Greece’s Costly Health Care Craze


Every stakeholder was benefiting from the system, except one: the patient. In addition to the official costs of care and drugs, there was another price people had to pay: a fee known as “the envelope.”


Greece’s bloated pension program is often cited as a primary cause of its crushing national debt, but its government-run health care system has been a significant and under-recognized contributor to the country’s crisis. The sad and appalling tale of how this came about has important lessons for other countries, especially the United States.

Under a spate of new programs between 2000 and 2007 Greece’s health care spending soared, reaching nearly 10 percent of gross domestic product — high by European standards — in the year before the financial crisis hit. This spending spree, coupled with a lack of accountability, fostered an epidemic of excessive medical care following a frenzy of hospital construction and hiring that began in the 1980s.

The country’s health care culture became one of overtreatment and overspending. Cardiac stenting, bone grafting and other expensive operations ruled the day. Caesarean-section rates hit 40 to 50 percent in some hospitals for no clinically justifiable reason. Doctors who faced disciplinary problems in other European countries set up shop in Greece, which requires only minimal credentials proving that the doctor has been practicing for three of the five years before applying for certification to practice medicine.

Corrupt administrators and unscrupulous doctors often received kickbacks from the makers of medical devices and pharmaceutical companies that flocked to Greece to take advantage of the health care free-for-all. Antibiotics were and still are widely overused. Nearly a quarter of Greek adults have taken antibiotics without a prescription, the general secretary for public health, Christina Papanikolaou, reported last year.

Meanwhile, important public health priorities have suffered. In a country where 32 percent of adults use tobacco — the highest rate reported last year among the 34 nations of the Organization for Economic Cooperation and Development — anti-smoking efforts were hobbled.

Medical disability claims, on the other hand, were liberally granted, and, if denied, could still be obtained through the right connections. Drug companies used their clout to win product approval, even as the government impeded the use of generic medications accepted in the United States. The Greek system often paid three to four times more for drugs than other European Union countries, the Greek health minister, Adonis Georgiadis, told The Washington Post last year. According to a 2014 O.E.C.D. report, a quarter of health care spending was on pharmaceuticals.

Every stakeholder was benefiting from the system, except one: the patient. In addition to the official costs of care and drugs, there was another price people had to pay: a fee known as “the envelope.” Surgeons receiving meager government paychecks were and still are routinely paid a large supplement by the patient’s family. The government turns a blind eye to this illegal practice, preferring to avoid addressing the disparity between low doctor pay and high systemic spending.

This is no surprise, since much of the money flowing into the system remains unaccounted for. A 2013 survey of Greek views on corruption in the health care system by the European Commission found that 75 percent believe bribery and the abuse of power for personal gain are widespread. The report concluded that limited transparency was a root cause. Public hospitals, poorly managed by ever-changing political appointees, rarely balance their budgets. The deficits are made up (with borrowed money) by the central government.

The spending spree decelerated with the global financial crisis of 2008. The following year, the Health Ministry announced that its 131 large medical centers would be cut to 82. Over the next four years, health care spending was slashed by 25 percent, according to the O.E.C.D. But the damage had been done. The system’s debt and the interest owed on it magnified the country’s financial crisis. More money has been wasted in the name of medical care and medical disability than has been accounted for.

Fear of default has forced Greece to slash health spending. The various bailout plans offered to Greece have overlooked a root cause of the country’s troubles: the urgent need for health care reform. Instead, austerity programs have set arbitrary spending restrictions that worsen already limited access, undermine patient safety, and are igniting a mass exodus of qualified doctors and other health care providers. Since the debt crisis hit, 850 clinics have closed, 30,000 health workers have been laid off, and 11 hospitals have shut down, according to union officials.

The government needs to listen to the doctors and other experts demanding an end to waste and corruption. Dedicated medical professionals want to replace transient political leaders now running hospitals with qualified managers, and they want more stringent oversight of medical reimbursements. In a plea that is strikingly reminiscent of the American debate over the Affordable Care Act, Greek doctors are arguing that in order to control health care costs, the nation’s leaders need to move beyond the question of how to finance the broken system and begin finding a way to fix it.

The chickens coming home to roost in Greece should be a wake-up call for the United States, which spends approximately 17 percent of its gross domestic product (more than any other country) on health care, according to figures from the U.S. Centers for Medicare and Medicaid Services. The real number is higher if you add the 7 to 8 percent of the Defense Department’s roughly $500 billion budget for the 2015 fiscal year spent on its own health care system, account for seniors increasingly spending their social security checks on medical co-pays and deductibles, and consider that interest payments on the national debt pay for health care spending.

With health care spending as a percentage of G.D.P. twice as high in the United States as it is in Greece, and a growing medical-industrial complex that is scrambling to meet the needs of the most disabled, obese and over-medicated population in world history, we Americans should be asking ourselves, “Where’s the money coming from?”

Dr. Marty Makary is a professor of surgery and health policy at the Johns Hopkins University School of Medicine and the author of “Unaccountable: How Transparency Can Revolutionize Health Care.”