ESADE report: Spain's healthcare system will need between 32 billion and 48 billion euros in 2025

The Spanish healthcare system will require a spending increase of between €32 billion and €48 billion, nearly doubling public healthcare spending in a decade in the worst-case scenario. This is one of the main conclusions of the ESADE–Antares Consulting report Funding the Gap: The Future of the Healthcare System. Can We Finance the System and Reduce Health Inequities? The new report was presented today at the latest edition of ESADE’s Big Challenges social debate series, moderated by the report’s co-author, ESADEgov Director Francisco Longo. According to the report, by 2025 public healthcare spending will be between €97 billion and €113 billion per year, whereas in 2015 this figure was around €64.8 billion.

€16 billion: the cost of doing nothing

According to the report, the difference between the two figures is based on a linear estimate – in other words, a managed estimate of public healthcare spending. The €16 billion difference between the two models represents the cost of inaction, i.e. the public healthcare funding needs attributable to not taking sufficient steps to manage the growth of healthcare spending between now and 2025. The authors of the report also determined that an estimated €32.5 billion is the baseline amount of funding that will be needed to meet the needs of the public healthcare system a decade from now.

Debate on the sustainability of the healthcare system

The new report shows that healthcare spending increases as countries develop, but does so at a faster rate than GDP growth – a 2-percentage-point difference, on average. As a result, there has been considerable debate regarding the sustainability of healthcare funding. According to Manel Peiró, Director of the ESADE Institute for Healthcare Management and co-author of the report, “Despite being important and necessary, this debate has often overlooked the benefits provided by the healthcare system. Nor has the same attention been paid to the issue of health inequity. Despite globalisation and great progress, there is significant room for improvement in Spain, for example in waiting times to see a specialist with private insurance, the effect of copayments or the lack thereof, and the large differences between autonomous communities in terms of funding for public healthcare costs.”

According to Joan Barrubés, Managing Partner at Antares Consulting and co-author of the report, “The debate about the sustainability of the healthcare system requires a more global vision that encompasses four areas. First, a collective reflection on our public-spending priorities and what portion of the common wealth, or GDP, society is willing to dedicate to healthcare. Second, an effective fiscal policy that makes it possible to obtain enough revenue to finance all public spending, particularly healthcare spending. Third, we need to engage in an in-depth debate about the coverage provided by the healthcare system, focusing on the cost-effectiveness of services rather than the population covered. Finally, we need continue the only policy that has been implemented to date: improving the management of the costs of healthcare processes.”

Public healthcare cuts during the economic crisis

This debate has obviously been made thornier by the economic crisis experienced by developed countries. The ESADE report shows that Spain’s crisis-related healthcare spending cuts have been significant: spending for 2014 was at the same level as in 2007. The authors of the report also analysed how this decrease in spending was achieved and what it can be attributed to. Based on data reviewed by the report’s authors, the main costs that have been reduced are the salaries of healthcare professionals (down by more than 10% since 2009), investments (28% of technological equipment in Spanish hospitals is now more than 10 years old) and spending on drugs (reduced by 22%).

Effect of lack of funding on social inequalities

The report shows that the economic crisis has had a profound effect on the risk of health inequities, especially in three areas. First, the impact of public spending cuts on healthcare systems (a decrease of €8.9 billion in Spain between 2009 and 2013). Second, the impact on the health status of the population, which is more difficult to characterise because the correlation between public healthcare spending, mortality and life expectancy is very low in the short term. And finally, the impact on social inequities in health (the most obvious of the three impacts). Between 2009 and 2012, the number of people at risk of poverty or social exclusion in the European Union increased by 9 million. The report provides data on how poverty leads to worse outcomes in education, nutrition, knowledge and access to the system, as well as lower capacity to follow the advice of healthcare professionals.