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Intelligent control: innovative health financing models


10 Oct 2011


Health & Consumers

Despite increasing demand, potential health care funding is limited, experts warned at the European Health Forum Gastein (EHFG). So it is that much more imperative that national health policies be able to intelligently apply  control-oriented criteria in order to optimise services and to make better use of existing  resources. 

Bad Hofgastein, 7. October 2011 – "Given demographic developments and the growing supply requirements that result, it is illusory to believe that there can be substantial budget cuts in the public health sector. It would be just as illusory, however, to believe that in the future, much more money could be made available. Thus, we need intelligent control criteria in order to cover the increasing demand as much as possible within existing budget constraints," said Dr Clemens Martin Auer, section chief at the Austrian Ministry of Health, today at the European Health Forum Gastein (EHFG). "In particular, the issue will be to health care services in an efficient way and to combine the competence for income and expenditures on public health in a unified structure with overall responsibility."  

In many European countries, and not least in Austria, there could be an enormous structural potential for economising, said Dr. Auer, who is a also a board member of the EHFG. “When comparing the frequency of hospitalisations, the number of hospital beds and the number of physicians in private practice, one sees a correlation. A lot of services that could be provided privately just as well, but at much lower costs, have to be provided in hospitals in many areas -- simply because capacity is lacking on the other side. “In the hospital sector itself, the highly praised decentralised structures of the 1980s have frequently proven to have both driven up costs and lowered quality.” Dr. Auer said that "economies of scale are are especially available in high-tech medicine. Smaller units can not use specialised capacities, such as expensive high-tech diagnostic instruments often enough. At the same time, quality decreases in more complex diagnostic and therapeutic methods when the number of cases is not sufficient.” 

Basic prerequisite: one hand, one pot 

The intelligent management of available resources presupposes the political and legal ability to require health providers to establish binding long-term guidelines in order to facilitate  structural changes; e.g. the development of macroeconomically less expensive performance structures while maintaining quality; and dismantling  inefficient ones, Dr. Auer said. This in turn means that the necessary funds and the decision about the type and place of expenditure is centralised in one hand, or in an common budget. "This is still not the case in many countries, and in Austria in the hospital sector in particular," said the expert. "Good governance --  another phrase for intelligent control -- can only be realised if all decision makers agree on a  health system with common planning and binding criteria and targets. It's no secret that this still appears to be a painful step, not only in Austria." 

Generally valid statements about what steps or structures are best for optimal health are not so easy. Dr. Auer: "In the EU alone, we have to deal with 27 historically developed,  and, diverse systems, each with its own advantages and disadvantages, that can not be optimised through a standard therapy. We know that in Austria as well as in Germany, France, Belgium and Switzerland, the common fee-for-service accounting system for medical practitioners is the most expensive form. Lump-sum compensation proves to be cost-effective by international standards,  and  fixed monthly salaries such as in Great Britain, Greece and partly in Spain are the most inexpensive of all. But such a comparison would only really have much significance if quality and patient satisfaction were also included in the comparison, which would be very difficult." 

Decision-making support through the "System of Health Accounts 2011"

The "System of Health Accounts 2011" (SHA 2011) of the Organisation for Economic Cooperation and Development (OECD) was presented at the EHFG as an update of the  system of health accounts (SHA 1.0). It facilitates the international comparison of cash flows in health systems. "The SHA 2011 clarifies in a simple and clear way  the direction in which money is flowing through the triangle among patients, healthcare providers and payers of health care and is thus independent of national peculiarities," said Dr. Marc Pearson, head of the OECD’s Health Department. "Sub-differentiation provides decision makers with a transparent picture, among other things, of how contributions to the system will eventually be spent." Currently the SHA 2011 only encompasses medical care in the narrowest sense.  The next update will also include prevention and long-term care and – not least – will make predictions about the evolution of health expenditure among states. 

The EHFG is the most important conference on health care policy in the EU. This year it attracted more than 600 decision-makers from 45 countries for discussions on the latest developments in health care policy.   

EHFG Press Conference “Innovative answers to demographic challenges”. 6 October 2011; EHFG Workshop 10: “Healthcare financing – the challenge of good decision making”; 7 October 2011

EHFG Press Office:

Dr. Birgit Kofler

B&K Medien- und Kommunikationsberatung 

Ph. during the Congress: +43 6432 3393 239

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