[Opinion] First Covid, now McKinsey – how austerity hit EU healthcare

Applause alone for incredibly hard-working healthcare staff does not guarantee adequate health care systems.

European policymakers must recognise that the dramatic and tragic situations during the pandemic in hospitals and care homes across Europe, were not the consequence of the coronavirus alone. They reflect the failure of policymakers to recognise the importance of the public and not-for-profit nature of healthcare systems.

The commission has historically conflated greater “efficiency and freedom of choice” with boosting the role of the private sector in healthcare. Covid-19 has shown clearly this argument does not hold water.

CEO’s latest report – drawing upon documents obtained via Freedom of Information requests – shows an alarming prognosis for Europe’s healthcare policy.

The marketisation of health and long-term care, the push for Public Private Partnerships (PPPs), and the public spending cuts encouraged by EU economic governance processes like the European Semester, all contributed to the increased commercialisation, privatisation, and reduction of health and long-term care services.

The European Semester is the economic governance procedure that affects the most EU member states.

Set up in the early stages of the euro crisis, it was designed as a tool to keep member states’ economic and fiscal policies under closer surveillance.

The Commission drafts annual recommendations to member states, pushing for austerity policies.

Health is a key and recurring theme since the first European Semester in 2011.

In total the European Commission has issued 107 recommendations involving cuts to member states related to their health sectors (including long term care). Given each country typically received 4-5 recommendations annually, health policy is clearly dominant.

Notably, BusinessEurope – one of the most powerful corporate lobby groups in Brussels – had pushed to include healthcare in the EU’s ‘economic governance’ recommendations.

Reduced hospital beds

Neoliberal reforms have had disastrous impacts on health and care systems’ ability to handle the pandemic. Budget cuts have led to understaffing and reduced hospital beds.

While private hospitals increased, numbers of intensive care beds fell, as they are less profitable for private companies. A United Nations Development Programme (UNDP) report found that healthcare privatisation contributed to more deaths from Covid-19.

The study Privatization and Pandemic: A Cross-Country Analysis of Covid-19 Rates and Health-Care Financing Structures”(UNDP) looking at the effect of healthcare privatisation on Covid-19 found that a “10 percent increase in private health expenditure relates to a 4.3 percent increase in Covid-19 cases and a 4.9 percent increase in Covid-19 related mortality”.

Italy’s overall number of acute care beds dropped significantly from 7 per 1,000 people in 1990 to 2.6 in 2015.

The commission cites figures for Italy that 68 percent of all acute hospital beds are public, four percent private not for profit, and 28 percent private for profit.

But, as a New Statesman investigation noted, while private hospitals in Italy have nearly 30 per cent of total acute beds, they have only 15 per cent of ICU beds. The British political magzine notes, “private hospitals’ capacity to contribute to the [Covid-19] response was minimal. The private sector tends to leave such things to the public hospitals”.

Lobby playing field

Despite this the private healthcare lobby, including Brussels-based lobby group the European Union of Private Hospitals (UEHP), actively promotes an “internal market in the field of healthcare”. Abusing the pandemic, the private hospitals lobby is demanding more public money including from EU Recovery Funds, in the name of “a level playing field” between public and private hospitals.

At a time when the evidence against commercialisation of healthcare is mounting, the commission commissioned private consultancy giant McKinsey (known for its role in increasing the privatisation of the UK’s NHS) to shape its Covid-19 crisis response.

The commission has refused Corporate Europe Observatory access to some of the key documents about the precise role of McKinsey and its advice.

In November 2020 the commission presented its initial proposal for a European Health Union, which would give the EU more power over health policy.

As part of its crisis response policies the EU has launched a multi-billion billion EU4Health funding programme for 2021-2027, “to build resilient health systems in the EU to better equip us for the future”.

As the Health Union is being shaped, CEO’s report highlights the need to safeguard the public not-for-profit nature of healthcare provision in Europe, and ensure that Covid-19 recovery funds are not siphoned off to for-profit providers.

CEO and other NGOs, like the European Public Services Union and the European Network against the Commercialization and Privatization of Health and Social Protection, demand that the EU ignores the private sector lobbyists, and reverses course on healthcare liberalisation.

As the EU Health Union takes shape, the EU needs to end its neoliberal policies that have resulted in damaging budget cuts and the disastrous replacement of strong public systems with elements of US-style privatised health care.

Without learning from past mistakes, the EU4Health Union will be built on very unhealthy foundations, leaving us vulnerable not only to the further ravages of Covid-19, but ill-equipped to tackle future health crises.