The EHMA Agora for seeking new paradigms

Abstract

At the opening session of the EHMA Annual Conference in Lahti, Finland, participants engaged in The Largo Simulation that instantly demonstrated the actuality of the conference theme: ‘Managing Radical Change in Health’. The simulation moderator, Laurie McMahon, confronted his audience with two major policy issues that will dominate health sector change in EU member states during the next decade. First, he raised the question about how to protect and improve health status in the face of the current recession. Public health research on previous economic crises has uncovered a broad range of negative effects on health and well-being, especially for lower socio-economic status groups. Second, he clarified the far-reaching consequences of the economic crisis on public funding of health services. EU governments are facing an unprecedented need to cut back budget deficits and national debts. As a consequence, they are looking for savings on health services expenditure on a scale not seen before. For example, the Dutch government is exploring opportunities to cut parts of its health sector budget by 20%. Other EU governments are looking for interventions of the same kind of magnitude. The health sector is used to financial pressure. Cost containment policies emerged in all Western countries during the 1980s, in reaction to a heavy economic recession and the extraordinary growth of health services expenditure in preceding years. Governments and health authorities filled a policy toolkit with instruments for restricting health service entitlements, refining need assessment procedures, slowing down capital investment, extending the range of co-payments, intervening in drugs price setting, tightening up macro budget control, and so on. During the last two decades the use of this toolkit intensified, as the growth rate of the publicly funded health sector tended to exceed domestic economic growth rate over and again. Under this pressure provider organizations have developed a broad repertoire of cost-saving routines to deal with recurrent budget cuts. These range from simply stopping waste, standardizing working procedures, and tightening financial control to measures to reduce labour costs and smarter procurement and utilization of buildings and equipment. Horizontal and vertical integration became a popular managerial option to pursue economies of scale and scope, as did substitution of cost-intensive clinical services for cheaper day treatment and ambulatory care. Efficiency became the buzz word that guided strategic actions on both the national and organizational levels. However, the present combination of growing health-care needs and macro-economic pressure on the sector requires strategic responses that go far beyond the conventional political and managerial routines of dealing with tight financial resources. This rapidly became visible for the participants participating in The Largo Simulation. First, everybody started to tackle the health and financial issues with solutions that had demonstrated their effectiveness in the past. Then, participants began to realize that the current socio-economic conditions imply a trend break with that past that strongly limits the effectiveness of those solutions. They recognized that out-of-the-box thinking is required to develop innovative responses to the changed circumstances. So they started to question the taken-for-granted values, principles and routines behind the organization and funding of health services. They questioned existing relationships between public funding, private payments, and charity. They explored the potential of radical patient self-management, of health operations management principles, and of redefining professional roles. They discussed the promises of prevention programmes and replacing organizational control by trust. Potential limits to equal access were reviewed as the development of unconventional sets of health insurance entitlements. They also considered the gains of replacing organizational hierarchy by