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HIDING THE real gap between private and public healthcare efficiencies

publication date: Oct 15, 2008
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'Public good, private bad' is still a common battle cry in Europe. But often the inefficiencies in public healthcare are hidden by the governments who are responsible for their delivery.

Where they aren't hidden, it is increasingly clear just how inefficient the public sector is.

Take France. Private healthcare operators say that the costs set out annually by the French government for a whole series of procedures often vary by a factor of 2-3 times.

A spokesperson at MediPartenaires said: "It is quite common to find that the cost of an operation is at least twice as expensive in the public sector. In fact, it can be 3 or 4 times more." Quite simply, the French government pays far more for procedures carried out in public hospitals than those performed by private operators.

At least the French set out the costs of different procedures. In Greece, where most private hospitals get half of their revenue from carrying out publicly funded operations, the government simply won't publish what it pays for the equivalent operation in the public sector.

A Greek source said: "Officially, there are two tarriffs, but the costs for the public sector were last published in 1992 and, since then, the government just provides extra supplements to the public sector. It won't say how much these are, so we have no way of comparing the costs."

Elsewhere, governments have quietly retreated from specific sectors, often leaving private insurers to pick up the extra costs. In Finland, for instance, the government contribution to operations carried out in the private sector has not been adjusted for 19 years.

A private healthcare insurer said: "This means that policies we wrote in the late 1980s, assuming a certain level of government contribution, have become totally uneconomic, as we have to pay a far higher percentage of the costs."

He says that this explains why the cost of insuring a child has risen from €40 to €200-400 today.

Our Analysis: What is curious is how this aspect of the private versus public debate has remained hidden in Europe.

Or perhaps it is not so surprising. To admit that such huge price discrepancies exist is, for the elite who run these systems - the politicians and policymakers - to admit to failure. So the voter never asks the question: "Why should I, as the tax payer, pay €2,000 for the removal of an appendix, when another provider can do it for €800?"

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