Centralization and Decentralization in the European Union Health System

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Centralization and Decentralization in the
European Union Health System

• Juha Kinnunen, Professor

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Outline

• Introduction
• Challenges for the reforms in European health
  care systems
• De- and re-centralization processes
• Other major trends in reforms
• Some typically Finnish characteristics
• Conclusions

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University of Kuopio

• Total number of students 6000
• 1300 postgraduate students
• 5000 in basic degree programs
• Over 40 degree programs, major subjects or
  specialization lines
• Annually
• 1000 new students,
• 400 basic degrees,
• 140 lower degrees,
• 80 doctoral degrees and
• over 100 professional postgraduate degrees
• 8 graduate schools
• Employer of about 1500 individuals, including
  108 professors and 200 other teachers
• Total funding 2004 about 96 million , external
  funding almost 50

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• University of Kuopio
• recognized internationally as a centre of
  excellence in research
• a major seat of learning in Finnish academia
• promoter of entrepreneurship in the new
  technologies
• attractive study and work environment for a
  community of 10,000 students and faculty staff

Strengthening the skill expertise base
Promoting regional welfare
Biomedical environmental engineering
Biotechnology Biosciences Molecular medicine
Information technology business management
Health, environment, well-being
The key to prosperity lies in exploiting our
skills and innovations
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Challenges of managing health sectors in Europe

• Aging population and increased demands
• Economic growth, but fiscal scarcity
• New technology and unrealistic expectations
• Equity pressures (all citizens are insured and
  eligible)
• Recruitment challenges of Human Resources
• Structural reforms (including de-centralization)
• HIAP Health in All Policies (Finland EU
  Presidency 2006)

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Different welfare models behind the European
health policies

• The Liberal Welfare State UK (US, Canada,
  Australia)
• The Corporatist Welfare State Austria, France,
  Germany,
• Mediterranean Italy, Spain, Greek (Catholic
  family tradition)
• The Scandinavian Welfare State Sweden, Norway,
  Denmark, Finland
• Transition states Former Soviet countries
  Poland, Baltic state, Check Republic

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State and municipalities
A
Semi-public providers
Third sector, association
B
C
Family and individuals
Enterprises
Figure 1 Balancing of stakeholders in health
care services
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European Observatory on Health Systems and
Policies Series Decentralization in health care
Strategies and outcomes Edited by Richard B.
Saltman Vaida Bankauskaite Karsten Vrangbæk Open
University Press/McGraw-Hill 2006 (forthcoming,
600 pp.) Chapter 10 Effects of
decentralization on clinical dimensions of health
systems Juha Kinnunen, Kirill Danishevski, Raisa
B. Deber and Theodore H. Tulchinsky
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About formal definitions
"The logic of decentralization is grounded in an
intrinsically powerful idea. It is, simply
stated, that smaller organizations, properly
structured and steered, are inherently more
agile and accountable than are larger
organizations.
"The transfer of formal responsibility and power
to make decisions regarding the management,
production, distribution and/or financing of
health services, usually from a smaller to a
larger number of geographically or
organizationally separate actors".
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Structural and process dimensions of
decentralization Rondinelli (1983)
Public management delegation
Devolution
Management delegation
Deconcen-tration
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Key variables, parameters and factors
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Levels and respective responsibilities in health
care in selected countries in Europe and Canada
(2004)

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i Hospitals are run by Regional Health
enterprises.
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Different movement at the moment

• Italy, Spain are in strong decentralization
  process since 1990's
• Germany, France also but changes are moderate
• Scandinavian countries decentralized their
  service structure in 1990's and are now
  centralizing again
• Norway from municipalities to national
• Others to larger regions
• Some of the former Soviet countries apply (hard
  line) privatization

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The other major reforms of health care systems in
Europe since 1990's

• The changing roles of state and markets
• Decentralisation to lower levels in the public
  sector and a shift toward the private sector
• also reverse movement
• Greater choices for patients and empowered
  citizens
• A new evolving role for community
• Heavy pressure towards improved management
  methods

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Continue (2)

• Priority-setting mechanisms for better rationing
  and resource allocation
• Changing service structures Reduction of
  institutional services and emphasis ambulatory
  services and day surgery
• A split between purchaser and provider
• Integration of social and health services
• especially in elderly care
• Quality assurance, monitoring approach

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How successful the EU member states have been?
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The Role of EU

• Principle of subsidiary
• Health (and social) services are prior
  responsibility of each member state
• Directives of competitiveness have indirect
  influnce
• General public health policies
• drugs and pharmaceutical products
• food safety
• health risks smoking and alcohol policy

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Finnish characteristics in Health Care Services

• Funded by taxation, about 75 per cent
• Decentralized provision 432 municipalities, 20
  hospital districts
• Private sectors' role increasing in ambulatory
  services and long term care
• Professions are salaried
• Clients have limited freedom of choice

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Means to response to the future challenges
(Parliamentary committee of Futures 2006)

• Major reforms of the service structure
• Widening target population
• Centralization of services
• specialized services
• laboratory services
• radiology
• Provider - Purchaser split
• opens role also for welfare entrepreneurship

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Means to response to the future challenges (2)

• Increasing responsibility of individual on
  his/her own health
• Community based structures between family and
  professional services
• Virtual contacts via information technology
  applications partly replace the direct visits
• The implementation of the new technology (soft or
  hard) means remarkable changes in work processes,
  organizing and managing
• Equity concerns

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Information age health services
Figure 1 Evolution of health services and the
role of information technology (Eysenbach 2000)
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Conclusions related to Lecture Objectives

• The reforms are needed to achieve efficiently the
  Health Policy targets in Europe
• Political and administrative interest is strong
  because of the equal access
• private business and competition approach is
  limited
• Mixture of de-re-centralization processes appears
• Huge impact Representing one of the largest
  service industries in developed countries
  (OMahony and van Ark, 2003)
• Health services are local phenomena,
• not transferred to China or India
• We Europeans can learn a lot positive and
  negative about US health system

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Thank you !