Bailouts, austerity and the erosion of health coverage in Southern Europe and Ireland

Since 2008, the onset of economic crises in Europe has resulted in profound social dislocations and steep rises in unemployment. At the same time, austerity measures and structural reforms have crippled the capacity of welfare states to effectively respond to heightened demands for their services. Yet, while these phenomena can be observed across Europe, five countries stand out: Greece, Ireland, Portugal and Cyprus were bailed out by the international community—comprising European institutions and the International Monetary Fund—in exchange for wide-ranging policy reforms, and Spain opted into a period of austerity. Here, I document how these policy responses affected health coverage and examine challenges ahead. Among the countries in crisis, Greece experienced the deepest economic downturn, with unemployment rising from 7.8% in 2008 to 27.5% in 2013. As health insurance there is tied to employment status, by 2014 >23% of the population (2.5 million) became uninsured. 1 In addition, health budget cuts and revenue-raising measures (increased co-payments and user fees) introduced as part of the country’s bailout furthered the inability to access or afford health services. 2 In response to popular pressure, the government introduced two schemes to increase access, but both failed to live up their promise. First, a new health voucher scheme, introduced in 2013, was intended to provide a limited bundle of services to 230 000 people, yet, in the first 17 months of the programme, only up to 23 000 vouchers had been granted. 1 Second, promising legislative changes in June 2014 enabled access to primary and in-hospital health services and pharmaceutical care for the uninsured. However, the terms of access were unfavourable: high co-payments for medicines form a barrier for the uninsured, rigid bureaucratic means-testing procedures were put in place to establish eligibility, and the reforms were insufficiently advertised or operationalized for hospitals. 1 Ireland also implemented steep health sector cuts in 2012 as part of the fiscal adjustment programme agreed on with its international creditors, and introduced a rise in user fees. 3 The onset of austerity marked a reversal in the extent of coverage, and tightened eligibility criteria for issuing ‘medical cards’—a means-tested programme for the poor—resulted in the decline of people covered under this programme. 4 Similarly, Portugal doubled user charges for health services and instituted stricter means-testing, as part of the country’s commitments to its creditors. Finally, Cyprus’ bailout also stipulated health sector reforms, including increases in user fees and a tightening of eligibility criteria for access to free public healthcare. 5 Beyond the countries receiving financial assistance from international creditors, Spain introduced a range of health sector reforms that have affected health coverage. A 2012 Royal Decree eroded the principle of universal health coverage, primarily affecting migrants’ access to health services. 6 At the same time, the country introduced a range of new co-payments for medicines, medical devices and transportation services that can form a barrier to receiving appropriate treatment. The erosion of health coverage in a time of economic crisis across hard-hit countries is worrying both in terms of population health and for the future of the welfare state. In relation to the former, the health of vulnerable groups is particularly at risk, as recent reforms have disproportionately affected these groups in a number of ways: tightening eligibility criteria, increasing user fees and co-payments, closing down health facilities or discontinuing targeted interventions. In relation to social protection, the universal nature of health systems has been consistently undermined, while demands for such publicly provided services are heightened. Sharp public health spending reductions and structural reforms changing entitlements or the affordability of care have disproportionately affected those at the bottom end of the income distribution. 2 The resulting escalation of unmet medical needs highlighted by Aaron Reeves and colleagues in the accompanying paper, raises pressing questions about the evolution of population health and—in particular—the future of health inequalities. Looking forward, a combination of three elements will determine the future of health systems in Europe: strong political commitment to maintain efficient and universal health coverage, improved economic performance that will generate employment and invigorate public finances, and an EU-level commitment to policies that promote health. Confronting past policy mistakes and redoubling efforts to undo damage wrought by across-the-board austerity and poorly targeted reforms are essential components of a move away from the current status quo. In this context, the 2012 reforms in Italy extending access to health services to migrants in the midst of economic crisis, and the stated priorities of the newly elected Greek government to address the catastrophic social consequences of the crisis are positive developments. Such initiatives need to be carried forward and supported by a wide range of actors—including the European Commission and the World Health Organization—so as to re-ground European health systems to the principle of universal health coverage. AK acknowledges financial support from the Greek State Scholarships Foundation (IKY) and the Onassis Foundation. Conflicts of interest : None declared.