The Rationale of the Health Care Expenditure in Greece - Essay Example

? Health Care Expenditure in Greece Health Care Expenditure in Greece I. Introduction The rationale of the health care expenditure in Greece can be based on the effectiveness of healthcare program funded by the government. It has become a concern for the policy makers to have some measures as benchmarks for the effectiveness of the health care programs. From a consumer perspective, decision making for health care has multiple-attributable problems (Mc Mullin et al., 2004, p.21). Consumers not only take into account cost and quality of the health care, but they also consider factors such as transport, amenities, convenience, and location. In order to effect decision making, weights for these things must be developed. It is of considerable significance to take care of the quality consequences of measurement, which entails measurement of the effect of quality reporting on the part of the decision-making by the consumers, (European Commision on Health Care 2012, p.1). Some of the measures that can be used to critically analyze the rationale of healthcare expenditure would be effective if the Greece government has its main basis in the pharmaceutical expenditures. These include external reference pricing, internal reference pricing; price updates (bulletins), Vat, Health technology assessment, positive or negative lists, discounts, payback, claw back, risk-sharing agreements, public tendering, and generic substitution. Other techniques used involve the use of the marginal cost per unit of health care which is obtained in varied interventions for the same condition without trying to monetize the gain of the health care is the cost-effective analysis (Gray 2006, p.45). On this fundamental basis, this literature review attempts to examine how the Greece can rationalize healthcare expenditures by use of pharmaceutical expenditures and the way such expenditures can be rationalized on diagnostic exams. II. A Literature review on rationalizing health care expenditure in Greece by use of pharmaceutical expenditures In 2010, Greece immensely reduced its health care expenditures by adopting various structural reforms and strategies. Various pharmaceuticals expenditures can be used to rationalize health care expenditure in Greece. Such pharmaceutical expenditures include external and reference pricing, Vat, price updates (bulletins), health technological assessment, positive or negative list, discounts, payback, claw back, risk-sharing agreements, public tendering, and generic substitution (Kanavos et al., 2009, p.78). Pharmaceutical industries, in Greece, produce medicines with the highest specifications, and ensure that the exportation of such manufactured medicines to more than 1oo countries. The pharmaceutical industries have also taken the initiative of introducing discount policy together with a free and open competitive pricing system to social insurance funds. Such free discount and pricing systems will ensure that sufficient supply of medicinal products in the market; since, these systems will limit parallel export (Vrijens et al., 2010, p.56). Additionally, these systems will be of considerable significance in the reduction of illegal circulation of authenticity tags. Such illegal circulations force the insurance funds to pay for medicines, which patients have not received; hence, increasing the level of reimbursement fraud. Therefore, these systems will decrease such frauds; hence, rationalizing health care expenditures (Dylist et al., 2011a). Non-reimbursed medicinal products are included in the negative list. Positive reimbursement list bring together generics and original products to reduce health care expenditures. Health care system decided, in early 2010, to cover only the drugs that are included in the positive list, and which are prescribed for approved indications. However, these measures may deny a patient the chance to access some innovative treatments. Greece government is also urging doctors and other physicians to embrace the use of generic substitution. Generic substitution helps pharmacists to dispense a drug with the same active ingredient as the original drug. The manufacture of such drugs is less expensive; hence, they will greatly reduce the government expenditures on health care systems. Besides, generic medicines are less expensive as compared to the original one. This measures aims at increasing generic medicines to reach thirty five percent, by the end of this year, of the total volume of the medicines sold by pharmacies. For this to be achieved, generic price should be sold at 40 percent of the original medicine (Le Polain et al., 2011, p.98). However, producers of such generic medicines may decide to lower the price to increase competition of such drugs in the market. Likewise, the health care provider may decide to lower the price of original medicines, at the time of their patent expiry, by 5o percent of its original price. Consequently, the competition of such medicines in the market will constantly increase (Puig-Junoy 2007, p.203). Health care expenditures can also be rationalized by continuous updates of the price of various drugs. Price on drugs such as pain killers should be constantly updated since their demand is high. Therefore, patients who are in need of them will readily buy them, when their prices are updated. Great demand of such drugs means that the government will realize huge profit from them (Sorenson 2010). The profit realized from such drugs will be used in the manufacture of more drugs; hence, the government will not have to divert most of its funds to the health care system. A mechanism of automatic claw-back ought to be implemented, and be paid by the pharmaceutical industry. Such mechanism ought to be introduced on the turnover of pharmaceutical producers. This, in turn, ensures that outpatient pharmaceutical expenditures do not exceed budget limits. This will help cut down pharmaceutical expenditures, and rationalize health care expenditures. Pay back strategies can also be used to rationalize health care expenditures reward all citizens who find safe ways to cut down their health costs. By so doing it will cut its expenditures on health care. This is because most citizens will look for means to cut down their health costs in order to get rewards. The government can also pay back citizens by educating them on the need to embrace various diseases’ preventive measures (PPRI 2008). Risk-sharing agreements can also rationalize health care expenditures. In this process, two or more parties come together, and agree to share the risk associated with a certain income. To achieve this, several schemes are incorporated, which include improving the incentives for innovation, increase in patient access to medicines, and costs controls. However, risk-sharing agreements have proven difficult to implement because it is not easy to predict whether they will succeed or fail. Risk-sharing agreements can work well or be implemented when drugs are rejected for reimbursement; they can be used to counteract the damage caused by the reimbursement. For effective risk-sharing agreements, inclusion or failure to include a certain drug for reimbursement ought to be well understood. When such reasons are well understood, effective risk-sharing agreements or arrangements are achieved. In addition, all risk-sharing agreements ought to sufficiently address performance and price concerns (Leopold et al., 2012, p.87). Value-added tax (VAT) is another method that can be used by the Greece government to rationalize health care expenditures. The total revenue, for instance, an increase in VAT was noted in the year 2010; in 2009, total revenue as a percentage of GDP was 37.3%, while in 2010 it was 39.1% (Cutler et al., 2010, p.123). This was as a result of higher excise taxes that were raised by 33%. Taxes increment was also achieved through special levies on profitable firms, high-value real estate, and high taxes on high income individuals. It can decide to finance excessive health care spending. This is because most of the government’s VAT ends up being used in less vital areas of Greece. Such VAT, for instance, can be used to purchase various facilities in health care centers (Schulenburg et al., 2011, p.256). It can also be used to clear hospitals bills for those people that are unable to pay such bills. Health technical assessment can also be implemented to cut down or rationalize health care expenditures, in most health sectors of Greece. Additionally, most health care centers in Greece have embraced and incorporated health technological assessments, in their practices. These assessments help health care providers to identify effects, properties, and impacts of the various technologies that they use. If such assessments discover that some technologies are of no great use, then, health policy makers are advised to look for alternative technologies that are of considerable significance. This helps eliminate or reduce some expensive technologies, which do not bring forth worth benefits (Aaserud et al., 2009, p.65). When such expensive technologies are replaced with less expensive one, the expenditures on health care systems immensely reduce. The government should also embrace the need of e-prescription by active participation of protocols and substance. Electronic prescribing system will ensure effectiveness of disbursement of all drugs and other services. It will help in safe storage of all transactions and information (Leive 2010, p.209). Hence, in case of any fraud all information can be retrieved. Consequently, all people involved in such frauds are laid off or other necessary measures taken upon them. This will serve as an example to any other people, in the health care sectors, who may be tempted to indulge in illegal or corrupt activities. In the end, e-prescribed significantly rationalize expenditures on health care systems (Espin et al., 2011, p.34). External reference pricing involves setting a price cap for pharmaceuticals. Such prices are based on ex-manufacturer prices of similar products, in other countries. This strategy has immensely been embraced and used as a cost-containment strategy in order to reduce health care expenditures. Internal reference pricing helps in the promotion of price competition in domestic markets. Such competition helps pharmacists to cut down price on various drugs; hence promoting demand amongst their consumers (Sabine 2008, p.89). Consequently, health care expenditures are significantly rationalized. Similarly, public tendering helps reduce expenditures on health care systems. Public tendering should be made in a transparent manner, and independent committees should be employed ion choosing the tender. This, in turn, will ensure that tenders are given to reliable and honest people. Such people are less likely to involve in corrupt activities, which may result to the misuse of health care facilities. Honest and reliable tenders, indeed, ensure rationalization of health care expenditures. The government ought also to embrace the policy of re-pricing all issuance and products of a price bulletin, which is correct and reliable (Gray 2006, p.78). Such policy follows the European countries’ law. Restructuring of primary health care services in the urban areas will ensure that should policy are used, which discourage misuse of government funds. The government should also encourage the formation of private health centers, which will help reduce congestion and expenditures in public health care centers. However, the government should ensure that these private sectors meet the required standards to satisfactorily attend all patients. III. Literature Review on Rationalizing Expenditure on Diagnostics Exams Rationalizing expenditure on diagnostic exams incorporates various measures, which include global; budget, rebates, claw backs, discounts, paybacks, price reassessment, and health technology assessment. Rebates help in the rationalizing various expenditure on diagnostic exams. For instance, Greece can opt to reduce the cost of private health insurance to all citizens who are members of certain private health funds, and are eligible for various Medicare care (Puig-Junoy 2007, p.54). Such rebate ought to be based on a person’s annual earnings and his or her age. Therefore, such people will not have to pay all the cost of their diagnostic exams. This, in turn, will help rationalize expenditures on diagnostic exams. Discounts on various diagnostic exams will also rationalize expenditures spent on such tests. Such discounts will help many people afford such tests; hence, reduce the occurrences of diseases amongst citizens in Greece. This applies mostly to patients who are members of various health insurance organizations. The government also ought to reduce unnecessary operational expenditure in the health centers, when making it annual budget. Such operations are not of any considerable significance. Finances that are fuelled to such operations can be use in the rationalizing of diagnostic exams’ expenditures (Kanavos et al., 2011, p.432). Health technological assessment will also help rationalize expenditures in diagnostic exams. Various assessments should be employed in determining the effectiveness of various technologies used to diagnose various diseases. Some technologies used in diagnostic exams or tests are expensive. s on such technologies help replace them with less expensive one; hence, rationalizing expenditures on diagnostic exams (Berg 1995, p.56). Such tests help policy makers to implement the use of quality technologies and facilities that are less expensive. Pay backs can again help in the rationalizing of diagnostic exams’ expenditures. This can be achieved if the health sectors strategize to reward all patients that have registered with various health insurance. This, in turn, encourages more patients to visit such health, and participate in the various diagnostic tests that the health centers offer. Money received from such patients enhances or facilitate such tests; hence, rationalizing spending on such diagnostic exams (Espin et al., 2007, 89). IV. Conclusion Undoubtedly, for several years the pharmaceutical expenditure of Greece has been in its highest, especially in the years 2007and 2009. The structural problems they faced and the lack of control of systems, which plagued the health systems in this country and the stakeholders in the drug chain like the pharmaceutical companies mainly, contributed to these occurrences, (Vrijens et al., p.47). The pharmacy industry was given the mandate to initiate a sincere and negotiation with the ministry of health and other healthcare stakeholders in 2009, (Gray 2006, p.74). The aim was to reverse the upward trend of the pharmaceutical expenditure in Greece and develop a sustainable health care system, (Puig-Junoy 2007, p.29). After this reforms the country’s heath care reform, the pharmaceutical expenditure has been reduced in 2010-2011 by approximately 2.5 billion, which is, 40% and it is projected that it will further reduce by 500million Euros by the end of 2012, (Dylist et al., 2011a, p.54). The medicine and the health sector in general can be prioritized to create a new economic development model in this country, (Cutler et al., 2010, p.35). If we give urgent priority to the completion of the technological-updating of the health system of our country, this will completely eliminate the wastage of money, misappropriation and mismanagement. The mobilization of the best technologist and the most proven technological processes was to be implemented the soonest possible, (Gray 2006, p.51). The loss of these valuable resources will be greatly reduced and give way to full utilization of these resources to ensure high level of public health. In this era of digitalization, electronic system can improve how our country collects revenue which is required for the health care system, (Gray 2006, p.37). Health technology assessment can be used to provide the rationale of the cost of the heath care of this country. When a lot of the recent developed technologies will be implemented in the pharmaceutical companies, the cost of the drugs will be lowered, (Mc Mullin et al., 2004, p.132). The streamlining of the methods of collection of the fund by the government will improve on the total money collected by the government, (Schulenburger et al., 2009, p.152). The government should provide the price updates through the pharmaceutical companies and create the balance of the conventional and the generic substitution medicine for the best heath care at the lowest cost possible, (Sorenson 2010, p.57). The professionals in the health care industry, doctors and pharmacist, have a key role to integrate the new ideas positively in the system to improve it, (Le Polain et al., 2011 p.94,). There is the need of these people to sensitize the use and benefits of these changes in the health sector. If they adopt it first, the public will have to adjust to these new changes, (Gray 2006, p.112). V. References Aaserud, M, & Villani, C.D, 2011, Health Technology Assessment, Houghton Mifflin Company, Boston. Berg, M, 1995, Rationalizing Medical Work: Decision Support Technique, Cambridge, Free Press. Cutler, K, & Everett, A, 2010, Health Care Finance: An Introduction to Accounting & Financial management, Health Adam Press, New York. Dylist, M, & Glied, S, 2011, Chronic Condition: Why Health Reform Fails, The Johns Hopkins University Press, Baltimore. Espin, J, & Rovira, J, 2007, Public Expenditure Policies in South East Europe, London Press, London. Espin,J & Rovira, J, 2011, Handbook Of Human Factors In Web Design, Routledge, London. European Commission on Health Care, 2012, Strategies for a BEA Satellite Health Care Account, Oxford press, Rome . Gray, S, 2006, Marketing: an Introduction to Global Edition, Power House Books, New York. Kanavos, G, & Cooper, D.P, 2011, Health Care Marketing: a Foundation for Managed Quality, World Book Inc, Chicago. Kanavos, P, & Hansen, A, 2009, Benefits Of Global Partnerships to Facilitate Access to Medicines In Developing Countries: A Multi-Country Analysis Of Patients And Patient Outcomes In GIPAP, University of Chicago, Chicago. Le Polain, H, & Diethard Klatte, H.J. L, 2011, Operations Research Proceedings 2011, Oxford Press, London. Leive, A & Jenkner, E, 2010, Health Care Spending Issues in Advanced Economies, Harvard Press, Harvard. Leopold, A, Curiel, P. F, & Martin, K, 2012, Advances in Cancer Research: Applications of Viruses for Cancer Therap, Academic Press, Texas. Mc Mullin, H, Peterson, C.L, & Burton, R, 2004, The U.S. Health Care Spending: Comparison with Other OECD Countries, Barons Press, New York. PPRI ,2008, Creating Evidence for Better Health Financing Decisions, A Strategic Guide ... World Bank, New York. Puig-Junoy, 2007, The EU Budget: The UK Rebate and the CAP – Phasing them both out?, Oxford press, London Sabine, V, 2008, PPRI Report, ASM Press, Washington. Schulenburg, K, & Wayne Smith, J. B, 2007, Corn: Origin, History, Technology, and Production, John Wiley & Sons, Chicago. Sorenso, 2010, Global Competitiveness of U.S. Advanced-technology Manufacturing Industries, Prentice-Hill, New York. Vrijens, L, & Brown, M, 2010, Health Care management: Strategy Structure & Process, Kaplan Publishing, New York. Zuidber, A, 2010, Rationalizing Medical Work: Decision Support Technique & Medical Practices, Greenwood, New York. Read More