Healthcare: a ticking time bomb?

A cost analysis of today’s major health risks

, by Bénigne Gandré, Timo Mohnani

Healthcare: a ticking time bomb?

Many countries in Europe provide welfare for their populations. This usually includes subsidised or free healthcare. Most Europeans agree that at the very least those people who cannot afford private healthcare should be provided for by the state. Healthcare has never been a very controversial issue. At most it has raised headlines about rising costs or about poorly run state healthcare systems and maybe issues about which specific care should be included as free or not (e.g. fertility treatment). Whilst healthcare is often the topic of several election campaigns it alone does not tip the balance to the success of a potential party.

However, many politicians and policy makers fail to see the impact that healthcare is having on our societies and how much it could affect our countries in the future. Current healthcare systems are inefficient at best. Billions and billions of euros are spent every year on unnecessary treatments, treatments that could have been avoided if the problem would have been caught early enough or treatments that go wrong and need further treatment to rectify the problem. Such problems range from misdiagnosis to wrong prescribing and dispensing of drugs. These are known as medical errors. In 1999, the Institute of Medicine in America declared that close to 100,000 Americans die annually from medical errors. This year, more dire news: medication errors harm at least 1.5 million people and cost some $3.5 billion per year [1]. That is in America alone!

Disastrous effects of smoking

Prevention is the better than cure! At least it is usually cheaper. Today, 215 million Europeans above the age of 15 are regular smokers: 130 million males and 85 million females [2]. Over 650,000 Europeans are killed every year because they smoke, one in seven of all deaths across the EU, and over 13 million more are suffering from a serious, chronic disease as a result of their smoking [3]. An estimated 72,000 Europeans are also killed each year by passive smoking at home and 7,000 at workplace [4]. Of course nobody just dies of smoking. Often there is the underlying condition that causes death: lung cancer, heart and circulatory problems, just to mention a few. These conditions are costly to diagnose and treat. If there were fewer smokers there would be a direct reduction in the cost of healthcare, not to mention more productivity (less sick-leave).

Prevention is the better than cure! At least it is usually cheaper.

The EU bears a substantial economic burden due to smoking. A conservative estimate of these costs falls between €98-130 billion a year, or between 1.04-1.39 % of the region’s Gross Domestic Product for 2000. The true costs are undoubtedly higher, and will continue to escalate if appropriate measures are not taken. Smokers, but also non-smokers, governments and employees have to cover these costs. Empirical evidence shows that tobacco consumption represents a net burden for state budgets even after accounting for collected tobacco tax and savings in social security payments due to premature mortality among smokers. Whilst governments cannot force people not to smoke it can try to educate people as well as make it difficult for them to smoke i.e. banning smoking in virtually all public places.

Diabetes – a costly disease

Governments also fail to encourage regular check-ups and preventative care. Regular check-ups can catch problems in their early stages thus making it cheaper and easier to treat problems. Adult Type II diabetes is one such case. This adult diabetes can be simply controlled by a change in diet, losing weight and exercising more if the problem is identified early enough. However if it is too late the only way to control it would be with insulin treatment. This is not a cheap alternative. Not to mention the added costs the complications with diabetes bring. For example in Europe the number of diabetics is approximately 22.5 millions and the Type II diabetes represents from 85 to 95 % of the whole diagnosed diabetes [5]. According to a study carried out on a large scale in eight of the principal European countries, the total direct medical costs of the Type II diabetes would rise to €29 billion a year, including 15.9 billion corresponding to hospitalisations [6].

Obesity – more than a health problem

By educating people from an early age from as early as primary school a culture of “healthiness” could be encouraged. All school children should be exposed with basic health courses throughout their education. The very fact that schools allow soft-drink and candy machines shows the short-sightedness of governments. Governments should ban any such machines in schools. Schools however argue that these machines provide much needed income. However giving up such income is a small sacrifice compared to the gigantic costs that governments will have to pay to solve problems with rising obesity and its complications.

By educating people from an early age from as early as primary school a culture of “healthiness” could be encouraged.

According to the European Association for the Study of Obesity, almost a third of people living in the EU are overweight and more than one in ten is now clinically obese. Some 14 million European children are estimated to be overweight, and the figure is rising by more than 400,000 a year [7].

Obesity is draining around €59 billion a year from EU member states’ pockets in direct health care costs, but the overall economic impact could be as high as €118 to €236 billion, with rising childhood obesity auguring badly for the future. The startling €59 billion figure - well over Brussels’ €43 billion a year Common Agricultural Policy budget - is based on a May 2006 European Commission estimate that obesity costs the EU an average of 7% of its total health care spend [8].


At the moment governments are coping with the rising costs of healthcare, but not for long. With aging populations and lower birth-rates the costs of healthcare will explode. In the future governments are going to have to make difficult and unpopular decisions because of healthcare. They will no longer have the luxury of choosing, they will forced to make the decisions! These decisions are going to have major repercussions on all decisions made, including those at the European level. At some point the European Union will be forced to get involved and this could cause more complications and fragmentation in Europe.

Governments might go so far as to make controversial decisions such as “smokers will not be entitled to free care for smoking related disease”. Then what? Who will pay the bill? Do we leave poor smokers on the streets to die a slow and painful death? Governments will eventually have to choose between say healthcare and education. Governments will have to leave out other benefits. Pensions might need to be reduced. Taxes might need to be raised. These are just the tip of the ice-berg. If things don’t change now, the healthcare we take for granted, will be a thing of the past.


 Healthcare money pills, source: Flickr


[1Institute of Medicine of the National Academies. Preventing Medication Errors: Quality Chasm Series. 2006 July 20.

[2World Health Organization. Moving towards a tobacco-free Europe. The European report on tobacco control policy, 1997–2001. Press release EURO/02/02.

[3European Commission. Tobacco or health in the European Union - Past, present and future. 2004 October.

[4Smoke Free Partnership. Lifting the smokescreen: 10 reasons for a smoke free Europe. 2006 February.

[5World Health Organization. The European Health Carryforward. 2002.

[6Jonsson B Revealing the cost of Type II diabetes in Europe. Diabetologia. 2002 Jul;45(7):S5-12. Epub 2002 May 24.

[7Community Research & Development Information Service. Euroabstracts, 2006 January.

[8EUobserver / Focus. Obesity epidemic costs EU €59 billion a year. 2006 May.

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