Crisis as a serendipity for change in Cyprus' healthcare services

Summary

As Cyprus signed a financial agreement with a team of international lenders, several reform measures were outlined as pre-requisites for disbursement of financial instalments. The health sector was massively reformed in order to enhance efficiency and reduce waste. The magnitude of reforms included introduction of guidelines and clinical algorithms, co-payments, and revision of criteria for public beneficiary status. In order to safeguard equity in access, solidarity in coverage and sustainability of its healthcare sector, reforms must continue unabated and, more importantly, the introduction of a universal health system should be the ultimate goal.

Keywords::

• Cyprus
• Financial Crisis
• Reforms
• Efficiency
• Troika

Introduction

Europe is currently navigating through its worst financial crisis since the Great Depression of the 1930s, and several countries are teetering on the edge of bankruptcy. As a result, bailout agreements were agreed upon between impoverished countries and international lenders, which caused a groundswell of anger over austerity imposed measures.

Cyprus is the latest country to apply for a bailout agreement, in the form of a memorandum of understanding (MoU) with a team of international lenders. Its debt overhang was the confluence of the exposure of its small economy to a bigger and failing Greek economy, which was compounded by the impotence of competent authorities to adequately monitor financial sector in Cyprus1.

Cyprus is a unique case in the EU, since it is the only country without a universal National Health System (NHS)2. The current healthcare sector is fragmented in two uncoordinated sectors, public and private. A long-standing lack of continuity of care between these two sectors escalated to the duplication of healthcare infrastructure, and a subsequent increase of running costs ensued. This augments both propensity for supplier-induced demand and higher out-of-pocket expenses for private sector patients. Eligibility criteria for the free public healthcare sector are rather biased, which gives rise to prevalent inequity to health access3^,4. A much anticipated introduction of a National Health System never materialized due to deep-rooted clientelism, political particularism, administrative weaknesses, and entrenched interests by several stakeholders5. Ingrained chronic inefficiencies and inertias of the system have been percolating for a long time, such as absence of health indicators, lack of an independent regulatory body, lack of clinical guidelines, and minimum coordination between primary and secondary healthcare levels, while the ramifications of lack of demand side measures were imminent, as in the case of antibiotic over-use6.

It is acknowledged that the fiscal crisis poses major threats to health; nevertheless, it also constitutes an opportunity to enhance efficiency, a doctrine of necessity in any macroeconomic environment. In this notion, several measures were imposed by Troika as pre-requisites for disbursement of financial installments, aiming to enhance efficiency, reduce waste, and restore equity. Efficiency, in its simplest interpretation, is the alignment of costs to quality of care and the production of more health for the same expenditure7. Efficiency enhancement initiatives were overlooked by other recession countries, partly imputed to a latent period between reforms and attaining financial gains. Moreover, the savings of an efficiency reform cannot be accurately forecast, in contrast to budget cuts.

Reforms in Cyprus

It is often articulated that the emergency room (ER) of a given country is a small scale version of the corresponding country’s health system, which is applicable for Cyprus as well8. Cyprus’ ER department is characterized by over-use, misuse, and even abuse, findings that do extrapolate to the whole health sector3. Overcrowding and abuse of the ER is an indicator of waste, owing to a 4-times costlier operational framework compared to corresponding primary health care use, while it also jeopardizes people in acute conditions. The most important reform was the introduction of user charges as a demand side measure. In this context, introduction of a fixed co-payment fee of 10 euros reduced predominantly non-emergent visits (i.e., visits which could be coped with in primary health structures), while it did not demonstrate any effect on emergent visits9. Its introduction was also viewed as an appropriate measure in a cross-sectional patient study10.

Another field that was massively revamped was the laboratory ordering. Laboratory tests have attained a leading position in disease diagnosis and monitoring, nevertheless it is estimated that 20% of all laboratory ordered tests are inappropriate; i.e., highly unlikely to verify or lead to diagnosis11. Apart from wasting scarce resources, inappropriate ordering burdens the patient physically and psychologically11. The co-payment in the form of 0.5 euro per test was coupled by the introduction of laboratory ordering clinical algorithms. A technical committee was set up to elaborate laboratory algorithms for eight health conditions for which high volume and value lab-test ordering is required (including ordering of tests in ER and screening for asymptomatic adults). This was assessed as a significant measure by 94% of primary care physicians, from a sample of 168 responders in Cyprus’ two biggest cities. Participating physicians also requested the introduction of more guidelines along with continuity of related educational courses12. This contests the assumption that people always expostulate to change12. Having said that, this corroborates the supposition that change management succeeds if

• The need and the impact are crystallized and articulated properly, and

• Affected people are involved.

Findings epitomize that there is a significant and counterintuitive inter-relation between all ostensibly unrelated healthcare sectors. For instance, inappropriate laboratory ordering may be an indication of health professional inefficiencies, which are further aggravated due to lack of continuous medical education and absence of clinical pathways13. Lack of guidelines is also a causality of polypharmacy14. Therefore, the conundrum of efficiency and waste of health resources can be partly resolved through the introduction of integrated, multidisciplinary, and coherent guidelines15. Some doctors feel that their medical independence is compromised; nevertheless, it is also true that even their expert opinion—which they usually appeal to—carries the lowest grade of scientific evidence. On the contrary, guidelines offer summarized, high quality and easily accessible data to practicing physicians, while they can also lead to cost containment by restraining inefficient and irrational interventions. Currently, 20 clinical pathways for primary and secondary care were introduced and some are being elaborated.

Economic evaluation of pharmaceuticals and Health Technology Assessment (HTA), in line with MoU, have been enacted in Cyprus and are actively pursued by pharmaceutical services and Health Insurance Organization15.

Further proposed reforms

While introduction of small primary healthcare centres has always been a popular approach among politicians, their consolidation and merge could retrench 3-fold:

• By reducing overlapping services;

• By introducing fewer, bigger, upgraded primary care centres, which could ultimately be better off in effectively dealing with an aging population, as the gatekeepers; and

• Through improved co-ordination and integration with secondary and tertiary healthcare structures, which can potentially extenuate the burden from—costlier—hospital usage16.

Government must resist the temptation to further increase co-payment, thus transforming its operational status from an over-use deterrent to a fundraiser mechanism. A fixed co-payment is a regressive tax and, as such, it disproportionately burdens people with lower income or more healthcare needs. Therefore, government should safeguard access of vulnerable groups through exceptions, setting of a maximum ceiling for co-payment and introduction of a variable co-payment, contingent to patient’s income.

HTA should extend to cover medical activities. Moreover, any health system should put forward generic utilization, through setting of a lower price compared to branded products17. Pharmaceutical prices should be updated frequently and the pharmacist’s fee should be reassessed in the new financial perspective. Of course, any savings should be transferred to a faster adoption of innovative products. Finally, the role of over-the-counter medicines should be reconsidered along with their market access pathways15.

Ramifications of crisis may persevere, thus Government should primarily satisfy the needs rather than demands of patients, especially given the reduction in public expenditure. In this notion, it must not forfeit reforms in case economy recovers. Government should strive for increased transparency, accountability, and eliminate immoderate politicization from healthcare management5^,18.

During crisis, health risks oscillate with an unpredictable pattern, along with the ability of patients to secure funding due to impoverishment. From an economic perspective, health competes with other financial obligations and, despite being a relative inelastic service, many patients end up in sparing out and forgoing treatment18^,19. This effect will probably be magnified in Cyprus, given that out-of pocket health expenditure is the main source of Health Expenditure. Consequently, it is imperative to timely monitor and analyse health indicators, since impact of crisis on health has not been fully unfolded.

To this direction, it is also crucial that Cyprus expedites the introduction of a universal NHS, another pre-requisite raised by Troika. The magnitude of this reform is unparalleled, an attribute that partly explains the delay, which was further exacerbated by a recently provoked debate regarding the selected payer type of the proposed health system, single vs multi-payer system. A multi-payer system may not be feasible for a small country due to economies of scale and lack of expertise in risk equalization, while it may aggravate current inequity in health access20. Moreover, the alleged competitive advantage of a multi-payer system, that is the enhanced competition between payers, is rather dubious in the context of the dynamic efficiency and the frail Cyprus healthcare market forces.

This ambivalence should not distort the big picture, that is the claimant needs to provide universal health coverage to all its citizens, based on the pillars of equity and solidarity.

Transparency

Declaration of interest

PP has disclosed that he has no significant relationships with, or financial interests in, any commercial companies related to this study or article. JME peer reviewers on this manuscript have no relevant financial or other relationships to disclose.

Notes

*This team consists of the International Monetary Fund, the European Commission, and the European Central Bank (commonly known as Troika).