Nov. 15 (Bloomberg) -- Alfonso Rodriguez, a 30-year-old Spaniard struggling with mental-health problems for a decade, was able to live independently until last month.
Following cutbacks in community support, his condition deteriorated and he was forced into an overcrowded, understaffed hospital ward with peeling paint and ancient furniture in his hometown of Alicante. He can’t even satisfy his desire for a cigarette.
“If they had enough staff, at least they’d have someone who could take him out for a smoke,” says his father, also called Alfonso. “He gets out less than a prisoner in a military jail.”
Rodriguez counts among the millions of losers from policy makers’ response to the euro area’s financial crisis. Even as populations age and unemployment climbs to a euro-era record, governments have cut spending on health care for the first time since 1975, according to the Organization for Economic Cooperation and Development. The EU public-health care bill was 6.5 percent of gross domestic product in 2011, down from 6.7 percent of GDP the 28-nation bloc spent in 2009. It’s less than the U.S. government’s 8.2 percent of GDP spent on health care in 2011.
The biggest cuts are in bailed out countries, though even the Netherlands and Italy have brought an end to the annual increases in health spending, according to World Bank figures.
As President Barack Obama struggles to expand health coverage in the U.S., Spain, Portugal, Greece and Ireland are going in reverse.
Dismantling Health Care
“Spain had an excellent health-care system,” said Helena Legido-Quigley, a researcher at the London School of Hygiene and Tropical Medicine. “It’s basically being dismantled.”
Last year, Prime Minister Mariano Rajoy outlined 7.3 billion euros ($9.8 billion) of cuts to reduce spending that peaked at 75.3 billion euros in 2009. Since last year’s measures were announced, 3.55 billion euros of savings have already been achieved, according to the government.
Spain, with the highest unemployment rate and widest budget deficit in the euro zone, has implemented rules to make it harder for foreign nationals to access services, introduced new charges for medicines and saved 2.3 billion euros in pharmaceutical spending since measures were announced last year.
Next year, Portugal plans to spend 8.2 billion euros on health, according to its budget plan, 9.4 percent lower than 2013 estimates. One condition of its 78 billion-euro bailout from the EU and International Monetary Fund was the “rationalization of the hospital network” to reduce costs.
Drug Sales Decline
In Greece, total health spending plummeted by 11 percent in both 2010 and 2011, according to the OECD. Ireland, which has gone through the worst recession in its modern history, cut public health spending by 1.63 billion euros between 2009 and 2012, according to the Irish government’s health department.
Pharmaceutical companies are losing business in Europe, with drug spending expected to fluctuate between a decline of 1 percent and growth of 2 percent through 2016, compared with a growth rate of 3.8 percent between 2007 and 2011, according to the IMS Institute for Healthcare Informatics. Annual spending per person is expected to drop for Europeans to between $321 and $375 by 2016 compared with $892 in the U.S., IMS said.
European sales at the world’s biggest drugmakers, Roche Holding AG, Novartis AG and Pfizer Inc., have declined since 2010.
Across Europe, governments have reduced health-worker salaries, increased patients’ share of costs, reduced the number of people eligible for free or cheap treatment and renegotiated deals with drugmakers.
To be sure, there may have been room for economies.
Health Costs Rocketed
During the two decades before the debt crisis, spending on health care rocketed. In Portugal, it more than doubled from 5.1 percent of GDP in 1980 to 10.8 percent in 2009, according to the OECD. In Greece, the ratio shot from 5.9 percent to 10.2 percent over that period. In Spain, spending soared from 5.3 percent to 9.6 percent in 2009.
That level of spending risked becoming unsustainable, Standard & Poor’s said in a research paper last year that cited the need to rein in costs.
The policies may further deepen divisions amid mounting joblessness; unemployment across Europe is 23.5 percent for those younger than 25, double the overall average.
“While recessions can damage health, pursuing austerity will only exacerbate these negative health effects,” said Aaron Reeves, a sociologist at the University of Oxford. “Research has shown that when the cost of receiving health care increases, utilization declines.” That may widen the gap between the poorest and richest members of society, he said.
The Budget Axe
Mental-health treatment and preventive services are usually the first to feel the budget axe, said Mark Pearson, the head of the OECD’s health division.
“If you close a hospital, you’ve got all those stakeholders screaming and shouting about it, the workers and the patients in the local area,” he said. So governments make more subtle cuts instead, with victims suffering in silence.
And when times are tough, people need the support the most. Across the euro area’s crisis-hit nations, unemployment and foreclosures have been linked to depression and suicides.
“In the countries that have not had health cuts you’ve seen more people going to see doctors about mental-health problems,” Pearson said. “In the countries where you have seen cuts, you’ve not seen that and that implies an access-to-care issue.”
Until last year, Rodriguez was living in an apartment near his parents. As the government started to cut spending, he saw the official classification of his disability -- schizotypal personality disorder -- downgraded.
As a result, he lost the 400-euro monthly payment that allowed him to live with his friends, and his parents saw their annual tax bill rise by more than 2,000 euros as they were disqualified from rebates granted to caregivers. On top of that, he has to pay about 60 euros a month for the medication that helps to stabilize his condition.
While receiving outpatient treatment at a day-care center, the activities helped him to structure a daily routine that he was unable to sustain on his own.
“The staff at the day center thought it was appropriate for him to reintegrate with daily life,” his father said. “But there weren’t the resources to support him.”
He dropped out of soccer games with his neighborhood friends; he stopped helping out at a local magazine; he quit painting and writing, gave up taking his medication and steadily withdrew from the world. Four months later, he was hospitalized.
It’s an increasingly common situation in countries cutting budgets, and one that’s leading to a reverse of a decades-long trend of supporting those with mental-health problems at home instead of hospitals, said Josee Van Remoortel, senior policy adviser at Mental Health Europe, a group based in Brussels that lobbies for the improvement of care.
“They reduce the funds and families have to send their sons, their daughters, their husbands back to the psychiatric hospitals,” she said. “Instead of de-institutionalization we get, through the crisis, re-institutionalization.”
For Jose Maria Sanchez Monge, president of the Spanish Confederation of Families and People with Mental Illness, budget cuts are counter-productive. “The number of professionals has declined, so the quality of care has been reduced,” he said. “As a result, people have more relapses, so they need more emergency care, and more hospital admissions. And that means more spending.”
Cuts for Seniors
The Irish government promised to “protect frontline services” as it allocated a maximum of 13.3 billion euros for health care in its 2014 budget. Total public health expenditure was 14 billion euros in 2011 and 13.9 billion euros in 2012, according to Ireland’s health ministry. For next year, the government proposed stricter limits on the number of over-70s who get free health care.
“While health is a key priority for government, the fact is that it accounts for 27 percent of public expenditure and, therefore, cannot be immune from making a contribution to our recovery efforts,” Ireland’s Public Expenditure and Reform Minister Brendan Howlin said in a statement accompanying the budget plan, published on Oct. 15.
For Rodriguez in Alicante the consequence of the spending cuts is that he’s “hidden away and stigmatized,” according to his father. The hospital doesn’t have enough psychologists to give the therapy that patients need, he said.
“It’s a life with very few prospects.”
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