Elsevier

Health Policy

Volume 67, Issue 3, March 2004, Pages 281-291
Health Policy

Financing and planning of public and private not-for-profit hospitals in the European Union

https://doi.org/10.1016/j.healthpol.2003.07.003 Get rights and content

Abstract

While much has been written about health care financing in Europe in recent years, discussion has almost entirely focused on revenue. In contrast, there has been remarkably little written on financing of capital investment in European health care systems. Yet major changes are underway in several countries, in particular involving new forms of public–private partnerships (PPP). At the same time, there is growing recognition of the way in which the inherited structure of the health care delivery system constrains the system’s ability to adapt to changing circumstances. This paper reports the results of a survey undertaken among key informants in the member states of the European Union to begin to ascertain existing practices and future plans in relation to hospital planning and financing amongst public and private not-for-profit hospitals. The locus of hospital planning decisions reflect the constitutional framework of the country involved, and thus the emphasis on national or local plans. There has been an expansion of private sector involvement, with four basic models identified: private loans direct to the hospital; private loans to a regional health body; a PPP where the private sector’s role is to build, design and operate the non-clinical functions of the hospital; and, finally, a PPP, where the private sector’s involvement also includes management of the clinical functions of the hospital. It is too early to say whether these approaches will be more successful than the models they are replacing.

Introduction

The pace of change in the health care environment continues to accelerate. Health care systems are confronted by evolving patterns of disease, ageing populations, and growing public expectations. The scope for health care intervention continues to expand, with new pharmaceuticals and technology making it possible to cure, or at least prolong life, for those with previously untreatable conditions. The evolving context in which health services operate, including changes in medical education and research, and the resources available to them, whether financial, human or otherwise, provide many new opportunities and constraints [1].

Within the health care system the hospital is especially vulnerable to these changes, an important consideration as hospitals are so resource intensive, taking typically 45–60% of health care budgets. Hospitals require complex, long-term capital investment. They employ professionals whose high levels of skill have been acquired through many years of training. Once created, hospitals are difficult to change, whether in terms of geography, such as where they are and what configuration they have; culturally, as they often face entrenched professional attitudes; or in their scope, such as what conditions are treated in them and what outside, for example, in primary care. But change they must as the world changes around them [2].

Although there are some exceptions, such as the regional hospital plans in France [3] and more local initiatives elsewhere, hospital systems in many countries have failed to adapt to these changing circumstances. There is growing recognition of the need for continuing investment, first to prevent the frequent decline in the quality of the infrastructure, when attractive new investments, in particular of high technology equipment, take priority over the basic infrastructure in which they are accommodated. Second, the long-established process of adapting existing facilities, by which some European hospitals still operate in late medieval buildings, is increasingly seen as both inappropriate and often more expensive in the long run than building new ones.

There is now a great deal of information available on the diversity of systems of funding and delivering health care in Europe and governments have explicitly recognised the value of shared learning and exchange of best practice. However, despite the importance of large-scale capital investment, there is remarkably little systematically collected evidence on the approaches taken in different countries. This is exemplified by the widespread adoption of common taxonomies, such as social insurance or taxation, that are based on revenue funding, while a taxonomy based on capital funding would create a quite different set of divisions within Europe.

This paper begins to remedy this situation, describing the process by which each country in the European Union invests in its hospital sector. Specifically, it surveys the range of methods employed to finance major capital investments in non-profit-making institutions and explores the range of approaches to hospital planning that have been adopted. Exchanging this knowledge across Europe, including those countries that have undergone political and economic transition in the 1990s, will assist national policy makers to understand the range of options open to them. It is the first stage of a larger project that is examining in more detail the strengths and weaknesses of particular approaches by means of a series of country case studies.

Section snippets

Historical trends

The pace of investment in hospital infrastructure has tended to reflect the degree of economic prosperity in a country. Throughout Europe, the 1950s and 1960s were the golden age of the hospital. A sustained period of economic growth, before the 1974 OPEC oil crisis, combined with the huge growth in the scope of in-patient treatments, saw an unprecedented investment in hospital infrastructure. Services housed in pre-1900 buildings or networks of small cottage hospitals and private physicians

Methods

A survey of key informants was undertaken to elucidate certain aspects of hospital planning in each country of the European Union, with the exception of Luxembourg. Respondents were selected from individuals identified in the course of a recent major study of hospitals in Europe, undertaken by the European Observatory on Health Care Systems, supplemented where necessary by recommendations by national authorities on health policy. The criteria for selection were a practical knowledge of the

Results

Questionnaires were received from 13 countries. No questionnaire was returned from Denmark, although information was obtained from other sources. The single questionnaire sent to the UK was returned with information relating to England only although we know that broadly the same systems for planning and financing exist in Wales, Scotland and Northern Ireland.

Discussion

This study begins to address a previously under-researched element of comparative analysis of health care systems in Europe, capital financing. It highlights the diversity that exists between otherwise comparable systems but also identifies an expansion of public–private partnerships as means of capital development in the hospital sector across Europe, particularly in health systems that are predominantly funded from general taxation. Four basic models for private sector involvement were

Acknowledgements

We are grateful to the country informants for their efforts in collecting information: Rita Baeten (Belgium); Manuel Delgado (Portugal); Pascal Garel (France); Walter Ricciardi (Italy); Rosemary Avort (The Netherlands); Sylvia Wyatt (England); Paloma Alonso Cuesta (Spain); Martti Kekomäki (Finland); Miriam Wiley (Ireland); Charalambos Economou (Greece); Jesper Stenberg (Sweden); Eva Krczal (Austria), and Helmut Brand and Reinhard Busse (Germany).

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