Managing the status quo is not an option – it is time to change how we fund and deliver health in Europe.

Non-communicable diseases (NCDs) like heart disease, diabetes, obesity and Alzheimer’s, account for 88-90% of all deaths in Europe, and almost one in three people over fifty are living with two or more chronic conditions. They place a heavy cost on European societies in terms of expensive hospital and long-term care, reduced labour force participation, and sickness and disability benefits.

Five major NCDs are estimated to cost EU countries €530 billion annually, which is more than 3% of the EU’s combined annual GDP.[1] And this is not even accounting for the “invisible” burden of informal care, which for Alzheimer’s alone was estimated to over $200 billion for the European region in 2019.[2]

This trend puts an upwards pressure on European health and social protection budgets that is a cause for concern in Finance Ministries all over Europe. According to the European Commission, public health expenditure in EU27 could grow to 7,7% of GDP in 2070 compared to 6,6% in 2024.[3]

At the same time, population ageing is also decreasing the base for economic growth and public revenue - by 2050 there will be only 2 working age individuals for every elderly person, compared to 3 today. Many European countries try to mitigate the effects by raising the pension age, but this will of course only matter if people close to retirement are healthy enough to keep working one or a few years more. Ill-health is a shackle on Europe’s economic growth that we cannot afford to ignore. Without economic growth we cannot fund increased spending on security and defence, the green and digital transition or any other societal priority, and certainly not our welfare systems.  

So what to do about it?

One problem is that our health systems are built for another era, a hospital-centric model with the focus on emergency care and treating individual diseases in isolation. There is also a lot of fragmentation in both delivery and financing of health and care services, with healthcare, social care and long-term care often divided between different budgets and levels of government. This structure is ill-suited for an older population living with several chronic diseases and conditions that require constant monitoring and follow-up, and often also other care needs, such as assistance with daily living activities.

Secondly, European health systems have not yet embraced the full potential of prevention and preventative care. While there is a fair amount of political attention (at least in principle) on primary prevention - for example getting people to exercise more and eat healthier – there is less focus on scaling up effective secondary prevention strategies which are more targeted as they are usually aimed at specific risk groups. This includes early detection of diseases like breast and colorectal cancer and risk factors for cardiometabolic disease like high cholesterol or blood sugar, or treatment with statins for persons with a history of heart attack or stroke. More effective identification of people with risk factors or early stages of undiagnosed disease would be a game-changer both for the individual and their families, and for society as a whole as costly hospital care is avoided and people stay healthy and in the labour force. There is also a clear benefit in scaling up evidence-based immunisation programmes, as many infectious diseases constitute an increased risk for people living with chronic disease.

Indeed prevention should be seen not as a distinct moment in time but as a continuum that can be delivered through a range of different interventions. Managing obesity for example  – be it through lifestyle changes, surgery or medication – reduces risk factors for diabetes, cardiovascular disease and cancer. The cost of inaction is almost always greater than the cost for early intervention.

How to spend it

The health and economic case for investing in effective prevention is strong. For example:

• Diagnosing colorectal cancer early increases survival from 10% in stage IV disease to 90% in stage I. It also costs 2.6 times less. Evidence from the Basque Country shows that screening can reduce incidence by 16% and mortality by 26%, generating €93 millionin net savings; scaling such programmes across the EU and UK could deliver 331,000 additional healthy life years annually and €9.9 billion in savings.
• Scaling up cardiovascular, diabetes and breast cancer care in European countries would conservatively have a return on investment between €1.1 and €4.9 respectively per €1 spent, looking only at healthcare cost savings and improved labour productivity, meaning that the interventions not only pay for themselves but return a surplus direct to the economy.[4]
• Scaling up a best practice disease management programme for COPD to all EU Member States plus the UK would generate combined savings from €690.2 million to €2.1 billion due to reduced hospitalisations.[5]

Preventing disease and serious complications is a great economic case for society. The problem from a health budgeting perspective is that all of the above interventions require some form of upfront investment or resource allocation, but the income side of the equation doesn’t show up immediately, and maybe not even in the health budget but somewhere else. Through reduced social care costs. Through increased tax revenues. Through reduced sickness benefits. 

But health budgets are normally not set with this in mind. The 2026 health budget is usually the 2025 health budget minus a savings target set by the Ministry of Finance. The savings target is then divided more or less evenly across the different line items in the budget. Very rarely does someone sit down and think about what would actually be the most effective resource allocation, and certainly not what the impact is on other areas of public spending or revenues. For this reason, health is caught in a cost-cutting spiral, and the reforms that would improve health outcomes as well as the economy long-term are not realised.

How do we break out of this cycle?

Here are three suggestions:

1. Ministers responsible for health, social protection and finance should sit together and plan for the long-term, based on a multi-year financial perspective. This would help identify reforms and investments that will deliver both better health and economic returns, also taking into account technological change, introduction of new innovative products and services, and epidemiology. The EU’s new economic governance framework is facilitating this multi-year perspective of public budgeting, so let’s use it.
2. Experiment with models for integrating budgets across silos. If budget holders have a joint responsibility for prevention, primary and secondary care and social- and elderly care services, they will take a holistic and long-term perspective.
3. Experiment with innovative financing models for investing in health. In several countries, social impact bonds have enabled dedicated programs for prevention and disease management through attracting private capital, with returns tied to achieving health outcomes targets. With public budgets tied to annual cycles, private capital can help create the bridge between today and tomorrow.

Clinging to the status quo is not the right choice for Europe – that would be equivalent to managing a gradual decline. What we need is new and bold thinking, and the realisation that the health of Europeans is not just a matter for public health experts but of fundamental importance for our economic prosperity, fiscal sustainability and societal resilience.

It’s about the future of Europe. Surely worth investing in.

References:

[1] https://www.efpia.eu/media/xpkbiap5/the-case-for-investing-in-a-healthier-future-for-the-european-union.pdf

[2] https://iris.who.int/server/api/core/bitstreams/9e8aab50-ca34-45e0-9fb0-26e675746f65/content

[3] https://economy-finance.ec.europa.eu/document/download/d182f8d0-14fd-489b-8ca5-059d1a6babc4_en?filename=eb088_en.pdf

[4] https://www.efpia.eu/media/xpkbiap5/the-case-for-investing-in-a-healthier-future-for-the-european-union.pdf

[5] https://www.ohe.org/wp-content/uploads/2020/10/Opportunities-to-increase-efficiency-in-healthcare-Errea-et-al-October-2020-5.pdf