NCPA - National Center for Policy Analysis


November 17, 2004

Recently the European Union proposed to remove market barriers in an effort to legislate a single market for services, particularly in health care. This proposal comes after the European Court of Justice, Europe's highest court, ruled in favor of a German civil servant demanding medical reimbursement after traveling to Italy for health care.

The court said individual countries can choose their own social-security and health-care systems, but they must do so in a way that is compatible with EU law, meaning without creating national barriers for services:

  • EU health care systems don't have much competition at the moment, and competition is a major source of quick implementation of new innovations, says one European health official.
  • With the euro-zone economy growing at a tepid 1.7 percent and unemployment at 9 percent, legislators in Brussels are interested in eliminating state barriers to boost European competitiveness and economic growth.
  • Nonmanufacturing services account for more than 50 percent of Europe's gross domestic product and 60 percent of employment; social services like health care are a big part of that, say observers.

The European health care industry hopes erasing such borders can spur demand for new medical technology and improve care. However, in a bloc with 25 different health care systems and pricing schemes, countries fear that allowing people to shop around for health services could be messy, or worse.

Source: Hannah Karp, "EU Has Health-Care Headache," Wall Street Journal, November 12, 2004.

For WSJ text (subscription required),,SB110012391199170570-search,00.html


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