Basque Country (Euskadi) has claimed more autonomy. Decentralisation is beneficial for some systems and not so for others...


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