Spain health service chokes as austerity tightens

 

Medical suppliers haven't been paid for as much as two years, emergency rooms have been shut down and doctors in Catalonia have been told to accept a pay cut or 1,500 medical residents will lose their jobs. Spain's treasured public health care system has become the latest victim of the euro zone debt crisis. "We haven't been paid, but there's nothing we can do about it. We need the contracts, so we're just going to have to wait it out," said a representative for a cleaning company who did not want his or the firm's name used for fear of a backlash. The company, which says it is owed hundreds of millions of euros by the government of the Castilla-La Mancha region south of Madrid, is one of dozens of providers of everything from surgical swabs to disinfectants struggling to pay workers as Spain's regions delay payments to meet tight deficit targets. The debt-burdened autonomous regions' spending cuts are a tangible sign of the present and future pain as Spain works to meet ambitious deficit reduction goals pledged to the European Union in the midst of an economic downturn. Spain's political parties have kept their positions on the issue vague ahead of November 20 general elections, but even the most passionate defenders of the current system agree there is scope for cost savings and more efficiency. Spain's conservative opposition, the People's Party (PP), which is expected to win in November, will likely cut into social welfare programs the incumbent Socialists have left untouched. But even the Socialists now say they can find ways to reduce health spending without harming services. Examples include forcing car insurance firms to pay for the treatment of accident victims and sending foreign governments the bill when their citizens use Spanish hospitals. 900-DAY WAITS Multinational pharmaceutical firm Roche says the Castilla y Leon region north of Madrid is more than 900 days behind on its bills, which has raised fears here that the company could start withholding drugs for some hospitals as it did in Greece, which is fighting off bankruptcy. Spain's central government makes yearly transfers of income tax revenue to the country's 17 autonomous regions, which are in charge of administering health care and schools. But the regions are being forced to make drastic budget cuts after piling up debt during Spain's property boom, the collapse of which in 2008 sent the country into recession and unemployment soaring to more than 20 percent. As the regions squeeze spending wherever they can, what they owe to companies that provide health care services and products has risen 42 percent in a year to more than 4 billion euros, according to the Spanish Federation of Healthcare Technology, known as Fenin. AT Kearney consultancy calculates the system's long-term deficit is 15 billion euros, a heavy burden for a government whose borrowing costs have soared in the euro zone debt crisis. Margarita Alfonsel, secretary general of Fenin, says small companies in her federation "are suffering to an alarming extent due to the liquidity squeeze." She said some will have to lay off staff or go into bankruptcy. The average number of days providers must wait for payment has risen in the past year to 415 days, from 285 days, she said. "It was unacceptable before. Now it's totally incomprehensible," said Joaquin del Rincon, Spanish representative of Boston Scientific, which provides medical and surgical instruments to Spanish hospitals. "We have to explain to our central offices that this is an ongoing problem in Spain made worse by the crisis," he said.

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