Spain’s expenditure on healthcare and its paying parties

In the Spanish healthcare financing mechanism, in broad terms: money follows the patient; the patient may select which provider to turn to. The provider in turn will be paid by the public and private fund that the patient is entitled to, or independently by the patient.

Private expenditure is increasing

Healthcare spending as a percentage of GDP in Spain in 2015 was 9%, equivalent to €2,100 per capita, and €97,42 bn in total.

Healthcare spending per capita decreased from 2011 (€2,170) to 2015, but is forecasted to reach above 2011 levels by 2017 (with €2,245).

In terms of the total healthcare expenditure within Spain, 70% of the spending originated from public sources, and 30% came from private funds. The private share of expenditure has been increasing over the past years and will continue to do so. This is one of the highest private share expenditures in Europe.

Private out-of-pocket spending has also been increasing, reaching 78% in 2015 and expected to continue rising gradually.

In comparison to the other Big5-EU nations, Spain spends slightly below the % of GDP expenditure, and has a notably lower healthcare per capita spending. Its total spending is also significantly smaller.

The financing of healthcare services

Around 70% of the Spanish healthcare costs are financed publically and 30% are financed privately.

Healthcare budgets are developed and made at a regional level, and approximately 6% stems from State and Social Security budgets.

Sources of financing for the different payers

Public healthcare expenditure is funded through compulsory social security contributions from employees and employers, income taxes, state grants, and compulsory insurance contributions.

Public funding is collected centrally and allocated to those Autonomous Communities that have their health services centrally managed.

Private financing stems from out-of-pocket charges for private care, private health insurance and prescription charges (less than 50% of the medicine’s price). Private insurance accounts for approximately 5.5% of the healthcare financing.

70% of the funding of the civil servants’ mutual funds comes from the state tax money. 30% comes from the civil servants’ own contributions to their mutual fund.

Payers

  • Regional and local authorities finance (in part) most types of providers from primary to tertiary, in both the public and private sector, and fully lend financial means to regional Health Services.
  • The central state finances the mutual service funds, local entities, and public health services.
  • Private insurance funds finance private providers and pharmacies, and the share of their private members’ drug demands.

Regional variance in financing

Each region must take fiscal responsibility over the allocation and use of the budget that the central government provides it. To a certain degree, their budgets also vary according to the incomes of a given region. Since these incomes vary, so do the overall budgets per region, which results in healthcare expenditure representing different shares of their public spending.

For example, in the Valencia region, healthcare expenditure represents close to 40% of their budget, whereas it represents around 23% in the region of Navarra.

Where the budget is already such a high percentage of the total disposable budget, the region has a greater pressure to be efficient, implement improvement reforms more rapidly, and has less leeway for error.

Trends and developments

  • Since 2010 private payments have increased from around 25 to 30% of total healthcare expenditures.
  • The introduction and implementation of the DRG’s happened at different times and with different strategies in the regions. The financing of the capital costs are not included in the DRG system. For the last two years DRG tariffs have been decreased by 10% on average each year.

Medicines are paid for in part by a non-refunded percentile charge on the patient. The share depends on demographic factors such as age, income, etc.

Financial flow

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