1402 - The demise of health systems in Europe resembles the one in Africa

To cope with the crisis which has deeply affected the European Union, the EU has subjected its member states to massive budget cuts. Combined with other measures, this has badly affected health and social security systems which are undergoing great changes and fierce privatisation in both northern and southern Europe. These precarious European health systems, unthinkable a few years ago, followed the trend in developing countries where policies imposed internationally have greatly weakened the public health services. Health is a concern for everyone as much in developing countries as in the Western world to us. Our converging interests lead us to unite our efforts to obtain quality public health services everywhere, so as to protect the health of all.


 The countries of the South have acted as guinea pigs


The commodification of health and social security systems began in the mid-eighties. The International Monetary Fund (IMF), the World Bank (WB) and western powers imposed on countries of the South structural adjustment programmes (SAPs) that prioritised the repayment of their sovereign debt over defending the peoples’ rights to health. Systematically, the neoliberal policies imposed by the IMF, the WB and the World Trade Organisation (WTO) led to the privatisation of health and social security. This led to the dismantling of health services and appalling health conditions in sub-Saharan Africa and South America. Moreover, where democratically elected governments wanted to put in place universal social security, destabilization manoeuvres took place and pressure was applied. The SAPs and, later, trade agreements and investment, were used to impose these policies of liberalization and privatization that were to destroy public services in developing countries.


Europe affected by health service privatisation


After World War 2, social security arrangements in Europe played a fundamental role in the welfare of the people.  After the recent financial crisis, the EU responded with austerity and structural adjustments and these were bad for the economies. Cutting funding to health systems has resulted in their deterioration and that of all state social security mechanisms.


Today, health which has traditionally be a common good for the whole population, has become, even in Europe, subject to competitive market forces. Since the beginning of the financial crisis in the EU, strong private bids have been supplanting non-commercial public services. For example, in 2013, the German company Fresenius bought 43 hospitals from Rhön-Klinikum Ltd. and is so becoming the uncontested European leader in profit-making clinics with 175,000 employees. In Germany, between 1995 and 2010 the proportion of private hospitals has doubled to 33%, while the overall number of hospitals has gone down by 11%[1].  The French Korian group which specialises in profit-making retirement homes merged in September 2013 with the Medica group to become the European leader of 'white gold'. The German and French multinationals are looking for even bigger profits.  Wherever you look, public schemes are losing out to private ones.  However, there is scientific and economic proof that non-commercial, inclusive models are much more efficient than private schemes.  It can be seen that the social welfare system can work as, thanks to this model, life expectancy in the EU is among the highest in the world and the much envied level of health costs relatively little.  Liberal economic dogma cannot be applied to health because health is not a commodity!


State under-investment is leading to financial globalisation


The early nineties saw a move in public policies towards reducing public finances, taxes and contributions to social security. Education, prevention of illness and action on factors affecting health were the first to suffer. This was the beginning of under-investment and insufficient, poor quality health care. The rising age profile of the population brings increasing demands on health systems and the public services are unable to offer an adequate response. Germany, the Netherlands and Switzerland introduced a health insurance system offering a free choice of insurers.  In addition, the closure of local facilities and mergers meant service-users had to travel longer distances while paying significantly more. The long waiting lists indicate the inadequacy of the public system.


The lack of public funding has led many managers, even of public institutions, to outsource a number of activities, such as logistics (cooking, cleaning, laundry ...) and diagnostic activities (radiology, laboratory ...). Passing the responsibility to patients impels them to take out private insurance. However, commercial health cover does not include all the benefits covered by social security. In some countries, traders can even access public funding which varies according to the disease. This leads them to select the most profitable diseases and encourages business groups and health multinationals to specialise in the more lucrative areas, leaving public operators with the less ‘profitable’ illnesses and patients.


Marketing is making great strides.


The Treaty of Maastricht (1992) reaffirms free competition and movement. Following the liberalisation of services in 2006, Europe has attempted to define services of general interest that could be excluded from free competition and free installation, but health care was not among them. Taking advantage of this framework, for-profit operators considered subsidies as 'state aid', thus distorting free competition. They have filed lawsuits against states, demanding a greater share of the market. They want to capture the huge financial windfall offered by social welfare and health services, which still are mostly state funded or come within social security schemes.


Europe has imposed on everyone, but especially those most affected by the crisis, solutions centred on market-oriented services. But more serious is the proposal of the Commission to have 'social impact bonds' to resolve the problem of financing. Under this system, a private fund invests in a social project and if certain results are achieved, the state pays a return on the investment to the private fund. This would allow financial players to grab money that should be used to meet the needs of the population.


Society’s response


For years, groups and networks have joined the global fight against privatization, commercialization of health and welfare and the dismantling of these systems in developing countries. In recent years these networks have expanded to incorporate the fight against the commodification of health systems and social security in Europe. This has set in motion significant pressure groups, especially in the south of the continent where the crisis is felt more strongly. A popular rally for health justice in Madrid, known as the "White Tide", managed to stop the privatization process. A battle has been won but the war against privatization continues.


Begoña Iñarra


Executive Secretary AEFJN


Taken from « La santé, la protection sociale ne sont pas à vendre » 

[1] According to the federal office of statistics, Destatis.

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