Public Services International Research Unit

This paper reviews multinational companies involved in the healthcare sector in 2012, focusing on companies that either have, or are eligible for a European Works Council (EWC).  It builds on previous papers.      The paper starts with an overview of EU legislation and the development of public health and healthcare policy at European level. Although EU treaties acknowledge the importance of health and health promotion, the implementation of specific Treaty clauses is through EU strategies rather than through the use of Directives, which would have more influence.  The promotion of the health of the population or public health is seen as more of an advisory activity targeted at national governments and not an integral part of the stronger internal market policies. 

Although subsidiarity has been an important principle that has enabled national health services in Europe to determine their own policies, several EU Directives, for example, cross border health care and the movement of professionals, and the internal market are beginning to influence national health systems directly.   The European Court of Justice (ECJ) has influenced health policy through decisions about cross border healthcare as well as medicine and pharmaceuticals. 

In 2011, the final Directive on ‘Cross-border health care’  to facilitate access to safe and high-quality cross-border healthcare and promoting cooperation on healthcare between member states was published.   It represented an important development in the growing role of the EU in healthcare.  The aim of the Directive is to both ‘respect the case law of the European Court of Justice on patients' rights in cross-border healthcare while preserving member states' rights to organise their own healthcare systems’. The European Council finally approved the text on 28th February 2011, although Austria, Poland, Portugal and Romania voted against and Slovakia abstained.

There is still a lack of clarity about which “health services” are covered by the Directive.  Health services are defined as services delivered by health professionals to “assess, maintain or restore …..state of health, including prescriptions, administration of drugs and medical products”.  It does not cover long-term/ care services for older people.  Reimbursement of costs depends on the eligibility of the individual to services within their home country.  However, if a country does not provide a service, it is unclear what will happen if the patient is unable to afford to pay for treatment.  A member state can pre-authorise on the grounds of the general interest for: hospital care, non-hospital care requiring medical technology infrastructure; treatments presenting a risk for the patient and a healthcare provider where there is concern about the quality and safety of care.  

A second issue where action at EU level is affecting national healthcare systems is the movement of professionals. EU Directives relating to free movement of (health) professionals are based on a provision for mutual recognition of qualifications.  This has implications for health professionals working in national healthcare systems.  Educational programmes have to comply with basic standards, which are usually defined in relation to length of training.  Health professionals are considered to have reached the level of competence to work anywhere in the EU once they have completed a series of qualifications, defined by length of training.   

In a further revision of the 2005 Directive, a proposed Directive amending Directive 2005/36/EC on the recognition of professional qualifications and regulation on administrative cooperation through the Internal Market Information System was published in 2011.  The proposed Directive highlights some of the potential problems in facilitating the movement of professionals, particularly health professionals, between countries.  It recognises that health professionals are an increasingly mobile workforce but some of the recommendations threaten to weaken the scope of national systems of professional registration.  The Directive proposes the creation of an Internal Market Information System (IMI) European Professional Card which would make the recognition of professionals quicker when moving from one country to another.  The card would be voluntary and its success would depend on national registration authorities having sufficient resources to deal with this process.

Although national governments retain the responsibility for health care policy, many policies, for example, contracting and outsourcing, adopted by national government have created markets in national healthcare systems. Services delivered by national health systems are, as a rule, now considered as an economic activity, according to ECJ rulings and EC policies of recent years, for which the rules of Community law, on the fundamental freedoms of the internal market, public procurement and state aid in principle, apply.  Exemptions, exceptions and limits can and need to be decided by making reference to other policy goals, such as health, social and employment policy, and by invoking ‘overriding reasons of general interest’ or ‘public service obligations’.  What often starts with the contracting-out of ancillary services evolves into more extensive contracting-out of diagnostic and clinical services, which are unambiguously healthcare services, leaving reduced core services directly delivered by the public sector. 

In countries of Central and Eastern Europe the transformation of publicly funded and publicly provided healthcare systems has taken place since 1989.  New legislation has created a legal basis for private providers to operate and charge fees.  Decentralisation of hospitals and health care institutions has been accompanied by a reduction in health care budgets which have led to the introduction of user fees and subsequent limits to publicly provided or financed healthcare access.  User fees have contributed to the corruption at local and national levels.  All these changes have contributed to the weakening of public healthcare systems.  Although there have been attempts to challenge these reforms and struggles to maintain publicly funded healthcare systems continue, there have been some fundamental changes which make healthcare vulnerable to continued commercialisation.  

 Companies involved in the healthcare sector in Europe can be divided into five main groups, which are not exclusive:

•                    Service companies – facilities management;

•                    High technology equipment for diagnosis and treatment, e.g.renal care; 

•                    Laboratory services – pathology services;

•                    Healthcare companies that provide healthcare directly

•                    Public-private partnerships

The impact of the economic/ financial crisis and austerity policies in many European countries can be seen on several companies.  Austerity policies in many European countries have reduced public sector budgets with some reductions of contracting-out but austerity policies can also lead to increased contracting out. 

 A series of short company profiles include a) companies eligible for EWCs and b) companies not yet eligible for EWCs but which have shown signs of expansion outside their domestic market.

Rapid economic growth has increased demand for electricity in Vietnam, but the generating capacity, transmission and distribution system has been unable to meet that demand. Government policy proposals are based on liberalization to induce competition into wholesale or retail markets, but these policies have been inconsistent and contradictory, heavily influenced by World Bank conditionalities linked to hundreds of million dollars in loans, and still rely on the existing under-performing management of EVN. There is also no evidence that liberalisation will deal with the three main problems: the inefficiency of EVN arising from bad management, technical problems, and corruption will remain ; there will be no real competitive incentives or opportunities for new investment in generating capacity; and the affordability of electricity will be worsened by the policy of increasing prices towards full cost recovery.  The experience of the UK, the country which led global privatization and liberalization, demonstrates that competition does not happen in wholesale markets; underinvestment means that the UK now risks blackouts, and cannot deliver the required growth in renewable energy; while consumer prices, even under regulation, have risen sharply so that there is a serious problem of fuel poverty. The UK government has now re-established central planning of the development of the industry.

(This paper is confirmed to be published in Vietnam Trade Research Review in April 2013 issue. The published Vietnamese version is based on this original English version)

This report sets out a broad overview of energy provision in Africa, focusing specifically on the role of the public sector, while also mapping out the multiple roles of the private sector. 

Africa currently has the lowest per capita electricity usage of any region in the world.  Most electricity is provided by state-owned utilities, although many of these utilities have, over the years, been broken up, and commercialized, and some have been privatised.  Most electricity production in Africa relies on large hydropower systems or fossil fuels, including gas-fired power stations operated by private ‘independent power producers’ under long-term contracts.  

At the same time, Africa is rich in sources of renewable energy – including wind, hydro- and solar power.  There are various initiatives underway in Africa to tap into renewable energy.  Some of these are state-led initiatives, albeit with private sector partners, while others are smaller, more community based initiatives. Some are extremely large projects led by multinational companies.  

Annexes to 'Corruption and public services' including further information and materials.