It is a great pleasure to introduce this volume edited by Elias Mossialos, Govin Permanand, Rita Baeten and Tamara Hervey. It is a volume which continues the success of two earlier books commissioned by the Belgian government and published by Peter Lang Publishing Group in 2002. The topic of this contribution is a crucial one. Indeed, one can hardly imagine a subject closer to the lives of European Union (EU) citizens than an exploration of how EU law and policy has influenced, and will continue to influence, the health systems of the 27 Member States. This two-dimensional perspective means that this work will certainly be studied with great interest by all concerned with the functioning of the EU as well as by those wanting to discover more about national health systems.

In principle, in light of Article 152 of the EC Treaty, national authorities are solely responsible for health care. Yet, though the Member States are free to decide how to deliver and organize health services, they must do so in compliance with other aspects of the Treaty, in particular with the fundamental freedoms and elements of competition law. Put differently, national health systems are not enclaves of national sovereignty insulated from European market integration. While EU legislators may not regulate health care as a means of promoting social cohesion, they may, however, enact legislation relating to those aspects affecting the establishment and functioning of the internal market. Given that national health systems are deeply rooted in social solidarity and welfare, the “constitutional asymmetry” (to borrow the term used by Fritz Scharpf)laid down in the Treaty gives rise to important tensions.

Introduction

Throughout the European Union, health care systems traditionally have been characterized by extensive regulatory intervention. National and regional authorities intervene mainly to ensure equal access, sustainability, quality, safety, equity and efficiency of health care for the citizens residing in their territory. Given the multitude of different actors involved, they need to align these overall principles and objectives with the interests of stakeholders to ensure the stable cooperation of all the players in the system.

Increasingly, this high level of public intervention has been challenged on the part of the European Community. Regulation in the field of health care is being scrutinized with regard to its conformity with EU law, particularly Community rules on free movement (of persons, goods and services). As different forms of mobility in the EU increase and also extend to all sectors, including health care, national measures and mechanisms increasingly run the risk of being seen as unjustified obstacles to free movement, which is prohibited under the EC Treaty. This chapter will focus particularly on the impact of the EC Treaty rules on free movement of services, which encompass both the principles of free provision of services (Article 49–50 EC) and of free establishment of providers (Article 43 EC).

Mainly spurred on by the jurisprudence of the European Court of Justice (the Court) and the action undertaken by the European Commission, the application of these two principles has gradually made its way into national health systems and has extended far beyond the specific cases of patient and provider mobility.

Introduction

The Charter of Fundamental Rights of the European Union (EU Charter) has caused much debate and controversy since it was proclaimed in Nice in December 2000. For health care lawyers, the potential impact of the EU Charter on law and policy in the EU Member States is particularly intriguing. While there is a long history of engagement with litigation concerning human rights and health care in many European jurisdictions, what is notable is the considerable diversity of approaches to fundamental human rights that relate to health. The EU has shown increasing involvement with health care law and health policy over the last fifteen years. It is also increasingly concerned with human rights. What is perhaps not yet so clear is how the two will relate to each other. In other words, how will enhanced engagement with human rights at the EU level impact upon health law? And will one consequence of the EU Charter be that a particularly ‘EU’ approach to human rights in health and health care develops?

Section two of this chapter explores the relationship between human rights and the regulation of health and health care. It considers various human rights principles with relevance in health contexts, as developed at the international and Council of Europe level. By reference to selected examples, it explores some of the ways in which human rights have affected health and health care at the Member State level. Diverse national approaches to controversial ethical questions may give rise to particular challenges for the EU in attempting to construct health and health care law and policy in the light of human rights principles in the future.

The scope and aims of this book

This volume assesses the impact of European Union (EU) policy and law on Member States’ health systems and their governance in a number of key areas. In so doing, it builds on two earlier books that sought to assess the changing legal and policy dynamics for health care in the wake of the European Court of Justice's (ECJ) seminal rulings in the Kohll and Decker cases. These books showed that, despite widely held views to the contrary, national health care systems in the EU were not as shielded from the influence of EU law as originally thought. The explicit stipulations of Article 152 EC (as amended by the Amsterdam Treaty) that health is an area of specific Member State competence, and implicit understanding of the subsidiarity principle where policy is undertaken at the lowest level appropriate to its effective implementation, proved not to be the ‘guarantees’ of no EU interference in national health care services that they were often held to be. As the raft of legal cases and degree of academic attention that followed have shown, Kohll and Decker were certainly not the ‘one-offs’ many policy-makers hoped they would be. In fact, they are widely held to have set precedent in terms of the application of market-related rules to health care, which in turn ‘allowed the EU into’ the health care arena.

Introduction

In 1992, the legislative institutions of the European Union (EU) adopted regulatory measures in the field of health insurance. The mechanism affirming the free movement of health insurance services – the Third Non-life Insurance Directive – does not apply to health insurance that forms part of a social security system. But all other forms of health insurance, which we refer to as ‘private health insurance’, fall within the Directive's scope. This chapter examines the implications of the Directive, and some aspects of EU competition law, for the regulation of private health insurance in the European Union. The EU-level regulatory framework created by the Directive imposes restrictions on the way in which governments can intervene in markets for health insurance. However, there are areas of uncertainty in interpreting the Directive, particularly with regard to when and how governments may intervene to promote public interests. As in most spheres of EU legislation, interpretation largely rests on European Court of Justice (ECJ) case-law, so clarity may come at a high cost and after considerable delay.

The chapter also questions the Directive's capacity to promote consumer and social protection in health insurance markets. In many ways, the Directive reflects the health system norms of the late 1980s and early 1990s, a time when boundaries between ‘social security’ and ‘normal economic activity’ were still relatively well defined in most Member States. Today, these boundaries are increasingly blurred – the new health insurance system in the Netherlands is a case in point.

Introduction

Talk of networked ‘new governance’ is everywhere. It elicits strong reactions – from scorn to extreme enthusiasm and from unthinking participation in new fora to excited applications of recondite social philosophy. Familiarity with the phenomenon also varies. Some forms of new governance are often found in health, but they are not necessarily known as such, while others have long histories outside health but are largely unknown within.

This chapter discusses new governance in EU health policies, examining the mechanisms and frameworks that EU institutions and Member States have introduced into health policy-making. These mechanisms promise to induce law-like behaviour by creating norms and networks (whether they will have that effect, or are intended to have that effect, varies). There are four obvious questions about any new policy development including ‘new governance’, and we answer them in the next three sections. What is it? How did it get started? Why is it happening? And what effect might it have?

A fifth question, naturally, is what has it done? Unfortunately, we cannot reasonably ask that question. For better or for worse, there is not much impact to study. Most new governance processes in health care became operational after 2005, or even later. Furthermore, many of the effects will be on process rather than outcomes – the direct effects will be on the networks and worldviews of policy-makers. The effects on infant mortality or leukemia deaths will often have to be inferred from those process changes.

Introduction

Competition law has been an essential tool in the establishment of the single European market (SEM) and the European Community. The EC Treaty reflects the Community's evolution from an economic organization with extensive competence to regulate the SEM. Social policy, on the other hand, reflects the diversity of Member States’ social systems and remains primarily the jurisdiction of national governments. EU policies reflect a balance between European welfare state principles of universal access to public services and social solidarity, and the competition law principles of market integration and economic freedom.

The enforcement of EC competition law by the European Court of Justice (ECJ) and national courts has been a significant driver pushing health policy onto the European Union agenda. Community competition rules prohibit undertakings from participating in anti-competitive activities, such as agreements to set prices or abuse of dominant position. Since the definition of an ‘undertaking’ focuses on the function of the organization rather than its status, it has been applied to both private and public health care services. Article 152(5) EC leaves health provision and financing squarely under the jurisdiction of Member States, as long as other EU laws, including competition rules, are followed.

Chapter 7 in this volume presented the context of this debate by analysing competition law and public services. This chapter will present specific cases where competition laws have been applied to the health sector, providing a basis for analysis of the current state of EU law and the indications for the road ahead. The most important Treaty provisions governing competition law are Articles 81, 82 and 86 EC, found in Section 1 of Title VI.

Introduction

The European Union pursues two major objectives in its policy on pharmaceutical products: its policies strive to secure a high level of public health and innovation and, at the same time, provide support for a competitive industry that ensures that Europe continues to benefit from new medicines.

The first objective requires that access to medicines and treatments is affordable and that medicines are safe and effective, but also, increasingly, that patients should receive the information necessary to make informed choices about their own treatment. The second objective requires enhancing the competitiveness of Europe's pharmaceutical sector. The competence to intervene in the market, and the related tools with which the EU institutions pursue – or, rather, attempt to reconcile – these two objectives are by no means similar in legal scope or nature. Although the European Union has now created a centralized licensing agency, the European Medicines Agency (EMEA), and also enjoys extensive legislative powers to determine what might be termed the ‘regulatory pathway’ for authorizing the marketing of new products in accordance with strict criteria on safety, quality and efficacy, it has less direct influence on what can be termed the commercial or ‘market pathway’ – the prices and conditions under which products are purchased by national heath care providers and insurance companies, and, indeed, patients.

Introduction

Governments of European welfare states face an uncomfortable predicament. To transfer their welfare-state obligations to the EU level would jeopardize the political basis of their legitimacy. However, since at least the mid-1980s, the processes of European integration, to which those governments are irreversibly committed, have become increasingly pervasive. As a result, European integration creates a problem-solving gap in that ‘member governments have lost more control over national welfare policies, in the face of the pressures of integrated markets, than the EU has gained de facto in transferred authority’, substantial though the latter may be.

At face value, health care seems to be a case in point to illustrate this predicament. Indeed, generally speaking, with some limited exceptions, the European Union has no legal competence to adopt EU law in the field of health care, this being a matter of national competence according to the EU's founding or ‘constitutional’ document, the EC Treaty (to be replaced by the Treaty of Lisbon 4 once it has been ratified by all the Member States). Unsurprisingly, both Member States and EU institutions are heavily bound in their ability and willingness (on account of national interests, political sensitivities and the huge diversity of health care systems in an EU of 27) to issue legislation in this area. Those who are (politically) responsible for health care at the domestic level are faced with a second problem: since the very beginnings of what is now the European Union, other areas of EU law have had unintended effects in health care contexts.

Introduction

Free movement of patients – or patient mobility, as it is commonly referred to – implies people accessing health care services outside their home state. Although health care normally is delivered close to where people live, in some instances the need for medical care arises while away from home or patients decide to seek care elsewhere. Patients’ readiness to travel for care, especially across borders, is determined by a mix of factors linked to the specific situation of the patient, to the specific medical needs and to availability of care at home and abroad. Motivations for travelling abroad for care vary from the search for more timely, better quality or more affordable health care to treatment responding better to the patient's wants or needs – including when care is inexistent or even prohibited at home.

While citizens in the EU, in principle, are free to seek health care wherever they want and from whatever provider available, in practice this freedom is limited by their ability to pay for it or by the conditions set out by public and private funding systems for health care. Traditionally, countries have confined statutory cover for health care delivered to their population to providers established in their territory. Whereas initially, bilateral conventions derogated from this territoriality principle to ensure access to care for people living and working in different Member States, a more general derogation was established in the context of European integration under Article 42 EC, based on the fundamental principle of free movement of persons.

Introduction

The recognition by the European Court of Justice (ECJ) that health care services are services within the meaning of the EC Treaty has very important legal implications, most of which are still to materialize. Free movement of patients, recognized in Kohll, Geraets-Smits and Peerbooms and their progeny, is just the tip of the iceberg. Much more crucial than accommodating the few thousands of ‘peripatetic’ patients moving from one state to another is the issue of financing high performing health care systems that have universal coverage.

Financing health care and securing universal coverage traditionally have been tasks attributed to the state. Indeed, even in ‘an era of contractualized governance in the delivery of public services’, where the ‘providential state’ gives way to the ‘regulatory state’ and where the containment of public spending is an absolute value, nobody in Europe seriously questions the need for the public funding of health care. However, once it is established that health care services are ‘services’ within the meaning of the Treaty and that there is a ‘market’ for health care, public money cannot reach this market in an arbitrary way. It has rightly been pointed out that ‘while in the 1990s the debate concerned anti-competitive practices and Article 82 EC … since the beginning of the current millennium, the main question has shifted to the means of financing public services and to state aid’.