At this roundtable session dedicated to the subject of Italian welfare reform, it was noted that European welfare models have come under pressure from major demographic, economic and social changes, including progressively aging populations, rising expectations for healthcare, increased risks of non-self-sufficiency, sporadic employment and income, and concerns over public debt, which have conspired to make healthcare and welfare systems devised in the past gradually more unsustainable. This situation, which has gained momentum from the crisis, poses two important questions for Europe: how to go about designing a new welfare model capable of ensuring the competitiveness of the production system, and how to guarantee the long-term sustainability of social security systems.
In Italy, whilst the public sector no longer has all the resources necessary to meet social welfare demand, even the traditional contribution from informal networks (such as families) is showing signs of flagging. The participants thus felt that in order for long-term financial and social sustainability to be restored, the system needs to be reconsidered with a view to creating a greater synergy between the public and private sectors that will ensure fairness and efficiency. The approach taken must be one that, by eliminating existing distortions, puts in place a system which – if not optimal – is at least up to the tasks that welfare is called on to fulfill in the medium to long term.
The reforms and changes that Italy is contending with must – it was emphasized – be placed within a European perspective. They sit properly within the multi-pillar model that is reshaping the role played by the states of the Old Continent. It was observed, however, that whilst before the crisis the demographic factor presented the greatest concerns, the worsening economic climate has brought other issues to the fore, namely: the role that welfare should play in the reallocation of production factors; the twofold constraints of budgetary limits and fairness in a situation where economic recovery will not be rapid; and the need to develop a social security system that is capable of responding to the shocks to which the Monetary Union is subjected.
Yet, whilst in terms of labor market policies there is general consensus in Europe on gradually moving towards flexicurity, there still seems to be no agreed approach in the field of health. It was stressed, however, that even in the absence of a systemic framework, there is no shortage of best practices from which Italy might draw inspiration. In France, for instance, a co-payment system operates in which private funds and insurance firms play a significant role, albeit within a heavily public-centric healthcare system. The Netherlands, on the other hand, has introduced a system based on compulsory private health insurance (which funds around 50% of health costs), with a government allowance available to help people on lower incomes meet their premiums. Lastly, in Germany, a long-term health insurance system applies in which it is possible to choose between public or private coverage.
Based on these examples, the participants concluded that partnership between the public and private sectors for the delivery of healthcare would seem the best way of not only increasing the sustainability of health expenditure, but also of helping to spread healthcare and pension investment risks. It was acknowledged, however, that the already existing hybrid models in Italy, such as supplementary pension schemes, do not seem to have met with complete success yet. Yet whilst it was conceded that there are issues related to forms of taxation that discourage the resort to annuity-based supplementary pensions, it was felt that the problem remains largely one of education. Hence, improving the grounding of Italians in financial literacy might help cultivate mature and active investors aware of the risks and benefits associated with their choices, whilst furnishing the requisite impetus for new social security systems in a European mould.