2 Crisis? What crisis?

How are crises and reforms related to each other in the political science literature? John Keeler defined a crisis as a situation of “large-scale public dissatisfaction or even fear stemming from wide-ranging economic problems and/or an unusual degree of social unrest and/or threats to national security” (Keeler, Reference Keeler1993: 440). Only when a (social) problem is severe enough to make the public audience receptive to its depiction as a crisis, we can expect it to have a significant impact on the policy-making process. However, while economists claim to have clear measures for defining what economic downturns and recessions are, political scientists are less clear about what distinguishes a crisis from a normal situation. Following the work of Colin Hay, a crisis is not simply a condensation of contradictions that produces a condition of rupture and breakdown, but it must be understood as a moment in which a ‘decisive intervention’ can and should be made by an agent (Hay, Reference Hay1996: 254). Furthermore, a crisis must be perceived as such by agents capable and willing of making a decisive intervention at the level at which the crisis is identified. In the real world outside there is often no commonly accepted threshold beyond which a problem should be defined as a crisis, nor is it always clear who is authorized to take any actions.

To understand how a crisis impacts upon politics and policies, we need to understand how crises and reformist action are related to each other and how institutional structures channel the conflicts that go along with these (Baumgartner and Jones, Reference Baumgartner and Jones1993: 12). The model of punctuated equilibriums, as it has been developed in the agenda-setting literature, provides us with some useful insights. The central claim of this model is that democratic policy-making is characterized by relatively long periods of stability, in which policy making evolves in an incremental way, but that these periods are linked to each other by disruptions and periods of rapid change during which established institutions and policy programs are seriously challenged and altered. It should be emphasized here that stability is not necessarily indicative of equilibrium. Even during periods of stability, institutions may be altered incrementally through processes of layering and conversion, bringing in new participants and reallocating power and authority (Helderman and Stiller, Reference Helderman and Stiller2014). Stability in politics and policies is maintained by two major devices: the existing structure of political institutions, that allocate power and authority, and through the definition of issues that need to be resolved by public policies and that are processed by institutions (Baumgartner and Jones, Reference Baumgartner and Jones1993: 15). During periods of relative equilibrium, alterations in policies and institutions unfold in a gradual way, leaving the policy monopoly largely in the hands of those who have been assigned by the institutions with the mandate and authority to act.

Any issue that moves onto the formal government agenda has to pass a ‘policy window’ (Kingdon, Reference Kingdon1984). Policy windows are agenda-setting opportunities that may be opened because of either an upheaval of the problem stream (problem-driven reforms) to which governments have to respond or because of shifts in the balance of power in the political stream (mandate-driven reforms). Most policy windows are relatively limited in scope in the sense that they open in a fairly predictable and routinized manner. Think of the annual budget cycle of the government. A crisis, however, has the potential to open policy windows in a less predictable way (Kingdon, Reference Kingdon1984; Baumgartner and Jones, Reference Baumgartner and Jones1993; Keeler, Reference Keeler1993). Crises can open ‘macro windows’ basically in two different ways (Keeler, Reference Keeler1993). The first is the so-called crisis-mandate mechanism by which a crisis discredits the ideas and policies of ruling governments and, through negative voting during elections, produces an unusually impressive mandate for the political parties in opposition to take over governmental authority. Alternatively, a crisis may create a socio-political context for ruling governments to gain extraordinary mandate to take immediate action: the crisis-urgency mechanism. The crisis then presents an opportunity for political actors and policy entrepreneurs to be exploited (never waste a good crisis) in which they may even draw related issues into the already opened window (the spillover effect). However, a crisis may also have a third and perhaps more indirect effect in the sense that it opens windows for new venues for interventions.

It is at this point that we need to bring in the concepts of ‘policy framing’ and ‘policy venues’. Policy framing is about the process of defining the image of a policy; how a particular situation and potential policy solutions should be understood. Policy venues are the institutional sites where the portrayal of problems and solutions takes place (policy framing) and where authoritative decisions (decisive interventions) are made concerning a given issue (Baumgartner and Jones, Reference Baumgartner and Jones1993: 32). Policy venues are sites of strategic issue control, they are the locations where policies originate, obtain support and are adopted as binding decisions. There are many different types of policy venues, ranging from the formal political arenas such as the legislatures, the structure of executive governments and the judiciary, but also the more or less formalized arena’s for interest group representation and interest-intermediation. Authority is not automatically assigned to particular venues. On the contrary, how an issue gets assigned to a particular arena of policy making is as much a puzzle as how the issue comes to be associated with one set of images rather than another. And just as policy images may change over time through processes of framing, so may venues change over time. Policy-makers thus attempt both to manipulate the dominant understanding of the issues at stake and to influence the venues that exert jurisdiction over them. Where images are in flux, one may expect changes in policy venues. Conversely, where the venues change, the terms of the debate may be altered. Venue assignments thus play a key role in both establishing the structures that create policy equilibriums for most issues most of the time, and in facilitating occasional dramatic changes when the structures fall apart or are replaced by others (Baumgartner and Jones, Reference Baumgartner and Jones1993).

In the remainder of this paper, I explore how the GFC has influenced the process of health policy framing within the EU and how it created new venues, beyond the level of European Member States, to do so. The immediate effect of the GFC is that it created new venues for the EU to intervene more decisively in the health policies of its Member States.

3 Health entering the European agenda

From the Second World War onwards, governments have had to cope with three major challenges with respect to their maturating health care systems: first, how to create and extend universal coverage; second, how to contain booming macro health care expenditures; and third, how to foster efficiency in health care services while guaranteeing the quality of these services (Bevan et al., Reference Bevan, Helderman and Wilsford2010). Although these were common challenges, each country was sovereign in its decisions concerning the scope and content of its health policy repertoire. The weak democratic structures of the EU did not even allow any interference in this (Majone, Reference Majone1998; Scharpf, Reference Scharpf1999). Nevertheless, despite the fact that Member States are still in the lead when it concerns their welfare state and health systems, as a consequence of further economic and monetary integration in the 1990s, they have in fact become semi-sovereign welfare states (Ferrera, Reference Ferrera2005; Hemerijck, Reference Hemerijck2012).

It was at the Lisbon Summit of the European Council in March 2000, that the EU committed itself to become ‘the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth and more and better jobs and greater social cohesion’. While the EU used to be primarily focused on economic integration and the creation of an internal market, and at a later stage at monetary integration, it now accepted responsibility and claimed at least some authority for social policy as well. Next to the goals of economic integration and the creation of the European Monetary Union (EMU), the EU began to develop its own social policy frame. The Lisbon Strategy was the first integrated agenda of the EU that gave equal weight to full employment and social cohesion, alongside economic growth and competiveness, on the acknowledgment that social policy essentially should be conceived of as a productive factor for economic growth.

In the years following the Lisbon Summit, this European frame on social policy has been further elaborated and diffused to the Member States. The key-word that since then has come to characterize this emerging European perspective on the welfare state and social protection and security is ‘social investment’. Social investment is the denominator of a manifold of concepts and ideas (social development, the social developmental welfare state, the enabling state, inclusive liberalism) introduced in the 1990s and 2000s aimed at reconciling social policy goals with economic goals in the EU (Morel et al., Reference Morel, Palier and Palme2012). The central contention of the social investment perspective is that the sustainability of European welfare states, including their competiveness and inclusiveness, hinges on the number and productivity of future tax payers. At the core of the social investment perspective is the idea that social provisions and social security programs should be realigned along a ‘life course perspective’ (Esping-Andersen et al., Reference Esping-Andersen2002; Hemerijck, Reference Hemerijck2012). It emphasizes the need to strengthening people’s current and future capacities by helping them to prepare themselves with the various risks that they are confronted with at successive stages in their life course, rather than simply repairing the consequences of these risks with the ultimate goal to increase a healthy and good educated workforce. Social support should be better targeted to those in need at the times and at the stage in their life course when they need it. This calls for both individualized (tailor made) social services as well as for integrated services. The primary focus is on active labor market policies and human capital improvement (including education, training, and better youth and child care services), which still is the central focus of the current Europe 2020 agenda and its strategy for smart, sustainable and inclusive growth [European Commission (EC), 2010b].

It goes beyond the scope of this paper to discuss the details of the social investment perspective (see Hemerijck, Reference Hemerijck2012; Morell et al., Reference Morel, Palier and Palme2012). It is certainly not a deeply rooted public and social philosophy that unites European citizens and EU leaders (Schmidt, Reference Schmidt2013: 194), nor is it simply a portrayal of neo-liberal ideas, although it certainly contains some neo-liberal elements. It is neither a coherent policy paradigm or program (in terms of the diagnosis of the problems, the values and principles pursued, the norms for public action, policy prescriptions and the instruments to be used). It aims at best to combine two partially conflicting views on the welfare state; the Anglo-liberal ‘Third Way’ approach as advocated by Anthony Giddens with its emphasis on activating social policies with the ‘social democratic’ Nordic approach, which aims to combine both an investment strategy and a protection strategy (Esping-Andersen et al., Reference Esping-Andersen2002; Morel et al., Reference Morel, Palier and Palme2012).

Its ambiguous nature could be seen as its weakness, but also as its strength in the sense that it has probably contributed to its acceptance within the EU. However, in order to be able to engage in these complex and domestically sensitive social policy areas, where its authority is weak, the EU needed new policy venues and governance mechanisms that did justice to the highly delicate balance of authority and power in the EU, especially where it concerned social policies. To that end, the EU developed the Open Method of Coordination (OMC). The OMC has been gradually introduced in the 1990s, in order to develop a European employment strategy by coordinating Member States’ economic and fiscal policies, but since the Lisbon treatment of 2000, it is also applied to areas of social protection and social inclusion (OMC-social). The OMC is based on iterative benchmarking of national progress toward Community objectives, while still allowing the Member States to chose their own preferred approach to achieve these commonly agreed objectives (Hemerijck, Reference Hemerijck2012). After consultation with stakeholders from the Member States, common EU policy objectives are defined. These objectives are then used to guide national policies by setting specific targets and guidelines within certain time frames for the Member States. Member States have to translate these guidelines into National Action Plans. The performance of each Member State is evaluated by the EC, against the agreed EU objectives, using quantitative or qualitative indicators. Finally, through benchmark exercises, the best practices are identified and diffused to the Member States (Hervey, Reference Hervey2008: 107).

Again, to discuss the OMC in detail goes beyond the scope of this paper. Critics argue that the OMC is a smokescreen behind which liberalization and privatization of social institutions is carried out (see Hervey, Reference Hervey2008: 107). Others see it as a promising new governance instrument that facilitates mutual learning and experimentation by exploiting the differences between European Member States (Sabel and Zeitlin, Reference Sabel and Zeitlin2008). The European Council and the EC promote the OMC explicitly as a collaborative mechanism that allows Member States to learn from another. However, the OMC certainly is a venue that results in policy priorities, objectives, guidelines and indicators that help to reframe existing policies.

As said, it was at the Lisbon Summit of the European Council in March 2000 that the EU began to develop its own social policy frame in which the emphasis on ‘social investment’ became the key-word. Although the social investment agenda centered primarily around active labor market policy and human capital development through better education and life-long learning programs, it soon started to spillover to other social policy areas, including health care and pensions. Health was not directly included in the social investment agenda, but it was soon recognized that the goal of making Europe ‘the most competitive and dynamic knowledge-based economy in the world’ would depend crucially on the fiscal sustainability of European welfare states and in particular of their health systems, if only because rising health care expenditures crowded out potential investments in other social policy domains (Pearson, Reference Pearson2012). Next to this emphasis on financial sustainability, was the challenge of demographic aging, which got a prominent place on the European agenda at the Stockholm Council meeting in 2001 (Lindh, Reference Lindh2012). Aging clearly has a more direct relationship to the life-course perspective that was adopted by the EU since the social risks related to aging are life-course risks by nature. Aging not only puts strains on pensions and social security systems, but it also calls for supporting the needs of an aging labor force (in order to enable them to participate longer in the labor process), the need to increase the number of trained health care professionals and to accommodate the higher demand for health care services and long-term (institutionalized) care (EC, 2009).

At the Lisbon Summit of 2000, it was reconfirmed that health care is the responsibility of the Member States (Paoli, Reference Paoli2012). However, it was also stated that the Commission, in close contact with the Member States, could take any useful initiative through the OMC to promote coordination on health-related policies and programs by means of establishing guidelines and indicators, exchanging best practices and periodic monitoring and evaluation (Paoli, Reference Paoli2012). The health policy image created by the EC, in close alliance with the WHO and the OECD, focused on two discrete but related dimensions of health care: the challenge of demographic aging and the subsequent need to develop long-term care programs, and second, the need to contain public health care expenditure levels in order to achieve fiscal sustainability in European welfare states. The emphasis on the fiscal sustainability of health care expenditures was legitimized by the widespread consensus among policy-experts that there are still many ways to enhance efficiency in health care systems, more than in any other social area. Second, health not only is the largest area of government expenditure after social protection, but it is also one of the main areas of public expenditure that is projected to come under additional pressure from demographic aging. It is estimated that on average 30% of the total age-related expenditures in the EU countries are public expenditures in health (EC, 2009; Lindh, Reference Lindh2012).