KEY INSIGHTS
- A delayed backlash: Ratings of the health system rise slightly in the year after a privatisation reform, then fall for years and never recover.
- Charges do the damage: Out-of-pocket fees and cuts to benefits drive the lasting decline, while voluntary private insurance wins only brief approval.
- The sick react first: People in poor health turn negative within a year of a reform, and the healthy catch up by the third year.
- Partisanship fades: Privatisation by left-wing governments is judged more harshly at first, but experience soon outweighs ideology.
- Fees cost votes: Hungary’s 2008 referendum and Czechia’s regional elections show how patient charges become political liabilities.
Across Europe, governments facing ageing populations, tight budgets and long waiting lists are once again asking whether markets can fix public health systems. The arguments, which have guided health reforms since the 1990s, are familiar: patient fees will curb overuse, private insurance will relieve pressure on the public system, and turning hospitals into companies will make them more efficient. Governments seldom ask how citizens judge their health system once these reforms are in place. The answer is that they judge it more harshly, but only after a delay that can lull reformers into a false sense of security.
In a study published in the Journal of European Public Policy, we linked nearly 250 privatisation reforms passed in 30 European countries, drawn from the HEALTHDOX dataset of health legislation, to European Social Survey data on how some 300,000 people rate their national health services. We then tracked opinion for six years after each reform.
The pattern is consistent. In the year after a privatisation reform passes, evaluations of the health system rise slightly. From the second year they begin to fall, and the decline is clearest four and five years on. By the sixth year the additional damage fades.
Taken one year at a time, the decline looks small. But it accumulates over the years that follow, and ratings do not return to their pre-reform level.
Not all privatisation is alike. The early rise in positive opinion comes from reforms that people experience as added choice. Voluntary private insurance offered on top of the public system is one example. Hospital privatisation, at first presented as a fix for debts and inefficiency, is another, but the goodwill wears off as paid extras such as private rooms or better meals make a two-tier system visible.
The lasting damage comes from reforms that people meet at the reception desk or the pharmacy counter: new or higher out-of-pocket charges, and cuts to what the public system covers. The more directly a reform reaches into the act of getting care, the more harshly people come to judge their health system.
The people who need care most notice first. Those in poorer health become more negative about the health system within a year of a privatisation reform. Healthier people follow later and have caught up by the third year. Older respondents also grow more critical, while the young, who rarely see a doctor, barely react.
Politics matters too, but only for a short time. When a right-wing government privatises, evaluations initially improve. When a left-wing or centrist government does the same, they fall. Within a couple of years, however, that partisan filter wears off.
Citizens’ own ideology plays only a weak and later role: a significant effect appears just five years on, when right-leaning respondents turn more negative. In the end, it is people’s need for care, rather than government partisanship or their own ideology, that most shapes their judgement.
Patient Fees Become Political Liabilities
Hungary shows how quickly direct charges for health services can become a political liability, and why privatisation by the left may carry a particular cost. Under a law passed in December 2006, the Socialist-led government of Ferenc Gyurcsány introduced a flat fee for doctor visits and a daily charge for hospital stays. At the same time, its liberal coalition partner, which ran the health ministry, pushed a plan to replace the single public insurance fund with competing insurers part-owned by private, for-profit investors. The fees were small, at 300 forints (about €1.20) per visit, and about one in five people were exempt and as many again were compensated. The reaction, however, was anything but small.
Fidesz, then in opposition, called a referendum, and in March 2008 more than four in five voters, on a turnout of about half the electorate, chose to scrap the fees, together with university tuition fees. The health fees were gone by 1 April. Facing the threat of a second referendum, the Socialists also dropped the insurance plan and dismissed the liberal health minister, and the coalition broke apart. The Socialists governed as a minority until 2010, when Fidesz and its Christian Democratic allies won a landslide. They then took the health system in the opposite direction, bringing hospitals under state ownership and placing the insurance fund’s administration under direct ministerial control.
The Czech case shows the same dynamic under a centre-right government. In January 2008 Mirek Topolánek’s coalition introduced so-called regulatory fees: CZK 30 for a doctor’s visit and for each prescription item, CZK 60 for a day in hospital and CZK 90 for emergency care. The fees were promoted as a way to discourage unnecessary use of services. Instead, they became the symbol of the government’s entire reform programme.
In the regional elections that October, the opposition Social Democrats won every region on a campaign against the fees, and some of the regions they now ran began covering patients’ hospital charges. The fees were then cut back step by step. Children were exempted in 2009, and the hospital charge was struck down by the Constitutional Court in 2013. The visit and prescription fees were abolished from 2015. Only the emergency fee remains.
Southern Europe tells a similar story. Under its 2011 bailout, Portugal sharply raised user charges from January 2012: a health-centre consultation went from €2.25 to €5 and an emergency visit from €9.60 to €20, even as exemptions were widened for children, the poor and the chronically ill. As these measures took hold, Portuguese ratings of the health system fell, most steeply among older, sicker and poorer people. Later governments phased out the fees in primary care from 2020 and then removed them for most other services.
What Governments Should Learn
Our findings offer governments considering market reforms in health four lessons.
First, do not mistake the honeymoon for consent. Ratings taken in the year after a reform can mislead: the decline sets in from the second year and is clearest four to five years on, roughly the length of a parliamentary term, so the reckoning may well fall on the government that comes next.
Second, charges and benefit cuts are the costliest form of privatisation, both politically and socially. WHO Europe’s review of 40 countries finds that out-of-pocket payments cause financial hardship and stop people getting the care they need in every country studied, and that they hit the poorest hardest. In Czechia and Hungary, more than 70 per cent of households facing catastrophic health costs are among the poorest fifth, with outpatient medicines the main burden.
Third, the sick are the early warning. Because the people with the greatest need react first, falling satisfaction among patients signals that broader discontent is on its way. As health inequalities widen across Europe, this group will carry more weight in how health systems are judged.
Fourth, left-wing governments that adopt the market toolkit out of budgetary necessity are judged more harshly at first and gain no lasting credit for it. The lesson extends to the European Union, whose economic governance has repeatedly nudged member states towards commodifying healthcare. If cost-sharing is judged most harshly by those who need care most, recommendations that shift costs onto patients risk eroding support for solidarity-based health systems, a concern for national governments and policymakers in Brussels alike.
European health systems rest on a social contract of solidarity: the healthy pay so that the sick can be treated. That contract is tested most directly where patients meet the system. Privatisation that shifts costs onto those patients may balance a budget in the short run, but it leaves a bitter aftertaste that outlasts the government that introduced it.
Source: www.socialeurope.eu
