New WHO analysis shows how access to health care and financial protection deteriorated in Cyprus following health budget cuts and coverage restrictions from 2012 to 2015. Policy responses to the financial and economic crisis exacerbated existing gaps in health coverage, but reforms introduced in 2019 are closing these gaps and addressing other long-standing health system problems. Informed by evidence, the reforms are expected to reduce unmet need and financial hardship. They represent a major step towards universal health coverage.
Gaps in coverage before the financial crisis
The health system in Cyprus has always relied heavily on out-of-pocket payments, which reflects a large gap in population coverage, low levels of public spending on health, persistent budget and capacity constraints in public facilities, fragmented service delivery, and a large and underregulated market for privately provided health services.
Austerity aggravated underlying problems
Before the crisis, Cyprus was one of only two or three countries in Europe to base entitlement to publicly financed health care on income. In 2013, in response to the financial crisis, the government restricted the basis for entitlement even further, linking it to payment of social security contributions as well as income. As a result, the share of the population without public coverage rose from 15% to 25%. The government also increased user charges (co-payments) and reduced public spending on health. These policies increased waiting times, encouraged health staff to move from public to private facilities, and shifted health care costs onto households at a time of rising unemployment, poverty and income inequality. Between 2009 and 2015, the share of people experiencing unmet need for health and dental care grew and the number of households with catastrophic health spending doubled.
Post-crisis reforms aim to transform the health system
After the crisis, in 2019, the government began to implement the long-debated General Health System (GHS). To shorten waiting times, improve care quality and reduce out-of-pocket payments, the GHS strengthens the role of the national purchasing agency (the Health Insurance Organization) in buying services from both public and contracted private providers.
The GHS has also introduced major improvements in coverage policy, changing the basis for entitlement from income and payment of contributions to residence, which allows all legal residents to be covered for the first time; simplifying and reducing user charges; and reinforcing protection mechanisms – there is now an annual cap on all co-payments for everyone, with a more protective cap for children, people receiving the guaranteed minimum income and pensioners with a low income.
“This is the biggest reform since independence, not only because it ensures the whole population is covered and will reduce waiting times for patients, but primarily because it minimizes out-of-pocket payments and offers significant financial protection to all beneficiaries,” said Marios Kouloumas, President of the Pancyprian Federation of Patients Associations and Friends, which represents all the patient organizations in Cyprus.
Greater public investment in health is needed to sustain progress towards universal health coverage
The 2019 reforms bolstered Cyprus’s ability to meet the health and economic challenges of COVID-19. A key test now, once again in difficult circumstances, is whether the government can continue to secure public investment in the health system and keep the reform agenda on track. Reducing fragmentation, lowering waiting times and improving access, quality and financial protection will require steady growth in public spending on health and continued effort to strengthen the purchasing of health services.
WHO supports countries to move towards universal health coverage – leaving no one behind
Financial protection is at the heart of universal health coverage, which means that everyone can use the quality health services they need without financial hardship. Linked to WHO’s General Programme of Work, the European Programme of Work places universal health coverage as one of the three priorities for the WHO Regional Office for Europe. Through the WHO Barcelona Office for Health Systems Financing, the Regional Office undertakes context-specific monitoring of financial protection in over 30 countries, including Cyprus.
The Barcelona Office also provides tailored technical assistance to countries to reduce unmet need and financial hardship by identifying and addressing gaps in coverage.
Can people afford to pay for health care? New evidence on financial protection in Cyprus
Can people afford to pay for health care? New evidence on financial protection in Europe
Economic crisis and health systems in Europe