More Private Sector in Health Systems

Written statement for the WHO European Region’s high-level technical meeting on health systems in times of economic crisis, to be held on 17–18 April in Oslo, concerning the follow up the high-level ministerial meeting on this theme, held in Oslo in April 2009

Lithuanian Free Market Institute conducting research on key economic research on key economic and economic policy issues, developing conceptual reform packages and advising government institutions how to better implement the principles of individual freedom and responsibility, free market, and limited government– with the aim to empower individuals to have a voice in health systems and promote a better dialogue between private sector and government in order to achieve more efficient healthcare and sustainability in health systems regardless of the economic challenges.



The impact of the economic downturn on health systems in the European region and financial means to implement the Millennium Development Goals related to health were highly discussed by the World Health Organisation (WHO). The necessity to ensure investment in health, to increase efficiency in health systems and to reconsider financial burdens was stressed in the WHO European Region meeting in Oslo, Norway, 1-2 April 2009. We see, however, the recommendations formulated not fully solving the issues outlined.


(a)    as it was admitted in the meeting, the economic crisis increased public debts, inter alia, public finance is limited,

(b)   health systems need investment to ensure the health of individual, access to healthcare services and efficiency of healthcare systems, (WHO European Ministerial Conference on health systems: “Health Systems, Health and Wealth”, Tallinn, Estonia, June 2008),

(c)    policy and decision-makers are not able to prioritize investments or to provide the most necessary healthcare goods or services to individual (as  pointed out by the keynote speaker prof. A. Maynard at the meeting),

We call for a greater patient choice and responsibility, promotion of private sector’s participation in the healthcare system, and more targeted public spending. Accordingly:

1)      while maintaining the solidarity, equity and participation in health systems, the reasonable redistribution of public budgets out of general taxation and social insurance contributions:

–          should be clearly separated from social measures, i.e. public spending on health promotion, disease prevention or health cannot be mixed with other social policies – health is health, other issues are safeguarded by other policies and tools;

–          should not be used as a tool in the policy kit for conducting social policy – for example, freezing the price of a medical service or pharmaceutical product may seem ease social tension in the short-run, but it will definitely create more problems in the mid- to long-run;

–          should be used only for ex-ante and clearly defined healthcare services; this also means that policy makers will undertake an increase in the scope of public financed healthcare services only after a thorough actuarial analysis of the healthcare system and socio-economic environment;

–          should not be discriminatory against the health insurance payers/ (in favour of non-payers) – this means that the gathered financing through social insurance contributions will be used explicitly for goods and services for health insured people; financing for healthcare goods and services, in accordance to national law, provided to uninsured people will be obtained from general taxation.

2)      while protecting healthcare spending:

–          to encourage private voluntary payments, as the private spending on healthcare is the fairest and most efficient way for citizens to contribute to the healthcare system, governments should encourage it as much as possible, not oppose it;

–          to keep public expenditure limited to maintaining basic health services, disease prevention and health promotion activities, health care quality and patient safety supervision; governments should aim to provide universal healthcare with a limited range of publicly funded service, while at the same time promote the development of private funding of the system (e.g. out-of-pocket payments);

–          to eliminate burdens on private investment in health and healthcare; promote private sectors’ participation which has more means to assure cost-efficiency than the public sector;

3)      while ensuring access to a functioning health system and aiming for health care quality and patient safety:

–          to focus on primary health care, disease prevention;

–          to promote patient choice via investment and competition;

–          to grant a greater patient choice via patient-orientated health system; the public financing of healthcare should follow the choice of the insured person and not be used as a means by public authorities to impose restrictions on the insured individual.

In light of economic crisis we witness that governments can hardly offer solutions to meet the healthcare needs of a particular individual. The incoherence between the limited public financing and wide governmental scopes in the healthcare field leads to more unreasonable demand than practical tools to insure an individual’s access to quality healthcare. Therefore, states should enable the private sector to participate in health care systems via competition, private voluntary contributions, patient and tax-payer choice, thus, both promoting private responsibility of ones’ health and not making human health depended on the limits of the public budget.