HEALTH CARE SYSTEM IN GREECE

OECD PUBLIC MANAGEMENT REVIEWS: STRENGTHENING PUBLIC ADMINISTRATION REFORM IN GREECE

WORKING PAPER V5

HEALTH CARE SYSTEM IN GREECE

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TABLE OF CONTENTS

  Executive Summary.........................................................................................................................................3  Foreword .........................................................................................................................................................5  1. A Greek approach to health care..................................................................................................................6  1.1.  A consensual diagnostic of the problem ...........................................................................................8  1.1.1.  An unnecessarily complex system leads to greater inefficiency .................................................8  1.1.2.  …and greater inequality ............................................................................................................10  1.1.3.  A centralised system raises costs and decreases flexibility .......................................................11  1.1.4.  Unmanaged conflicts of interest result in a corrupt system.......................................................12  1.1.5.  Poor management results from a lack of evidence-based decision-making ..............................14  1.1.6.  ….and a medically-dominated system.......................................................................................14  1.2.  A consensual analysis of the results of reform................................................................................16  1.2.1.  2000-2005: Stop and go reform efforts .....................................................................................16  1.2.2.  Consequences of a failure to reform..........................................................................................17  1.2.2.1.  Inequalities will, at best, remain unchanged and, most likely will increase..............................17  1.2.2.2.  Inflation will continue to grow without obvious benefits..........................................................18  1.2.2.3.  Health won’t improve without a public health policy ...............................................................19  2. Some necessary elements to improve the management of the Greek health system .................................20  2.1.  Build an information system on demand, consumption and costs ..................................................20  2.1.1.  Detailed knowledge of morbidity and mortality........................................................................20  2.1.2.  Measures of drug consumption..................................................................................................20  2.1.3.  Measures of physician activity ..................................................................................................21  2.1.4.  Measures of hospital activities ..................................................................................................22  2.1.5.  Procedure and expertise to compute detailed tariffs for the above nomenclature .....................23  2.1.6.  General, managerial and costs accounting systems for hospitals ..............................................23  2.1.7.  Quality and cost control.............................................................................................................24  2.2.  Plan and train the appropriate human resources..............................................................................24  2.2.1.  Planning and controlling demography of the medical and paramedical professions.................25  2.2.2.  Public health experts, hospital managers, medico-technical experts in biology, imaging, informatics … ............................................................................................................................................26  2.3.  Set the necessary conditions for allowing public hospitals to be managed.....................................27  2.3.1.  Autonomy ..................................................................................................................................27  2.3.2.  Stable resources .........................................................................................................................28  2.4.  Informatics is not a panacea, but a help when the information system exists.................................28  2.5.  The importance of primary care......................................................................................................29  2.6.  Drug policy: favour generics and control prescription....................................................................31  3. Conclusion .................................................................................................................................................32 
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Executive Summary 1. In spite of its still good performance in absolute terms, the relative position of the Greek health care system deteriorates. Health indicators, such as life expectancy at birth, increase less rapidly than in other OECD countries, when health expenditures rise at a fast path. Besides, the discontent within the population is high and still growing. 2. The Greek system came from a superposition of reforms, rather than a progressive transformation or a universal reform which would have given its logic. This unnecessarily complex system leads to greater inefficiency: there are intricate organizations, financing mechanisms and responsibilities. The system is both fragmented and centralized, which raises costs, decreases flexibility and increases inequalities. 3. Besides, if conflicts of interest are universal, there are poorly managed in Greece and, as result, the importance of the underground economy is massive. 4. Given the intricacy of responsibilities, there are a poor management as well as a lack of evidencebased decision making mechanisms. This, in turn, produces a lack of information and tools to analyse and orient the system. 5. To this quite consensual diagnostic done by many reports and many reformers, whatever the political orientation, Greece must invest time and money in order to built a manageable system, by that we mean a system which can respond to local as well as national orientations. These are only necessary conditions. 6. I. • • • • Greece should: Collect information collect on a regular basis morbidity data in the population as well as in outpatient as well inpatient medical facilities. It must as well control the quality of its mortality statistics, know precisely the drugs prescribed and consumed by categories of physicians and patients, develop appropriate nomenclatures to measure physicians activities in hospitals, primary care centres, diagnostic facilities, laboratories, imaging and solo-practitioners, adapt a DRG system in order to measure hospital activities.

II. • •

Build managerial tools generalize a double ledger and a cost accounting system in any health institution, create an accreditation procedure for public and private hospitals as well as an independent institution in charge of implementing it,

III. •

Provide autonomy to its health care institutions and control them propose a by-law which will make hospitals independent enough to be managed,
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• • •

provide stability and clarity to hospital payment from public funds as well as social insurance funds, control the efficiency and effectiveness of each hospital, control the prescription of drugs.

IV. • •

Plan the provision of scarce resources according to medical and health needs plan human resources: doctors, nurses, public health experts, accountants, medical engineers, software specialists, plan the adaptation of medical facilities according to both public health statistics and medical technology.

7. A well coordinated effort could attain that goal in four years. The investment is low since Greece could benefit from the experience of many other OECD countries. Besides, already, Greece spends money in training a great number of medical doctors and part of the money could be reoriented.

This paper was prepared by Jean de Kervasdoué
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Foreword 8. The following report is not the first one to be written on the health care system in Greece. Other national and international experts have analysed its qualities, as well as its major shortcomings. Greek academics who have published articles and books and many actors, not only know it in detail, but have ideas on what should be done in order to improve it. We do not pretend in a few months of intensive, but limited, acquaintance to come with a magic solution. There are none, but there are several options, including, of course, a continuation of the present state of affairs. 9. Only the Greek people will find their way to a more appropriate system and, as always in other countries, it will happen step by step. Change never comes at once. It is important nonetheless to underline some necessary conditions for such an improvement. Some are basic and seems simple, such as having an accounting system in the public hospitals. Others are equally necessary, but are more political and certainly less likely in the near future. One such is a global negotiation between the Government and the medical profession on several issues such as: the number of physicians admitted in medical school, the level of physician’ income in the public as well as the private sector, the relative role of specialists and general practitioners. 10. As this is a working paper and not a formal review of the Greek health care system, we have chosen to cover a wide set of issues in rather broad terms. Some judgements may seem abrupt to the reader. Our intention is certainly not to offend any persons in charge, be it a politician, a civil servant or a health professional. Nor are we seeking to embarrass any persons who so graciously agreed to meet with the OECD team on its data collection missions to Athens. But the words we heard were not nuanced. The situation is serious, both medically and financially. And, the saddest of all, it is likely to continue since we did not trace internal political or social forces which could lead to a significant change. Why then try to modestly contribute to change a system which seems to fit to the Greeks? Well, it does not. According to a survey done by the OECD in 1999, only 18, 6% of the Greek population was satisfied with its health care system. The relative percentage gave for the same survey a score of 83, 4% in Austria, 78, 2% in France, 55, 7% in the UK, 49, 9% in Germany. 11. The Greek population considers that health care is the 2nd most important issue after unemployment. The increasing importance of private insurance is also an indicator of the lack of trust. Since 1990, the number of privately insured Greek was 50 000, in 2008 there are around 1, 5 million. 12. It therefore seems to us that the Greek population is more fatalistic than satisfied. Indeed, how to change a system which seems to fit to the political and medical elite? Major changes in social policy are rare. Kingdon 1 argues that they must be at the confluence of three streams: the problem stream (a general sense of urgency that a major problem requires action), the policies streams (the availability of acceptable and feasible solutions) and the politics stream (fuelled by certain political events such as a change of administration). There is a problem stream in Greece, but the policy and politics stream are, so far, weak.

1

Kingdon, J.W. 1984. Agendas, alternatives, and public Policies”. Boston: Little, Brown and Company.

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1. A Greek approach to health care 13. The Greek health care system is facing a crisis…

14. In order to have a global opinion of a health care system, three indicators are generally used. The first has to do with health per se, it measures life expectancy at birth, a good synthetic indicator since it is influenced by the cause of death at any age. In order to interpret it, as for any other indicators, one has to look at its absolute value, as well as its rate of growth. The second is the global spending in “health” as a percentage of GDP (Gross Domestic Product), it defines the global economical investment in medical care, rather than health. The third is the percentage of medical expenditures financed by sate or social taxes, it gives a fair idea of solidarity within a country.
82 80 78 76 74 72 72 70 68 66 64
19 60 19 70 19 85 19 80 19 87 19 88 19 86 19 90 19 89 19 91 19 92 19 93 19 95 19 94 19 96 19 97 19 98 20 00 19 99 20 01 20 02 20 03 20 05 20 04

Greece: Life expectancy at birth (Males & Females)
79,3 78,7 78,9 79,1 78,2 77,9 78,1 78 78,5 77,5 77,7 77,7 77,8 77,2 77,2 76,7 77 77,1

76 76,4 76,2 74,5

69,9

Source OECD Health Data, 2007

15. Not all of the changes can be attributed to the medical system. Fifty years ago, Greece was ranked second in the OECD in terms of life expectancy at birth, it is now in the fifteenth position. High tobacco consumption, traffic accidents and obesity help explain that evolution. The average weight of the population has dramatically increased with the change of food habits that are increasingly Americanised and a low level of physical exercise. While the Greek population is relatively young when compared with other OECD countries, it is rapidly aging which will also create new pressures for the health care system. 16. The global cost of the system, however, is escalating without obvious benefit. According to the different official sources (OECD and WHO), the amount of health expenditures in Greece should be around 10% of GDP in 2005, higher than OECD average (8,9%) for that year. But, given the importance of “gray” economy in Greece, the real figure is certainly higher than 10%. The OECD was told that it represents 29% of the total amount. If that is the case, Greece would spend 12,9% of GNP for its health and would become the second country in the word for its level of health expenditures, after the USA and before Switzerland. 17. Only considering the official figures, Greece had the highest increase in health expenditures since 1990 (almost 4% of GDP), while having the lowest growth in life expectancy at birth with the Netherlands (2 years). Despite increases in health care expenditure, Greece has actually fallen in terms of global health outcomes.

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12 10 8 6 4,7 4 2 0 5,8 5,1 5,2 5,7 5,8 5,6

Greece : Health expenditure - % GDP
9,3 7,5 6,9 6,1 7,5 7,4 7,3 7,3 7,5 9,8 9,7 10 9,6 10,1

1970 1980 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Source OECD Health Data, 2007

Figure 2: Health expenditures and life expectancy growth

Life expectancy at birth and total health expenditure - % of GDP between 1990 and 2004 7,4 6,6 5,8
Life expectancy both sexes (gain in years)

Korea

5 Finland 4,2 Spain 3,4 2,6 1,8 1 -1 0 1 2 3 4 5
Health expenditure (increase of % GDP)

New Zealand Australia France Germany / Italy United States United Kingdom Greece Netherlands Japan

Sweden Canada

Source : OECD Health data

18. In absolute term, the Greek situation demonstrates the low efficiency of the system, even, again, when one takes only into consideration the official figures.
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Figure 3 Life expectancy at birth and share of health expenditures in GDP

Life expectancy at birth and total health expenditure - % of GDP in 2004
85 Life expectancy both sexes (years) 83 81 11 79 9 77 75
Au st r ali a Ca na da Fi nl an d Fr an ce G er m an y G re ec e Sp ain Sw ni ed te dK en in gd U ni om te d St ate s Ita ly Ja pa n K or N ea eth er lan N ew d Ze s al an d

17 15 13 Health expenditure -% of GDP

7 5

U

Life expectancy

Health expenditures

Source : OECD Health data

19. Since public funding of medical expenditures represents 50% of total expenditures, Greece has the lowest level of solidarity within European countries (à verifier). 20. Despite these high levels of investment, public hospitals are bankrupt. In the last years, at least 10% of their budgets were not covered either by the State or by Social security funds. This explains why suppliers are reluctant to sell to these institutions. At the end of 2008, the press even reported that some firms withdrew their equipment because a lack of payment. 21. The health status of the Greek population, and the evidence of difficulty in the health financing system, therefore require significant management improvements to the Greek health administration in order to enhance its efficiency, effectiveness, probity, and financial sustainability. 1.1. A consensual diagnostic of the problem 1.1.1. An unnecessarily complex system leads to greater inefficiency 22. The following chart summarises the Greek medical care system, as seen from the patient point of view. (Mossalyios, health economics, 2005 – Page S153).

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Figure 1: Organisation of the Greek health system: financing flows and delivery of health services

NHS NHS Hospitals & Semi-urban and Rural Primary Care Centres & Rural Posts

Private Doctors (contracted by Health Insurance Funds)

f-f-s

IKA Primary Care Centres

* Capitations

f-f-s Per diem

Private Hospital Services Diagnostic Centres
f-f-s

Direct payments or surcharges on f-f-s paid by HIFs

PMI

Per diem Subsidies & Staff Salaries Informal Payments

IKA

OGA

OAEE

Other Funds

f-f-s

Health Insurance Funds Formal Private Payments

Contributions for group contracts

Subsidies

Taxes

Contributions

Enterprises Population
(not for OAEE, OGA, self-employed, or liberal professions)

*OGA contracts private doctors for repeat prescription Note: f-f-s refers to payment by fee-for-service

23. This intricacy reflects organizational complexity at the State level in a country where civil servants are centrally managed. This is not only the case of the legal status of civil servants but, in Greece, positions are allocated and filled centrally, staff is directly paid by the government, and local institutions, such has hospitals, have no idea of the costs of personnel, that is at least half of their annual budget. This is the main reason why cost accounting has such a difficulty to be used in Greek hospitals. The Ministry of Health and Social Solidarity is not the only public body concerned with assuring the health of Greek citizens. The Ministry of Employment and Social Protection is in charge of the major health insurance funds, while the Ministry of Defence supervises the army health care services, the Ministry of Rural Development and Food deals with the delivery of health care to the rural population, the Ministry of Mercantile Marine covers the sailors and their families, and the Ministry of Economy and Finance supervises the fund for civil servants (OPAD). The Ministry of Human Resources has responsibility for civil servants With the Ministry of Finances. The Ministry of Finance allocates budget. The Ministry of Development fixes prices for drugs and has the responsibility for public procurement. The Ministry of Interior is in charge of administrative reforms. And “Digital convergence” progresses with the help of the Ministry of Economics and the Ministry of Interior. Besides, one should understand that, contrary to most western countries, these Ministries not only organise the system, prepare new laws and decrees, but also manage day-to-day operations, not an easy task in a fragmented system which seems to greatly lack interministerial co-ordination. (See Working Paper H1) 24. Some of the present characteristics of the Greek health care system go back to the nineteenthirties. The major Social Insurance Fund, IKA was established in 1934. The other major funds go back to fifties (self employed) or the sixties (farmers). They still play a very significant role.

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25. The National Health Service was created in 1983. It added new financing mechanisms to the preexisting one. In short, public hospitals became free to the population. Health centres were created in rural areas, delivering primary health care. But, of course, this did not change the existing systems such as IKA’s. Each additional set of services was layered on the top of existing one. Only public hospitals are universally accessible, since health centres are not accessible in urban areas. In practice, there are several systems in Greece, they vary according to the location, the profession and the level of income of the potential patient. 26. After reading the literature on the state of the Greek health care system, one is struck by the high degree of consensus between different authors regarding the results of this complex system. 27. Mossialos et al. (2005) 2 summarize it: “The current system is characterized by a high degree of centralization, fragmentation of coverage, a regressive system of funding, inequitable coverage and access to health services, distortions in the allocation of resources, perverse incentives for providers, escalating costs and heavy reliance on relatively expensive inputs”. 28. The EURO HEALTH index 2007 computed by “Health Consumer Power House”, confirms it. On its major index Greece is classified in 22nd position out of 29 countries. It only precedes Bulgaria, Hungary, Lithuania, Poland and Romania, countries which spend between two to four times less than Greece. And its rank would be the lowest if Greece did not have a good score on the dimension: “Patient rights and information”.

1.1.2. …and greater inequality 29. Although seemingly offering complete health coverage for all Greeks, the chart in Figure 1 can also be misleading. Greece has a mixed public and private financing system for health care with one of the highest percentages of private financing in the OECD, after the United States. Public coverage for Greeks is limited to NHS hospitals and primary care centres in semi-urban and rural areas. For care through private hospitals and diagnostic centres, a person has to pay directly or subscribe to a private insurance which then provides a reimbursement. Only IKA members have access to IKA primary care centres (which cover roughly have of the Greek population and provides the most complete geographical coverage), and care by private doctors is only partially reimbursed by health insurance funds. 30. The system is universal in principle, but not in reality since, even within NHS hospitals, money makes a difference. In public hospitals, a patient still has to pay out of his/her pocket in order to get basic services such as non-medical nursing care during off-hours, which are provided by private nurses at the patient’s expense (or that of his/her family). In principle, a patient can access freely to an outpatient visit with a specialist in a NHS hospital, but s/he will then have to wait several weeks or months before getting his appointment. On the other hand, the same appointment, with the same doctor, in the same hospital can be obtained almost immediately with a private payment. 31. Every health care system is inequitable. In any country, life expectancy varies according to sex, social class, regions. There are also territorial differences for the supply of doctors, hospital beds, and diagnostic equipments. The political question is then the degree of inequity. It exists in Greece but is quite difficult to appraise due to the lack of good recent data.
Διαγράφηκε: ¶

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http://www.health-inequalities.eu/

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32. The number of doctors per thousand inhabitants varies between Central Greece (2,9) and Attica (6,5) as well as the number of hospital beds: 2,8 in Central Greece and 5,6 in Attica. Mortality rates differs also, but are not always linked with average income since it is high in East-Macedonia (7, 68 per thousand inhabitants) and low in Epira (6, 2), two poor regions. The number of visits to doctors varies between upper and lower social classes by 30%, but the rate of variation for certain tests is much higher: 100% for the “PSA” test which contributes to the diagnosis of prostate cancer. Type II diabetes is present in 3% of the members of the highest social class and 6,2% of the lowest. 33. These scattered data, mostly accessible through European sources 3 , demonstrates the low prioritization in Greece of public health issues. One of the absolutely necessary conditions for an effective public health policy would be detailed knowledge of the variation of health indicators, of health determinants, as well as of medical supply through time and space.

1.1.3. A centralised system raises costs and decreases flexibility 34. Managing a hospital is, everywhere, a difficult endeavour. Caring for a patient requires the coordinated advices of several medical specialists, as well as the attention of numerous other professions and occupations. There are always several processes going on simultaneously, each with its own logic and imperatives. Errors are frequent and can have severe consequences for the patient. According to the international literature, 85% of medical errors are managerial errors. Organising a planning for nurses in a ward, or an operating room, is always difficult. With the specialisation of medical care, not only does coordination become more complex, but the type of equipment required becomes more and more specialised. There exist at least 300 000 different references just for biomedical equipments and other medical goods, to which 8 000 drugs could be added. Every day the patient load evolves, and the staff is then not always adapted to the changing demand. Besides, employees have their own lives. Hospital managers, head nurses, even doctors, must adapt. In such an environment, sociologists of organisations 4 have demonstrated that, in order to perform, an organisation must be decentralised. 35. The necessity for decentralised and flexible healthcare management is therefore practically a matter of international consensus. In Greece, however, another route has been chosen: not only are organisations very centralised, but they are in the process of becoming even more centralised. The recruitment process is done at the national level. For instance, once a nurse is appointed to a hospital, if s/he wants to move, and is given permission, s/he starts to look for another institution. When s/he finds it, s/he asks for a transfer and soon leaves. Then, it takes between eighteen months to three years for her first hospital to get another nurse. When the procedure is decentralized, that delays varies with the available supply of trained nurse, but when there is no shortage as in some parts of France, this procedure takes a month; when there is a shortage the hospitals waits for the new graduation of nurse from school in June. 36. The consequences of this type of inertia are a reduced capacity to provide adequate health care services. In a hospital in the Athens area, opened two years ago with 14 operating rooms, only 5 are in use today due to the lack of personnel. 37. Procurement in Greek hospitals is already bureaucratic and quite centralised, but under the new law (35-80, valid as of 18 June 2008), it is in principle, in the process of becoming completely centralised. A State Committee for Public Procurement was created with the objective of reducing procurement costs, improving payment time (currently over three years), making uniform medical requests, transferring
4

Lawrence, P., and Lorsch, J., "Differentiation and Integration in Complex Organizations" Administrative Science Quarterly 12, (1967), 1-

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redundant materials from one hospital to another, and improving management of expired products. In most European countries there are two types of procurements: the first category has to do with usual products. The markets are passed at regular period (from one to three years) and each hospital unit (ward, department) orders within the market, they don’t have to wait but the time of delivery. For a more exceptional market such as the construction of a new building, the procedure for the market varies from three months to one year. 38. In practice, the new centralised procurement procedure will not speed things up. To the contrary, it is a very slow process that begins with the lowest level of hospital management (a medical ward for instance) to its hospital, then through the regional administrative units which will transmit the demands of the different hospitals in its region to the State Committee. The Committee might then look for some opportunities for standardisation and go back to each hospital and later organise a call for tender, wait for the answers and choose the best offer. Only then will the products be delivered to the hospital. Since the procedure has been legally defined, at each step, a company can go to court and if the State isat fault, the procedure starts all over again. In addition, the law specifies that the State Committee not have more than 40 employees to manage this very complex system (as of early-January 2009, it had a staff of 25 persons). 39. In the meantime, hospitals have to treat patients. They need supplies and use the vendors which were supplying their hospitals in 2002. We were told that currently (January 2009) “75% of the contracts were illegal”. 40. This situation will not change any time soon. Under its current set of legal constraints, the system cannot deliver the expected time and financial benefits, including the 500 million Euros of announced potential savings. The assumption that one gets a better discount if one buys a greater amount can be empirically demonstrated for an identical time schedule, but, de facto, the new procedure will take more rather than less time. And potential savings can be substantial if, and only if, the buyer has the capacity to negotiate. This is rarely the case, however, for public tenders. In comparison, even in France where the procedure is more adaptable and completely decentralised at the hospital level, procurement in public hospitals is more costly than similar transactions in private hospitals, even though they tend to be much smaller than public hospitals (and therefore offer fewer opportunities for benefits of scale). Speed of payment and the capacity to negotiate have made the difference. The OECD did not receive an official answer to its request for information on the order of magnitude in the difference in cost between public and private hospitals. It is clear, however, that the cost difference for procurement is important 5 . What counts is not the quantity of the order, but rather the reputation of the client and how fast it can pay. Under the new law, there is no direct negotiation between the user and the producer and, so far, no more money to pay the suppliers on time. Centralisation is not an efficient way to protect against corruption, not only because there are a great number of people involved at every stage of the procedure who can, at least, retard it, but also because the potential conflict of interest remains intact. Private firms have demonstrated that procurement must be decentralized at the appropriate level, that level depends on the type of product and the nature of the supplier. In order to fight corruption, procedures are never sufficient, control with potential sanctions is.

1.1.4. Unmanaged conflicts of interest result in a corrupt system 41. As indicated earlier, the “underground economy” in Greece is substantial, amounting to an estimated 29% of total “official “expenditures”. A survey done among patients of public hospitals found that 49% of them gave directly money their physician. Of this 49%, 39% of them reported that they did so
5

Between 50% to 300% according to unofficial estimates.

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willingly, 12% said: “I did what I was told” and 49% paid only after they were “pressed” to do so in order to be treated. The OECD was also told of anecdotes in which “vignettes” (i.e. the proof of purchase) were sold without the accompanying drug in order to allow illegal reimbursement claims. Unfortunately, the OECD, however, was not able to substantiate these and many other similar stories with evidence. 42. What is the most striking is not the corruption itself but the lack of control in the situation where there is a potential conflict between the patient and his physician. The basis of medical deontology, also of Greek origin, assumes that a doctor always defends his patient’s interest. In many situations, everywhere, there is a de facto potential conflict between the interest of the patient and the interest of his physician. As Bernard Shaw once said, you should not trust a fee-for-service surgeon any more than a general sold to the enemy, since the surgeon has a personal interest to cut your leg. So the problem is not the potential for conflict of interest, which is universal, but the lack of control of any real, as opposed to potential, abuses. For instance, in Greek public hospitals, doctors have a public practice in the morning and a private one in the afternoon. In the first case, it takes several weeks -- even months -- to get an appointment; in the other, less than a week. They also receive from the hospital 12% of the turnover induced by their patient. 43. Dichotomy is also a very frequent practice. A physician who refers a patient to a cardiac surgeon gets 30% of the global “allowance” paid directly by the patient or by his/her private insurance company to that surgeon (30% of 10 000 Euros). In the touristic part of the country, it has been reported that there is an organised network between hotels, taxi, doctors and private hospitals. Doctors are paid 200 Euros for a visit and hospitals up to 3 000 Euro per day for a “normal” disease. 44. Generic prescriptions in Greece represent only about 10% of the pharmaceutical market, as compared to 60% in Germany. Old, but efficient drugs are also not prescribed. The Government has not tried to explain that generics are as efficient as the original drug. They are authorised, but the interest among doctors to prescribe them is limited, despite the huge potential for cost savings since their price tends to be only 80% of the price of the original drug. Generics are constraints. Besides the false believe of being a “cheap” version of the drug, they don’t have the same shape and the same colour, they change the patient’s habits. , Finally, in Greece, new drugs which are substituted to ancient one, often as efficient, and certainly much less expensive. Innovation is not always a systematic improvement. 45. This pattern of prescriptions is the clear result of the influence of the pharmaceutical industry (which has argued that Greeks simply prefer branded drugs). In fifteen years, between 1990 and 2004, pharmaceutical expenditures in Greece have multiplied by a factor of 7 (from 413 to 2 916 million Euro)! The local production of pharmaceutical products represents 15% of the consumption and employed, in 2004, 4 951 employees, a relatively small number given the Greek population. Nevertheless, it has been powerful enough to obtain the suppression of any positive reimbursement list (law 347, May 2006). All prescription-only-medicines are reimbursed by social security, and drugs can be bought at a pharmacy without any medical prescription. Indeed, as the pharmaceutical industry puts it: “the new reimbursement system is expected to improve patient access to drugs and especially to new drugs” 6 . 46. So, in spite of a low price index (73 compared to EU average of 100), pharmaceutical expenditures continue to grow by double digits (10%) in 2006. The turnover of the industry grew by 15, 8% in 2005 and the return on equity of the four leading company that year was 36, 2% which is a dream for most companies.

6

Hellenic Association of pharmaceutical companies: “The Pharmaceutical market in Greece – Facts § Figures””, Athens 2008, page 59.

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47. For medical equipments, such as a pacemaker, a doctor will receive 15% of the total price of that device. The conflicts of interest between the population, the health insurance funds and the State on one side, and doctors and industry on the other is obvious, and unfortunately, to the advantage of the latter.

1.1.5. Poor management results from a lack of evidence-based decision-making 48. In order to improve the efficiency of service production and to reduce conflicts of interest, any health system needs to be actively managed using information about the costs of production and the quality and type of inputs. Yet in Greece, no one seems to know how much it costs to produce health goods. Hospital administrators have no control over their budget and therefore no management tools or incentive to control costs. The lack of information at the national, as well as the local, level is striking. Money is not counted in public hospitals or in primary care centres. That implies, without playing on words, that it does not count. The top health civil servants speak of a double-ledger accounting as an innovation 7 . Due to the lack of appropriate information systems, the lack of nomenclatures, it is impossible to have an idea of what is done in diagnosis centres and in hospitals. Of course, some physical indicators, such as the number of admissions or the number of visits, are measured. However, nobody knows precisely what patients are treated and at what cost. 49. This explains why, at the national level, there are no health accounts.

50. The OECD was told that a national survey on the health of the Greek population takes place every five years, but it has been unable to get access to any results or to see if the data is sufficiently precise to yield regional and social indicators. Such data is essential to elaborate any public health programme and adapt it to local situations. In addition, due to the lack of nomenclatures, there is an absolute lack of knowledge about the morbidity rates of inpatients and of outpatients. There are also no detailed descriptions of the use of either imaging or biological tests. 51. “The Minister is the law”, we were told several times. That surprising sentence implies that each Minister is free to conduct his/her policies and to hire whomever she chooses, including hospital managers and regional directors. The recent past demonstrates that, in Greece, there is no real continuity, even when the same political party is in power. Not only do policies change with each Minister, but the same Minister can also go through different phases. On average, during the last 25 years, a Minister of health stayed 18 months in charge. To complicate things further, as demonstrated earlier, the Minister of Health is only one actor among many, each with different incentives that put them at odds with finding a consensual approach to reform.

1.1.6. ….and a medically-dominated system 52. Since the first publications of Eliot Freidson’ work on the medical profession at the end of the nineteen-fifties and the development, by this important American sociologist, of the concept of “dominance” by that specific profession, it is obvious that doctors are powerful everywhere. However, the Greek case seems to be an ideal-type of that dominance. 53. More than in other countries, today in Greece, health equals medical care, in spite of the fact that, 2 500 years ago, the Greeks showed us the essential difference between these two concepts, with a separate
7

It was invented six centuries ago, by the bankers at the end of the Middle Ages.

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goddess for health, “Hygié”, and a god for medical care, “Esculape”. Today, “Hygié”, as represented by public health, is well thought of in Greece as an academic discipline, but lacks support as a political concern. At the national level, efforts to support public health reforms have been underfunded, an indicator that it is not a priority. While a recent concern for limiting tobacco consumption does show a new interest in public health issues, it has appeared one or two decades later than in most western countries. 54. Of course, the dominance of medical care on health goes with the false belief that there is always a medical solution to a health problem, a possibility to cure and a way back to a previous healthy state. The OECD was told that 100% of visits to doctors resulted in a prescription, compared with 40% in the Netherlands. 55. The Greek medical care system has a very low percentage of general practitioners (GPs) (around 20% of the medical profession), compared to other developed countries. They are mostly in rural areas, and have both a relatively low status and a low income. The number of nurses by physician is also much lower than comparable countries: 0,8 rather than 2 in France and 4 in most Anglo-Saxon countries. But the number of CT scanners is one of the highest in the world (16, 4 for one million inhabitant), even higher than in the States (13, 2)! Since the partial failure of the reform of 1983, the supply of medical has become distorted. The system favours hospitals and specialists rather than primary care and public health. 56. Over the course of its interviews, the OECD developed the impression that the overwhelming level of respect in Greece for members of the medical profession can result in insufficient checks and balances on medical authority in the interest of managing costs, controlling conflicts of interest, assuring accountability and transparency, and assessing the legitimacy of medical decisions. Doctors get their way throughout the Greek health system, and indeed it is built to their advantage. “It is the lack of confidence in doctors which leads to centralisation”, said one hospital director. 57. In 1994, two committees (one Greek and one “international”) were established to investigate the system. After their reports, further work by three subcommittees proposed: • • • “the unification of sickness funds and the decentralization of the provision (Sissouras et al., 1995) 8 , the new organization and management of health manpower (Dervenis and Polyzos, 1995) 9 , the primary and public health network, including a new GP system (Moraitis et al., 1995) 10 ” 11 .

8

Sissouras A., Karokis A., Polyzos N., Theodorou M., (1995), Unification of sickness funds and the decentralization of the provision, Athens, Ministry of Health & Pharmetrica (in Greek).

9

Dervenis C., Polyzos N., (1995), Study and Proposal on the Organization and Management of the NHS and the Development of Health Care Personnel, Athens, Ministry of Health & Pharmetrica (in Greek).

10

Moraitis E., Georgousi E., Zilides C., Theodorou M., Polyzos N., (1995), Study on the Organization and function of a Primary health care system, Athens, Ministry of Health & Pharmetrica (in Greek).
11

Nicholas Polyzos, Charalampos Economou, Christos Zilidis; “NATIONAL HEALTH POLICY IN GREECE: REGULATIONS OR REFORMS ? THE SISYPHUS MYTH” (published at European Research Studies in 2008) -

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58. These law plans were first “postponed” and then abandoned. There still has been no real unification of the social security funds. (See Working Paper V4) This has certainly contributed to the growth of social security expenditures (6, 5% in 1980, 8, 5% in 2000), since without unity the power of negotiation with physicians is limited, and the main issue are prices and volume control. . This was mainly due to the opposition of the two main doctors’ bodies. 59. • • • In 1997, a new law proposed: the creation of 13 regional public authorities, the recruitment of hospitals managers according to international standards, the implementation of “clinical” budgets (while keeping the existing accounting system).

60. If many reforms to the Greek health system have been voted, the ones that have been implemented are those that are favourable to the medical profession. The State seems to have difficulties to counterbalance the strength of the corporation which deeply penetrates the different political parties.

1.2. A consensual analysis of the results of reform 61. The history of health reform in Greece shows that while there have been clear improvements in technology and the availability of human resources, efforts to increase equity, efficiency and the quality of the system have been limited. There have been some positive developments: in 1992, for example, legislation for patient’s rights was introduced. It became easier to create new private hospitals. A new per diem tariff for hospital was created and some co-payment (drugs prescribed for outpatients, inpatient admissions) was put in place. Private provisions and private insurance developed quickly during that decade. As demonstrated in the last section, there has not been a lack of good ideas on how to reform the system, but overall, the path of health reform in Greece is full of dead-ends, discontinuity, and failure to undertake systemic reform.

1.2.1. 2000-2005: Stop and go reform efforts 62. In 2000, a new reform plan proposed “200 points of reform”. These points were not substantially different from any of those made over the two previous decade (i.e. an agenda of regionalisation, organisation of hospital management, unification of primary care, unification of the main social insurance funds, evaluation of NHS doctors…) What was new was the emphasis on public health, in particular the definition of public health targets and the reorganisation of public health services. 63. This time, the regionalisation was implemented. Hospital management changed with the recruitment of professionals, the creation of new departments (personnel training, information technology and quality insurance) as well as the definition of new financial procedures and methods of management. The unification of primary health care service, however, failed, as well as the unification of financial institutions.
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64. In 2003 a new bill on public health policy was introduced but quickly inactivated. Then in 2005, professional hospital management was abolished and reverted back to “political administration”. In the same line, the responsibility of regional authorities over hospitals was limited as well as the tool of regional health policy development. “Both the Law on Public Health Services and the Law on the optional cooperation among social insurance organisations in the field of primary health care services were inactivated. The doctors´ evaluation process stopped. None of the drafts of law prepared during the 2000-3 period was introduced to Parliament.12 ” 65. • • • • • • This brief summary demonstrates that Greece tries: to build a consistent public health policy, to decentralise, to professionalise hospital management, to control the quality of medical care, to reduce inequities, to promote a drug policy and favour generics.

66. But, what is done by one Government is undone by the next without continuity, even inside the same political party.

1.2.2.

Consequences of a failure to reform

67. The results of stop and go reform are persistent inequalities and high inflation. Many reports have been published and many sensitive ideas have been proposed. Useful laws have been voted. But there are rarely followed by reforms. Existing social forces have been strong enough to prevent change which would modify their real or perceived interests. Failure to reform, however, will lead to a series of striking consequences in Greece. 1.2.2.1. Inequalities will, at best, remain unchanged and, most likely will increase 68. The present system is inequitable in every dimension. Some of the issues that can be observed are quite universal, while others are more specific to Greece. 69. Geographical inequity: primary health centres exist only in rural areas. The density of hospitals, diagnostic centres and doctors varies tremendously between regions. 70. Institutional inequity: IKA primary care centres are only accessible to its members.

71. Financial inequity: due to the importance of private expenditure (48%), the consumption of, and the access to, medical care varies with income.
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In Polyzos and al. Page 12.

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72. Fiscal inequity: in order to get similar coverage, the financial contribution to an insurance fund varies greatly (from one to three) from one fund to the next. 73. Medical inequities: medical practices vary from one hospital to the next. The patient has no way to know if his/her physician follows the “good medical practices” recommended by learned societies. Doctors are not controlled. 74. Health inequities: health indicators vary with sex, income, education and geography, as everywhere in the world. It is likely that, in Greece, however, these inequities increase with the place of residence, though the OECD has not yet been able to find any detailed data to document this intuition. 1.2.2.2. Inflation will continue to grow without obvious benefits 75. Figure 2 shows that, if life expectancy in Greece grew by 2 years between 1990 and 2004 (one of the lowest rates of growth in the OECD), its health expenditures grew by 4% of the Greek GNP (the highest of the OECD countries). 76. There is an empirical paradox concerning health expenditures. Contrary to what one would expect, the higher the direct payment by patients, the higher the inflation! The experience of the USA, Switzerland, and Greece all confirms this relationship. In these countries, the growth of health expenditures, even when there are at a very high level (e.g. USA, Switzerland), continues without any obvious beneficial impact on the health of the population (Figure 3). Kenneth Arrow 13 noticed the particularities of markets where information and medical care is asymmetrical. The patient feels sick, but is not sure of the fact. Even with access to the Internet, s/he has a limited idea of what could improve his/her state. If s/he feels better, s/he does not know whether the disease has been effectively cured or if there has been a natural, and positive, evolution of the disease. This phenomenon is at the root of regulation in the field of medical care. Who can reduce that asymmetry? How can this be achieved? 77. This paradox has a complementary explanation. When a patient feels sick and decides to visit a doctor or goes to a hospital, s/he does not buy a good or even a service, what s/he is looking for is confidence: confidence to be well treated in every meaning of that qualifier. The patient expects to get the latest up-to-date care -- care that is adapted to his/her state of health. Due to the asymmetry of information, s/he is unable to judge the real quality of the doctor. Absent other indicators, s/he will therefore believe that the “good” doctors are the expensive one. In other words, the more one pays, the better the treatment is expected to be. The reasons for this belief are not important, but the consequences are. Since “informal” payment is the rule across the Greek health care system, even in NHS hospitals, the tariffs of the health insurance funds or the salaries in the NHS are never enough. The system produces a specific medical inflation. 78. The upshot of this analysis is that public financing (through taxes and social security) is not only more equitable, but is also more efficient since it is associated with price (tariff) control. 79. It is important to note that solidarity has nothing to do with wealth, and everything to do with recognizing the ‘other’ as one of the group. When the Count Von Bismarck created social security in Germany in 1883, when France (1945) or the United Kingdom (1948) organised a public financing mechanism for health care, the wealth of these countries was much lower than the present wealth of Greece. The question is not whether or not health expenditures occur -- they do -- but whether they are equitable, efficient and fair.
13

Kenneth Arrow, « Uncertainty and the Welfare Economics of Medical Care », American Economic Review, 1963.

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1.2.2.3. Health won’t improve without a public health policy 80. Once, not so long ago, Greece was reputed worldwide for its long life expectancy and its excellent food habits. As demonstrated in the introduction, this is becoming less and less the case. Obesity, lack of physical exercise, tobacco consumption, violent deaths (e.g. by car accidents), among other factors, explain the slow Greek improvement of its life expectancy at birth, which is even slower that for Americans. 81. In a health care system dominated by medical doctors, public health has difficulty to find its appropriate place. It took France at least twenty years, and several scandals, in order to do so, for the same reason. Furthermore, Greece lacks the statistical data to build such a policy. Regulations in that domain are inspired by EU, rather than drawn from the specific problems of the Greek population.

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2. Some necessary elements to improve the management of the Greek health system 82. To manage any system -- a farm, a factory, a hospital, a health care system -- it is necessary to collect information on what that institution produces and how it does it. Does the firm or institution reach its goals? At what cost? Are the human and capital resources put in place well utilised? It happens that, for health institutions and health systems, the answers to these questions are quite universal and can be easily adapted from other countries’ experiences.

2.1. Build an information system on demand, consumption and costs

2.1.1. Detailed knowledge of morbidity and mortality 83. What is the medical demand (a better word than medical “need” 14 ) of a given population? This is a central question when one wants to meet that demand, as every Government does. Measuring the expressed demand for care is, in principle, easy. In order to do so, one has to collect the appropriate information at the point of delivery. However, if one desires to measure the demand itself, and not only how it is expressed, as will be demonstrated below, there is only one way: organise a detailed survey of a representative sample of the population. This implies, of course, visiting their home, collecting retrospective data on their medical history and their feelings about their health status. 84. Such surveys are long and expensive. In most western countries, there are done only every five to ten years with a sample, at the national level, of roughly 5 000 inhabitants. The results, which take at least one year to be published, cannot be used as managerial tools: they are used to understand how the health of the population evolves, what are its relative trends, what is the potential demand, what are the social and regional inequalities. As noted earlier, such surveys are conducted in Greece, but absent any information on their results, the OECD cannot determine their quality of design, their rigour, or their impact on health policy. 85. On an annual basis, mortality data are used in order to know the absolute and relative cause of deaths and the evolution of life expectancy at different ages. This is a precise, easy to compute, indicator. 86. For medical care policy, rather than “health” per se, most of the time for day-to-day operations what is measured is the “expressed” demand, i.e. the reasons why a person goes to a pharmacist, a physician or a hospital and – of equal importance -- what that person buys and what treatment s/he receives.

2.1.2. Measures of drug consumption 87. It is now quite easy to know what drugs are bought and by whom. While such information does not reveal much about whether a drug has been used effectively, it is already important information. 88.
14

In order to collect such information, the following components are required:
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“Needs” are either sell defined or defined by the medical profession, arguments in a negotiation, there are potentially infinite. Many workers would “need” a helicopter go back and forth to work.

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• • • •

a national nomenclature for every drug, with its specific barcode; eventually another nomenclature for health insurance funds on the same vignette, with its own barcode; Computers in each pharmacy; Information on the patient (e.g. age, sex, place of residence, type of health insurance fund at each point of sale.

89. The OECD has understood that, in Greece, there is a barcode per drug, but that the identity of the patient is not registered at the point of sale. Of course, a “smart card” provided by the insurance fund would help to achieve that goal. IKA seems to be the first fund ready to implement such a project. A universal system, however, is necessary to collect national data, regardless of insurance fund affiliation. To achieve this, not only would smart card initiatives need to be generalised to other funds, but they would need to share a common set of standards and data definitions in order to be able to pool and share data and to permit interoperability with individual pharmacy systems and national databases.

2.1.3. Measures of physician activity 90. In the last fifty years, more and more precise measures of physicians’ activities have been proposed. The first detailed, up-to-date and modifiable nomenclatures were invented for the most technical areas of medicine: surgery, biology, imaging, radiotherapy and the like. They exist, to some extent, everywhere, but are not always revised at the proper speed, the reason being that it has an impact on physicians’ income. It is always easy to pay more for a given procedure or diagnosis, but more difficult to advocate a productivity gain and a lowering of a given index or tariff. In addition, in order to give life to such nomenclatures, a good team of technical, clinical and economic experts are required. This is the case in the United States, Germany, and France, to name a few examples. When it is appropriate, in imaging for instance, two separate nomenclatures should exist, one for measuring the clinical complexity and the other its technical counterpart. In Greece, a working group for developing such a nomenclature for medical and dental care was launched in 1996, under the responsibility of Doctor Phenikos. It worked for four years with the Greek learned societies. His team was composed of medical doctors as well as certified accountants. Starting from five foreign nomenclatures (British, French, German, Spanish and US) and some field work, he proposed an original classification adapted to Greece and then asked the representatives of each medical specialty to validate his classification as well as the relative ranking of each procedure. His final report was given to the Minister in 2000. The Minister told the chairman how highly he thought of him and of his contribution. A law was required, it never passed. As Doctor Phenikos puts it to-day, it was a fascinating and “a life threatening experience”. When the classification was finished he was threaten, his phone rang day and night; his colleagues wanted to demonstrate their discontent. Biologists, pathologists, radiologists were afraid of the application of this new and logical endeavour. Today, every hospital has its own coding system. Social security funds also have theirs, with tariffs which have not been revised for 18 years. However, in 2009, the Greek Ministry of health, asked a consulting firm to propose a complete nomenclature. The first meeting took place in Athens in marc 2009. 91. The application of the methods to purely clinical expertise is less developed. Of course, every system differentiates between a visit to a general practitioner, a specialist, a paediatrician or a psychiatrist and, consequently, has a sort of nomenclature. However few systems measures on a day to-day basis, thereason-why-a-patient-goes-to-see-a-physician. That periphrasis is necessary since a visit is not always due to a medical problem. For instance, in most western countries, when a child wants to practise a sport, s/he has to visit a doctor who decides whether s/he is fit to engage in that type of physical activity. An

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interesting experiment is going on in Creta, but has not yet been generalized. Such nomenclatures exist; for example, one is Canadian, another is Austrian (Braun’s Kazugraphy).

2.1.4. Measures of hospital activities 92. Since the innovative work of Robert Fetter at Yale University in the nineteen seventies, Diagnostic Related Groups (DRG), or DRG-like, nomenclatures have been used all over the world. That unit measures a posteriori the reason why a patient stayed in a hospital. It is both a clinical and an economical unit of measurement. Properly collected and controlled, it describes precisely the activities at the hospital, ward and physician level. With limited geographical information on each patient, that system also permits one to estimate local demand as well as the preferences of residents of a given geographical area for one hospital over another. It is a prerequisite for applying marketing techniques to hospitals. 93. So far in Greece, there is no shared and universal database on equipment, personnel, visits, rate of occupancy, medical expenditures and, most of all, activities measured by a standard universal unit of measurement such as through a DRG. Greece has just decided to develop DRGs in 2009. It should choose the best system from its point of view and for doing so, among the several DRG scales available; pay a great attention to the frequency and the quality of the process of revision. It is a long and complex political process, but one that several countries have gone through and Greece would do well to sign a partnership with the country of its choice. Whatever the system for paying a hospital: price, tariff or global budgeting, a unit for paying or computing a budget is always required. One needs to answer to the question: what is paid for? Since the early 1980, most countries have abandoned the per diem system for paying hospitals. To give more money when a patient is kept longer does not make sense when, for instance, he his hospitalised for a lens extraction. He does not want to stay longer in a bed, he wants to see well. This explains why DRG diffused all over the world. They compute the service provided to the patient. In order to compute DRG, of course an algorithm is necessary, but there are several on the market and they are quite easy to access. More importantly, at the end of a hospital stay, the physician in charge must systematically fill a simple form. It basically asks to collect data on five variables: the main diagnosis (reason why the patient was hospitalised, coded with ICD-10), the associated diagnosis (ICD-10), the surgical procedure (if any); age and sex. DRG require a nomenclature for procedures. According to the countries, the level of details varies from 700 to more than 2000. It must be a national classification, compulsory for public and private hospitals. In must be done in each hospital under the responsibility of a physician, appropriately trained. The first use of DRG is epidemiological. It allows describing precisely what is done in each hospital and, with some simple information about the patient’s address, what person goes where, for what type of disease. The second application is economical. A tariff for each DRG can be computed with a sample of Greek hospital, starting with the present average or median cost. Greece can also import the relative value of foreign DRG and price it when it has evaluated the potential consequences of the new tariffs on the budget or the income of the hospital. With an appropriate team, a complete DRG system, adapted to Greece can be conceived in 18 months. Another six months is then necessary to train physicians. The reactions to that method are strong for two main reasons. The first one is that it makes the production of every hospital and every doctor visible. They can no more pretend that their activity is complex when it is not. The second is that not only it facilitates benchmarking between hospitals in Greece and abroad, but it changes the income of most institutions. Some gain and remain silent, other loose and protest. This is why most countries choose to take a reasonably long period (from 5 to 8 years) to deploy the system. So, nomenclatures, cots accounting and DRG goes together. In France, he took three years to
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Georges Bernard Shaw said, a long time ago, that « one should trust a fee-for-service surgeon as much as general sold to the enemy. The former has a personal interest to cut your leg”.

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build, test and diffuse the system: a new nomenclature, a DRG classification and a cost accounting system. A year was necessary to recruit and train the physicians in charge of medical information. Hardware is not a problem: for the largest hospital all the information can be store on a personal computer. But, after the first enthusiasm, for political reasons, it took ten years to be partially in place, and almost twenty to be fully deployed. To-day, if there are a sufficient numbers of hospitals to compute the cost of each DRG, cost accounting methods are not yet used everywhere.

2.1.5. Procedure and expertise to compute detailed tariffs for the above nomenclature 94. Economists assume that health professionals are “rational” which consequently means that there are sensitive to the way they are paid. Hence, setting medical tariffs is a very important part of health policy since it is assumed that doctors, like other human beings, will react to economic incentives. It was reported to the OECD that the tariffs of health insurance funds have not changed since 1992. This helps to explain not only hospital deficits, but also the importance of out-of-pocket payments for patients, as well as the fact that some medical activities are not paid at their appropriate level. Medical technology evolves, productivity increases in many areas (e.g. biology, imaging, even surgery); tariffs should evolve accordingly with that trend, as well as with the general cost of living and other considerations. If setting a tariff is always a political decision, nomenclatures and relative scales can be imported. The Greek state used that method for pricing drugs. Of course there will discrepancies between that index and present tariffs, and of course the representative of the medical profession will advocate using the most favourable interpretation and will try to avoid adjusting to the mean, but this is also the price for the future of solidarity in Greece. Transparency of tariffs is a necessary condition to share a feeling of equity and accept a new method.

2.1.6. General, managerial and costs accounting systems for hospitals 95. It is striking that the Greek health system does not allow for cost accounting at the point of delivery. This fact marginalizes it from the systems of most other OECD countries and implies a limited knowledge of the purpose of expenditures at the national level, most notably how much is spent for manpower, drug, medical equipment, laundry, heating, etc. Again, when money is not counted, that means that it does not count and, consequently, that the delivery system will – and does – experience both rationing and waste. 96. There is an on-going project in Greece to impose a double-entry accounting. This is obviously a priority and should be implemented at a much faster pace. So far, only 12 out of 26 hospitals in Athens have implemented this reform. Successful implementation, however, will require appropriate training and standard computerised accounting software that has been selected, documented and used as part of the training. It would also be wise to simultaneously introduce both double-entry accounting and cost (or analytical) accounting in hospitals and health care simultaneously. The OECD was told that 4 out of 26 hospitals already had analytical accounting. This could be the case, but then, at best, it would be partial since personnel expenditures are not included. 97. In hospitals, three types of cost accounting are required in order to have proper managerial information: • cost accounting by unit of production (e.g. a meal, a kilo of laundry, an hour of operating room, a day in intensive care); 23
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• •

cost accounting by unit of management; cost accounting by DRG.

98. This should allow Greek hospitals and primary care centres to have a balance-sheet and an income statement. Within public institutions, it is necessary to explain to the tax-payer what service has been provided with their money, how and at what cost and income statements are essential to do so. Besides any institution, even a small primary care centres, use space, buy computers, want to invest and deploy new activities. Balance sheets measure years after years how its assets evolve and how they are financed. It also gives an indication of depreciation and how an institution survives through time.

2.1.7. Quality and cost control 99. In the Greek health system, budgets are a priori approved and a posteriori controlled. The control is always done by a public or private external body in less than six months after the end of the year. This time constraint is essential to take decisions on the management and the managers. Controls must have consequences. Although the bureaucratic mind believes that rules are the most efficient way to control an organisation, this never really works. Rules are easy to get around and, currently they are so numerous, that they have become contradictory and inapplicable (see also H3 paper on Improving Regulations). Of course some rules must exist, but as argued in the first section of this paper, managers must also have autonomy. 100. Given the specificity of hospitals, 56 years ago a new procedure began to be generalised in the United States; it is called hospital “accreditation”. This approach has been copied all over the world, sometimes under the title of “certification”. It can be compulsory, as in the case of France, or voluntary, as in the case of the UK. While, at its inception, accreditation tended to be process-oriented, it is becoming increasingly geared towards outcomes. The idea is simple: every four or five years, each hospital accepts to be controlled by a group of “visitors”, usually composed of a physician, a nurse and a manager. They verify if the different procedures and measures of outcomes, nationally defined and presented in a manual, are effectively applied in that hospital. They write a first report that the hospital comments on. Lines of action are suggested and the final report is published. 101. Quality control is the last dimension. The literature on the quality of medical care is exponentially increasing. “Quality” does not exist in the abstract. It is a relative, or an absolute, attribute of a good, a service, an institution or a person. So, when one speaks of the “quality of medical care”, the important word is … care. It is necessary to describe what type of care one is looking at, in order to measure its quality or qualities. This is the reason why a policy designed to improve quality starts with the appropriate tools. These are: units of measurement, medical records and a subset of information chosen for their importance. They can be specific to a disease or not specific (nosocomial infections). The search for perfection in that matter has been the excuse used by the medical profession not to be controlled. Rough estimates are better than nothing and, when published, demonstrate that quality can be improved everywhere when transparency and accountability measures are put in place.

2.2. Plan and train the appropriate human resources 102. No health care system, even the most liberal, leaves to the market the planning of health care manpower resources. Training a doctor is costly and uses a lot of public resources, it is also long since it takes roughly a decade to train a medical doctor, there is then no easy adaptation of demand and supply. Besides medical care evolves, medicine is becoming more and more specialized and a double division of 24

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labour takes place. The first one is within the medical profession which has between 50 and 100 medical specialties; the second is among the other professions and occupations working within the system. The French administration counts 184 of these inside its public hospitals and it takes public planning to forecast the nature and the approximate volume for the necessary skills which will be required to-morrow. In consequence, the Ministry of health must plan with universities and other public as well as private training institutions not only the absolute number of trainees per year but also the percentage of generalists and specialists and, within each speciality the absolute number. Many projects have failed due to the lack of appropriate human resources.

2.2.1. Planning and controlling demography of the medical and paramedical professions 103. Greece trains more medical doctors than most OECD countries. Since most of them want to become specialists, they often wait several years after their basic training in order to be accepted in a program. Hence they sometimes finish their medical school in their mid-thirties. Their professional life is therefore shorter than that of their foreign counterparts, which contributes to their desire to achieve a high annual income. This is exacerbated by the fact that general practitioners in Greece are not as highly valued as specialists. Greece, like the United States, has an unbalanced medical profession. There are too many specialists and not enough general practitioners. In addition, there are a relatively small number of nurses by physician. 104. For many of the reasons already described, Greece, like France, has chosen the most expensive way to produce care: through hospitals rather than outpatient care, through specialists rather general practitioners, through doctors rather than nurses and through diagnostic expenditures rather than clinical attention. 105. Demography is the most precise social science. Managing a demography means doing some forecasts and, most of all, negotiating between the medical profession, the health funds and the Government with one, and only one leader on the Government side. It is not enough to compute how many GPs. Greece is going to train next year; one has also to think about the incentives of medical students and their desire to work in remote areas. So far Greece obliges recent graduates from medical to work for over a year in remote areas and distant islands but this does not seems to be enough. The problem of these areas is not income but isolation. In principle, Greece would a perfect place to reduce that solitude by telemedicine. Many projects were tested, but the necessary laws in order to have a routine use of telemedicine were never passed. Another solution to prevent solitude is to allow medical doctors, nurses, physiotherapists, dentists to create a common private centre, besides the existing public one, provided that their access is open to social security patients and/or financed by public fund. 106. For ways to remedy the lack of GPs, Greece should look at Canada. By increasing substantially the level and the mode of payment of primary care doctors, many specialists choose to go back to this interesting mode of practice. Nothing needs to be imposed. Such a reform would probably be done at no cost since international data demonstrate that a payment by capitation (and fee-for-services for night and week-ends) decrease substantially the number of prescription by a far larger amount than the growth of income. This is the reason why the pharmaceutical industry has everywhere opposed, overtly or not, such a reform.

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2.2.2. Public health experts, hospital managers, medico-technical experts in biology, imaging, informatics … 107. As has already been noted, the double-division of labour inside the system implies more and more specialised training. New disciplines have emerged in the last half-century and they contribute to the elaboration and to the deployment of health policy. This is not only true of the medical profession (interventional cardiology, interventional neurology, neurocarcinology, rythmology …), but also for the managerial as well as technical functions. Hospitals need specialized managers in marketing, in finances, in human resources and cost-accounting. Hospital are the most technical building after nuclear powerplant, these facilities require civil engineers, but also software specialists, bio-physicians and logistic managers who can themselves be specialised for different types of products (drug, food, laundry) or functions (lab tests, imaging). 108. Health per se, requires not only epidemiologists but also specialists of infectious diseases, nutrition, toxicology, bio-informatics, mathematics, sociology, economics and political scientists. The Government cannot always assume that this expertise exists outside and that it can contract it out when needed. Furthermore, in order to pose the right questions to these experts and analyse their recommendations, inside expertise is needed. 109. Specific training for hospital managers began sixty years ago in most western countries. Progressively, courses in management were added to their basic legal curriculum. Hospitals are not only heavily regulated institutions, but they are also complex ones. In order to promote this type of expertise, appropriate training has to be offered, but this is just a necessary condition. Hospital managers must also have the possibility of a career inside the civil service. Their promotion must be based on merit, expertise, and skill. A system based on political appointments cannot motivate talented and dedicated individuals since they know that, in the end, their talent will not be the principal dimension taken into consideration for a promotion. So far, it seems that permanent training for hospital administrators is limited and that most administrative “learn on the job”. Since 2005, the system has become based on clientalism rather that a real public meritocracy. 110. Besides managers, hospitals need technical expertise. Bio-medical as well as civil engineers should gain importance in the hierarchy, if the institution wants to be in a good position to negotiate with private firms and contract with good internal expertise. 111. New types of jobs are also required. Hospitals need people with, not only a computer-science background, but a nursing, a medical or a managerial training. Complex software on the managerial, as well as the medical side, cannot be implemented without people able to adapt and translate the constraints of the word of medicine, to the word of informatics, two separated words. Imaging with its “PACS” is also computerised and the vendor should not be the only expert. In France, in the last two years, serious medical problems were raised by the lack of expertise in radiotherapy, and some patients were over irradiated as a consequence. At the local level, nobody was really mastering the software. They did not get, in due time, the appropriate signals. 112. Diagnostics require a greater number of biological tests. Their importance is going to grow with the importance already taken by bioinformatics. Of course, in order to perform these tests and interpret them, the expertise will remain in the medical domain, but the process between clinical wards and laboratories have to be managed. It is a problem of logistic which can have financial and medical consequences.
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2.3. Set the necessary conditions for allowing public hospitals to be managed

2.3.1. Autonomy 113. Without making any judgments, in Greece political events have an impact not only -- as is the case everywhere -- on policies, but also on managers of regional authorities as well as hospitals. In any case, managers are currently limited to day-to-day issues that, while important, preclude the strategic planning and management necessary to improve systemic performance. Most managerial decisions have been replaced by administrative rules, interpreted outside the hospital by different bureaus, in different ministries. Hospitals are, at best, administrated, not managed. Every appointment (almost) in a Greek hospital must be signed by the Minister of Health. 114. Management is not a term reserved to private firms. There is such a thing as “public” management with its training and reputed international journals. Hence, improving Greek health administration management is not an issue of privatisation of NHS hospitals, but rather that unless public management is improved, the present rules of Greek hospitals will continue to produce inequalities, bureaucracy, costs, dissatisfaction of the public and a high political price. 115. Even if the personnel are regulated by public laws, and even if hospital employees are civil servants, their management, i.e. recruitment, promotion etc., should be me made locally. One of the first decisions of a manager is to arbitrate between different types of resources in order to improve the care delivered to the patients. If personnel, the most important resource and source of expenditure, is nominated, promoted and even assigned, by a bureaucrat outside the organisation, everybody knows that not much can be done locally. Planning becomes de facto impossible and nobody tries to improve the day to day organisation. In the case of a poorly organised system, the only way to give an acceptable service is to increase the personnel. Inefficient systems are expensive and produce a high level of dissatisfaction. 116. Matters are aggravated when the Ministry lacks any basic precise data on its hospitals, in order to allocate personnel and subsidies. In principle, the same accounting system, measure of output and quality indicators etc., should apply to both public and private hospitals. It will then be possible to benchmark the two types of hospitals and develop standards for public performance. 117. What should be done is consequently the reverse of what is presently taking place. Rather than further centralization, Greek hospitals need to have a high level of autonomy on the managerial side and a strict control on costs and outputs. 118. This implies, of course, that a universal cost-accounting system is first put in place under the control of external accounting firms (or a public body) and a measure of production (DRG), with some indicators of quality. Without such an accountability framework, guided by adequate and universal data, then increasing autonomy can raise real concerns about the legitimacy of on-the-ground managerial decisions. 119. As noted earlier, DRGs are on the agenda of the Ministry of Health, but the OECD has not yet been able to get information on the precise timing for its implementation, on how it was going to be managed, or on what DRG system was going to be chosen. 120. In order to pursue in that direction, Greece could look at the United Kingdom, Spain or Portugal. In 1991, British hospitals became independent trusts -- private-non-profit entities -- owned by the NHS. That reform gave them managerial autonomy. In Spain, since 2001, the system of concession authorizes a
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private firm to manage a private hospital. In November 2002, Portuguese hospitals are autonomous. They have the same by-laws that a private firm, but 100% of the shares are state-owned.

2.3.2. Stable resources 121. Today, public hospitals in Greece have three sources of income. Its employees are paid by the State; health insurance funds pay a per diem for their members, and the State provides subsidies for operating costs other than personnel. A fourth, and growing, source is deficit spending. Finally, hospital employees, and perhaps hospitals themselves, also have a fifth source of payment: the “informal” one. 122. One cannot manage a system with a structural deficit. When efforts do not show and have no consequences, why bother? The system seems to imply that large deficits are unavoidable, but they are not. Health insurance tariffs are based on costs which go back to the early nineteen-nineties, they then don’t cover costs and then if, in principle, the State pays only the salaries, it also ends-up by paying the deficit, since social security does not contribute to its theoretical share. 123. The different solutions to this difficult political problem are well known. The quickest would be that the State increases its global allowance, but it is outside of the scope of this report to choose what would be not only the most appropriate, but also the most politically feasible level. Whatever change that does take place, it can only be incremental. Whatever the solution, the amount of money used to pay salaries should be transferred to each hospital. Hospital employees should be managed at the local level even if some careers (e.g. doctors, hospital managers …) can be managed at the national level. As noted above, these changes are predicated on information and accountability systems. 124. Budgets should be realistic and equitable, and the financing system should be based on a mix between a case-mix payment (DRG or DRG-like), completed by subsidies for some public-service type functions (e.g. emergency, training etc.). France, but also Germany, the Netherlands have such a system. Although details vary, the idea is that there are services which can be paid case by case (DRG) such as taking care of a patient who needs a hip replacement, but other functions are more global (training, emergency) and need then a global financing mechanism. 125. The same principles could be applied to private hospitals. This does not mean that their tariffs will be necessarily identical. There, also, the references are numerous, since most European countries changed, at least once, the way they finance hospitals during the last thirty years: Germany, France, U.K., or the Netherlands. Most of them are partially or totally based on a case-based system.

2.3.3. Informatics is not a panacea, but a help when the information system exists 126. The use of information technology (IT) should neither be a priority, nor a limiting factor for the evolution of the Greek health care system. Information is. Then, there are a lot of important informational prerequisite in order to be limited by information technology. At the macro level Greece has not adopted the OECD system of health accounts, because it does not have the information system capable of giving detailed data such as: the break down between the different types of care (hospitals, outpatient facilities, private practitioners …), or between public and private expenditures. We saw that there is no common nomenclature between the State, social security funds, diagnostic centres and hospitals to measure medicotechnical activities. There is no double ledger accounting in the majority of Greek hospitals. Each insurance has its own financial structure. So, even if each part is, of course, using computers for certain 28

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functions, this will never form an information system. Of course, given the magnitude of the gap to be filled Greece can simultaneously work on its information system and its informatics per se. International technical standards, such as HL7, should be imposed on software manufacturers but, again, Greece has first to invest in writing accounting instructions for both the producers and the financers of care. It has to define nomenclatures not only for medical activities but categories of institutions, type of manpower and the rest. Greece could use and, most of the time copy, what has been done in France by: La formation “Santé Protection sociale du Conseil National de l’Information Statistique” (CNIS) in France or by the National Institute for Health and Clinical excellence in the United Kingdom. 127. E-health cards, e-claims, and e-payments are all on the health reform agenda, but their efficient use implies some informational and procedural prerequisites. Where they are in place, computers will be of great help. As mentioned earlier, health insurance funds could benefit from smart cards in order to limit paper work and to improve information on costs. (See also V4 Working Paper on Social Security) 128. “Enterprise Resource Planning” (ERP) software could integrate the different financial and medical data, where they exist, thereby improving individual efficiency and contributing to a better overall picture of the management environment. 129. Computerised medical records will improve co-ordination and allow hospitals to control the quality of care, but they imply important and stable resources (3 to 4% of the hospital budget), discipline, motivation and training of, at least, 50% of hospitals employees. Such a system works is procedures exists, and if everybody is involved. When all the national and local prerequisite are fulfilled, when nomenclatures exist and procedures are defined to precisely know at anytime who is a patient of an hospital, what are the doctors who can prescribe, what is the drug list, what are the protocols, what is the bare-code system for drug, patients, equipment, when there is a hierarchy powerful enough to impose a system to every physician, it takes at least four years to share through medical records relevant information and four more years to benefit for integrating medical knowledge. The problem is that the prerequisites are long and expensive before any benefit of that collective discipline become tangible. Let us lastly underline that any investment in having good procedures and “paper” medical records will save a lot of money when time comes to computerized them.… 130. Given its geography, Greece is one of the European countries which could benefit the most from telemedicine. It requires a legal framework in order to follow the EU directive issued in January 2009. So far, the experiments have not gotten past the testing stage, this is due to the lack of governmental support and definition of an appropriated method of payment. There is an abundant literature on that technology. It can help in specific situations. However, one should not expect any basic transformation of the delivery of medical care. The Internet has already produced the fundamental shift. Not much more can be added at the State level, besides securing medical files transfer and defining specific services for the most remote part of the population.

2.4. The importance of primary care 131. Some health care systems in the world, and most notably the British, have been able to keep an important role for their general practitioners. In England, GPs are well paid, rarely work in a solo-practice, and can be accessed directly without any direct payment by the patient. Chosen by the patient, his/her GP acts as a gateway to more specialised treatments and will limit access to hospitals and prescription of drugs, tests and radiological exams to what is necessary. It is, in the United Kingdom, a prestigious occupation. There are paid mostly (65%) through capitation. There are only three ways to pay physicians; two of them are used in Greece:

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• • •

salaries (which does not mean that the salary of every doctors should be identical across regions and medical specialty); capitation (the rule in northern Europe for primary care doctors); fee for service.

132. The benefits and drawbacks of each method are well known. In order for the “fee-for-service” method to be effective, the “service” needs to be precisely defined, on the one hand, and its tariffs need to be computed by a well diffused and known method, on the other hand. Furthermore, in order to limit any unjustified prescriptions or visits, under a fee for service system doctors should be controlled in order to verify the absence of over prescription since the patient, by himself, is unable to do so. As noted earlier, the information between a patient and its doctor is asymmetric. 16 This should be most notably the case in diagnostic centres. 133. In Greece, doctors in primary care centres are paid with a salary and private practitioners are reimbursed on a fee–for-service basis. This is also the case for hospital’s doctors in their private practice in the afternoon. 134. From what the OECD has understood, primary care centres are found in rural and urban areas. They belong to the closest public hospital which does not favour their expansion. They tend to be understaffed and underfunded, and nobody knows what money they have spent since they do not have a separate budget. One interviewee stated that prevention is a “black hole”. Doctors in such facilities simply do not have the time to try to educate their patient 17 . 135. There are projects to increase the number of primary care centres in urban areas. It seems that they care mostly for the poorest part of the population, whereas IKA centres treat the middle class. 136. 80% of the primary care sector is private. When money is not a problem, if the case is serious, most Greeks take an appointment with a physician working in a hospital during his private practice. For more banal diseases, they go to see a private practitioner 18 in town and do not seem to restrict themselves from the use of diagnostic methods. Prices in private diagnostic centres or private hospitals are not controlled and are much higher than in most European countries. As has been explained earlier in this paper, this leads to a built-in inflation. In any country there is only one market for professional expertise, if income is not controlled in one part of that market, this has inflationary effect on the other part. Doctors are acting rationally according to the incentives of the system. 137. In addition to the necessary information on nomenclatures, tariffs and prices for every public and private physician in order to appraise the situation, primary care centres should be managed independently. Doctors working in these centres should receive an income comparable to their colleagues’ average. For public health reasons, private diagnostic centres should be controlled in order to avoid dangerous over prescription. For economic reasons, physicians’ fees should be capped when they work either for social security or for public hospitals. Income can be high, but inflation must be controlled. This is the case in Canada where doctors works on a fee for service basis but above a certain level, besides their taxes as a Canadian citizen, their pay a progressive tax in order to limit their incitation to prescribe more.

17 18

50% of the Greek population does not exercise. Social security will only reimburse a small part of the fees since the State price list has not been revised for 18 years (1991).

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2.5. Drug policy: favour generics and control prescription 138. There is much scope for reducing health expenditures through drug policy. Not so much through the control of pharmaceutical prices, which is already the case (even if the system of reference price can be manipulated by the manufacturers), but by influencing prescription behaviour and habits. Over the last decade many major drugs became “public”, and this will continue in the coming years. Hence Greece could favour, with more efficiency, the development of generics. There are many quite well-known methods to do so: quasi-automatic substitution by pharmacists from branded drugs to generics and, most of all, tariffs. The present regulation sets the price of generics at a 20% discount of patent-protected product, there is no reason why this should be so limited. Lastly, the Greek population could be informed that generics are not discount products and that in many domains, such as antibiotics, more is not better but worse. 139. Greece, for instance, could organise every three years an international bid (on price and quantity) among the makers of generics and choose not necessarily the lowest (there are arguments for more complex choice), but rather a limited number of producers, without limiting itself to a price rebate of 20%. 140. When there are efficient, and most of them are indeed, drugs are dangerous if used too frequently or in a non-appropriate manner. Hence, for public health reason, they should not be sold without prescription. Prescriptions themselves should be limited and controlled by the health insurance companies. 141. Besides, Greece should come back to a positive list of drugs and define what is reimbursed, at what rate, under what financial and clinical conditions. These definitions should be permanently revised. 142. Because of the limited economic importance of the Greek pharmaceutical industry, a drug policy should be relatively simple to elaborate. Greece should not have to balance between favouring its national industry and trying to limit its health expenditures. As everywhere, the pharmaceutical industry tries to influence doctor’s behaviour. Investing in marketing pays. This can be controlled by regulations such as taxes on any advertising to doctors. Besides in many countries a doctor cannot accept any gift, trip or payment from the pharmaceutical industry unless it is strictly linked with medical information. Although it is very important that doctors keep at a given point in time the freedom to prescribe, the scope of that prescription can be limited for a specialty and, most of all, these prescriptions can be controlled a posteriori.

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3. Conclusion 143. The sequencing of the required reforms is clear. Some are already launched, sometimes for the second or third time, but they will succeed this time, if everybody feels that this a stone to a house which has its design, its budget and its construction schedule. In many areas Greece does not have to start from scratch, but uses what has been done in several other European countries. It could then benefit, with the OECD expertise, of the practical knowledge of a limited number of foreign experts, teamed with their Greek counterpart. They could produce a public report every six months. 144. In three years, Greece could have its own nomenclatures including DRG, information systems for health insurance funds, hospitals as well as its own body of health statistics and health accounts. 2012 could be a target. 145. Simultaneously Greece should launch a planning for its health care resources. This is of course concerns the medical and paramedical professions but also the specialized jobs in hospitals management, health care technology and medical informatics. 146. Then Greece has to search for a way of increasing the autonomy of its medical institutions. With a team working on a by-law of the future “autonomous” (the degree of autonomy can vary) hospitals, another team could define its managerial tools on the financial as well as the medical side. There, also, is a very abundant literature and a lot of applied expertise in North America and western European countries. Again a hospital is a complex institution. No rules can replace day-to-day decisions of tenth of managers, nurses and physician. Administrate, define abstract universal rules in these conditions leads to costs and frustrations. Of course, autonomy can only be conceived if there are strong mechanism of evaluation and control, including quality control through accreditation and certification procedures. 147. Improving the supply of medical care needs to be tied with the overall objectives of the health system. This implies that Greece develop a strong public health expertise at the regional level in order to better answer to the specific needs of each region. 148. Of course, here and there ICT will contribute to this construction, but that technology is not a magic stick and it cannot create an information system, so far there it has been a solution in search of answers. Some expensive experiments were launched but went nowhere. Greece needs to orient, step by step, its system toward performance and accountability, and for that go through austere, but necessary reforms.

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Greece : GDP - /capita, US $ PPP
32000 28000 24000 20000 16000 12000 8000 4000 0

32000 28000 24000 20000 16000 12000 8000 4000 0

19 60 19 70 19 80 19 81 19 82 19 83 19 84 19 85 19 86 19 87 19 88 19 89 19 90 19 91 19 92 19 93 19 94 19 95 19 96 19 97 19 98 19 99 20 00 20 01 20 02 20 03 20 04 20 05
Source OECD Health Data, 2007

19 60 19 70 19 80 19 81 19 82 19 83 19 84 19 85 19 86 19 87 19 88 19 89 19 90 19 91 19 92 19 93 19 94 19 95 19 96 19 97 19 98 19 99 20 00 20 01 20 02 20 03 20 04 20 05
Source OECD Health Data, 2007

Greece : GDP - /capita, US $ PPP

Μορφοποιήθηκε: Θέση: Οριζόντια: Στο κέντρο, Σε σχέση με: Περιθώριο, Κατακόρυφα: 0 στ., Σε σχέση με: Παράγραφος, Αναδίπλωση γύρω από

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