Archive:Social protection statistics - sickness and health care benefits

Data from May 2019.

Planned article update: May 2022.

Highlights

In 2016, the total expenditure on sickness and healthcare benefits in the EU amounted to EUR 1 194 billion, or 8.0 % of GDP.

In 2016, average expenditure per inhabitant on sickness and healthcare benefits in the EU was EUR 2 338. Cash payments made up 12.9 % of this total while the rest (87.1 %) was for benefits in kind.

Expenditure on sickness and healthcare benefits relative to population size, 2016

This article presents statistics relating to expenditure on social protection benefits concerning sickness and healthcare benefits. These statistics are collected through the European system of integrated social protection statistics (ESSPROS). Data are presented for the European Union (EU) Member States, European Free Trade Association (EFTA) and candidate countries.

Full article

Relative importance of expenditure on sickness and healthcare benefits

Expenditure on sickness and healthcare benefits was valued at EUR 1 194 billion in 2016. This sum was equivalent to 8.0 % of gross domestic product (GDP) and 29.5 % of all expenditure on social protection benefits (see Figure 1).

In the vast majority of the EU Member States, the level of spending on sickness and healthcare benefits in 2016 ranged between 4 % and 8 % of GDP; it exceeded this range in the United Kingdom (8.5 %), the Netherlands, France (both 9.2 %) and Germany (9.8 %), as well as in all of the EFTA countries for which data are available (Iceland; 2015 data); it was below this range in Romania (3.9 %), Latvia (3.7 %) and Cyprus (3.5 %), as well as in Turkey (3.5 %).

Relative to the total expenditure on social protection benefits in 2016, the range in expenditure on sickness and healthcare benefits among the EU Member States was somewhat narrower, generally between 22 % and 34 %. Nevertheless, it reached 34.9 % in Germany and 38.1 % in Ireland (as well as 36.2 % in Iceland; 2015 data), while it was notably lower in Denmark (20.7 %), Greece (20.5 %) and in particular Cyprus (18.6 %).

Figure 1: Expenditure on sickness and healthcare benefits, 2016
(%)
Source: Eurostat (spr_exp_sum)

The analysis of the proportion of social benefit expenditure allocated to sickness and healthcare benefits is impacted to some extent by the amounts spent on all other types of benefits, which are in turn affected by a wide range of economic and socio-demographic factors. For example, expenditure on unemployment related benefits is linked to the state of the labour market, while expenditure on old age pensions and family/children benefits is linked to the age structure of the population. However, this is also the case to some extent for sickness and healthcare benefits, as these tend to be higher for older people.

An alternative analysis of expenditure on sickness and healthcare benefits can be made on the basis of expenditure per inhabitant, as shown in Figure 2. Two measures are presented, the first in euro terms and the second in purchasing power standards (PPS). The latter are used to eliminate price differences between EU Member States, with EUR 1 set to 1 PPS for the EU-28 as a whole. Member States with relatively high price levels, such as many western and Nordic Member States as well as Italy, have a lower average expenditure when calculated in PPS terms than in euro terms, whereas Member States with relatively low price levels — all other southern, eastern and Baltic Member States — have a higher average expenditure when calculated in PPS terms than in euro terms.

In euro terms, the expenditure per inhabitant on sickness and healthcare benefits in 2016 averaged EUR 2 338 in the EU-28, peaking at EUR 4 855 in Luxembourg ^[1] while it was lowest at EUR 316 in Bulgaria. As such, the ratio between the highest and lowest average expenditure per inhabitant on these benefits among the EU Member States was about 15 : 1.

Turning to the average expenditure per inhabitant in PPS terms, the EU-28 average remained the same (by definition), while Germany (3 684 PPS) and Latvia (712 PPS) recorded the highest and lowest expenditure on sickness and healthcare benefits (adjusted for price level differences), giving a ratio of about 5 : 1. As such, because wealthier EU Member States tend to spend more on sickness and healthcare benefits per inhabitant than poorer ones, the overall impact of expressing this ratio in PPS terms is that it greatly narrows the range of the average expenditure among the Member States. As can clearly be seen from Figure 2, this was not just the case for the two extreme values: the 12 Member States with the highest average expenditure per inhabitant in euro terms all recorded lower averages in PPS terms, while the remaining 16 Member States recorded higher averages in PPS terms.

In euro terms, Switzerland and Norway recorded higher average expenditure per inhabitant on sickness and healthcare benefits in 2016 than in any of the EU Member States, while in Iceland (2015 data) this ratio was only lower than those observed in Luxembourg and the Netherlands. After adjusting for price level differences, the ratios expressed in PPS were, nevertheless, lower in the EFTA countries than in some of the Member States. In a similar vein, the ratios in Serbia and North Macedonia were lower than in any of the Member States when expressed in euro terms, while in Turkey the ratio was higher than in Bulgaria or Romania. After adjusting for price level differences, the ratio expressed in PPS was also lower in Turkey than in any of the Member States.

Figure 2: Expenditure on sickness and healthcare benefits relative to population size, 2016
Source: Eurostat (spr_exp_sum)

Developments for expenditure on sickness and healthcare benefits

Between 2008 and 2016 the total expenditure on sickness and healthcare benefits in the EU-28 increased 25.6 % in current price terms. Part of this increase reflects increases in prices: the increase in real (constant price) terms was 16.7 %. Adjusting for the increase in the population during this period, the average expenditure per inhabitant on sickness and healthcare benefits increased from EUR 1 897 to EUR 2 338, an overall increase of 23.3 % in current price terms and 14.5 % in constant prices.

Figure 3 presents average expenditure per inhabitant on sickness and healthcare benefits in PPS terms for 2006 and 2016; note that the 2006 data for the EU concern the EU-27. Apart from Greece and Cyprus, all EU Member States reported higher average expenditure per inhabitant on such benefits (in PPS terms) in 2016 than in 2006. Large increases were observed in several eastern and Baltic Member States, as well as in Germany and in Malta, with particularly large increases in Romania, Bulgaria and Poland. Among the eastern Member States the most subdued increase was observed in Hungary. The large increases recorded for many Member States that had low levels of average expenditure meant that there was a general convergence in levels of expenditure per inhabitant between the Member States. For example, in 2006 the ratio of the highest to the lowest average expenditure on sickness and healthcare benefits among the Member States was about 10 : 1, whereas by 2016 it was about 5 : 1 (as noted above).

Figure 3: Expenditure on sickness and healthcare benefits relative to population size, 2006 and 2016
(PPS per inhabitant)
Source: Eurostat (spr_exp_sum)

Analysis of the type of expenditure on sickness and healthcare benefits

Sickness and healthcare benefits can be distinguished between cash benefits (comprising paid sick leave and other cash benefits) and benefits in kind: the latter mainly includes benefits for in-patient health care and for out-patient health care (comprising expenditure for pharmaceuticals and other health care), but also includes other benefits in kind.

The largest types of expenditure for sickness and healthcare benefits in 2016 were two types of benefits in kind: in-patient health care (43.6 %) and out-patient health care other than pharmaceuticals (29.8 %). Paid sick leave (12.4 %) and pharmaceuticals (11.6 %) were the other large types of expenditure.

Figure 4 shows this analysis for the EU Member States, EFTA and candidate countries. Within each of these grouping the countries are ranked on the relative importance of cash (blue shades) and in kind (orange shades) benefits. Benefits in kind accounted for the majority of expenditure for sickness and healthcare benefits in 2016 in all EU Member States, ranging from 95.1 % in Greece to 78.1 % in Latvia; in most Member States (17 out of 28) the share of benefits in kind was between 81 % and 91 %.

Turning to the six types of benefits identified in Figure 4, in-patient health care was most commonly the largest expenditure item: in the nine EU Member States where this was not the case — Belgium, Estonia, Italy, Latvia, Luxembourg, Portugal, Slovakia, Finland and Sweden — other out-patient health care was the largest. Generally these two types of benefits were the two largest in terms of expenditure, but there were some exceptions. In Portugal, expenditure on in-patient health care was particularly low (6.6 %, the fourth largest type of benefit) and pharmaceuticals was the second largest type of expenditure. In several south-eastern Member States — Bulgaria, Greece, Cyprus, Malta and Romania — other out-patient health care was relatively low (always under 20 %) and pharmaceuticals was also the second largest type of expenditure, followed by other out-patient health care in third place. Among the EFTA countries a broadly similar situation was observed, although the share of expenditure for paid sick leave was higher, most notably in Norway where it accounted for a greater share than other out-patient health care.

In-patient health care exceeded half of all sickness and healthcare benefits in 2016 in Malta (where it peaked at 67.5 %), Denmark, Spain, Cyprus, Greece, the United Kingdom and Romania. By contrast, Belgium was the only Member State where other out-patient health care accounted for a majority (54.5 %) of the expenditure on sickness and healthcare benefits. The share of pharmaceuticals was high in Portugal (33.2 %) as already mentioned, with this share elsewhere peaking in Bulgaria (24.2 %). Paid sick leave only surpassed one fifth of the expenditure in Luxembourg (21.6 %). Other benefits in kind accounted for less than 5.0 % of expenditure on sickness and healthcare benefits except in Estonia (6.7 %), Romania (7.6 %) and Portugal (19.0 %), while the share of other cash benefits was below 3.0 % except in Ireland (5.2 %), Latvia (7.0 %) and Malta (8.0 %).

Figure 4: Analysis of sickness and healthcare benefits by type of expenditure, 2016
(%)
Source: Eurostat (spr_exp_fsi)

The final analysis looks at benefits in kind for in-patients and out-patients: together these benefits accounted for 85.1 % of all expenditure on sickness and healthcare benefits in the EU-28 in 2016; excluded are cash benefits and other benefits in kind. Figure 5 shows the nature of these benefits, whether they were direct expenditure or reimbursements. In the case of direct payments the institutional unit running the social protection scheme provides medical care benefits directly to patients (or enters into contracts with health care providers to do so). In the case of reimbursements, the patient pays for the health care and then claims part or all of the costs from the social protection scheme.

Across the EU-28 as a whole, 88.5 % of expenditure for benefits in kind for in-patients and out-patients were direct expenditure and the remaining 11.5 % were for reimbursements. However, this average is somewhat misleading, as in many EU Member States all or nearly all of this type of expenditure was direct expenditure and there were only a few Member States — including Germany and France — where reimbursements were important. In 18 of the Member States, reimbursements accounted for less than 1.0 % of such expenditure. Reimbursements also accounted for a relatively small share of expenditure for benefits in kind for in-patients and out-patients in Greece (2.0 %) and Portugal (3.3 %) as well as in Germany (7.8 %), although the latter had a relatively large impact on the EU-28 average because of its size. Reimbursements accounted for one tenth to approximately one fifth of expenditure for benefits in kind for in-patients and out-patients in Cyprus, Estonia, Finland and Latvia. The share in France was over one third (35.9 %), which strongly influenced the EU-28 average due to its size, while the share in Luxembourg approached a half (45.9 %). The situation in Belgium was almost the exact opposite of that in the majority of Member States, as reimbursements accounted for nearly all (98.2 %) of this kind of expenditure.

For the EFTA and candidate countries shown in Figure 5, most reported a similar situation to that for the vast majority of EU Member States. In Switzerland, the share of reimbursements was 6.7 % and it was 1.2 % in Turkey; elsewhere healthcare expenditure in kind for in-patients and out-patients was exclusively composed of direct payments.

Figure 5: Healthcare expenditure in kind for in-patients and out-patients — direct provision or reimbursement, 2016
(%)
Source: Eurostat (spr_exp_fsi)

Source data for tables and graphs

Social protection statistics — sickness and health care benefits: tables and figures

Data sources

The statistics presented in this article were collected from national statistical offices and/or ministries of social affairs. Most of the data were compiled from administrative sources. For more detailed information, please refer to:

The European system of integrated social protection statistics (ESSPROS) was jointly developed in the late 1970s by Eurostat and representatives of the EU Member States in response to the need for a specific statistical instrument for the observation of social protection issues.

ESSPROS is a common framework which enables international comparisons of administrative data on national social protection systems. It provides a coherent comparison of social protection benefits for households and their financing across European countries.

ESSPROS is composed of a core system and a set of modules. The modules contain supplementary statistical information on particular aspects of social protection and essentially relate to the number of beneficiaries of social protection pensions and to net social protection benefits. On the other hand, the core system contains data that have been collected by Eurostat since 1990, namely:

quantitative data — social protection expenditure and receipts by scheme (a distinct body of rules, supported by one or more institutional units, governing the provision of social protection benefits and their financing);
qualitative data — metadata for the different schemes and detailed social protection benefits.

The receipts for social protection schemes may be classified according to type and origin. The expenditure of social protection is classified by type, indicating the nature of, or the reason for, the expenditure:

social protection benefits;
administrative costs;
transfers to other schemes; and,
other expenditure.

Social protection benefits are transfers to households, in cash or in kind, that are designed/intended to relieve households from the financial burden of a number of different risks/needs that are classified as functions. The following list of functions is identified within ESSPROS:

old age and survivors;
sickness/healthcare;
disability;
family/children;
unemployment;
housing and social exclusion.

The way in which healthcare systems are organised varies considerably from one EU Member State to another. Data relating to in-patient and out-patient health care are broken down into directly provided benefits and reimbursements. There are three main patterns of health care provision.

The indirect system: the social protection scheme provides medical care benefits for protected people by paying all or part of the cost of the medical care supplied by the providers. The patient pays the medical bill, all or part of which is then reimbursed by the social protection scheme. The benefits therefore take the form of reimbursements.
The direct system: the institutional unit running the social protection scheme owns, operates and controls the necessary medical facilities and employs the medical, para-medical and administrative staff. In this system benefits are directly provided to the protected people.
Direct settlement system: an alternative pattern of provision, intermediate between direct and indirect. The social protection scheme enters into a variety of contracts or agreements with health care providers. The medical care is provided to the beneficiary free or at the contractual rate (below its cost) by the providing unit (which is not a social protection scheme). The providing unit is then reimbursed by the social protection scheme. This type of benefit is also recorded as directly provided.

Tables in this article use the following notation:

:	not available, confidential or unreliable value;

Context

The organisation and financing of social protection systems is the responsibility of each of the EU Member States. The models used in the Member States are therefore somewhat different from each other, while the EU plays a coordinating role to ensure that people who move across borders continue to receive adequate protection. The EU seeks to promote actions among the Member States to combat poverty and social exclusion, and to reform social protection systems on the basis of policy exchanges and mutual learning. This policy is known as the social protection and social inclusion process. Furthermore, the European Commission provides guidance to Member States to assist them in modernising their welfare systems through the social investment package.

The European pillar of social rights sets out a number of key principles and rights to support fair and well-functioning labour markets and welfare systems; it forms part of the policy developments related to a deeper and fairer economic and monetary union (one of 10 European Commission priorities for the period 2015-2019). The pillar contains three main categories for action, one of which concerns social protection and inclusion. Right number 16 states that ‘Everyone has the right to timely access to affordable, preventive and curative health care of good quality’ and right number 18 states that ‘Everyone has the right to affordable long-term care services of good quality, in particular home-care and community-based services’.

Notes

↑ The particularly high value for Luxembourg is, at least to some extent, the result of a significant proportion of benefits being paid to persons living outside the country.