Private Healthcare, Adding Value. Situation Analysis 2019
The ninth anniversary of the creation of the IDIS Foundation is approaching. It is also the ninth edition of this report entitled “Private healthcare, adding value”. This was precisely our most important founding principle and is a fundamental goal: to affirm the value of privately owned medical services and private enterprise in healthcare for society as a whole.
The ageing of the population, the chronicity of diseases and the constant evolution of technological and scientific advances pose a challenge to the sustainability of modern health systems.
Faced with this situation, the private healthcare sector positions itself as a fundamental strategic ally of the public system, through the release of resources and the generation of savings, improving, in turn, patient accessibility through its extensive network of centres and professionals, and the quality of healthcare.
This report, as in previous years, shows several ways the private healthcare sector contributes value:
Represents a large proportion of Spain’s productive sector
Healthcare spending in Spain stood at 9.0% of GDP in 2016, a value very similar to that recorded in recent years, although it represents a slight decrease as compared with the previous year (9.1%). In terms of distribution, private healthcare spending represented 28.8% of total healthcare spending, increasing its proportion by one tenth as compared with the previous year.
Public healthcare spending, on the other hand, accounted for 71.2% of total healthcare spending, one tenth below the percentage registered the previous year (Graph 1).
In comparison with neighbouring countries, Spain (9.0%) is above the OECD average (8.9%) although behind the main neighbouring countries such as France (11.5%), Germany (11.1%) and the United Kingdom (9.8%) (Graph 2).
In relation to private healthcare spending as a proportion of total healthcare spending, Spain has one of the highest ratios (28.8%), above the OECD average (26.5%) and above the main neighbouring countries such as the Netherlands (19.0%), France (17.1%) and Germany (15.4%) (Graph 3).
In evolutionary terms, private healthcare spending reached 28.858 billion euros in 2016, representing 2.6% of GDP and representing an increase of 573 million euros over the previous year. In the last 10 years (2007-2016), private healthcare spending has evolved at a compound annual growth rate (CAGR) of 2.5%, with constant and solid growth over the ten years analysed (Graph 4).
Public healthcare spending, on the other hand, and according to OECD data, continues with its growth trend that began in 2014 and reached 71.477 billion in 2016. In the last 10 years (2007-2016), public healthcare spending has evolved at a compound annual growth rate (CAGR) of 1.7%, which is 0.7 percentage points less than the growth experienced by private healthcare spending.
Over the last ten years, growth in public healthcare spending has been less constant than private healthcare spending, with two major setbacks in 2012 and 2013 (Graph 5).
Notwithstanding the above, taking into account the data published by the Ministry of Health, Consumption and Social Welfare in the Public Healthcare Spending Statistics (EGSP), included in the National Statistical Plan under the name of Satellite Accounts of Public Healthcare Spending, expenditure reached 66.678 billion euros in 2016 (Graph6), which is 4.799 billion euros less than the figure published by the OECD.
In this case, the difference is due to the estimation method. The EGSP only considers expenditure made or financed by public health agents, and its methods of elaboration and objectives have been agreed between territorial and non-territorial organisations integrated into the National Health System.
It is therefore consistent at national level and can be used for comparisons between autonomous regions.
The System of Health Accounts (SHA), on the other hand, is adopted by the OECD and other bodies such as Eurostat and WHO, as a reference for the collection and processing of information on healthcare spending, in order to make it comparable between the member countries of these organisations. The SHA is based on classifications and methods agreed in international organisations that affect their Member States, and includes the expenditure of private agents, without entering into considerations on the organisation of national health systems. It is therefore used for comparisons between states.
From a sectoral point of view, the EGSP does not include expenditure that may be incurred in those institutional units whose main activity is not healthcare and which do not develop programmes included in the health function of the General State Budgets.
Therefore, public social service institutions that carry out activities related to the series of social and healthcare benefits defined by Law 16/2003, of 28 May, on the cohesion and quality of the National Health System
are excluded from expenditure calculations: long-term care, convalescent healthcare and rehabilitation in patients with recoverable functional deficit. These institutions and their activity are generally taken into account when preparing the SHA figures, and, together with the private sector, by definition not included in the EGSP, they constitute the basic difference between the two systems of accounts.
On the other hand, in relation to the composition of private healthcare spending, out-of-pocket spending1 represents 2.1% of GDP in 2016, private insurance 0.4% and the expenditure of non-profit institutions 0.03%
Also, a percentage of public healthcare spending is allocated to funding private provision through collaboration agreements, which is 11.2% in 2016 (Graph 8). In terms of GDP, it is estimated that these agreements make up 0.7%, of which 0.5% corresponds to autonomous regions, 0.13% to civil servant mutual insurance and the remaining 0.03% to the Social Security System (Graph 9).
Taking into account the above and adding spending for these agreements to private healthcare spending, we find that the estimated total expenditure on private healthcare provision represented 3.3% of GDP in 2016, an approximate expenditure of 36.308 billion euros (Graph 10).