The Second Economic Adjustment Programme for Greece March 2012

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The Second Economic Adjustment
Programme for Greece
 March 2012

4.3.5. Healthcare and pension reform
39. Healthcare reform is a crucial component of Greece's fiscal consolidation efforts, given the high
share of public expenditure that is spent on healthcare. Despite efforts and some progress in reforming
the system, major weaknesses still need to be addressed to increase the efficiency, cost-effectiveness
and equity of the system. The institutional setup remains fragmented, leading to reduced policy
coherence. Corruption is reported, data availability is still inadequate; and the lack of effective
monitoring and control mechanisms for prescription of medicines is hampering the achievement of the
targets. In 2011, there were delays in the implementation of policy measures on pharmaceuticals.
Strong resistance by vested interests, combined with the lack of timely data and effective monitoring
mechanisms, has made healthcare reform difficult. However, progress has been observed in areas
such as hospital accounting and centralised procurement, leading to some savings in the hospital
sector.
40. Major policy efforts are necessary in several areas. In particular, EOPYY, the new national health
organisation responsible for purchasing health services, needs to become fully operational in order to
induce savings through a more rational use of available resources. In order to reduce the
fragmentation and contribute to policy coherence, the Government has expressed the intention of
moving all health-related institutions and policies to the responsibility of the Minister of Health,
instead of the current distribution of tasks among the ministries of Health, of Labour and of Regional
Development. The rationalisation of the hospital network needs to be speeded up and operational
costs reduced further. A set of measures should be simultaneously implemented of such as
compulsory prescription by active substance (INN), compulsory e-prescription by doctors and
pharmacists, regular monitoring of doctors' prescription behaviour and their compliance with binding
prescription guidelines, mandatory generic substitution by pharmacies, further reduction of prices of
generics and off-patent medicines to move them closer to the prices paid in most other EU countries.
Moreover, the Government is putting in place an automatic claw-back mechanism (i.e. a rebate which
will be charged on pharmaceutical companies on a quarterly basis) will guarantee that outpatient
pharmaceutical spending for 2012-15 does not exceed the available annual financial envelope in the
budget.
41. A number of adjustments are still necessary to complete the pension reform. The reform of the
main pension schemes at the beginning of the adjustment programme has substantially improved the
dynamics of public pension expenditure. However, the supplementary pension schemes (including
welfare lump-sum schemes) remained unreformed, though both auxiliary pension and lump-sum
pensions of civil servants have been reduced in 2012. In the most recent projections by the National
Actuarial Authority, the budget of the supplementary pension schemes (and other, unreformed,
schemes) is projected to be consistently and increasingly in deficit over the coming decades: in 2011,
their deficit, about 0.4 percent of GDP, had to be financed through public resources. The current and
future deficit in several supplementary funds threatens the viability of these funds already in the shortto
medium-term and calls for both an immediate reduction in pension benefits and an in-depth
revision of their functioning. Moreover, the existing setup appeared to give rise to persistent inter- and
intra-generational differences, and as such is not socially equitable. The Government and mission staff
agreed that the forthcoming reform of the supplementary pension funds – initially via a framework
law, and later on, through other implementing acts – is of paramount importance to complete the
reform of the pension system and to ensure the long-term sustainability of public finances.

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The Second Economic Adjustment
Programme for Greece
 March 2012

4.3.5. Healthcare and pension reform
39. Healthcare reform is a crucial component of Greece's fiscal consolidation efforts, given the high
share of public expenditure that is spent on healthcare. Despite efforts and some progress in reforming
the system, major weaknesses still need to be addressed to increase the efficiency, cost-effectiveness
and equity of the system. The institutional setup remains fragmented, leading to reduced policy
coherence. Corruption is reported, data availability is still inadequate; and the lack of effective
monitoring and control mechanisms for prescription of medicines is hampering the achievement of the
targets. In 2011, there were delays in the implementation of policy measures on pharmaceuticals.
Strong resistance by vested interests, combined with the lack of timely data and effective monitoring
mechanisms, has made healthcare reform difficult. However, progress has been observed in areas
such as hospital accounting and centralised procurement, leading to some savings in the hospital
sector.
40. Major policy efforts are necessary in several areas. In particular, EOPYY, the new national health
organisation responsible for purchasing health services, needs to become fully operational in order to
induce savings through a more rational use of available resources. In order to reduce the
fragmentation and contribute to policy coherence, the Government has expressed the intention of
moving all health-related institutions and policies to the responsibility of the Minister of Health,
instead of the current distribution of tasks among the ministries of Health, of Labour and of Regional
Development. The rationalisation of the hospital network needs to be speeded up and operational
costs reduced further. A set of measures should be simultaneously implemented of such as
compulsory prescription by active substance (INN), compulsory e-prescription by doctors and
pharmacists, regular monitoring of doctors' prescription behaviour and their compliance with binding
prescription guidelines, mandatory generic substitution by pharmacies, further reduction of prices of
generics and off-patent medicines to move them closer to the prices paid in most other EU countries.
Moreover, the Government is putting in place an automatic claw-back mechanism (i.e. a rebate which
will be charged on pharmaceutical companies on a quarterly basis) will guarantee that outpatient
pharmaceutical spending for 2012-15 does not exceed the available annual financial envelope in the
budget.

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