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Investor-state dispute settlement mechanism ‘is financial threat’ to UK National Health Service

EU trade policy and the European Semester will affect the health landscape and the way patients access healthcare and get healthcare coverage all over Europe, writes Marc Bell. 

The upcoming trade agreements with the United States and with Canada in particular could have a massive impact on the health sector in both positive and negative ways. Through the Transatlantic Trade Investment Partnership (TTIP) for instance, policy at European level will have a big impact on medical products standards’ harmonisation and most importantly could also have an impact with the Investor-state Dispute Settlement on the level of privatisation of care provision and on public health.

In the field of health we want to make sure that the National Health Service will not be negatively impacted by TTIP. Our mutual health care organisation, Benenden, thinks that the British government should retain full control over the way the UK health system is organised and whether it wants to change the rules of procurement in the health sector or not. The Investor-State Dispute Settlement (ISDS) mechanism should therefore be excluded from all trade agreements: if it was in the agreements, companies would be able to challenge a repeal of the Health and Social Care Act. The fears of the impact of TTIP in the health sector are not to do with scaremongering, rather they have to do with the financial threat that an ISDS case, even with an undue claim, represents. Voices such as nurses (RCN) and doctors (BMA) have also pointed to the risk of an ISDS for the NHS.

As for public health, based on the ISDS case of the claim of Philipp Morris in Australia against plain tobacco packaging, we see the influence that companies can have to try and deter legislation that puts forward public health objectives such as tobacco control measures or minimum alcohol pricing.

We believe that in order to have a positive effect on health, the negotiators and member states should protect health systems in Europe and consider the exclusion of ISDS.

The European Semester was created in 2010 as acycle of economic coordination, where member states align their budgetary policies with the objectives and rules agreed at the EU level. As the pressure on member states’ budgets is likely to remain high, we would like to highlight the fact that no further pressure should be exerted on health budgets. We at Benenden see that the austerity and cuts in countries affected by the crisis, such as Greece and Spain, have led directly to a lowering of health standards and have hampered access to healthcare – triggering more unemployment and economic difficulties in the long-term. The Health Directorate of the EU Commission has already recognised that health spending is an investment in the future and should not be the victim of austerity. We believe that the new Commission as a whole should recognise this and protect health budgets from the pressure of cutbacks. Mutuals are very important in the financing of many health systems in Europe. Therefore, as a widespread model they need to be protected. This will then inspire other countries such as the UK to consider the role of mutuals in healthcare.

The first priority for the European Union in the field of health should be sustainability of health systems in the face of tight European Budgets and an ageing population. Sustainability is only possible with more support for solidarity-based health coverage models like mutuals as well as measures to enhance prevention and cost-effectiveness in the health market.

Supporting solidarity-based health systems including mutuals will be a crucial part of the solution. Based on the principle of solidarity between its members, mutuals are not-for-profit oriented and put members first: indeed, unlike for-profit insurers, they do not have shareholders to remunerate. Mutuals are therefore more resilient and more sustainable forms of providing health coverage as they put members’ long-term needs first. In many European countries, mutuals sit alongside taxation for healthcare delivery and Benenden is looking at the opportunities presented by this model where they might enhance the role of mutuals in the United Kingdom.

In order to support mutuals, the EU should adopt a European Mutual Statute which would allow them to engage in cross-border activities and which would recognise mutuals’ legal form at European level. A Statute would also place mutuals as an alternative in European countries where mutuals are not already developed.

Sustainability can only be achieved if the focus at national and EU level is on prevention: the EU should thus strive to focus on concrete solutions to prevent chronic diseases by adopting a ‘health in all policies’ approach and by looking at the external factors as well as internal factors that can drive prevention (empowering patients, tackling environmental threats, more stringent tobacco measures and appropriate food policy measures)

 The limited amount of additional funding that will be available for health in the future means that the EU should be even more vigilant when it comes to proving the cost-efficiency of new health products, whether these are pharmaceuticals or medical devices. This should prompt the EU to place real therapeutic added value and proven safety at the heart of authorisation procedures of medical devices and pharmaceuticals and in the current debate about medical devices regulation.

Marc Bell is CEO of Benenden Health, a not-for-profit mutual healthcare organisation that was created in 1905. It has around 900,000 members, to whom it provides diagnostics and treatments for over 240 conditions on a discretionary basis. 



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