Regional government bails out Balearic health service, increases budget

PALMA
THE Balearic government is making a special payment of 237.5 million euros to the regional ministry for Health to drastically reduce its debt of 354 million, Tax and Economy Minister Carles Manera said yesterday. He added that the government will also increase next year's Health budget by 5 percent.

Manera was accompanied by Balearic Health Minister, Vicenç Thomas who highlighted the fact that in 2007 when he took up office, the regional health service was 186 million euros in debt, meaning that the level of debt has grown by 90 percent during the present Balearic government.

The Health Minister explained that the accumulation of his department's debt relates to a regional financing problem that dates back to 2002. Right up until last year, said Thomas, the system failed to compensate the regional government for costs associated with the major increase in population in the Balearic Islands.

Thomas said that a new financing model will improve the situation but it won't show material results until 2012. He purported that the new treatments available to the public through the regional health service and the aging population are also factors contributing to rising healthcare costs.

In fact, the Minister furthered, public health spending has been rising at a rate of 10 percent per year.
To tone down this trend, said Thomas, the regional Health ministry has set up a savings plan which he was confident would result in spending in the Health sector increasing by 1 percent in comparison with 2009.

In order to further explain the rise in debt of the regional health service - Ib-Salut - since 2007, Manera pointed out that the economic crisis had meant that over the past two years, the Balearic government had had to face a 1'000 million euro shortfall in income from taxes.

As a result, claimed Manera, the government had been forced to borrow to keep up the level of public services, pushing up its debt level to 3'600 million euros.

Thomas claimed that nearly 60 percent of the public healthcare debt related to hospital pharmacy supplies which were secured directly from major distributors.

Both Manera and Thomas left open the question of whether or not the 5 percent Health budget increase planned for next year will be part of a government budget extended from 2010 into 2011.

The ruling Socialist coalition and opposition parties have failed to agree on figures for 2011, largely because of the coalition's insistence on raising taxes on wealthy incomes. Legally, failure to reach agreement affords the present government the possibility of using budget figures which have already been agreed for 2010 during the course of next year.

Manera and Thomas said that the government's decision to afford the Health ministry a special payment to reduce its debt was a clear indication of the commitment of the present Balearic government to finance its social policy.