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HEALTH STATUS AND LIVING CONDITIONS
IN AN ENLARGED EUROPE





Report prepared by European Observatory on the Social Situation

LOT 4:
Health Status and Living Conditions Network
for the DG Employment, Social Affairs, and Equal Opportunities,
European Commission



Final Report




December 2005


THE LONDON SCHOOL
OF ECONOMICS AND
POLITICAL SCIENCE

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TABLE OF CONTENTS


LIST OF TABLES AND FIGURES ...............................................................................4

EXECUTIVE SUMMARY ...........................................................................................8

1. INTRODUCTION..............................................................................................14

1.1 Methodology and structure of the report ..............................................................18

2. HEALH STATUS IN THE EU...............................................................................21

2.1 Health status in the EU-15....................................................................................22
2.2 Health Status in the new Member States ...............................................................22
2.3 Health status in the Candidate Countries: Bulgaria, Romania and Turkey...............27
2.4 Explanations for the health divide.........................................................................29


3. AVOIDABLE MORTALITY..................................................................................44

3.1 Cross-sectional analysis .......................................................................................45
3.2 Analysis of trends in selected countries ................................................................49
3.3 Discussion............................................................................................................54


4. SOCIOECONOMIC INEQUALITIES IN HEALTH AND ACCESS TO HEALTH CARE....62

4.1 Income inequality and health................................................................................65
4.2 Socioeconomic determinants of health..................................................................67
4.3 Socioeconomic inequalities in mortality ................................................................72
4.4 Socioeconomic determinants of risky behaviours: smoking and obesity ................76
4.5 Other social determinants of health: employment and housing .............................79
4.6 Inequality in access to health care services ...........................................................91


5. MENTAL HEALTH IN EUROPE: A POLICY PERSPECTIVE.....................................109

5.1 What are the consequences of poor mental health? ............................................. 111
5.2 What are the economic costs? ............................................................................. 112
5.3 The policy response across Europe ..................................................................... 114
5.4 Legislation and the development of mental health policy .................................... 116
5.5 Funding mental health across Europe ................................................................. 116
5.6 Out–of-pocket payments and utilisation of mental health services ...................... 118
5.7 Allocating resources to mental health ................................................................. 119
5.8 Entitlement and access to services outside the health care system ...................... 120
5.9 Resources and service mix across Europe ........................................................... 121
5.10 Interventions to promote positive mental well-being? ....................................... 129
5.11 Promoting mental health in the workplace ........................................................ 130
5.12 Continuing challenges ...................................................................................... 132

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clear however is that in many countries in Europe mental health care is grossly under-
funded. Despite the high prevalence, substantial contribution to the global burden of
disability, strong association between deprivation and mental illness, and the growing body
of cost-effectiveness evidence, the proportion of total health system expenditure devoted
to mental health care is often very small. There are still countries with a low political
commitment to making improvements; the stigma of mental illness is an enormous barrier
to action in some cultures.

The 2001 WHO Atlas on Mental Health was the first attempt to systematically collect
information on expenditure on mental health across Europe, indeed across the world.
Combining data from the Atlas13, with more recent work undertaken by the Mental Health
Economics European Network (MHEEN), data on mental health expenditure in 28 countries
are now available (McDaid et al. 2004). Only four countries in Europe as a whole report
spending more than 10% of their health budget on mental health, with the lowest reported
levels of under 2% in some of the newly independent states of the former Soviet Union.
Expenditure on mental health within the health care budget is at its highest levels in the UK
and Luxembourg with spending in excess of 13%. The proportion of the health budget
spent on mental health in the EU (where known) appears to be lowest in Portugal and some
autonomous communities in Spain, at around 5%.

This lack of funding is both inefficient, because of the substantial benefits that
interventions would bring, and inequitable given the high contribution to overall burden,
and disproportionate impact on the poor. It can also hamper the ongoing reform of mental
health systems across Europe, as these often require the injection of additional resources.
Systems that have been starved of funding and skilled human resources for decades will be
in no shape to support major changes to the delivery setting, organisation or processing of
care (Knapp et al. Forthcoming).

Despite the variation in the level of funding across Europe there is little difference in the
way in which mental health is financed compared with general health system funding
(Knapp, Novick et al. 2003; McDaid, Knapp et al. 2004). Nearly all countries rely largely on
some form of income or sales-related taxation and/or social insurance and broadly
speaking access to services is universal. However for some in central and eastern Europe in
particular, the transition to social health insurance systems has not always been effective,
increasing still further the significant proportion of health expenditure incurred through
out-of-pocket payments and private insurance. The limited evidence available suggests
that private expenditure on mental health is limited, due in part to the association of
mental health problems with poverty, so that many individuals have to rely on state-funded
services where these are available. Turkey appears to be a slightly different to the other
countries analysed; in the Turkish health care system it is possible that individuals not



13 Although there is a 2005 edition of the ATLAS – data on funding for mental health in
Europe has not changed from the previous edition in 2001, suggesting that these figures
have not been updated

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covered by one of the government or private insurance schemes will have to pay out of
pocket for all services.

Voluntary (non compulsory for-profit or not-for-profit) insurance schemes provide
minimal coverage for mental health in the European Economic Area. One reason for this is
the chronic nature and high cost of mental health treatments and interventions. Where
these treatments are covered premiums are likely to be higher. Evidence from the US,
where the private health insurance market is most well developed, illustrates the difficulty
that mental health has in achieving parity with physical health, leading to unequal access to
insurance coverage for mental health treatment.

There are some exceptions. In the UK while the number of individuals purchasing private
insurance remains very small, a recent market report suggests that mental health is the
fastest growing independent private health care insurance sector. As more mental health
services are provided by the independent healthcare sector as the NHS increasingly
outsources actue psychiatric care, opportunities to also provide this service through private
insurance also increase. Independent psychiatric hopsital revenues grew strongly in 2001
to £336 million, up 17% on the previous year (Laing and Buisson 2003). Across Europe it is
also the case that some specialist services such as psychological therapy and treatment for
addictions or eating disorders may also be provided on a private basis.

The importance of voluntary (private) insurance is also growing in many parts of central
and eastern Europe, (Dixon et al. Forthcoming) and a future challenge will be to ensure that
where countries shift towards more reliance on private insurance, rather than social
insurance or tax, mental health disorders are fully covered in the same way as other
conditions. At present premiums are usually risk-rated based, on an assessment of
individual risk rather than being community-rated as with social health insurance. One
consequence is to impose the greatest financial burden on people with mental health
disorders or with a family history of mental health disorders (where this information is
used to calculate premiums.



5.6 Out–of-pocket payments and utilisation of mental health services

The MHEEN study reported that eight of the 17 countries levied some out of pocket
charges for specialist mental health services within their publicly funded health systems.
For instance in Ireland while the bottom third of the population are exempt from charges,
the remainder of the population will pay a variable fee for primary care consultations and
indeed pay a hotel charge towards the costs of inpatient stays. Access to mental health
services under private health insurance is limited so there may also be out of pocket
payments for behavioural and occupational therapy (O'Shea and NiLeime 2004). In Iceland
individuals must make a co-payment for most services, although there are reductions for
those who are registered as having a disability, (Tomasson K 2004) while in Belgium there
are fixed fees for specialist mental health services, but these are reimbursable under the
social health insurance scheme (Dierckx H 2004). Economic transition and mental health

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factors behind individual behaviours: What motivates individuals to exercise? What brings
them to lead a more sedentary life and unhealthy behaviour? What is the role of the
environment, social support and family and friends on behaviours?

Access

The surveys coordinated by the European Commission provide a very useful tool for
research. However, it would be incredibly valuable to have access to micro-level data.
Some good examples of accessible are SHARE – the Survey on Health Aging and Retirement
in Europe, and the European Social Survey.

Furthermore, investigations of the relationship between different aspects of time use and
health at the macro level, through surveys, may miss the individual effects. This is
especially important in identifying causal relationships across the life course. It has been
shown that factors in childhood play a major role in determining lifestyle and behaviours in
adulthood. For example, obese children are more likely to become obese adults; the
analysis of the impact of physical activity and diet on obesity should be done at the
individual level.

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References


Barnay, T., Jusot, F., Rochereau, T., Sermet, C. (2005) Comparability of health surveys in

Europe: France, United Kingdom, Russia, Poland, Czech Republic, Germany, Greece,
Italy, Spain and Sweden, International Longevity Centre. Paris: IRDES.

WHO (2004b). Global strategy on diet, physical activity and health. Fifty-seventh World
health Assembly, A57/9.

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