The welfare state in Greece is almost 70 years old and attempts to create a so-called “safety net” for the whole of the population, including the sick, disabled and elderly people. The responsibility for the management of the social insurance system, as well as of the unemployment and family assistance benefits, belongs to the Ministry of Labour and Social Insurance.
The system is financed by contributions from employers and employees. The founding stone of the Greek welfare system was the creation, back in 1934, of IKA (Social Security Institution), which was, and still is, a vast organization comprising 331 Administrative Centres and 364 Health Units. All IKA members (more than 5,550,000 including the ones who are not directly insured) have access to a sufficient standard of health care as well as a pension, upon their retirement. A second milestone was the creation, in 1961, of OGA (Agricultural Insurance Organisation), which covers all the country’s rural population. It is worth noting that since 1975, the welfare state in Greece has been constitutionally guaranteed (see Article 24 of the 1975/1986/2001 Constitution).
In the early 1980s, despite economic problems, the welfare state expanded. In order to reduce the degeneration of the old health care system as well as to restrain the expansion of private practices, the ESY (National Health System) was enacted by the first socialist government of PASOK. The inaugural article of the relative legislation (law 1397/83), declared that: «the state has a responsibility for providing health care to all citizens, regardless of their financial, social or professional status». ESY’s main objectives were the equal distribution of health services, sufficient coverage of needs, improvement of quality and emphasis on each region separately.
Most of the aspects of the new system have been spectacular: for example, the number of hospital beds has increased from about 32,000 in 1983 to more than 52,000 today, while the number of doctors —including dentists— exceeds 54,000.
As a result, a recent study by the World Health Organization ranked the Greek health system as 14th out of 191. Encouraging though this figure was, the Greek government is pushing ahead with major health care investment, as witnessed in the budget for 2001, in which the sector was given a considerable boost with an 11.5% increase in health spending.
In addition, in order to solve the problems and malfunctions of the present welfare state system, the government decided to proceed towards a restructure of ESY. According to the plan under way, ESY is being divided into 17 autonomous and independent regional branches, called PESY (Peripheral Health Systems). Although the cost of PESY development during the first year of their operation, starting from July 2001, will exceed the amount of 6.6 billion drachmas, it is expected that in the long run, the system will save a big amount of money estimated to reach 65 billion drachmas up to 2006.
The quality of services provided is also expected to increase significantly, therefore discouraging many Greeks from turning into the private health sector.
By the same token, in order to improve the overall level of medical services, to provide greater access to health care services and to manage resources in the health care sector, the Ministry of Health and Welfare is implementing a number of projects with the aid of information technology and telecommunications.
However, the increase in life expectancy and the falling fertility rates pose new challenges in the social insurance system. These developments progressively affected all the major insurance organizations, decreasing the standards of the services provided, keeping the amount of pensions allocated on a low level and, consequently, forcing many Greeks -those who can afford it- to seek complementary (private) insurance.
As a result, the adoption of a new scheme was deemed to be necessary and in 2002 a big reform initiative on this issue was presented by the Ministry of Labour and Social Insurance.