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PUBLIC HEALTHCARE IN THE EUROPEAN UNION: STILL A SERVICE OF GENERAL INTEREST?

Published online by Cambridge University Press:  11 August 2008

Adam Cygan
Adam Cygan
Affiliation:
Senior Lecturer in Law, Faculty of Law, University of Leicester.
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Abstract

This article examines how recent judgments of the European Court of Justice have interpreted the concept of a service of general interest in Article 86(2) EC in the delivery of healthcare services. The article explores how and why the Court has afforded greater latitude to Member States in organizational matters by not applying competition rules. By contrast, the Court has actively promoted patient mobility and has not applied the derogation in Article 86(2) EC where it would restrict the free movement of services. Does the Court's policy of protecting individual rights undermine the ability of Member States to deliver a universal healthcare service within finite resources?

Type
Articles
Information
International & Comparative Law Quarterly , Volume 57 , Issue 3 , July 2008 , pp. 529 - 560
Copyright
Copyright © 2008 British Institute of International and Comparative Law

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References

1 Article 90 EEC, which was replaced by Article 86 EC.

2 [1996] OJ C281, 3.

3 More specifically, healthcare would fall within the sub-category of a ‘social service of general interest’. In a report in 2007 the European Parliament Committee on Employment and Social Affairs recognized that social services of general interest had the primary objective of promoting solidarity and equality and social justice. See European Parliament Committee on Employment and Social Affairs Report on Social Services of General Interest in the European Union, 6 March 2007 A6-0057/2007.

4 For a discussion of the how the concept of solidarity has developed in relation to public services generally, see M Ross, ‘Promoting Solidarity: From Public Services to a European Model of Competition’ (2007) 44 Common Market Law Review 1057.

5 An alternative viewpoint is offered by Hervey, who argues that individuals have a ‘human right’ to access healthcare services. This right arises from an equality argument that the State has an obligation to guarantee equal access to healthcare for all. Hervey points to the inclusion of the ‘right to healthcare’ in the Constitutions of several Member States and its inclusion in Article 35 of the Charter of Fundamental Rights as further evidence of this right and that healthcare occupies a unique place in the State's relationship with its citizens. The criticism of this standpoint, which is developed in this article, is that by focusing on the individual patient who is afforded an absolute right of access to healthcare services, this ignores the State's fundamental role as organizer and financer of healthcare services. This comes within the overall responsibilities and fiscal limitations that the State encounters when providing other public services such as education and policing. See further T Hervey, ‘The right to health in EU law’ in T Hervey and J Kenner (eds) Economic and Social Rights under the EU Charter of Fundamental Rights (Oxford: Hart, 2003); T Hervey and J McHale, Health Law in the European Union (Cambridge: CUP, 2004) 156–158.

6 Treaty on the Functioning of the European Union.

7 See Watts (n 9).

8 See, for example, Smits and Peerbooms (n 30) and Kohll (n 100). A good discussion of the Court's approach to patient mobility can be found in E Mossialos and W Palm, ‘The European Court of Justice and the Free Movement of Patients in the EU’ (2003) 56 International Social Security Review 3.

9 Case C-372/04 The Queen on the application of: Yvonne Watts v Bedford Primary Care Trust, Secretary of State for Health [2006] ECR I-4325.

10 Joined Cases 286/82 and 26/83 Luisi & Carbone v Ministero del Tesoro [1984] ECR 377.

11 See further C Newdick, ‘Citizenship, Free Movement and Health Care: Cementing Individual Rights By Corroding Social Solidarity’ (2006) 43 Common Market Law Review 1645. Newdick argues that judgments such as Watts have the capacity to erode the EU's commitment to promoting social solidarity and encourage individual litigation, based upon Article 49 EC, which challenges national policies. See also Ross (n 4) at 1063.

12 See further Newdick (n 11) at 1654. Mobility and citizenship rights in the context of health services and the potential impact this has on resources of Member States can be compared with the education sector. See for example Case C-184/99 Grzelczyk [2001] ECR I-6193 and Case C-209/03 Bidar [2005] ECR I-2119. The debate relating to access to State education is contextualized by M Dougan, ‘Fees, grants loans and dole cheques: Who covers the cost of migrant education within the EU?’ (2005) 42 Common Market Law Review 943–986. Hitherto, the primary difference between the State's provision of education and health services is that the Court has acknowledged in Case 263/86 Humbel [1988] ECR 5365 that State education involves no element of remuneration and is outside the scope of Article 49 EC. However, in Watts, Advocate General Geelhoed questioned whether this distinction could still be considered as good law and that the comparison between education and health services, which are both operated on a not-for-profit basis and financed from public funds, was not appropriate and would not provide a justification to exclude Community law. See paragraphs 58–60.

13 Watts at paras 120–123.

14 See Case C-385/99 Müller-Faure and Van Riet [2003] ECR I-4509 at para 39.

15 Watts at para 98.

16 See the discussion on FENIN in the section The Boundaries of Community Competition Rules.

17 ibid.

18 See, for example, the Opinion of Advocate General Maduro in FENIN discussed below.

19 This was the argument put forward by the United Kingdom government in Watts.

20 See Newdick (n 11) 1664.

21 Hatzopoulos contends that ‘Negative integration pursued by the ECJ through piecemeal application of the internal market principles is by definition, casuistic and may not ensure a coherent and smooth coordination of the various systems. The relevant case law of the Court is neither complete nor entirely coherent and, even if it were, it would affect in distinct ways each healthcare system.’ See V Hatzopoulos, ‘Health law and policy: The impact of the EU’ in G de Búrca (ed), EU Law and the Welfare State: In Search of Solidarity (Oxford: OUP, 2005) 111–168 at 167. See also JV McHale, ‘Health Law in Europe—A matter of convergence’ (2002) 9 MLJI 17 at 18–21.

22 A comparison of Community competence in healthcare can be made with EC regulation of sport. Weatherill argues that the lack of a distinct Treaty base for sport excludes the Community from introducing secondary legislation to regulate sporting activity. Similarly, the lack of a Treaty base for public health would appear to provide a justification against EC action. But since healthcare, like sport, has an economic dimension, the Treaty rules have been used to assert a basis for supervising individual rights of free movement. Weatherill suggests that in this way EC law has overlapped with ‘internal’ sports law and an analogy can be drawn with how EC law appears to have impacted upon national rules relating to organization and delivery of public healthcare. One important difference in relation to sport is that the Court has recognized the existence of the ‘purely sporting rule’ and imposed judicial self-restraint to the application of the Treaty rules; see C-519/04 P David Meca-Medina and Igor Majcen v Commission of the European Communities judgment of 18 July 2006. This can be contrasted with litigation under Article 49 EC, where in cases such as Watts, the Court did not view waiting lists as a purely internal mechanism that is used to organize healthcare and manage resources. For current issues concerning the regulation of Sport in the EU see further S Weatherill, ‘On overlapping legal orders—what is the purely sporting rule?’ in B Bogusz, A Cygan and E Szyszczak (eds) The Regulation of Sport in the EU (Cheltenham: Edward Elgar, 2007) 48.

23 See, for example, Case C-475/99 Ambulanz Glöckner [2001] ECR 8089 discussed below.

24 Case C-205/03P Federación Española de Empresas de Tecnología Sanitaria (FENIN) v Commission, judgment of 11 July 2006 not yet reported.

25 Case T-319/99 FENIN v Commission [2003] ECR II-357.

26 At para 55.

27 Case C-41/90 Höfner and Elser v Macroton GmbH [1991] ECR I-1979 at para 21.

28 Opinion of Advocate General Maduro in FENIN at paras 43–44.

29 ibid at para 51.

30 Case C-157/99 BSM Geraets-Smits v Stichting Ziekenfonds VGZ and HTM Peerbooms v Stichting CZ Groep Zorgverzekeringen [2001] ECR I-5473 at para 58.

31 Opinion of Advocate General Maduro in FENIN at paras 50–51. This point was further discussed by the Court in Watts where the same conclusion was reached.

32 The CFI held that the presence of a distinct private healthcare sector or domestic statutory provision by which third country nationals would be charged for treatment did not undermine the purely social objective of healthcare provision. See Case T-319/99 Judgment of the Court of First Instance in FENIN at para 41.

33 Joined Cases C-159/91 and C-160/91 Christian Poucet v Assurances Générales de France (AGF) and Caisse Mutuelle Régionale du Languedoc-Roussillon (Camulrac) and Daniel Pistre v Caisse Autonome Nationale de Compensation de l' Assurance Vieillesse des Artisans (Cancava). [1993] ECR I-637.

34 Case C-218/00 Cisal di Battistello Venanzio & C Sas v INAIL [2000] ECR I-691.

35 Case C-67/96 Albany International BV v Stichting Bedrijfspensioenfonds Textielindustrie [1999] ECR I-5751.

36 See Drijber Joined Cases C-264/01, C-306/01, C-453/01 and C-355/01 AOK Bundesverband a.o. (2005) 42 Common Market Law Review 523.

37 See Ross (n 4) 1068.

38 This situation is analogous to criticisms that have been made of public service broadcasters such as the BBC, which by using a guaranteed source of income from the licence fee may acquire a dominant position within the market. See for example Case NN-88/98 BBC News 24 [2000] OJ C 78/6.

39 Opinion of Advocate General Jacobs in Cisal at para 71.

40 In Joined Cases C-264/01, C-306/01, C-453/01 and C-355/01 AOK Bundesverband a.o. Advocate General Jacobs argued that the upstream and downstream markets can be distinguished with competition rules being applied only to the upstream market. The Advocate General highlighted that in this case the activity of fixing maximum prices for certain pharmaceutical products by the national sickness funds (AOK) fell within the remit of an economic activity. The presence of competition between the sickness funds and the sickness funds and private insurers in relation to prices suggested that the activity was economic in nature and could be carried out by private undertakings. The Court rejected this view and held, as it did in FENIN, that the activity of the State sickness funds was a service of general interest. As with the SNS in FENIN, the Court viewed the activities of the German sickness funds as managerial and not as undertakings participating in competitive markets.

41 See Drijber (n 36) 526 who argues that while ‘full competition and full solidarity are mutually exclusive’ he also notes that ‘competition and solidarity is a matter of degree’.

42 In his Opinion in AOK Bundesverband a.o. Advocate General Jacobs suggested that the necessary redistributive element required for Article 86 (2) EC to apply was not present, cf with Poucet Pistre and Cisal (nn 33 and 34). The Court, while disagreeing with this view, did acknowledge that the absence of effective competition does not automatically lead to the exclusion of the activity from the scope of competition law. On this basis the comparative criterion therefore would appear to extend the concept of an economic activity to include any activity which is capable of being carried out by a profit-making organization. See further Drijber (n 36).

43 Opinion of Advocate General Maduro in FENIN at para 64.

44 Judgment of the Court in FENIN at para 2.

45 FENIN can be contrasted with the UK Competition Commission Appeal Tribunal (CCAT) ruling in Case No 1006/2/1/01 BetterCare [2002] Competition Appeal Reports 299. The CCAT held that purchasing activities by a public body can, in certain circumstances, amount to an economic activity carried out by the State. Accordingly, such an activity was held to be within the scope of the Competition Act 1998. The complaint concerned the behaviour of the North and West Belfast Health and Social Services Trust and whether it was abusing its dominant position as the sole purchaser of BetterCare's goods and services. The substance of the complaint related to the Trust acting as a monopsony and compelling BetterCare to sell its products at lower prices.45 In practice this is similar to the factual situation in FENIN where 80 per cent of products were purchased by SNS. In principle the impact of the Trust's actions upon Bettercare's finances is the same as SNS not settling debts promptly.

46 Case C-475/99 Firma Ambulanz Glöckner v Landkreis Südwestpfalz [2001] ECR I-8089.

47 See the Opinion of Advocate General Jacobs in Ambulanz Glöckner at paras 180–189 and in particular at para 185.

48 ibid at para 182.

49 Opinion of Advocate General Jacobs in Ambulanz Glöckner at para 62.

50 See Drijber (n 36).

51 See M Krajewski and M Farley, ‘Non-economic activities in upstream and downstream markets and the scope of competition law after FENIN’ (2007) 32 ELR 111 at 123. Krajewski and Farley argue that as the Member States introduce greater commercial and competitive elements to the delivery of healthcare service the protection offered to the upstream market may no longer be justifiable.

52 Judgment of the Court of Justice in Ambulanz Glöckner at para 20. It was acknowledged by the Court that the applicant in this case had previously operated both services.

53 Case C-188/89 [1990] ECR I-3313.

54 Paragraph 18 Rettungsdienstgesetz (1991). Hereafter RettDG 91.

55 Paragraph 18(3) of the RettDG 91.

56 Judgment of the Court in Ambulanz Glöckner at para 38.

57 ibid at para 33.

58 ibid.

59 See Luisi and Carbone (n 10) and Case C-159/SPUC v Grogan [1991] ECR I-4685. To see how Article 49 EC will assist an individual when national law prohibits a specific treatment see R v Human Fertilisation and Embryology Authority, Exp Blood [1997] 2 WLR 806.

60 Judgment of the Court of First Instance in Smits and Peerbooms at para 58.

61 See for example Case C-158/96 Raymond Kohll v Union des caisses de maladie. [1998] ECR I-1931.

62 The Court has rejected this distinction categorically in Müller-Fauré (n 14). Here the Court was of the view that the NHS and an insurance-based system are in character no different. The Court stated at para 39 that ‘a medical service does not cease to be a provision of services because it is paid for by a national health service or by a system providing benefits in kind’. In Watts, Advocate General Geelhoed expanded on this point in para 53 and dismissed any philosophical argument that the NHS was different because services were delivered to patients free at the point of consumption. The Advocate General stated ‘from the perspective of the free provision of services under Article 49 EC, the manner in which the financing of the service is arranged is as such irrelevant for deciding whether or not a given transaction comes within the scope of this Treaty provision. The role of the NHS, like that of the ZFW [Netherlands] sickness funds in the cases of Smits and Peerbooms and Müller-Fauré, is merely instrumental [emphasis added] in relation to the main transaction between, in this case, Mrs Watts and the hospital which provided her with medical treatment in Abbeville, France.’

63 See D Martinsen and K Vrangbæk, ‘The Europeanization of Healthcare Governance: Implementing the Market Imperatives of Europe’ (2008) 86 Public Administration 1 at 9–10.

64 It is also important to note that in the United Kingdom waiting lists are politically sensitive and are utilized by political parties to demonstrate to the electorate how efficiently they may deliver healthcare. It would appear legitimate to argue that waiting lists are democratically approved by the electorate who have given the Government a mandate to organize healthcare. Such an analysis would be consistent with Article 152(5) EC and provide a reasoned argument against the Court's analysis in Watts.

65 This situation is analogous to that in Ambulanz Glöckner where the need to balance resources in the delivery of emergency and non-emergency ambulance services was considered by the Court. It will be recalled that in this case the Court provided greater flexibility for a Member State in the delivery of this service and recognized that resource considerations are legitimate factors for States to consider in the delivery of a universal service.

66 Hervey and McHale argue that patient mobility is likely to be restricted to only certain sections of society. See further Hervey and McHale (n 5) and T Hervey, ‘The Right to seek Healthcare Abroad in the EU’ (2007) 9 Cambridge Yearbook of European Law 261.

67 The Court confirmed in Vanbraekel at paras 31 and 32 that Article 22 of Regulation 1408/71 helps to facilitate free movement and should be interpreted in a manner which promotes the exercise of rights under Article 49 EC. This would rule out, as a justification, an argument by the NHS that waiting list targets for treatment will be met. In Watts, Advocate General Geelhoed argued that there is a distinct difference in situations where a patient has not asked for permission and one where the request for authorisation has been wrongly refused; see paras 87–90.

68 This was reduced to a maximum of four months following a medical reassessment. At this point the application under Regulation 1408/71 was again rejected by the Bedford Primary Care Trust (PCT) on the basis that, as in the first instance, her treatment would be delivered within waiting list targets. See further Hervey (n 55) at 276–283.

69 See further J McHale, ‘Law, Patient's Rights and NHS Resource Allocation: Is Eurostar the Answer?’ (2006) 14 Health Care Analysis 169 at 176.

70 Judgment of the Court in Watts at para 91.

71 There is a risk that treatment received abroad will cost more than if it were provided in the home State. This will result in a further strain on already limited resources. Furthermore, as the Court held in Watts that travel expenses should not be reimbursed, there is the danger that the right will not be available to everyone.

72 See Hervey and McHale (n 5), 156–158.

73 Though the Europe for Patients project suggests that seeking healthcare abroad is considered by an increasing number of patients. See generally M Rossenmoller, M McKee and R Baeten, Patient Mobility in the European Union, Learning from Experience (Geneva: World Health Organisation, 2006). Available at http://www.iese.edu/en/files/6_22160.pdf.

74 See n 31 above.

75 2004/2148 (INI).

76 SEC (2006) 1119/4, 26 September 2006.

77 The High Level Group consists of senior civil servants from the Member States and interested stakeholders. This Group was established to pursue the recommendations of the High Level Reflection Process on patient mobility first set out in COM(2004) 301 of 20 April 2004.

78 Report of the High Level Group on Health Services and Medical Care of 3 November 2006. Available at http://ec.europa.eu/health/ph_overview/co_operation/mobility/docs/high_level_wg_003_en.pdf

79 Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market.

80 ibid; Article 2(f).

81 Doctors were originally covered by Council Directive 93/16/EEC which was intended to facilitate the free movement of doctors and the mutual recognition of their qualifications. From 27 October 2007 this Directive has been replaced by a general Directive 2005/36/EC on the recognition of professional qualifications. In addition to doctors, other sectoral directives covering dentists, nurses, pharmacists and midwives have also been replaced by Directive 2005/36/EC. Under Chapter III of the Directive, all these professions come within the automatic recognition of training qualifications on the basis of coordination of the minimum training conditions. The effect of this is that each Member State automatically recognizes certificates of training giving access to the professional activity concerned. For the purposes of equivalence in qualifications, this Directive in Annex V sets minimum training conditions for the professions.

82 Draft report on the impact and consequences of the exclusion of health services from the Directive on Services in the Internal Market 2006/2275(INI).

83 Debate in the European Parliament on the impact and consequences of the exclusion of health services from the Directive on Services in the Internal Market, 23 May 2007. The Plenary adopted the findings of the Rossenmoller, McKee and Baeten Report which emphasized the need to promote patient rights. See n 73 above.

84 See euobserver.com 7 February 2008 at http://euobserver.com/851/25618.

85 See n 55 above.

86 See Case C-320/91 Criminal proceedings against Paul Corbeau [1993] ECR I-2533 at para 14.

87 ibid at paras 14–16.

88 Judgment of the Court in Ambulanz Glöckner at para 62.

89 ibid at para 33.

90 ibid at para 60.

91 Case C-266/96 Corsica Ferries France SA v Gruppo Antichi Ormeggiatori del porto di Genova Coop arl, Gruppo Ormeggiatori del Golfo di La Spezia Coop arl and Ministero dei Trasporti e della Navigazione [1998] ECR I-3949.

92 Case C-147-148/97 Deutsche Post AG v Gesellschaft fur Zahlungssysteme mbH (GZS) and Citicorp Kartenservice GmbH CKG [2000] ECR I-825.

93 See Szyszczak, The Regulation of the State in Competitive Markets in the EU (Oxford: Hart Publishing, 2007) 124–131.

94 ibid. These include, inter alia, cultural pluralism, environmental protection and consumer protection.

95 The Court has already acknowledged environmental protection as a legitimate non-economic objective.

96 Decision of the Commission of 24 January 1999 in Case IV.F.I/36.718, CECED, [2000] OJ L187/47.

97 See J van den Gronden ‘Rule of Reason and Convergence in the Internal market and Competition Law’ in A Schrauwen (ed) Rule of Reason: Rethinking Another Classic of European Legal Doctrine (Groningen: Europa Law Publishing, 2005) 79 at 90.

98 Case 72/83 Campus Oil v Minister for Industry and Energy [1984] ECR 2727.

99 For a further discussion of how the Court has considered economic justifications as derogations to the free movement rules, see J Snell, ‘Economic aims as justifications for restrictions on free movement’ in A Schrauwen (ed) Rule of Reason: Rethinking Another Classic of European Legal Doctrine (Groningen: Europa Law Publishing, 2005) 41–43.

100 At n 61 above.

101 ibid at [41].

102 See Smits and Peerbooms at paras 72–74 and Müller-Faure and Van Riet at para 67. In these judgments the Court acknowledged that the EC Treaty permits Member States to restrict the freedom to provide medical and hospital services in so far as the maintenance of treatment capacity or medical competence on national territory is essential for public health, or even the survival of the population. For a discussion of how the Court has considered what social objectives are permissible derogations within Article 86(2) EC see J van den Gronden (n 93) at 97.

103 Case C-444/05 Aikaterini Stamatelaki v NPDD Organismos Asfaliseos Eleftheron Epangelmation (OAEE) judgment of 19 April 2007 at para 35.

104 See Snell (n 99) 44.

105 See Krajweski and Farley (n 51).

106 ibid.