Emory Report

February 21, 2000

 Volume 52, No. 22

Saltman's book examines European health care

By Paul Thacker

Perhaps no single issue will be more hotly debated in the upcoming 2000 election than health care reform. The reason is simple: health care directly affects every one of us because every one of us gets sick.

Europeans have also dealt with health care reform, and their experiences have been compiled in two editons of a book, Critical Challenges for Health Care Reform in Europe, co-edited by Richard Saltman, professor of health policy management in the School of Public Health. The lessons garnered from this work have already affected discussion in Europe and may prove important here in the United States.

The book has its genesis in the early 1990s at the World Health Organization (WHO) in Europe. Covering all of Western Europe and many emerging nations of the former Soviet Union, the WHO's European office needed to reestablish itself at the center of the continent's growing healthcare debate. Since the late 1980s, most European discussion had been steered by the World Bank and the Office for European Community Development (OECD).

"Neither of those organizations had as its mission the promotion of health," Saltman said. "They were concerned with the economy--the OECD--and the broad transition and development in democratic/capitalistic economies, which is the World Bank."

So under WHO mandate, Saltman and two co-editors set out to determine the key issues of European health care reform. They contracted with authors to develop these topics into research papers; 30 papers emerged, covering a wide variety of European health care topics.

These papers became the background documentation for a WHO conference for European health ministers held in June 1996 in Slovenia. New eastern democracies like Poland and Romania hoped the debate could help them plot new paths for their citizens' health care. For western countries, the debate added depth of understanding to the nuances surrounding health care reform.

But why is reform needed?

Unlike the United States, most European countries have achieved system-level stability in health costs. But while costs are stable, there is fear that an aging population, new technologies and structural changes to the economy may cause costs to rise.

To examine the effectiveness of prior healthcare reforms, the authors looked at them from "supply-side" or "demand-side" perspectives.

"In health care terms, the demand side has to do with who is paying," Saltman explained. "So it can be the government in a tax-based system; it can be a social insurance fund, or it can be the individual [paying] out-of-pocket. The supply side focuses on altering the behavior of different providers--doctors, hospitals and various other providers."

Saltman believes the evidence demonstrates that supply-side reforms are much more effective. "It was quite clear, broadly speaking, that reforms focused on the supply side--changing the behavior of doctors and hospitals, and altering the mechanisms that pay those people--were relatively successful reforms."

The commissioned papers served as the basis for the two books. The first distilled and rewrote the findings into a WHO-published assessment of recent health policy and has greatly influenced debate in European governments. Last year a second edited volume won the prestigious Baxter Award as the best work in European health policy. Saltman and his co-editors donated the prize money to help purchase copies of the book for Central and Eastern European countries.

In this country, the finding in Saltman's book can offer insight. He described the papers not as lessons but as "observations."

"What the European experience suggests is that effective health reform and effective health delivery depends on having choice on the production side of the system--choice of doctor, choice of hospital," he said.

"Also, a judicious mix of regulation and competitive incentives on the production side can restrain costs," Saltman continued. This is quite the opposite to the demand-side assumptions that currently guide the United States' experiment with managed competition.

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