13 Colum. J. Eur. L. 489 (2007)

Inge Verdonck.
Research Associate, Institute of Social Law, Faculty of Law, Katholieke Universitiet Leuven, Belgium.

In Luisi and Carbone the European Court of Justice for the first time held that Article 49 EC Treaty confers upon all European citizens the right to travel to other Member States for the purpose of receiving medical services. After the Court’s landmark Kohll and Decker judgments, a body of case law on cross-border patient mobility had developed in which the application of free movement principles was thoroughly tested and clarified (Smits & Peerboonis, Miler-Fauri, Vanbraekel, Inizan, and Leichtle). From the outset it became clear that this case law, often labeled activist, would fundamentally impact the manner in which Member States manage their social security systems, making it ever more necessary for them to adjust these systems to comply with the free-market-oriented rules of Community law. Watts figures as a provisional last case in this series. At a fundamental level, some previous judgments had attempted to draw a distinction between two basic types of health care systems in Europe. Thus, on the one hand, some Member States have reimbursement systems in which the costs incurred by the patient are later (partially) refunded by health insurance funds. On the other hand, some Member States have adopted systems of in-kind benefits. In these States, medical services are financed through general taxation and provided for free to those entitled to it. In the first of the cases, which was in the field of patient mobility, the Luxemburg reimbursement system was at stake. Since services in such a system are first paid for by the patient, the Court reasoned that the services could well be assumed to fall within the scope of Articles 49 and 50 EC Treaty. By contrast, in Smis & Peerbooms and Mfiller-Faur, the litigants argued that the Dutch system of in-kind benefits could not fall within the scope of the Treaty provisions on services, since no remuneration was involved. The Court of Justice, however, rejected this thesis in the latter cases. In Watts, the Court took a further step in this debate by explicitly addressing the question whether a system which is fully publicly funded, e.g., the British National Health Service (NHS), falls within the scope of the Treaty provisions on services. In addition, Watts fine-tuned statements made in previous case law on patient mobility, by clarifying uncertainties that arose from Mfiller-Faur and Vanbraekel in particular. These statements mainly concerned: (1) the validity of planning considerations and resulting waiting lists as a ground of refusal to grant prior authorization for treatment abroad and (2) the determination at what level costs incurred for treatment abroad should be refunded. The lack of clarity in both cases followed from the simultaneous applicability to cross-border patient mobility of two provisions which on first sight may lead to contradictory results: Article 22(l)(c) of Regulation No. 1408/71/EEC (Regulation) and Article 49 of the treaty. At the heart of the dispute in Watts was the difficult and highly sensitive trade- off to be made between the efficiency and cost control of public health management and the interests of patients in receiving adequate and timely treatment.