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Friday, 11 July 2008 12:12 GMT
Italy's health budget at risk despite lower drugs spending - report
MILAN, July 11 (APM) - Italy's health budget is at risk despite a significant reduction in the amount spent on drugs, according to a report by the ratings agency Fitch.
The report warned that if it is to balance its healthcare accounts Italy will need to cut health spending by at least 6 billion euros over the next four years.
Healthcare expenditure grew at a slower rate of 2.9% in 2007 to reach 102.5 billion euros.
"Accounting adjustments apart, the slowdown is mainly due to a significant decrease in pharmaceutical expenditure (down 7%), which has partly counterbalanced the increase of goods and services costs (up 9.4%)," the Fitch analysts said.
The report cited price cuts ordered by medicines agency AIFA, generics awareness campaigns, direct distribution of drugs and, in some regions, the introduction of co-payments as the main reasons for the steep drop in pharma spending last year.
The accounting adjustments referred to included the postponing of 1.5 billion euros costs resulting from a national contract for healthcare personnel which was agreed by the outgoing government.
OUTLOOK BLEAK
Fitch said that the outlook for Italy's healthcare system is likely to be beset by problems. Forecast expenditure growth of about 4% between 2008-2009 will be inflated by the extra costs and other postponed charges, the agency warned.
As a result, expenditure is expected to exceed the 3.2% annual increase in health funding which was agreed between regions and the health ministry for the period 2007-2009.
"Meeting its health budgets targets will depend on the government finding 6 billion euros of spending cuts over the next four years and the introduction of a federal system whereby regional health administrations are made fully accountable for any deficits," the analysts wrote in their report.
Until now regions have had access to state funding to help cover health spending deficits. According to the federal fiscal plan they will now be solely responsible for covering their deficits through the introduction of charges if necessary.
"However, how and when these measures will be carried out, especially without impinging upon the quality of and quantity of services currently provided - whose expenditure grows faster than GDP - has yet to be decided, casting doubts on the achievement of balanced healthcare accounts over the medium term," the analysts warned.
OPPOSITION TO CUTS
The government's task has been made more difficult by a fierce reaction to the prospect that 6 billion euros might be cut from the health spending in coming years.
The regions, doctors, opposition politicians and even health system managers are part of "an offensive" against the cuts, the financial daily Il Sole 24 Ore reported on Thursday.
The measures being discussed by ministers include job and pay cuts for healthcare personnel, a reduction in the number of hospital beds, and the introduction of charges in regions which overspend.
Opposition has also built against one of the government's flagship healthcare promises - the elimination of a 10 euro charge on specialist medical service introduced by the previous administration headed by Romano Prodi.
On the surface it seems ending the charge would benefit patients. But opponents say the government intends to transfer the cost of ending the charge onto regions where many budgets are already creaking at the seams.
On Thursday, Enrico Letta, the opposition's spokesman on welfare, described the health spending measures as an unprecedented blow to public health which would put at risk the principle of universal access and the financial viability of the whole system.
MINISTER BLAMES PREVIOUS GOVERNMENT
The welfare minister, Maurizio Sacconi, whose extensive portfolio includes the health ministry, said the new administration was seeking to resolve the problems it had inherited from the previous government.
These included a deeply divided health system with virtuous regions in the north and badly-managed regions in the south, he added.
"In a global (financial) context of exceptional seriousness we have adopted measures to cut current account spending which respects the financial resources available in the preceding government's programme for 2009 and we have increased national health service funding by 5 billion euros for the two following years," he said in a statement on Thursday.
He said Letta was unrealistic because he appeared to be suggesting that there should be more public spending which would increase public debt without improving services.
Sacconi added that any decision about the removal of the 10 euros specialist charge would be discussed with the regions.
rg/rw
[12134] 11/07/2008 12:12 GMT - GENERAL
The report warned that if it is to balance its healthcare accounts Italy will need to cut health spending by at least 6 billion euros over the next four years.
Healthcare expenditure grew at a slower rate of 2.9% in 2007 to reach 102.5 billion euros.
"Accounting adjustments apart, the slowdown is mainly due to a significant decrease in pharmaceutical expenditure (down 7%), which has partly counterbalanced the increase of goods and services costs (up 9.4%)," the Fitch analysts said.
The report cited price cuts ordered by medicines agency AIFA, generics awareness campaigns, direct distribution of drugs and, in some regions, the introduction of co-payments as the main reasons for the steep drop in pharma spending last year.
The accounting adjustments referred to included the postponing of 1.5 billion euros costs resulting from a national contract for healthcare personnel which was agreed by the outgoing government.
OUTLOOK BLEAK
Fitch said that the outlook for Italy's healthcare system is likely to be beset by problems. Forecast expenditure growth of about 4% between 2008-2009 will be inflated by the extra costs and other postponed charges, the agency warned.
As a result, expenditure is expected to exceed the 3.2% annual increase in health funding which was agreed between regions and the health ministry for the period 2007-2009.
"Meeting its health budgets targets will depend on the government finding 6 billion euros of spending cuts over the next four years and the introduction of a federal system whereby regional health administrations are made fully accountable for any deficits," the analysts wrote in their report.
Until now regions have had access to state funding to help cover health spending deficits. According to the federal fiscal plan they will now be solely responsible for covering their deficits through the introduction of charges if necessary.
"However, how and when these measures will be carried out, especially without impinging upon the quality of and quantity of services currently provided - whose expenditure grows faster than GDP - has yet to be decided, casting doubts on the achievement of balanced healthcare accounts over the medium term," the analysts warned.
OPPOSITION TO CUTS
The government's task has been made more difficult by a fierce reaction to the prospect that 6 billion euros might be cut from the health spending in coming years.
The regions, doctors, opposition politicians and even health system managers are part of "an offensive" against the cuts, the financial daily Il Sole 24 Ore reported on Thursday.
The measures being discussed by ministers include job and pay cuts for healthcare personnel, a reduction in the number of hospital beds, and the introduction of charges in regions which overspend.
Opposition has also built against one of the government's flagship healthcare promises - the elimination of a 10 euro charge on specialist medical service introduced by the previous administration headed by Romano Prodi.
On the surface it seems ending the charge would benefit patients. But opponents say the government intends to transfer the cost of ending the charge onto regions where many budgets are already creaking at the seams.
On Thursday, Enrico Letta, the opposition's spokesman on welfare, described the health spending measures as an unprecedented blow to public health which would put at risk the principle of universal access and the financial viability of the whole system.
MINISTER BLAMES PREVIOUS GOVERNMENT
The welfare minister, Maurizio Sacconi, whose extensive portfolio includes the health ministry, said the new administration was seeking to resolve the problems it had inherited from the previous government.
These included a deeply divided health system with virtuous regions in the north and badly-managed regions in the south, he added.
"In a global (financial) context of exceptional seriousness we have adopted measures to cut current account spending which respects the financial resources available in the preceding government's programme for 2009 and we have increased national health service funding by 5 billion euros for the two following years," he said in a statement on Thursday.
He said Letta was unrealistic because he appeared to be suggesting that there should be more public spending which would increase public debt without improving services.
Sacconi added that any decision about the removal of the 10 euros specialist charge would be discussed with the regions.
rg/rw
[12134] 11/07/2008 12:12 GMT - GENERAL
