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Health care financing in the context of social security

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In view of increasing cost pressures, this paper aims to provide guidance to national EU policy-makers faced with the challenge of reconciling financial sustainability of health systems with the safeguarding of the key underlying values of these health systems; namely universal coverage, solidarity in financing, equity, efficiency and quality of care. The paper provides an overview of the current state of health care financing in the European Union, identifying broad trends and evolutions that have occurred since the 1990s. An annex to the paper offers descriptive summaries of healthcare financing in each of the EU member states. The first part of this paper seeks to clarify the nature of the sustainability problem, laying emphasis on the distinction between economic and fiscal sustainability. The second and third parts provide analysis of a variety of current financing arrangements in terms of both their ability to fulfil health financing functions and in terms of their commitment to the "policy goals" or key values considered vital to uphold health systems as developed by the WHO. Identifying the different stages of the healthcare financing process; from the initial collection of funds to pooling to the purchasing of health services and finally coverage of the population, this paper highlights the variables affecting key values at each stage. On the basis of this analysis, it is argued in this paper that public financing of healthcare is superior to private financing on three accounts: in terms of sustainability, contribution to the value of equity and in terms of efficiency. The fourth and final part of the paper provides general policy recommendations drawn from the conclusions of the analysis.

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