Most of the American discussion of what is happening in Europe focuses on the financial issues and potential consequences for the financial sector. But stop and take a look at the burdens on Europeans of markets and EU institutions’ actions.
Spain has long had one of the best and most cost-effective health systems in the world. It had an attractive combination of decentralization and tax-financed universality with a small supplementary sector for people who wanted to pay more to get simple operations in nicer settings. It was a triumph of Spanish democracy, coming just a few years after Franco’s regime was gone, quite compatible with a degree of budgetary rectitude that neither Germany nor the US could match, and an investment in a healthy workforce that, among other things, wouldn’t incur big costs as it aged.
And it’s being wrecked. Drowned out by the Bankia bailout and warnings of yet more subsidies to improvident bankers is the news that the Spanish health system is taking a big hit. A new law of May 17th will deny public health care to undocumented migrants and people over 26 who have not entered the labor market. It will also increase co-payments for medicines.
We know what this will do. Increased co-payments decrease use of good and bad treatment alike, so diabetics who can’t afford the co-pay in insulin will end up paying the co-pay on a foot amputation and we will all be worse off. As for excluding swathes of the population from the non-emergency health system, this is just bonkers. Without primary and preventative health care, the costs of emergency departments will explode, just as they do in the US (which is why the US is losing emergency departments at a frightening rate). Without enrollment in the health system, disease tracking will be harder and the odds will get better that middle-class tourists can pick up TB in Barcelona’s Raval or Madrid’s Lavapies.
And as for cutting off everybody who can’t find a job by 26- this is a country with 50% youth unemployment! It might bring in some people working in the black economy, but it will also create a permanent underclass excluded from health care for life. Just wait to see what that does for social cohesion, productivity, and the costs when they eventually stagger into an emergency room after a decade of untreated high blood pressure has led to kidney failure.
Like most of the “reform” justified by the financial crisis, it is a recipe of policy ideas that fail any test of health policy but make perfect sense if your real objective is to get rid of the welfare state and shaft regional governments in the process.