Bribery Makes Greek Health Care Work
Public health care’s strained finances have created a large private system, widely used by wealthier Greeks, as well as a shadow system built heavily on bribes—the envelopes of cash known in Greece as fakelaki. Generally, €20 to €50 buys a fast, basic office visit; surgeries can be thousands of euros, according to figures from Transparency International, the anticorruption group, which rates Greece the European Union’s most corrupt country.
“The state has exchanged public funding for private, under-the-table payments,” said Lycourgos Liaropoulos, a professor at the University of Athens and a prominent health-care economist. A study by Mr. Liaropoulos and his colleagues found that Greeks spend nearly as much on bribes and other “informal” payments as they do on “formal” costs such as insurance co-pays
This really addresses a point that Prof. Goodman, Linda Gorman, and others have emphasized in their articles: We can’t really trust international comparisons of health spending.
In 2008, reported health spending accounted for 10.1 % of GDP in Greece and 15.2% in the USA (http://www.globalhealthfacts.org/data/topic/map.aspx?ind=67).
However, the WSJ suggests that “informal” payments (bribes) account for the same amount of spending as the formal payments. Thus, Greek health spending/GDP is really more like 20%! If we assume there are no such payments in the USA (which is reasonable), the usual discussion of how expensive US health care is is quite unfounded.
This is arguably an example of how price controls created a shortage. Greeks have to add to the reimbursement with their own (informal) cost-sharing to get the services they need. If payments were adequate it is doubtful providers could (or would) demand an under-the-table payment.
Not exactly an option here but probably not unheard of, either.
This is fascinating. It’s like, even if people create a public healthcare system, the free market will find a way in one way or another.
In this case, it’s the free market of bribery that rose to the occasion.
Yes markets find a work-around. But the inefficiency and corruption that are introduced by bribery cost a lot and probably mean that a lot of people get a lousy product or none at all.
Soviet Union was the mother of all black markets and it wasn’t a pretty sight.
Thank’s for sharing this valuable information.
John Graham’s point is brilliant.
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