Building the European Observatory (3/4): Tallinn, the financial crisis and the limits of evidence

Fenton: Let's move forward within that first decade. By the mid-2000s the Observatory was established and growing. What came next?

Figueras: Several things happened that increased the visibility and impact of the Observatory. We worked closely with EU Council presidencies, including the Finnish Presidency in 2006 on Health in All Policies and the Slovenian Presidency in 2008 on cancer. Then came the Tallinn Charter in 2008. These were important because they showed that the Observatory could operate at the highest levels of European policymaking, not just analysing health systems, but helping shape the debate.

Fenton: Tell me about Health in All Policies.

Figueras: When Finland held the EU Presidency in 2006, they wanted to put health at the centre of the agenda, not just health care, but the idea that decisions in every sector affect health. Finland asked us to help build the evidence base. The result was Health in All Policies: Prospects and Potentials, with Matthias Wismar playing a central role. It helped give Health in All Policies practical life in Europe, linking it to governance, health impact assessment and implementation.

Fenton: And then Tallinn?

Figueras: In June 2008, WHO/Europe convened the high-level ministerial conference in Tallinn, Health Systems for Health and Wealth. Martin McKee and I played a central role in the analytical work, and the Observatory provided much of the evidence base. The key argument was that health systems are not simply a cost: they contribute to health, employment, productivity, innovation and social cohesion.

Fenton: That sounds obvious now, but at the time it was a contested claim, wasn't it?

Figueras: Very much so. In many finance ministries, health spending was still treated mainly as consumption, a budgetary pressure to contain. We assembled evidence showing that health systems generate employment, support innovation, improve productivity and contribute to social stability. The argument was not for unlimited spending, but that crude cuts could be self-defeating. The Tallinn Charter committed ministers to that broader view just before the financial crisis tested it severely.

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Fenton: The Observatory's influence also extended into areas such as antimicrobial resistance. How did that develop?

Mossialos: It grew out of work we had been doing at LSE Health on pharmaceutical incentives. In 2009, the Swedish EU Presidency asked us to examine how to encourage the development of new priority antibiotics, after much of industry had walked away. The economics were brutal: antibiotics are taken for short courses, the best new ones need to be held in reserve, and resistance means any drug has a limited lifespan. Everything about the market works against investment.

We analysed more than twenty incentive models and proposed approaches to public-private risk sharing and regulatory reform. The work fed into the EU Council's call for a Commission action plan, and later into the Transatlantic Taskforce on Antimicrobial Resistance. The Netherlands commissioned follow-up work in 2016, Romania's presidency in 2019 drew from the Observatory's work, and Sweden came back again in 2023. Four EU presidencies, fourteen years apart, turning to the same line of work, that says something about the Observatory model. It also says something sobering: the problem is still not solved.

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Fenton: The Observatory works closely with governments. How do you maintain independence? Is there a tension between being a trusted adviser and an honest broker?

Mossialos: There is no compromise on the principle. We synthesise evidence and present options; we do not tailor conclusions to please a particular government. We try to be a neutral broker, but one that can move quickly without sacrificing quality. That combination is unusual, and it is a large part of why the Observatory has been trusted.

Fenton: The first ten years were clearly challenging and rewarding. But just as that first decade closed, the global financial crisis began. How did that affect the Observatory?

Figueras: It was a testing time. Our immediate fear was that partner governments would withdraw support as budgets were cut across Europe. In fact, many wanted more from us. They were under pressure to make health systems more resilient and efficient without sacrificing equity, and that was exactly the kind of question we were built to address. The crisis, paradoxically, confirmed our relevance.

Mossialos: I would put it more bluntly. Europe was not prepared. The euro had been built with too little serious thinking about what would happen if a member state faced a sustained shock. When the crisis came, the response was improvised, and decisions about health budgets were often taken in finance ministries and the Troika without enough understanding of the likely effects on health systems and health outcomes. Two years after Tallinn, the commitment to treating health systems as an investment came under intense fiscal pressure. The evidence existed, and the Observatory documented it carefully. But the political machinery for using that evidence at European level was weak.

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Figueras: But something else changed. In 2009, Elias was elected to the Greek Parliament, and in 2011 he joined the government. That was a significant shift. Elias had been central to the Observatory's intellectual life from the beginning. His move into frontline politics meant we had to adapt. The Observatory did not stop, of course, but we lost the daily interaction that had driven so much of what we built together.

Fenton: Elias, did you stay in touch with Josep during that period?

Mossialos: Yes, but not as much as I would have wanted. Politics consumes you completely. Josep kept me informed about the Observatory's work, and he would ask for my views on things. But the rhythm was different. I was no longer in the room in the same way.

Fenton: Did you manage to meet at all?

Mossialos: The experience that shook me most was not academic. In October 2011 I was in Brussels with the Greek Prime Minister, negotiating the bailout. At that level, with the future of a country genuinely at stake, evidence in the usual policy sense had much less force. Decisions were driven by politics, panic and power. Josep and I met that evening, and I told him I was questioning much of what we had built. He reminded me why it mattered. But the doubt has never fully left me, and I think it should not. If you work in evidence-based policy and have never seen evidence fail at the highest level, you have not seen enough.

Fenton: That is a stark thing to admit. Does it not undermine the entire premise of the Observatory?

Mossialos: It should at least unsettle it. I have never found a fully satisfying answer. I came back, slowly, to the counterfactual: without the evidence base, the political room for manoeuvre is even narrower. But that answer should not become too comfortable. Institutions like the Observatory need to keep asking whether evidence is actually entering decisions, and where it is not. I think the Observatory is genuinely valuable, but anyone running it should sit with that doubt rather than resolve it too neatly.

Fenton: But did the doubt come back? Because the obvious question is: if evidence struggles to get a hearing when the stakes are highest, what is the point of an observatory?

Mossialos: It did come back. During the austerity years, governments often cut health budgets in ways that ran against the evidence. The Tallinn Charter said health systems are an investment, not simply a cost, yet finance ministries still cut because they were under pressure or believed they had no room to do otherwise. I kept returning to the counterfactual: evidence does not always win, but without it you do not even have an argument.

Figueras: I would go further. There were moments when governments, including sometimes partner governments, were uncomfortable with what we published: on inequities, access problems, hospital inefficiencies, weaknesses in primary care or pharmaceutical pricing. We had difficult conversations, but we never changed findings to suit a member state. That was a line we would not cross.

And in many cases, the relationship survived, even strengthened, because governments realised we were not there to flatter them. If we had pulled punches, we would have lost credibility. Maintaining independence inside WHO was not always easy, but WHO understood the nature of the partnership and gave us space to do our work.

Fenton: Can you give a concrete sense of how these tensions played out around the HiT profiles?

Figueras: The most common difficulty was when a government announced a reform and we needed to analyse it, but we had reservations about whether it would work. In those cases, governments sometimes pushed back, gently or more forcefully, depending on the country and the moment. We learned to present reservations as prerequisites for successful implementation rather than as attacks on the reform. A careful reader would understand the warning. The framing was diplomatic, but the substance was preserved. That kind of navigation is invisible from outside, but it was a constant part of the work.

Fenton: You mentioned Martin McKee's work during the austerity period. Can you say more?

Figueras: Martin did something that took real courage. While governments were insisting that austerity was not harming health, he published evidence linking austerity to deteriorating access to care, cuts in harm reduction and other damaging outcomes. Some governments, including partners, were uncomfortable. Martin did not tone it down. That willingness to follow the evidence wherever it led was part of what made him indispensable to the Observatory.

Fenton: Looking back across that first decade and its immediate aftermath, what would you say the Observatory achieved?

Figueras: Zsuzsanna Jakab, when she was WHO Regional Director for Europe, said at our twentieth anniversary that the Observatory had been ahead of its time in bringing together governments, academics and international organisations. I think that was right. We built a form of collaboration that did not really exist before, and it proved more necessary than many of us expected.

This is Part 3 of a four-part series on the founding and development of the European Observatory on Health Systems and Policies. Read the other editions here.