XML Template (2015) [30.5.2015–7:37am] //blrnas3.glyph.com/cenpro/ApplicationFiles/Journals/SAGE/3B2/HSRJ/Vol00000/150013/APPFile/SG-HSRJ150013.3d
(HSR)
[1–2] [PREPRINTER stage]
J Health Serv Res Policy OnlineFirst, published on June 3, 2015 as doi:10.1177/1355819615585894
Editorial
Health care policy and politics in Italy in hard times
This time is different. According to Pierson, welfare states emerged virtually unscathed from the strains of the economic crises of the 1970s and the 1980s1 and that they bounced back thanks to their enduring popularity and powerful constituencies. By contrast, the current financial crisis is one of those unexpected and rare emergencies (the prototypical ‘black swan’) capable of producing powerful short-time effects and long-lasting political and institutional change. Even health care systems, the most immovable objects of the ‘frozen’ landscapes of welfare states, are on the move to a destination unknown. Italy is the poster child for creeping corruption of the basic principles of its Servizio sanitario nazionale (SSN), established in 1978 along the lines of the UK National Health Service (NHS).2 Although there is no direct assault on the SSN and its universalism, the unprecedented cutbacks in health care expenditure are not just transient ‘haircuts’ but convenient avenues for reductions in social rights. In this respect, the Italian case bears watching by other countries.
Testing times The financial crisis emerged in 2011 as a sovereign debt crisis and rapidly transmuted into a full-blown recession, unprecedented in depth and duration.3 As of March 2015, the Italian economy is in its 14th consecutive quarter of negative growth; unemployment is at an unprecedented 13% and at a staggering 50% among the young despite the standard ‘tough love’ cure of fiscal austerity. The SSN has taken most of the burden of the fiscal adjustment with a reduction of 3.1 billion euros, or 2.8% of its budget between 2010 and 2013, with further cuts ahead. Overall, public expenditure fell from 1856 to 1797 euros per capita, with a parallel slowdown in private spending. Health care policies did not change, implying that the same could be done with less. Current policies just intensify processes well under way such as centralization and dehospitalization. Centralization of devolved regional powers formalizes a trend set in motion years ago,4 and de-hospitalization has been an obsession over the last 20 years. Pressures from the cutbacks have fallen heavily on public sector workers with a freeze on
Journal of Health Services Research & Policy 0(0) 1–2 ! The Author(s) 2015 Reprints and permissions: sagepub.co.uk/journalsPermissions.nav DOI: 10.1177/1355819615585894 jhsrp.rsmjournals.com
recruitment and pay, now in its fifth year. The level of co-payments has been substantially increased for drugs and outpatient services. Inpatients are still exempt from co-payments but the transfer of more hospital services to ambulatory settings may increase the breadth of co-pays. While in Greece and Ireland customers of the private sector turned to public hospitals and clinics, the reported drop in the use of public outpatient services in Italy suggests that the balance between cost and convenience for users is now tilting towards private care.5 This summary tells quite a different story from the received wisdom that high visibility and strong constituencies can protect health care spending. In fact, the SSN is quietly taking extensive budget cuts with no significant opposition from its traditional supporters such as the unions and the Regions, the pivotal forces that contributed to the introduction of the SSN in 1978 and the rolling back of counter-reform in 1992.2
Dogs that didn’t bark Different governments as well as bipartisan parliamentary commissions have repeatedly argued that the generous benefits offered by the SSN put its sustainability at risk unless entitlements are targeted at those in ‘real’ need and additional sources of financing are mobilized. To argue that rescuing the SSN requires abandoning its fundamental principles seems a logical paradox, but pitting universality against sustainability has been quite expedient politically. The rhetoric of selectivity is difficult to argue against in hard times. It helps develop vice-into-virtue strategies of obfuscation for domestic and supranational use, blending cutbacks with claiming credit from domestic audiences for rescuing the SSN and for fiscal virtue when speaking to international markets and supranational organizations. National governments are now accountable to two conflicting constituencies at national and European Union levels with a strong moral undertone of Southern profligacy and Northern thrift.6 The moral notion of ‘austerity as penance’ helps the targeting of countries and, by implication, their populace, with the less-than-flattering term of PIGS (Portugal, Italy, Greece and Spain), which of course prompts national public opinion towards eurosceptic positions (or worse).
Downloaded from hsr.sagepub.com at UNIV OF MICHIGAN on June 12, 2015
XML Template (2015) [30.5.2015–7:37am] //blrnas3.glyph.com/cenpro/ApplicationFiles/Journals/SAGE/3B2/HSRJ/Vol00000/150013/APPFile/SG-HSRJ150013.3d
(HSR)
[1–2] [PREPRINTER stage]
2
Journal of Health Services Research & Policy 0(0)
That the European Union is now a significant voice in domestic policy can partly explain why the centre-left political inclinations of the governing coalitions have had no visible effect on health care budgetary decisions. A host of domestic factors also contribute, including the weakening of the ideological and institutional underpinnings of the SSN. Although not specifically associated with health care, the argument that the unions are defending the privileges of the employed who enjoy too much social protection, against the swelling number of outsiders who do not, has put them on the defensive. The institutional clout of the Regions is also on the wane, troubled as they are by scandals and corruption, and on the brink of a constitutional reform that will take away most of their powers.
Still here but for how long? The current financial crisis has brought about a sea change in Italy in relation to domestic and international politics with significant effects on the internal dynamics of the welfare state. So far, health care policies have taken a backseat with the SSN acting primarily as a lender of first resort to State coffers. The disjointed process of doing the same with less money, higher copayments and shrinking entitlements maintains the institutional logic of the SSN.7 However, big changes do not need big bangs. The emerging path is a process developed largely by stealth, embodying a patchwork of market and non-market regulations leading towards a new regime of cost and risk privatization.8 The drift is towards a peculiar hybridization9 of the SSN, where voluntary insurance schemes are nested in a State-supported system which provides minimum benefits to all. Universality is secured by the basic system, while voluntary insurance schemes take care of privatized risks. The feasibility of the hybrid model depends on expanding the virtually non-existent private health care insurance market in Italy, and on the capacity and willingness of prospective customers to pay. The latter seems farfetched in hard economic times, while the former is bound to be plagued by bitter political confrontations and difficult technical problems. Titmuss famously explained that, in time, adding different tiers to the NHS would encourage the middle class to opt out, transforming the NHS into a residual
system catering to low-income, often elderly citizens. More to the point, top-up voluntary insurance will only increase the uncertainties and insecurities created by market shocks, just as new policies of labour market flexibility do, and multipillar, public and private pension schemes have already done. The emerging hybridization of the SSN thus appears as the latest episode in the classic story of the enduring tension between markets and social protection.10 References 1. Pierson P. The new politics of the welfare state. World Pol 1996; 48: 143–179. 2. France G and Taroni F. The evolution of health-policy making in Italy. J Hlth Pol Pol Law 2005; 30: 169–188. 3. Quaglia L. The response to the Global Financial Turmoil in Italy: ‘‘A financial system that does not speak English’’. South Europ Soc Pol 2009; 14: 7–18. 4. Tediosi F, Gabriele S and Longo F. Governing decentralization in health care under tough budget constraint What can we learn from the Italian experience? Hlth Pol 2009; 90: 303–312. 5. AgeNas Gli effetti della crisi economica e del super ticket sull’assistenza specialistica. Roma, www.agenas.it (2013, accessed 5 January 2015). 6. Fourcade M. The economy as morality play, and implications for the Eurozone crisis. Socio-Econ Rev 2013; 11: 620–627. 7. Hall PA. Policy paradigms, social learning and the State. The case of economic policy-making in Britain. Comp Pol 1993; 25: 275–296. 8. Hacker JS. Privatizing risk without privatizing the welfare state. The hidden politics of social policy retrenchment in the United States. Am Pol Sci Rev 2004; 98: 243–260. 9. Tuohy CH. Reform and the politics of hybridization in mature health care states. J Hlth Pol Pol Law 2012; 37: 611–632. 10. Polanyi K. The Great Transformation. The social and political origins of our time. Boston: Beacon Press, 1957 [1944].
Francesco Taroni Department of Medical and Surgical Sciences, University of Bologna, Via Zamboni 33, Bologna 40126, Italy Email: [email protected]
Downloaded from hsr.sagepub.com at UNIV OF MICHIGAN on June 12, 2015
(HSR)
[1–2] [PREPRINTER stage]
J Health Serv Res Policy OnlineFirst, published on June 3, 2015 as doi:10.1177/1355819615585894
Editorial
Health care policy and politics in Italy in hard times
This time is different. According to Pierson, welfare states emerged virtually unscathed from the strains of the economic crises of the 1970s and the 1980s1 and that they bounced back thanks to their enduring popularity and powerful constituencies. By contrast, the current financial crisis is one of those unexpected and rare emergencies (the prototypical ‘black swan’) capable of producing powerful short-time effects and long-lasting political and institutional change. Even health care systems, the most immovable objects of the ‘frozen’ landscapes of welfare states, are on the move to a destination unknown. Italy is the poster child for creeping corruption of the basic principles of its Servizio sanitario nazionale (SSN), established in 1978 along the lines of the UK National Health Service (NHS).2 Although there is no direct assault on the SSN and its universalism, the unprecedented cutbacks in health care expenditure are not just transient ‘haircuts’ but convenient avenues for reductions in social rights. In this respect, the Italian case bears watching by other countries.
Testing times The financial crisis emerged in 2011 as a sovereign debt crisis and rapidly transmuted into a full-blown recession, unprecedented in depth and duration.3 As of March 2015, the Italian economy is in its 14th consecutive quarter of negative growth; unemployment is at an unprecedented 13% and at a staggering 50% among the young despite the standard ‘tough love’ cure of fiscal austerity. The SSN has taken most of the burden of the fiscal adjustment with a reduction of 3.1 billion euros, or 2.8% of its budget between 2010 and 2013, with further cuts ahead. Overall, public expenditure fell from 1856 to 1797 euros per capita, with a parallel slowdown in private spending. Health care policies did not change, implying that the same could be done with less. Current policies just intensify processes well under way such as centralization and dehospitalization. Centralization of devolved regional powers formalizes a trend set in motion years ago,4 and de-hospitalization has been an obsession over the last 20 years. Pressures from the cutbacks have fallen heavily on public sector workers with a freeze on
Journal of Health Services Research & Policy 0(0) 1–2 ! The Author(s) 2015 Reprints and permissions: sagepub.co.uk/journalsPermissions.nav DOI: 10.1177/1355819615585894 jhsrp.rsmjournals.com
recruitment and pay, now in its fifth year. The level of co-payments has been substantially increased for drugs and outpatient services. Inpatients are still exempt from co-payments but the transfer of more hospital services to ambulatory settings may increase the breadth of co-pays. While in Greece and Ireland customers of the private sector turned to public hospitals and clinics, the reported drop in the use of public outpatient services in Italy suggests that the balance between cost and convenience for users is now tilting towards private care.5 This summary tells quite a different story from the received wisdom that high visibility and strong constituencies can protect health care spending. In fact, the SSN is quietly taking extensive budget cuts with no significant opposition from its traditional supporters such as the unions and the Regions, the pivotal forces that contributed to the introduction of the SSN in 1978 and the rolling back of counter-reform in 1992.2
Dogs that didn’t bark Different governments as well as bipartisan parliamentary commissions have repeatedly argued that the generous benefits offered by the SSN put its sustainability at risk unless entitlements are targeted at those in ‘real’ need and additional sources of financing are mobilized. To argue that rescuing the SSN requires abandoning its fundamental principles seems a logical paradox, but pitting universality against sustainability has been quite expedient politically. The rhetoric of selectivity is difficult to argue against in hard times. It helps develop vice-into-virtue strategies of obfuscation for domestic and supranational use, blending cutbacks with claiming credit from domestic audiences for rescuing the SSN and for fiscal virtue when speaking to international markets and supranational organizations. National governments are now accountable to two conflicting constituencies at national and European Union levels with a strong moral undertone of Southern profligacy and Northern thrift.6 The moral notion of ‘austerity as penance’ helps the targeting of countries and, by implication, their populace, with the less-than-flattering term of PIGS (Portugal, Italy, Greece and Spain), which of course prompts national public opinion towards eurosceptic positions (or worse).
Downloaded from hsr.sagepub.com at UNIV OF MICHIGAN on June 12, 2015
XML Template (2015) [30.5.2015–7:37am] //blrnas3.glyph.com/cenpro/ApplicationFiles/Journals/SAGE/3B2/HSRJ/Vol00000/150013/APPFile/SG-HSRJ150013.3d
(HSR)
[1–2] [PREPRINTER stage]
2
Journal of Health Services Research & Policy 0(0)
That the European Union is now a significant voice in domestic policy can partly explain why the centre-left political inclinations of the governing coalitions have had no visible effect on health care budgetary decisions. A host of domestic factors also contribute, including the weakening of the ideological and institutional underpinnings of the SSN. Although not specifically associated with health care, the argument that the unions are defending the privileges of the employed who enjoy too much social protection, against the swelling number of outsiders who do not, has put them on the defensive. The institutional clout of the Regions is also on the wane, troubled as they are by scandals and corruption, and on the brink of a constitutional reform that will take away most of their powers.
Still here but for how long? The current financial crisis has brought about a sea change in Italy in relation to domestic and international politics with significant effects on the internal dynamics of the welfare state. So far, health care policies have taken a backseat with the SSN acting primarily as a lender of first resort to State coffers. The disjointed process of doing the same with less money, higher copayments and shrinking entitlements maintains the institutional logic of the SSN.7 However, big changes do not need big bangs. The emerging path is a process developed largely by stealth, embodying a patchwork of market and non-market regulations leading towards a new regime of cost and risk privatization.8 The drift is towards a peculiar hybridization9 of the SSN, where voluntary insurance schemes are nested in a State-supported system which provides minimum benefits to all. Universality is secured by the basic system, while voluntary insurance schemes take care of privatized risks. The feasibility of the hybrid model depends on expanding the virtually non-existent private health care insurance market in Italy, and on the capacity and willingness of prospective customers to pay. The latter seems farfetched in hard economic times, while the former is bound to be plagued by bitter political confrontations and difficult technical problems. Titmuss famously explained that, in time, adding different tiers to the NHS would encourage the middle class to opt out, transforming the NHS into a residual
system catering to low-income, often elderly citizens. More to the point, top-up voluntary insurance will only increase the uncertainties and insecurities created by market shocks, just as new policies of labour market flexibility do, and multipillar, public and private pension schemes have already done. The emerging hybridization of the SSN thus appears as the latest episode in the classic story of the enduring tension between markets and social protection.10 References 1. Pierson P. The new politics of the welfare state. World Pol 1996; 48: 143–179. 2. France G and Taroni F. The evolution of health-policy making in Italy. J Hlth Pol Pol Law 2005; 30: 169–188. 3. Quaglia L. The response to the Global Financial Turmoil in Italy: ‘‘A financial system that does not speak English’’. South Europ Soc Pol 2009; 14: 7–18. 4. Tediosi F, Gabriele S and Longo F. Governing decentralization in health care under tough budget constraint What can we learn from the Italian experience? Hlth Pol 2009; 90: 303–312. 5. AgeNas Gli effetti della crisi economica e del super ticket sull’assistenza specialistica. Roma, www.agenas.it (2013, accessed 5 January 2015). 6. Fourcade M. The economy as morality play, and implications for the Eurozone crisis. Socio-Econ Rev 2013; 11: 620–627. 7. Hall PA. Policy paradigms, social learning and the State. The case of economic policy-making in Britain. Comp Pol 1993; 25: 275–296. 8. Hacker JS. Privatizing risk without privatizing the welfare state. The hidden politics of social policy retrenchment in the United States. Am Pol Sci Rev 2004; 98: 243–260. 9. Tuohy CH. Reform and the politics of hybridization in mature health care states. J Hlth Pol Pol Law 2012; 37: 611–632. 10. Polanyi K. The Great Transformation. The social and political origins of our time. Boston: Beacon Press, 1957 [1944].
Francesco Taroni Department of Medical and Surgical Sciences, University of Bologna, Via Zamboni 33, Bologna 40126, Italy Email: [email protected]
Downloaded from hsr.sagepub.com at UNIV OF MICHIGAN on June 12, 2015
