JPRS ID: 8289 TRANSLATIONS ON ON WESTERN EUROPE

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~ i979 ~ i' > -i OF n i

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r~K ~rrl~~N~ us~ u~~~Y
- JPRS L/8289
27 February 1979
TRANSLATIONS ON WESTERN EUROPE
(FOUO l3/79) . ~ .
~
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010LIOGRApHIC DA?A 1~ Ilcport No. Z~ Nccipient'a Accceaiun No,
SNEET .rpxs L/eaa9
, i~ c an 5u tu c S~ cpon ate
27 Februar 1979
TRANSLATION5 ON WF;ST~RIV EUROPC ~(FOUO 13/79 ) d,
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17. Kcy 1l'ord+ and Documcnt Analysis. 170. Desctiptors ~
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JPRS L/8289 �
27 February 1979
~
TRANSLATIONS ON WESTE~N EUROPE ~
(FOUO 13/79)
CONTENTS � PqGE
INTERNATIONAL AFFAIRS
French-Dutch Negotie~tions on Aeronautical Cooperation
, (AIR & COSMOS~ 25 Nov 78) l -
BELGIUM
Organizational Breakdown of Air Force Described ~
(AIR & COSMOS, 11 Nov 78) 3 _
FRANCE
Pierret Explaina Reaeon for Break With CERES
(Christian Pierret Interview; LE NOWF~ OBSERVATEUR,
30 Dec 78) 6
ITALY
Causes of Spiraling Health Costs Detailed
(Antonio Brehna; IL SOLE-24 ORE, various dates~ 8
ENEL's Alternative Nuclear Plan Preaented to CIPE -
(IL CORRIERE DELI~A SERA, 14 Dec 78) 35
Canonica d'Adde Oil Deposit Find Hits Record Depth
(Giulia.no Albani; IL COF.t"F~tE DELI,A SERA, 20 Dec 78) 37 -
SPAIN
PCE Leadere Discuas Postelection Program, Plana
- (CAHIDIO 16, 28 Jan 79) 41
WEST GF~NIANY '
Bonn Continuea Heavy Subsidies to Airbus
(Kurt Breme; STF~tN, 18 Jan 7~) 46
- a (III - WE - 150 FOUO]
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INTERNATIONAL AFFA'IRS
FRENCH-DUTCfI NEGOTIATION,3 ON AERONAUTICAL COOPEItATION
Paris A:IR & COSMOS in French 25 Nov 78 p 12
[7.'ext] I,ast Monday, Yvon Bourges, minister of defense, and Joel Le Theule,
minister of transpor~tation, went to the Hague for a meeting with the secre-
~;ary of state for de.fense, Van Eekelen and the secretary of state for the
- econoc?~y, Van AardennE. They were there to discuss French-Dutch aeronautical
~ cooperation.
' The Netherlands plans to replace its roya.l navy's Neptune either with the
Atlantic NG or with Lockheed.'s Orion. Thirteen Orions would cost some 300
Plorin leas. As compensution for this difference, France is offering ti?e
Netherlands an opportunity to participate 3n the product3on of the Atlantic
NG. France is also offering to buy 18 Fokker F 27's ta be used on missions
in the Pacific and to replace the DC-3's now uaed for training in the national
navy.
f{owever, the Dutch find that these compensations are not sufficient. In
addition, they proposed u partnership in the production of a short-range
courier aircraft F 28 Super. The total expenditure for this program is
approximately one billion flnrin. The Dutch plan to assume about half the
expenses and are proposing that the French assume one fourth. The Netherlands
hopes to interest Germany~ in investing, perhaps through the payment of an -
indemnity for the German-initiated separation of VFW [United Aeronautical
WorksJ from Fokker. The Bonn cabinel; will diacuss this transaction on
- 29 November.
Last Nbnday at the liague, there did not appear to have been any discussion ,
of 1:he Nettierland':: participation in the Airbus industry. There is evidently
a d.i.ft'erence of opittion on this sub~ect. France wants all new airliners,
including the future F 28 Super, to be a part of the total product~.on of -
Airbus. The Netherlands seems to want Fokker to remain commercially inde- _
pendent.
From t~ie French point of view it might be noted that definitive plans for the
F 28 :uper (previously called ths ~+.:per F 28, then the F 29) are far from
_ being c~tablished and Frr~nce cannot commit herself to signing a blank check.
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'1'he Dutch stute t;liat; they merely want France to s3gn a declaration of
:Lnl;ention ~Lo participate in the pxogram.
~T t sc:ems un~.ikel,y ttiat these differences can be resolved in the short amount
oF tlme France has been ~*iven 'oy the Netherl.ands. The Dutch had hoped to
tiuve a more precisc answer from Paris yesterday, in crder ~hat this trans-
r~ct9.on mi~ht be discussed rzt the 24 November meeting of the Dutch cabinet.
T.f France were to offer any new, s3gnificant proposals, a report for 1 Decem- -
_ bcr tias been uul;hor3.zed. The Hague has from now until 1. December to choose
tiie aircraft which wi7.1 replace the Nept~xne . After that, the Dutch par7.ia-
ment wi11 have 2 weeks to discuss the choice which will become definitive in
mid-December.
At ttiis writing, the Hague does not seem likely to chaose the European craft.
- '1'hc conseyuences would be serious for Fokker: not only wi11 ;hey lose an
op~~ori;unity for compensation with the Atlantic NG, and a s.~gnificant amount _
- o!' orders for ~he I' 2'(, they will also be unable to undertake the civilian -
projcct on their owti.
, COPYRIGHT: AIR & CO~IOS Paris 1978
9~.61
cso: 3ioo
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, BELGIUM
~
ORGANIZATIONAL BREAKDO'WN OF AIR FORCE DESCRIBED
Paris AIR & COSMOS in French 11 Nov 78 pp 40, 56 _
/Article: Alphajet in Service Soon in Belgian Air Force/
- LText/ The Belgian Air Force, which employs about 18,000 persons, comprises -
thxee main units:
The Tactical Air Force groups all the combat unit~ assigned to NATO. It
includes: an all-weather fighter wing and a fighter-bomber wing, both
equipped wiCh Lockheed F-104 G's; a fighter-bomber wing equipped with
Mirage S~s; a wing composed of a fighter-bombpr flight and a reconnais- -
sance flight, both equipped with Mirage S~s; two NIKE ground-to-air mis-
sile wings; a wing composed of a tactical transport flight equipped with -
C-130 H Hercules planes and a liaison flight equipped with Boeing 727's,
HS 746~s, Falcon 20~s, and Merlins; a Westland Sea King helicopter flight;
two redar control and detection stations; a meteorological wing, a tele-
communications wing, and various aupport units.
The Instruction and Training Group, responsible for training all personnel,
comprisest the basic flight training school, equi.pped with Siai-March~tti -
SF-260 M side�by-side two-seater planes; the advanced flight training school,
equipped up to tl~e present with Lockheed T-33's and Fouga Magisters, both
of which will soon be gradually replaced by Alphajets; tiie military training -
school; the military training center; and a technical school.
Finally, the Air Force Base is responsible for all logistfcal support. It
comprises four wings for aeronautical and electronic equipment, auxiliary
_ equipment, munitions and explosives, as well as various support units.
The Belgian Air Force ia presently preparing to receive and place in service
the first Alphajets and the first F-16's which are going to be delivered to .
it.
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WiCI~ Alphn~et, A1.1 Ynstruction on Two Types of Airplane
The latest issue of ~che magazine ALPHAJET CONTACT, published ~ointly by
Dassault and Dornier, co~ltains the text of an interview with Air Force
Lt Col A. Vanhecke, in ct~arge of the Alpha~et program for the general
_ staff of the Belgian Air Force. We recapitulate below the most inter-
esting passages From this interview.
Tlie Belgian Air Force i.s made up of a single type of pilot: F~.ghter pilots.
Therefore there is only cme training prngram. Until now, iC has been carried ~
on with the use of Chree types of airplane: Che SF-260 (which had replaced
the Stampe SV4), then the Fouga Magister, and finally the T-33. I~ 2 years,
~:~~.th the placing in service of the Alphajet and the gradual withdrawal of
the Magisters and the T-33's, the complete program of instruction will be
done on only two types of airplane: the SF-260 and the Alpha,jet. The en-
trance or the latter into service will make it possible to save a great many
- hours of flying time. Until now, the pilot's wings were awarded to the cadets
of che FAB ~[Belgian Air Force/ only after 350 hours of flight. With the
Alpha~et, this time will be reduced to 275 hours. A saving of 75 hours per -
cadet--thia is a lot for an Air Force which has to train some 40 pilots each
year. ThPSe 275 hours will break down as follows: 125 hours in the SF-260 M
and 150 hours in the Alphajet: that is, 90 hours in the advanced flight
trr~ining school and 60 hours in the transitional flight training sGhool. The
four FAB instructors who last month took a changeover training course on the
Alpha~jet aC the Military Air Testing Center of Mont-de-Marsan will in turn
conduct the changeover and instruction of the Alphajet coaches o� the Belgian
Air Force. -
The pilot candidates who entered the Belgian Air Force last September with
the prospect of a fighter-pilot career will be the first to benefit from the
program with only two types of airplane. With these two types of high-perform-
_ ance airplane, the training should be improved and the results should be better.
_ The Belgian Air Force has always considered that the advanced trafning plane -
with which the pilot-training program is completed should have very high per-
_ formance characteristics, for the professional ~quality of the pilots derives,
in the last analysis, from these high performance characteristics. The FAB -
found in the Alphajet the principal performance characteristics which it de-
sired: very short takeoff time and high rate of climb, to accustan the cadet;
_ fast cruising speed so as to accustom the pilot to rapid reading of maps and
inter.pretation of landscapes--two necessities for the ground attack missions
_ taken on by Belgium within the fracnework of NATO; considerably long range, so
that the mission can be sustained for at least an hour, and a comfortable
range so that if the young pilot makes a navigation error, for example, he
does not panic from obsession ~,~ith fuel consumption; good operational train-
' ing capacity and great simplicity of use; and finally, reasonable cost, both
of purchase and of operations.
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' The difFerencea between the French Air Force~a Alph~,jet and thaC of Che
Belgian Air Force are minimal and relate only to certain equipment and the
e~ection seats: Che French Air Forae has adopted the Martin Baker. MK IV -
~ becAUae it is built in France, and the FAB has preferred the MK 10, which
' offers zero-zero capacity, aimpl~�fied maintenance, and greater comfort.
Questioned on the notion of safety, Lieutenant Colonel Vanhecke repli.ed:
"I think that Alpha~et wi.ll be a very reliable airplane in use, because i.r _
is a twi~-engine plane and because it is a very sound machine,"
COPYRIG~iT: AIR & COSMOS, Paria, 1978
11267 _
CSO: 3100
.
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FRANCE
- PIERRET EXPLAINS REASON FOR BREAK WITH CERES
Paris LE NOWEL OBSERVATEUR in French 30 Dec 78 p 29 -
. [Interview with Christian PierreC by Franz-Olivier Giesbert]
[Text] [Question] The leaclership of CERES [Center for (Socialist) Stud3.es,
- Research und Education] received the support of 95 percent of the delegates
to the Epinay conference last week. Thus, you represent almost nothing:
the minorities within the minority.
Chriatian Pierret: SL�ri~tly speaking, the CERES leadere should have gotten
100 percent, since they were the ones who named the delegates to the
meetingl That is in fact wha~ is called bureaucratic manipulation, worthy _
of the organization of Che congresses of ti~~e SFIO [French Section of the
Workera International (French Socialist Party)] under Guy Mollet. Enough
tu discredit the speeches by CERES officials on self-government. ~
~ In my opinion, we represent 35 percent of the CERES. But we intend from
now on Co address the party ae a whole.
[Question] Why this sudden break wlth Jean-Pierre Chevenement? What was
the reason for the t~plit finally?
Christian Pierret: For the past 2 years the CEREA leadership has been
embarked on a nationaliet course. Everything began with that small affair of
(:i~evc~icment's appeal to the Gaullists in 1976, which I re~ected at the
time. Those responsible for the trend have since become more and more
~ogged down in a very coherenC reasoning: their anti-European,military
ideas have brought them today to the deieiise of e:z autarkic line that in ~
a way converges with that of Michel Debre. Now, as far Fs I am concerned,
being a socialist means being an internatonalist! I also believe that one
_ can be a European while still opposing Che F,urope of Giscard.
By dint of failing to look reality in the face, the CERES leadership
shrouds itaelf in theological language. Its thinking is immobilized.
~ Thus, its loss of ineaning. Chevenementlikes to think he is living in
June 1940. He preached a"naCional leap." Let's drop this "Cochin-call"
type of vocabulary; socialism would have everything to gain from it.
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_ [QuesCion] Do you agree with people who accuse CERES of "tagging along" '
with the CP?
Christian Pierret: I find Chat after they gave up their pursuit of self-
government several yeara ago, the CEkES leaders stopped criCicizing the -
communist countries. They even refuse to call Che Soviet system imperialist!
[Question] Jean-Pierre Chevenement and his team predicC a quick, open break
with capiCalism. Aren't you to the ribht of them on this issue?
- Christian Pierret: What has not been done in Che name of a break! Remember, -
Guy Mollet ruled Che SFIO frnm 1946 to 1949 on a pure, hard line. In the F
government he came to Cer.ms with the colonialisC right buC, as soon as he ~
gat into Che halls o� congress, once there, he was on the side of a break.
- After that, the French socialists ~hould be careful, it aeems to me, not
to pride themselves on words. -
I am in favor of a break, obv3ously, but I believe it is more important to
define it in technical and economic terms than to build a statue to it.
A returci to Molletist scholastics is not the way to mobilize the French -
nor the way one can satisfy their aspirations. Let's wake up! For the
time being, the real debAte--on social planning--is going on in the
CFDT [French Democratic Confederation of Labor] and the GGT or the CP more
than in the Socialist Party. Ft is time we got away from personal,
liturgical quarrels.
[Questionj The CERES leadersh~?~ denounces the "American left," which, in
its preachings of social expPrimentation, would play into the hands of
capitalism. Do you agree wi~h ~his?
Christian Pierret: That is a publicity formula of Servan~Schreiber. He
has not come up with anything new since thQ 1950's. It should not be taken ~
seriously, In their discussions, socialists should not use this type of
excommunication. Rather, why not talk abo>>* u"Chiraquian left" to -
describe certain nPw types of nationalism?
[Question] WhaC is your line? _
Christian Pierret: We want to relaunch the union of the left and endow
our party with real self-government.
[Question] In the final analysis, are you a Rocardian? -
Ctiristian Pierret: We disagree with Michel Rocard on the Union ~f the Left
because we reject the hypothesis of leaving the CP on the sidelines, and
also on the sub~ect of nationalizations. As far as we are concerned ciie
latter is one of the decisive factors in the building of socialism. But we
believe, instead of placing a ban on him, Michel Rocard should be asked the
real questions so that he will shed his ambiguousness and join the line of
Epinay in earnest.
- COPYRIGHT: 1979 "le Nouvel Observateur" `
9268
CSO: 3i00
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ITAL'i
- CAUSES OF SPIRALING HEALTH COSTS 1~ETAILED .
- Milan IL SOLE-24 ORE in Italian 5, 10, 15, 29 Oct 78
[Seven PF~rt article by An~onio Brehna]
[5 Oct 78 p 3]
[Text] Health: The Cost Burden
As health reform moves toward its final scrutiny -
- at Palazzo Madama, doubts are surfacing in seve- -
ral quarters as t4 whether or not the economy can
sustain th~: burden of its cost. The debate� as
often happens in Italy~ is based n~t only :,;:i
skimpy document ation, but also on scanty know-
- ledge ~?f the ~~economic groundrules" that govern
- i;he system. We believe therefore that we are
performing a us~ful �~ervice by providing, in a
- seri~s of articl~s by Antonio Brenna, director
of Lhe tnst,i.tute for Economic R~search in Health, -
some documenta~ion on growing health costs ~nd
a few ob~servati~ns as to the structural as
distinct from the institutional pose as~umed by -
_ the health delivery system causes for our in-
- creased expenditures. -
Far a number of years now there has been increasingly insisterit
talk of criais i.n the wel~are stute (incorrectly tranalatable as
~'state of well-being~'). There are two apparently conflicting
elements which characte~ize this crisis: one is the heavy bur-
~ den of spendii~g that must be borne to assure coverage of social
demands which are viewed nowadays as fundamental (spending which,
with its heavy anri systematic impact on the budget deficit has
wound up as one of the most widespread builtin causes of infla-
tion); and~ on the other, the apparently endless demand for so-
_ cial benefits ~rom various population groups.
Free health services are one example typical of that contradic-
tion. The marked increase,in spending for health particularly
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ro~ d~~zCtnr~ us~ otvLY
pub].ic expcitdi~ure ~inanced by m~nd~tory contr3.but3.ons, ~axes~
ar public d~Abt whiCh is usually aocomp~n3ed by increasing pub-
l:ic di~~a~isf~ction w~.th the servi^es prov3.dc~d, has for ~t lo~s~
' 5 ycars bcen ~ phennm~non dbservod everywh~re in ~he deve].oped
cn?tn~r~.es of ~hs wes~ern wo~r~.d.
Ftec~n~ etnp:trical observations indicate the ex~.s~ence of ~ signi-
tic~nt Correl~tiori be~teen ~he 3ncidenc~ o~ he~~.~h ~pending on
tl~e GDp attd per capii;~ incomes. The highor ~he la~ter (per c~-
pita income wl~ich, desp3.be i~s lack of pr~c3s3.on ~s an 3.ndex i~ -
w~animously consider~d, e~ en t;od 7y, a clue to the 1eve1 of we~~.t;h
oi~ pro,gp~r3ty of a specific popul.ation the higher the fraction
o� res~~urces dc~voted bo hettlth care. This correla~ion holds up
ovar t.3me and ~pace ~~nd, in this s~cond 3.nsbance, 3.~ ~an be
se~n bnth the international and in�rana~ional 1eve~.s.
Let~~ explain that a b3.t. xhe corr~la~3on ho~.ds up over time,
in that the r�ate of inCrease o� health spending is higher than
L-hut of the GDP. As the yoars go by per cap3~a income except
in periods nf acute depression risea, but so does the impact
of heal~h costs on the GDP. If during the san~e year, �urther,
we consider several countr3es or several regions within the
s~m~ country we see tiha~ ~he imF~ct oF health car~ costs on
t;he GDP is greatest prec3.sely where per capita income is highest.
Wi~.hin bhe CEC, that inc3dence has gone from 4.7 percent in 1970
L-o $.6 percent in 1g73, and to 6 percen~ just recently. A simi-
1ar trend can bo found in the larger international communi~y of
t}~e OECD, which embraces, in add3tion t~ most Wes~ European na-
tioiiA, the United States~ Canada, and Japan. As for Italy~ the
rise in the impact of [hea.lth] costs on the GDP has been extreme- -
ly marked, particular2y since 1969. From 3.8 percent in 1964
it has risen to 4.6 percent in 1969, and leaped to 6 percent in
1974� Conser~~~tive estimates for last year set it very close
L-o G.$ percent. It should be noted that the impact �igures just
quoted refer only to spending on health services, and hence do
not cover expenditur~�s on economic benefits (sick pay) or the
financial cos~s (intcrest on indebtedness) for the health care
system.
On thc European Community level, the validity of the correlation
is shown on the graph, which indicates, alongside the positions
of each country (the arrowheads), what might be considered the
combined normal positions (in~erpolating vertical). Unfortunate-
ly the data upon which this graph was construction refer to 1973�
On the basis of more recent data now available, however, there
- seems to be no substantial chaxige in the positions of the indi- -
vidual countries. Updating the graph would probably require -
no more than n shift in the vertical and in the points around it
at the L�op. In 1973, as a~ainst an EEC per capita income of
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$3,y30 ~nd un impact c~� he~~.th ~pond3ng on the GUP of 5.6 per- ,
- oen~, wn f3nd~ at nnc~ extreme point~ Donmat~k (wibh a por ca-
pitg income o~ more ~han $5~~00 ~nd xn impac~ on GDP of
percerrr) and at th~ o~her Ir~~.and (slightly less than ~2,000 and
~ 4.'L percen~ impact~. The riches~ countr3es ~re ~hua spending
more on he~lth care not Qn1y 3n h3.gher absolu~e f~.gures ($390
per capita 3.n Denm~rk vs. ~round $85 in rreland), bu~ also in
_ terms of the por~ion of resources wh3.ch annually become avail-
able.
If we run the same pattern for the Ital3.an regions, we come up -
with results tha~ are altogether ana~.ogous. In Lombardy, for
examplo, whose resident enjoy per eapita incomes very markedly
~ h3.gher than those of the residents o~ Calabr3a, health spending
per cap3ta 3s more than half ag~3n as much as ~hat in bhe sou-
thern region. And 3f we go on and look only at spsnding on hos-
pitalization, the disparity becomes even greater.
- These basic findings holp us, for one thing, to dissipate a very
widespread conviction one which is, in our view, as harmfttl
as it is widaspread that holds that health delivei~y services
, are, so to speak~ basic necesaities. On the contrary: a11 the -
data ind3~cate clearly that a good propartion of the services
actually available today goes to services which, if they cannot
be defined as "luxuries" or "voluntary," in the strict sense of
those terms, are neverthaless typical of aff lttent societies.
This being the case, one of the first arguments to Fa11 is the
one justi~ying public financing for the health care delivery -
system~.
Two issues automatically emerge at this point. First: to what "
point w,ill the rising trend in health costs be tolerable tor the
economies of individual countries? Second: where does Italy
stand in this context on the international scene, and more par- _
ticularly within the European Com~nunity? The answers are any-
thing but pleasant. There a:~, however, a few considerations
that may help dispel some of the fog. Althr~ugh to ~stablish
limits, a priori, upon the limits of tolerance is completely
arbi~rary, we can coiif idently assert that perpetuation of the
present trend is cle:~rly impossible over L-he medium and long
term. If we extrapo:Late the trends begun in the early Seventies,
health costs in the L'EC would swallow, on the average, more than
10 percent of available resources in 1985, and $ years later,
- in 1990, more than 1$ percent (around a sixth). Any "sponta-
~ neous" levelling off of the tendency toward increased expendi- _
_ tures looks highly w~likely fr~m today's perspective: in the
light of the expansionary factors ali�eady at work in health costs,
_ that tendency is far more liksly to be accentuated. Hence the
whole gamut of cost containment measures already adopted, or
under serious study, in other countries.
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- KEY TO TABL~ 5pese s~nilaria e reddilo prn - c~pilc
Oi~dinates : Impact nF he~l~in
- COStB Ori GDP Dan~me~ca
Ab~c~.ssa : I'er c~pita 3.ncoma ~
( in U .5 . dollar~ ) ; - -y_ 1.~.~ -
, " y Den~lu~-
Coun~ri~s, 1et t to ra.ght : ~ ~ ~Ce ` tl~~manla
~reland � -i~au~- _ -
~t- aly ~ 3 \ ~
Great E3rit~in ~ -
~~C generally � , _ Cran
~ Dretegna ~
Benelux COUritT`1@S ~ , ~
Denmark v Irianda ~
Germ~ny ~ z ~ _
v
Source: Ins~itu~e for Health
i3c~ndmic Rese~rch, using ~EC ` o
and United Nations data. iooo zooo aooo ~ooo sooo eooo
- HEALTH COS'I'S AND Redduo pro~eapito (doUa?I U~a)
PER CAPITA INCOME ~on~s: I~Uluto pe? is ritorte di eccnomle
~anltarie ou d~tl Cee sd Onu
Wh~t about Italy? True, in ~hi::. country health costs have noti ~
_ yet reached the impact on GDP~ much less the amount in absolutie
t~rms, that prevail in Germany, Denmark~ or France. Even so,
there are three considerations tha~ must caution us to extreme
prudencc in forming our opinions: first, ~he impact of such
costs is greater in Ita1y than one would rightly expect on the
_ basis of the mean European si~uation, if we consider the very
modest level of our per capita income (the point indicating
Italy falls above the interpolation line); second, the public
defici.t, for which health costs bear a goodly share of the re-
sponsibility, constitutes a far more serious problAm here than
it does to our European part:ners; and third, it must not be
forgotten that, partly becauQe of the jerrybuilt health care
delivery system we rely on, the imminent reforms to that system `
have already aroused some very high expectations both among
L-he people in general r~nd among those in the system and, as
recent experience has taught use yet again, those expectations
will have the net effect of boosting costs still higher.
[lo o~t ,8, p 3,
[Text] Why Yeople Are S~~ending More on Health I
'I'tie liealth cost explosion constitutes a very widespread
phenomenon, involvin~;, albeit at varying levels of intensity,
every developed nation in the Western world. At its root~ logi-
cally, in addition to aleatory factors affecting particular si-
tuations, there ought to be causes universal in scope. What
are those causes? Are there solid grounds for the belief that
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~OR O~~IC?AL US~ ONLY
N~ALTH CA12~ CON5UMPTZON AS A~UNCTION 0~' AGC
Ordinabe~gb~Tnd3ceg ~ consumi senitorl In tunzlone detl'et8
Absc3ss~: Ag~ Indlcl ,
Hogpi~~li~~~ion
' Tot ~l C t~rc: ~ao o~p.d.~i.~~ " ~ _
Aver~ge consumpti3.t~n compl~sNvl
of tt~.1 kinds o~ ~oo
i~ealth care.
~so
Source: Tnstitiute for Health
Economic Res~arch ( duta f rom ~oo. m.di
off3cial Swndi,~h pub~icat3ons)
ao
0
o zo ~no eo eo .ii
Fon1~: lellluto p~r t~ rlcerc~ dl aconomli
�~nllarl~ (dotl:pubbllce:. ulllclall �v~de~l~
the comman factors behind riaing coata in the recent past wi11
spontaneously start losing the3r effect in the years ahead?
He~lth costs are nothing more than the produci; of the quai,tity
of servicoe util3zed t3mes the3r unit prices. It therefore be-
comes easier to single.uut the causes for their increaee if we
' draw a distinction between the factors which swell demand and
those which affect the prices of services. Well, the demand
f~r health services has been rising steadily almost everywhere
since the early Seventies, both by reason of phenomena involved
in the economic development process, and becauae of the evolu-
tion in social legislation.
Improved living conditions, hi~her levels of education, and in-
creasing urbanization, all of them phenomena which go hand in
hand with industrialization~ bring with them a rising demand for
health services and for social services in general. This occurs
p~rtly because of the voluntary nature of a good portion of
health serv3ce consumption (a kind of consumption which grows as -
living standards rise); part].y because of heightened awareness -
of the state of one~s own heal~h, typical of a ci.ilturally ad-
vanced population; and, finally, becaus~ of tihe de~erioration
in the living and working environment which is the inevitable
accompaniment of industrial developmer;t (and which has given ris~
to new kinds of pathology all but unkn~wn among rural societies).
Although there are na empirical data o~z the basis of which we
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might yuantiFy the impract of the~e phenomena on health expend3--
bures~ r~cent research in Great I3r3.ttt3.n, France, ~nd the United ~
St~tes ~grde iii ~heir ~3nd3ng ~h~b ~he demand for he~l~h servi-
Cds 3s gre~teet ~mong ~he more aff].uent c~.asses ~nd~ giv~n equ~l
income, ~hog~ with more oduc~t~~ion, and ~mong urb~n popu~.ubidns.
A~ �or Ita1y, nn~ g3.gnificant piece of 3.nfurm~~3.dn 3.n th3s Con-
_ nection comeg ~rom YNAM (Nation~J. He~1~h rnsurance ~n~~3~u~e); ~
th~ costi af heal.~h c~re for ~n indu~~ria]. wcrker ~.3.v3.ng 3n ~ c~-
pital city 3.s~ on ~he average~ almost tiwice that of ~ f~rm worker
liviiig ~.n a sm~l~. country town. No~e, though~ ~h~~ this applies
only if bnbh wr~rkers have the sarn~ heal~h insurance.
Anothor extremely common phenomenon 3n industria~.izod socie~ies,
and one which exerts tremendous 3.nfluen~e on he~lth spend3ng~
is tihe ~ge3.ng of ~he population. Individu~l dem~nd Por heal~h
care is a~so a funcbion nf physical age. While it 3s low in ~he
early years of life~ it begins to rise sh~rply at around 30~ and
reach~s the mean 1eve1 at around 40 to 45� From ~hat age on,
the upw~rd ~rend grows stead3ly steoper until death occurs. ~
The Rraph, which shows the consumption curves for heal~h care
services as a whole, and separately for hospitalizat;ion, with
increasing a~e in Sw~den, confirms what we have just said. Note
t;hat psychitt~ric tre~tmenti is not included: if we figure that
in, the dev3atiion from the mean is accentuated (one need only
reflect, for examplo, that in the United Staties tihe demand for
psychiatric beds among the population ov~r 65 is almnst five
times the average). In Italy we have no detailed research data
. on titiis count. However, the very scan~y informa~ion avail-
- able would point to a very aimilar situation. A retirese on an
_ IHAM pensiun, for example~ consumes about g5 percent more than
the mean in days of hospitalization for acute illness.
Population age:ing is a~ extremely disquieting phenomenon, in
that, on the one hand, it involvea in just about equal measure
all of the developed countries and, on the other, it appears
destined to continue far into the Fu~ure. In the last quarter-
cecitury (1950 to 1975) the over-6$ population in the EEC coun-
tries rose from 8.$ percent to almost 13�S percent of the total.
It Ita1y, that same population, which amounted to 8.2 percent
in 1951~ had reached 12.1 percent by 1976 and, according to reli-
able predictions, should hit 12.8 percent by 1981.
The expansion of social security systems, with the introduction
of w~~olly or partially free services~ is the other factoz~ in the
expanding demand for health care services we mentioned at the be-
~;inning. Here again, we are dealing with an extremely wide-
spre~d phenomerion, and one which is probably not through grow-
in~. Insofar as Italy is conc~rned, health insurance which in
_ 1955 covered less thun ~0 percent of the population now covers
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~rour~d 97 p~rcen~ o~ us. Wi.th the adven~ o� Nat3~onttl Ho~1~n
Service~ cov~r~g~ should~ wi~h3n ~he spa~e o� a f~ew years~ ex-
bend bo ~he en~3.re popul.ation.
we ~re ~to axpl~3.n ~he exp~.osion 3.n h~a~.~h ~pen~ci3.ng~ we mus~
look at the r3se in un3.t costs of hea~.~h ~erv3.aes. ~ie1.1~ tihdae
cosbs ~re go3ng up for a~ le~sb ~hree re~sons. Th~e f3.rsb ~.s ~o
be �ound 3n the s~.3~hb or non~ex3.aten~ riae 3n labor produc~3.- -
v3~y in the ~yatiem~ and 3.n the partiaular~.y marked upward push
3n wages~ s~1.ar3es~ and fees. The f3ra~ of theso phenomena is
easy bo explain. Health services are~ in the main, personal
services. Scientific progresa and ~achno~.og3.ca1 innovation~ as
we ~h~ll soQ more clearl.y later on, ra~her ~han replacing ~he mnn
_ w3.bh a m~ch3nc~~ ~end ~o ati~ach ~ha~ machine to a man~ and thus ;
to bro~don the reach of ined3cine. Tl-.e fact iss that not only has
the number o� people employed in the delivery of heal~h services
_ been rising stiead3.ly ~ust ~about evorywhere; so has the 1eve1 0�
- qua].ification (roughly measured in ~erms of years r~pent in medi-
cal or spec3.a~.3s~ schooling) for ~he average medical employee.
Nence you have increasingly numerous and increasingly expensive
st~~fs. On top of this~ you have an 3ncrease in physicians~
earninga and by association in thoae of other categories of -
- peoplQ 3n the ays~em which is measurably faster ~han bhe ~ve-
r~ge. Here aga3n we hav~ a phenomenon to be found everywhure in
~urope, with tihe sole except3on of Great eritain.
The second factiox in r3sing coats is to be �ound in the fact that
many oF the more complex health care ins~itutions (hospitals) -
~re represented by public agencies or charitable institutions
which, as such, are not overly sensitive to the reed for fruga-
lity in management.
Md finally we have what has come to be commonly re�erred to as
- the "paradox of inedicine." Advances in health unlike what hap-
_ pens in other sectors very frequently gives rise to new need
- and hence to new and more costly servicea. The reduction of
_ pr~natal mortality~ fnr example~ brings with ~.t an increase in
- the number of handicapped. The lengthening of the average life-
span feeds the demand for services, hospitalization and other,
among the elderly. And so it goes. Every medical advance feeds
the hopes of new classes of patients, whose survival presumes
systiematic reliance on and utilization of health services which
are often extremely expensive: organ transplants and hemodialy:,::.~
sis are the most typical examples~ though by no means the only
ones, of this sort of thing.
This paradox constitutes a fundamental problem for the health
care systems of the future, often facing the planner with awe-
t~ome decisions (how, For example, can one justify spending huge
:~ums to prolong the already precarious existence of one person,
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- ro?~ o~~rr.inL us~ orrLY
wh~n y~u h~ven~t the m~ney ~o provide ~ccep~~b~.e hygienic condi-
tic,n~ for gre~~ti m~gsc~~ o~ people?). This is no~ the place ~o
~;ot in~o ~hc mc:rit,~ of this so~ of prob~ems. One ~hing, though,
wC Cun ~suy a~ of now. Mernly know~.ng ~boub ~hc poss~bili~ies
oponod up by med3.ca~ progre~s and being ~ware of ~h~ pract3c~1
util:I.zat~.on of t}iosC po~s3.b3~.it3.~s presupposes the commitment of ~
tremendous regources mugt spur ~hose respons3b~.e tio intervene
w3.th ~he utmos~ rigor in cu~~ing b~ck on the vas~ amount ~f wasbe
th~?~ ~oes ~n, as wel]. ~s on a1~. expenditure~ which go ~o supply
consump~ion whose e~�3cacity is, to say the 1e~s~, dubious.
[ 15 Oct '78 p 3) .
[Text] Health Spending Peaked? Not Likely
Jusr. how big has healtt~ spending grown in Italy? How
f.~s has it grown? What changes have occurred in the ratios be-
tween spending and the more aignificant macroeconomic indica-
tors? These are questions we sha11 try to answer, taking as our
context a period long enough to embrace a11 the major trends.
So As bo avoid misunderstand.ings, always possible when it comes
to figures, we might best define, first of all~ the real state
of affairs to which the expenditures we are concerned with refer.
Econom3ca11y and financially apeaking, the Italian health care
system is a mixed one: alongside a public sector, which includes
liealtih services f3nanced by 1oca1 agencies and whose cost burden ~
rests on the collectfvity as a whole, there are also an insurance
sector, kept going mainly by work-related contributions, and a
private sector. Whereas the public sector provides, in addition
to psychiatric services~ mainly preventive prophylactic and hy-
gienic services, the insurance sector has to finance almost all ~
diagnostic and therapeutic services.
[3eginning in 19~5, when public hospitals were transferred to the
regions, a new financial institute known as FNAO (National Nos-
pital Care Fund) has been operating with work-related contribu-
tions and transfers of funds from the Treasury. The Fund is
i~nique within tlie Italian financial structure, in that on the one
tiand, as we just said, it gets a very large share of its money
_ from worker contributions, which constitute an extremely and very
inequit-able burden on that one segment of society; and on the
, other hand it pays fa~r uniform and extensive services not only
to workers with health insurance; but to the indigent as well as
to "voluntary contributors.~~ This means that as of early 19~�,
we have had a new economic sector in the health field in the
_ form of the hospitals.
It is worth noting that the financial system we now have for hos-
pital cdre will, with the establishment of the National Health
Service (which calls for unification of the public, insurance,
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Cons3s~ont w3bh ~he con�3.guration our health system has b+~en mov-- .
ing tow~rd, then,, s~ar~3ng in 1975, hospa.talization spending is
shown separa~ely under tile FNAO head3ng. Gross health expendi-
tures (~3r~sured plus public ) a~ current pr3.cea, as shown on ~he -
table~ has rison From around 1,520 bi113on lire in 1964 to 2,690
in 1969, to ~,125 billion 3n ~.974 and finally ~0 7.as~ year~s
11,520 b311ion.
The sums are smaller when gross hea7.th expenditures are purged of
_ econom3c health payments (aervices which obv3.ously are not direct
health serv3ces~ but rather money transferred ~o families in par-
tial compensation �or income lost as a reault of illness); of the
adminis~rative coats of sueh ancill~ry services, and of the debt
service costs which we3gh so heavily upon the entire health sec-
t;or. This 1as~ item ltas grown 3ncreasingly weighty over the span
oP years, thanks to the steady r3so o:E indebtedness in the health
_ soctor as a whole (particularly among the insurance carriers) by
, comparison w3th the rest of the economy.
One need only think, in this connecti~~n, of the fact that at the
- end of i974 the inaurance carr3ers~ debt and that of the communes
to the hospi~als and consequen~ly that of the hospitals to the
banks and to their suppl3ers together came to more than 4,100
billion 1ire. Considering that net overall spending for health
_ in 1974 came to 6,050 billion, this one sector~s defic3t that
year accounted for 68 percent of all spending for the fiscal year.
flealth expenditures purg~d of the cited burdens (compensatory pay
for illness, administrative costs for the compensation program,
and deb~ service), meaning the money that actually went to pay
for health services, came to the amounts shown in the last column
of the table (from around 1,300 billion in 1964 to 9,8$0 billion
in 19~~).
The data shown here lend themselves to three kinds of remarks.
First, the kind of spending that has grown in a way that can only
be described as pathological is insurance fund spending. Over
the 1964-19~4 decade, in fact, while public spending on health ~
services was roughly tripling, only a little faster than the GDP,
insurance fund spending practical.ly quintupled. Over the next
three years, the gap widened perceptibly. The phenomenon is any-
thing but insignificant.
The expenditures referred to here as public, which more than any-
thing else show very moderate rises over recent years, are in -
fact the r~oney that goes to finance hygienic and sanitary servi-
ces, prevention and rehabilitation hence precisely the kinds
pf health care delivery the reform is expected to increase.
- Diagnostic and therapeutic services~ which in most people~s opi-
nion are riddled with abuses and consumerism~ and which as such
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~ FOit OI~'~'ICIAL US~ ONLY -
HCALTH CARE SPENDING IN ~TALY - 1964-1977 (b311ions of i978 lire)
1964 196g 1g74 1975 ~.976 ~.g7~
Public spending 267 41~ 852 ~65~~ 97i~ i.067~E
Insurance spendin~ 1,255 2,Z74 6,273 4,354 5,4i7~ 5,~36~ -
~'NAO 3, 300 3, 750 4~ 5i5
motai cross i, 5zz 2, 688 zzs 8, 6ig io,13$# ii, 5i8~~
Tot~i xet 1, 309 z, 374 6, 053 7, 2z83F 8, 480~ 9, 850
~ Preliminary da~a ~
Source: Tnstitute for Health Economics Research, using data from
off icial publications.
fiEALTH SPENDING AND GDP Spesa seniteria e prodotto inte~no Iordo
~ KeY ) ioa~ci
Abscissa : years spe~~ mutusliet'c� ;
~
Ordinates : Indices ~oo _ _ ~Pesa ae~iter~e '
Source : cfr. Table above ~ PubbllCS
p?odolfo Inlorno lordo
Tnsurance
e spen r.ling 500 ~umerl IndIe1:1984=100 ~
~ �
Public health ~
~pending -
~oo ~ '
GDP ~
Index numbers:
i964 = ioa ~
,oo -
1fl84 1969 74 )S 76 77
Fort~: cfr. tebelle
- hospital sectors on territorial lines) be expanded to cover the
- entire health delivery system, thus emerging as an instance of
- improper financing. -
The private sector of inedicine, relying on the personal income
of the users of its various services, completes the circle.
Although this sector~s dimensions are in actuality far larger than
one might think (it includes not only those who do not have health
ii~surance, but also to a considei�able degree those who do in f act
have it), we shall confine our considerations here to public and
- insurance spending on health services. The difficulties involved
in~arriving at an estimate of private health spending are such as
to proi~ibit our providing reliable data on that score.
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_
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ou~;h~ to be redimons3oned~ have on ~he con~rary ~ttracted con~ '
- ~tanbly ix~croasin~ amoun~s of mnney. -
Tho second observat3on has to do with the di�ferent pattern that
has governed overall health spend3.ng dur3ng the three periods in~o
whic}i we ~heorotically div3de tho l3 yeara covered by our data. -
Over the $ years �rom 1964 to 1969 that kind of spending rose by
~n annual average of 12 percent. The real leap comes in the fol-
lowing 5-year per3od (which coincides with the last period of full
ins~urance carrier management), the 5 years over whici~ ~he mean
annual rate of increase rose ~0 21.$ percent.
Beginning in i975, the increases consistently begin to taper of�
(21 percent in 1975, 17.6 percent in 1976, and 13.6 percen~ in ~ -
1977)� This 1eve11ing trend takes on greater signi�icance when
we remember that the in�lation rate was rising duritig those same ~
yea�rs. The data on expenditures for the last 3 years, however,
should be taken with more than a grain of salt, for reasons which
will be made clear later on. The graph shows the two observations
just made (note that oii it FNAO is included under insttrance).
In the wake of that spurt of increase and this is the third
_ observation the impact of gross health-connected expenditures
on a11 tlie major economic indicators (GDP,private consumption,
total consumption, etc.) has been growing even faster. Taking
GDP as a reference term~ the impact of gross health-connected
expenditures (including such expenses as sickpay and other costs
already discussed) has risen from a modest 4.$ percent or so in
1964 to ~ percent in 1974, and again to ~.5 in 1975� As of that
year, our da~a show that the trend is turning around. In 19~6,
in fact, the impact of spending on the GDP came to ~ percent~ and
last year it was down to 6.6 percent.
Nave we ;reall.y peaked? That conclusion is not what one would ca11
self-evident. At least two considerations come forcefully to mind
in this connection. First, the data shown on the table for in-
surance �und spending and public spending over the past 2 years
are preliminary, and there is every reason to assume that they
will be revised upward. Second, the data referring to hospital
care over the past s years do not reflect that expenditure, but
merely FNAO payments, and we all know that those payments have
shown themselves to b~ altogether inadequate to cover the actual
expenditures by the rcgions for hospital care.
We must there~ore be c:xtremely cautious in drawing optimistic con-
, clusions. The impression we get, above and beyond the data, is
that the share of avai.lable resources swallowed up each year in
the maw of the Italia~i health care system is going to increase
, still further. -
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I
~oR o~rici~ us~ ornY -
z9 oct 'p 3]
~ [Text) The GrAbby Fbapitals: How 'Chey Cot ThaC Way '
. The hospital is rhe eye of the storm of con~radictions
swirling around modPrn health care delivery systems. On the one
_ hand, and Por years, there has been a growing urgency in demands
, that we cut d~dwn the space this institution occupies in the health
organization; and on the other we must admit that there is steady
growth in the share of b~.ame the hoapital must ahou7,der, although
the blame pie is growing, too, if we look at the amount of money
_ we spend on protecting our health.
- On the one hand, there are those who insist that teaching and re-
search activities be taiten out of the hospitals and put into other
health structures, and on the other hand we must admit that the t?os-
p:ital particularly the large hospital with clinical facilities
_ is in practice the only place where students can get training,
at the university and professional 1e~e1, in the so-cal.led healing
_ arts.
_ On the one hand some say that the giant general haspital is increa-
_ singly hard to justify, given its particularly high costs and the
difficulties encountered in its administration; and on the other
we see peaple still planning general hospitals with more than 2,000
beds. We could, of course, go on with such con�licting examples
indefinitely.
The �act remains that the hospital repres~nts a concentration of
power, a coagulation of interests, a chancQ for a job, and, m~re
generally, a factor in local development whose weight few others
can match in everyday terms.
These contradictions stand out more sharply in Italy than elsewhere.
For at least two decades naw there have been widespread calls for
- "de-hospitalization,'~ for more emphasis on basic servicea, for
"territorializing" services (enclosing terms of questionable taste
in quotation marks is the requisite pinch of pepper in any dis-
cussion of health policy).
A posteriori, however,we cannot fail to see that while the hospi-
tal system has been undergoing spectacular expansi.on, at least in
quantitative terms, the basic health organizations, including the
fundamental public health services, have been steadily edged into
poverty. Furthermore, the much-talked-of health re~orm program
has thus far failed to come up with any measures other than those
centering on the hospital sector. The major legis~.ation from the
institutional aspect to appear in the last decade is all to be
- found under the heading of "Hospital Reform" (PL 132'of 12 February
1968) and ancillary decrees, and in the act transferring hospital
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functions to the reg3ons (PL 386, 7.7 August 19~4). Finall.y, it
is fairly pointless to recF~11 espec~.ally in the wake of the
pe11-mell expans3on o� the sec+-,or that our hospitals, parti-
cularly the largest o� ~hom have in recent yaars become the
focus o� massive p,r.utest,.where the period expl~sion of frustra- -
_ ted expectations ac~:s as a potent agent for aocial inst ability.
The pervasiveness of the Ztalian hospital in its financial aspects
is shown on the accompanyi~g table, where the cost of hospital
care is set against the cost o� health care as a whole ~this means
hospital and health coats borne either by local agencies or by
the insurar.ce carriers, not including sickpay and benefits, inte-
rest on health system indebtedness~ or administrative costs).
A Complex Problem
As you can aee, the impa~~~~~f hoapital spending on health costs
in general has risen from around 40 percent in 1964 to 44 percent
_ in ].969, to arc~und half ( 48. 6 percent ) in 1974 � Since 197,5, ow-
_ ing to the.~ransfer of hospital care responsibilities to the re-
gions,,thte problem has grown more complex. The table shows, along
with the amounts actually spent by the refions to provide hospital `
~are, the appropriations approved by Parliament for hospital care
under the FNAO Health Fund.
These appropriations should ;nave acted as a brake on hospital costs
themsel`wes, but that is not the way it turned out. Given FNAO -
_ appropriations of 3,300 billion in 1975 and 3~750 billion �or 1976, -
the regions spend 3,513 bil~.ion in 1975 and 4,061 billion in 1976
~(the data for last year are the combined preliminary budgets for
a11 the regions except Calabria, for which an estimate was made).
Anyhow, even if we take into consideration actual expenditures for
hospital care, the impact; on health spending for 19~$ begins ~o
flatten out : from 48.6 percent during the first year after the
regional takeover to 4~.9 percent in 19~6.
Thc real spending explosion thus occurred in the $ years immediate-
ly following the 1968 "reform" (from 1969 to 19~4 the annual
average increase in hospital spending was more than 24�S percent).
Why should that be? Can any remedy really help at this point?
_ This is not the proper place to go into the merits of the 1968
- flospital Act. Citing it, however, is anything but idle, since it
is the symbol and epitome of a reform which, having failed to spot
the rnost o~vious economic implications of its provisions, has had
disastrous effects. It is an example deserving of serious reflec-
tion (not to mention avoidance) right here and now, as we put the
finishing touches to another reform, that of the health system,
far greater in scope arid dimension.
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~ Spesa sanitaria e spesa otipednliera - Anni 1964� 1977 `
tylrl 1'~69 iVia 19i.9 1976 19i7
_ 1'al.~ Incr, ~';~I. In~v. 1';?I. Incr, ~ 1'ai. Incr. \'~L tnrr. ~'aL l;irr.
- 0S1U~. Ilil'l~lU ~KCO~. 1flM~1f1 ~\\!1~. IU~'l~lU il~~ll~, Illl'l~lU 8~~~~~. 111~'l~~D .l~~lli~ TT1C1~111
(rniLdi 1 unnuu 1 niiLili i,~imuu ~ ntil,di I auinu~ 1 n~iLui? ,inniw ImiL~li ~ annuc~ (i~iiLili i ,mnuri -
5pcsa sanil. com� ~ _ _ _
plcsxi~�a nclla I'~14 - ~ ii 1 12 h"~~ 6.0~= ~O,h � i.??R l~~,d "n � R.~PO 17,.i ~ u,�~q ~P.~
� Spr~a ospe~lalir~'.~ ~?4 - l.U~i 1a,6 "0 3,IiU .i,u "o "�3,.~~; IU,~ ~ n ~ J.~ri1 I~fi"~~ i.~L n.~,.
FJvAO
:..;lKl 3 7~1 I i,n d~ 15 :U,~4 "o
� Dati prov~~isori. l
Datu ~~01'Vi301'IU, It1 CSAO ~ ~II~~U~~ t~~Ul ~;1 ~It;tiO u.~~.t!~1~1CI.i ~ C~)u�ltl~li~~t Ill;l ~n ~I:~II/GilltCltlil ncl FNA(].
- Funlc: Elatwraziunc drll'I.iilulu prr ~,i fth.~~..~ I'.~unuin;:i ,~:n~~~:ir:,~ .u ~lali r~;i~illi da pubblir,iziuni uttiuali. ~
-
TOTAY. HEALTH SPENDING vs HOSPITAL SPENDING ( bill.ions of lire ) -
KEY TO TABLE
- ReFerence colunul entries :
Total net health expenditures
Hospital expenditures
FNAO ' -
fieadings for six double columns:
- Year Year Year
Actual Mean annua�1 Actual Mean annual Actual Mean annual
' amount increase amount increase amount increase
o...o
# Preliminary data
_ ~E# preliminary data, not including final hospital expenditures
but including payments into the FNAO
Source: Institute for Health Economics Research, using data from
official publications.
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,
1~'OR (1l~'CICiAI. USE ~N~Y
' HO~P:~TAL SPENDZNG vs TOTAI.
}IBALTH SPENDING 7N ITALY SPESA O~PEDALIERA E
( Key ) SPE3A SaNITARIA IN ITA LIA
Indic~r _
Ordinates : Zndex ~'E8A BANITAp1A
COMPLEBSIVA NETTA ~
_ Abscis~a : Years ~oo ;
,;i
~��1~��~~~~ 9PE9A 09PEOAL~ERA
TotaY net health ex- fNAO (
pend3.turet3 soo N~T.~~ ~�di~. ,oe,�~oo ' ~ -
�����a.. Hospital expendi- ~ ~
_ I ~
- tures 3001 ~ I
' I
0000000o FNAO ' ~
[3~~sc year for index levels: tao i --~t
- 1y64 - 100 ~ -
,
~oes ~oe~ ~~a �~s �~e
With the 1968 Hospital Act, what happened substantially was the
- introduction of four innovations�(I am referring ~o the greatest
innovations with reference to what we are talking about here): ~
- first, we endowed the hospitals (operated theretofore mainly by
"public welfare and charity institutions,~' the "Corporal Works"
of blessed memory with complete autonomy, turning them into ~
functional public agencies; second~ we liberalized access to them,
making it quite impossible for them to turn anybody away for any
reason, sound or otherwise; third, we set up regulations cover- _
ing staff, at the very least from the point of view of standards;
- and fo.urth, we took care, through a device as ingenious as its
consequences were catastrophic, of covering the costs of the hos-
pital agencies.
7'hat last point is particularly important. Therefore we had best
bc~;in with.it. With the reform of public hospitals it became pos-
_ sible to finance the services they ren~ered through what was called
the "hospitalizatio~z fee" (the cost per day of staying in a hospi-
t;~?l); L-hat fee is reckoned simply as the ratio. between t}ie pre-
= ciicted overall cost and the number of days hospitalization expec- -
ted for thr.it particular admission.
No Cont;rols
There is no control worthy of the name over the sum of costs: that
�unction assigned to the regional auditing boards amounts
in practice to merely ascertaining the legitimacy of the various
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Ltems ~C exp~nditurc~. '1'hc in~urane~ c~rrierg--ehe principal "purch~gers"
hdgpitc~l gervice~--~re thug srripp~d ,~f any ContrgCtual powPr, and their
role ix thu~ r~duced to merely p~ying th~ billg tl~e t~ogpit~~l ~ends them,
br~yecl o?i noChin~ but tlie numb~r of daye Che ingured gpent in n hngpital
bed.
- 't'he pub.lic hospi~als, therefore, hgve f~und thpmgelves in the position n~
~i mottopoly holder, with ane nddiCion~l ~ndvantage: while Che mdnopoly
lets itstintder set priceg, provided he is willing eo ~eetle �or whatever
d~m~nd there iq nt th~t price, when n huspiCal s~ta ~ high per diem r~te -
(hi6h enough ~o cover all COSCS~ however inCUrred) it doe~ not Ch~reby
lower demand, since the demand is gunrgntieed by Che insurnnce gystems
~nd--~lbeit in far lesser measure--by locdi ngenciee.
Nurther: the public tinapieal agency, eh~nks to Che fu11 ~ueandmy it now -
enjc~y~, iq suddenly operaCing like ~ny priv~te buginegg, but wiChout h~ving
_ tc~ :~tf~y wlthin ttny budget: maximizing profits, whiCh may be Considered
- tu constitute the dominant ~im in private hospitals~ is replgced in the
public hospit~718 with meximizing tltie satisfaction--in Cerms of opportun--
Itten fUr bncksCage maneuvering for prestige attd power--of locnl admin- -
istr~~Cnrs and bigwigs. 'Che elimination of ~11 barriers to enCry, the
esCablishmenC of minimum levels of staff CogeCher wiCh official recogni-
tion of tticir sCatus, not to mention the declining efficiency of Che
basic services, ever ready Co pnlm o�f onto Che hoapiCals any case
- involvinF tlie slightest difficulty, have largely contribuCed Co Che dis-
orderly ~rowth of the hospital system und to the congequent inflation of
COSC5.
To ttiis we must add that tt~e only Cwo provisions contained in the 196$ AcC
desi~ned to improve efficiency have never been put into effect. There
is reference to the powers delegated to the government to issue standards
covering hospital administration and accounting practices, and to the
planning function assigned to the regions (and, pending their institution,
to ad t~oc committees, the regional comnittees for hospital planning).
Wcll, the gc~vernment has leC those delegated powers lapse. With the
result that even now hospital administration and accounting practices
are still gov~rned by regulations dating back to the 19th centurv. As
- fnr tl~c pl.annin~ authority, �t is enlightening to reflect on the~fact
th:?t as of tt~e end of 1974 only one single region, Lombardy, had adopted
a pl~n ~~nd passed the enabling legislation. -
Thtti, In brlcE, is the history of all the things that have helped to beget
tf~e truly prec~~rious sttuation inherited by the regions in 1975. The
~~btlity of tt~c regions to apply the timeliest (and most feasible) reme- -
dic~: iti mntter Eor ~znother inquiry.
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~Utt C1~~tCiAL USN, hNLY
Nn~ 7n, n ~
mCxt ~ Wi~hnub he~1L-}i re~nrm ar?d pQnding ~ SpGC~.~I.C
, pro~,rammati~ p1~n~ Ib~ly~~ hospit~ls are
adrift.
tiigh cn~L-~~ ~ndemic ctittds~ ~nd cr~.SGJ ~ris3ng w~.th m~ddening re--
~ul~r3ty ~re th~ tra3.~s ch~r~cteri~tia o~ the hospital ene in
_ ~t~1y~ ~nd h~vc been ~or a~ l.~~st a dern~de. Why? 7'}1C ~i15WE,-'I' i~
~ny~hi.n~ but simple. ~ven soi w~ dn no~ fecl ~.b wduld be �~r -
wide o~ th~ mark to s~y ~hnt, undcrlying ~he whol~ si~u~~ion, is
thc f~ilure n~ the so~called ho~pit~l reform oF ~.qG8.
, 'I'hat rciorm w~s based on ~ wager: that we could turn our hospi-
t~1s from ch~ritable-wel~are inst3tutions~ relying largely on
vn].unte~rs~ on 1ow levels n~ sk3.11 and remuneru~3.on tn staf�~ in-
to mod~r~t~ li~F~lt;ll delivery structures of h3gh QFficiency, with wel.1.
p~id ~nd wc1~. tr~inc:d sti~�f capab7.e df prov3.ding medica~l cttr~ at
~ hi~;li levc~l~ as we11 as of performing educ~t3.ontt1~ teaching, ~nd
rese~rch Cuncti~ns. 7'hc increased Costs of th~ operat3on it
was thought ~t tihe time would bQ parti~lly offaet by the peo-
ple~s using the hospi~~ls lesa frequently. The modern hosp3tal
for acu~c cases is dif~eren~ from the o1d charity ins~itutions
in sevoral ways, including its prerog~tive of picking and choos-
ing 3.ts ~dmi~sions, and the i~elabive brevity o� tihe average pa-
tient st-~y.
Wh~t was missing in this pl~n? ~'irst of all, ~ny provision for
controlling t�he demand �or hospital services. The demand for ad-
missions is measured in days of hospitalization. Md hospi~al
d~ys ttre nothing more than th~ number ~f citizens admitted each
year times the number of days each patient stayed, on the ave-
rage, in the hospital. Well, the number of days spent in every
sort of hospital by the average Italian shows no sign of declin-
ing, and the time spend only in the public general hospitals (the
ones Eor acute cases, which notoriously have higher unit costs)
:i:~ incre~sin~, although noti by much, in spite oP the fact that
tl~c: ori~inal datum was quite correctly felt to be exces-
~ivcly high.
~ More spcci�icnlly, by compnrison with a madest decline in ~he
. ~v~r~~;c length of hospital stays from 13.83 days in 1969 to
13�34 in 1y74 nnd a~;ain tio 1'1.49 in 19~6~ there has been a marked
ri~c in the frcqucncy of hospital acimission: in i96g, 11$ of
1,UU0 cit.izens were admitted tio public general hospitals; in
1~~74, Lt~crc were 133 per 1,000, and in 1976 there were 14Z. This
mc:~ns Ll~:~t therc is st-eady upward trend in the number of pa-
L-.icnts :~dmit~ed p~r ye~r, while the decline in the length of stay
is sli~l~t und hencc not substanti~?1 enough to offset the admis-
tiions ritic. Consequcntly the number of days the average Italian _
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rnk n~~zctnt. U5L nNLY
ypcnds in thr. 1~nspit~~1 rir~c~ ~rnm 1.63 in 1gGg bo 1.78 in ]:974~
cu~d hit-:~ ~?n ull~-t~.mc high (1..8~) in i975� The gr~ph shows very
cle,~rly the trend Crnm i9~4 tn 197G~ th~ 1~?b~~t yc~r for trhich
dctt;a ~re ~vail~blc.
A godd port3.nn u~ the Cailure w~ rc~erred to ~t ~he beginn3ng
1:tes in ~;~1GgC vcry Cl~;ur~s. mhe tmttnsform~tidn o~ our hnspi.tuls~
~as a vast body ot exper3.ence ubrd~d tc~~ches us~ must come ~?bnut
t;lirough ti m~ssivC rcduction of adm3ss~.ons. you cio nnt ~~hi~ve
th~t goal~ you migh~ we11 ~orge~ ~bnu~ ~he other one. ~
Nr~~iCe the hospit~~l~ i~ it is to hc~ ~udged on the b~sis o~ the
vnlume of servic~s it dcl3.ver~~ is sti].1 ~un~tioning as ~ nnn~
disCrim:inating place o~ shel.ter~ ~nd~ viewed in that ~.3.ght~ it
iv ttot much difFcren~ from the wel~~re and charity ins~itutions
_i.t; w~~s supposed tn repl~ce. mh~ p3.e~ure~ though, changes when
w~ t~ike a ionk cosl;s. mhe hospital~.zatidn fee (per diem cos~)
_ for the "~v~ragc iii:~ured p~~ien~" rises f'rom ~round OOd lire
i?~ 1.q69 to ~1m~st ls~ 000 in i~74, thus practic~l].y quintupling
itt thc space nf 5 yc~rs.
'I'he reason for tt~is soaring spiral can bQ explained wi~h ~ few
_ datu. The numbcr of hospital beds is 3.ncreasing, al~hough at
�airly moderate pace (in the ordinary public hospitals bhe
incrcase over that $-ye~r period is 1$ percent) without br3ng-
_ in~; any noticeable reduction 3n the existing ~erritorial imbalan-
ces. But what is increasing faster tihan anything is staff. It
has ri~en, as tihe t~ble shows~ from 194,000 in 1q69 tio 335,000
a mcre 5 years .later. T'he staff increases involve primarily
~ki.lled medical pcrso~inc;1 (trained nurses~ w~rd supervisors,
Ob nurses, and par~medics).
Two considerations are needed in this connection, though: firs~,
tfie number of professional nurses is still very 1otv, and in any
_ ccisc well be].ow any reasonable requirement; second, there are
st,i11 le~;itimate doubts as to the level of training of that staff.
A~;ood many of thosc now on the roster as professionally trained
niirses have become such after taking crash courses designed to
L-?tr� practical nurses into trained nurses (see PL 124 of 2$ Febru-
ary 1.9~1) .
Propcrly citcd aloi~~ with this short~ge i.s the truly exorbitant
r~umber oC th~se ISTAT defines as "technicians, attendants, and
other sta�f,'~ thus lumping the bioengineer along with the door-
m.in, the sccurity guard, and the cleaning crews. Although no
t~reakdow~~ data are available~ it may be assumed that most of this
catct?all. cate6ory consists of people with a very low level not
o�ly of tipcciCic skills, but also of schooling. It is noteworthy -
t,hat, it' wc acid to this last category the administrative staff,
wc~ comr. to tt~c astonishing conclusion that about half of all
t~ospiL-~1 ~-mpl.oyccs are not doing any kind of patient-related work