Healthcare bubble played part in deterioration of public finances
A huge bubble in the health sector contributed greatly to the recording of inflated national income figures and the necessity of a bailout, according to data revealed by the System of Health Accounts.
Based on provisional figures that have not yet been ratified by the Hellenic Statistical Authority (ELSTAT), out of the 38.1 billion euros of gross domestic product growth from 2005 to 2009, 7.2 billion (19 percent) came from the increase in total health expenditure. Some 6.8 billion of that resulted from the increase in public health spending, which means that almost a fifth (18 percent) of the “miraculous” growth recorded during that period came from soaring state expenditure in the health sector.
That increase is not so much attributed to spending on pharmaceuticals, but rather to public hospital expenditure, which rocketed 79 percent, from 3.9 billion euros to 7 billion, in those four years.
The System of Health Accounts, which is set to be incorporated in Greece’s official statistics in the next few weeks after a decade adrift in the sea of bureaucracy, is based on the International Classification of Health Accounts and is designed to facilitate international comparisons and optimize monitoring of the impact of health policies.
The data it collects record the distribution of healthcare costs per funding agent (state, social security funds, households, private insurance etc) and where spending is channeled in terms of healthcare suppliers (general hospitals, health centers, private physicians) and activities (hospital stays, tests etc).
Frank Lichtenberg, professor of business at Columbia University in New York, who specializes in health economics, says that containing health expenditure requires a set of measures with a strategy and specific targets. He told Kathimerini that the phenomenon of excessive prescriptions can be drastically reduced through electronic prescriptions and the better use of information technology by hospitals, which is beginning to take place in Greece.
He said that the issue of proper healthcare must also be discussed, i.e. how the health system can offer effective treatment at the smallest possible cost in the long term. He further noted that the use of innovative drugs improves the quality of patients’ lives and therefore reduces healthcare requirements. Better quality of life leads to savings in terms of health system resources, Lichtenberg added.