Greece's healthcare system is coming under mounting demographic pressure. Life expectancy stood at 78.8 years in 2003, the fifth-highest in the EU15, and is forecast to reach 79.7 years in 2009. Nearly 20% of the population is 65 or older, a proportion that is set to rise as the population ages. Demands on the health system are growing, while euro area membership binds the country to the requirements of the Stability and Growth Pact.

The 2005 budget includes a 14.5% increase in spending on healthcare and social services (in local currency terms), which demonstrates the government's commitment to increased healthcare funding. The current government opposes privatisation of the national healthcare system. The recruitment of additional healthcare workers, primarily nurses, is expected to continue. Other plans include the restructuring of debts owed by public hospitals to third parties.

The extent to which the current government may alter its predecessor's plans is still emerging, but improving the healthcare system will continue to be a key priority for it. The main thrust of the national healthcare system reform plan initiated by the previous government is the decentralisation of services to a series of regional health systems. All clinics operated by public-sector insurance funds will eventually be absorbed into the new structure. A new single financing agency will collect and manage the healthcare portion of social security funds and will purchase primary hospital services from national health service hospitals. Funds can opt out, but would have to pay higher rates for treatment for members. One centralising element is that the financing agency will hire a network of general practitioners (GPs) on three-year contracts, who will be paid on a capitation basis. Free hospital care will require a referral from a GP; patients will have to pay one-half the cost of any treatment that is not the result of a referral. Private doctors will not be able to use public hospitals, nor will state-sector doctors unless they have practised a speciality exclusively within the public system for ten years. The system will incorporate an earlier scheme to establish primary-care providers and to promote preventive medicine. The scheme will take time to bear fruit, however, and the chances of a reduction in overall health expenditure are small.

The US dollar value of the over-the-counter drugs market is forecast to grow from an estimated US$143m in 2004 to US$184m in 2009. Growth will be driven by the tendency among local people to self-medicate. Greek pharmaceuticals companies are hoping that the New Democracy government will sponsor initiatives to make domestic companies more competitive and to end current policies that make imported ready-made products more affordable than domestically produced ones.

Improvements made to the healthcare infrastructure in conjunction with the 2004 Olympic Games should benefit the Greek population and visitors throughout the forecast period. Hospitals and emergency facilities in Athens, which were the primary recipients of Olympics-related investments, and their patients should reap the greatest benefits.