Welcome to The Weeken Read. This episode, we delve into the intricate world of European social welfare, focusing on a critical yet often underappreciated element: the role of publicly funded healthcare in shaping economic equality and resilience.

Strengthening the resilience of health systems is crucial, especially in the wake of the Covid-19 pandemic, which underscored the necessity for systems capable of withstanding future shocks—be they economic downturns, technological shifts, or significant demographic changes like population ageing.

As the European Union strives toward Universal Health Coverage (UHC) and ensures that economic growth goes hand-in-hand with social inclusion, building inclusive health systems is deemed essential. Our focus draws on new research that employs innovative metrics and tools, such as the EUROMOD microsimulation model, designed to assess the often-unmeasured distributional impact of non-cash benefits, specifically health-related Social Transfers in-Kind (STiKs).

This rigorous analysis reveals compelling evidence that publicly funded healthcare plays an essential role in mitigating income inequality and monetary poverty across EU Member States. Health STiKs account for approximately 35 percent of total social benefits in the EU, yet unlike cash transfers, their impact on poverty or inequality is not regularly measured in official EU statistics—a gap this research aims to fill.

We will explore findings demonstrating that the redistributive capacity of health STiKs is substantial, sometimes exceeding that of cash transfers (excluding pensions) in reducing both poverty and the Gini index. Furthermore, we examine the persistent challenges related to healthcare access, including the prevalence of unmet medical and dental needs and the financial hardship caused by catastrophic Out-Of-Pocket (OOP) spending, particularly among vulnerable households.

Finally, we look forward to the looming challenges of generational fairness, investigating how demographic shifts and projected increases in healthcare expenditure threaten to place a disproportionate burden on future working-age populations.

Source: European Commission: Directorate-General for Health and Food Safety, Cruces, H., Riera Mallol, G. and De Agostini, P., The role of healthcare in reducing inequalities and poverty in the EU, Publications Office of the European Union, 2025, https://data.europa.eu/doi/10.2875/4749240