PL ISSN 1233-5835
M aria Węgrzyn*
HEALTH INSURANCE - FURTHER STEP TOWARDS
SYSTEM CHANGES IN THE HEALTH CARE
The most important problems concerning the implementation o f the health insurance system in Poland arc discussed. Main emphasis is stressed regarding the extent o f realization of particular tasks as related to the capabilities o f present and future health care institutions.
1. INTRODUCTION
The free and common availability of health care services, as guaranteed for Polish citizens by the Constitution of 1952, has been for the whole post-war period recognized as a fundamental feature of the health care system. Only the crisis o f public finances at the end of the 1980s and the early 1990s revealed the vital macroeconomic problems which influenced the expenditure o f funds for health care and, consequently, the shape of the national budget. The huge Polish debt has led to financial insolvency and forced the initiation of negotiations with foreign creditors. This foreign debt had also an indisputable influence on the health care budget. In consequence, a rapid degeneration of medical equipment in health care institutions took place, as low per capita expenditures for this purpose made its reproduction impossible. The only way to stop the process of medical services decline seems to be the reform of the existing system. This reform is taking place based on solutions adopted by the Common Health Insurance Act (Dziennik Ustaw 1998). Having a number o f shortcomings, this Act however makes a system framework for any reformatory activities in this field.
2. ACCOMPLISHING PURPOSES OF THE COMMON HEALTH
INSURANCE ACT
B asin g on this act a program (Informacja ... 1997) to develop the system changes in the health care has been prepared. The set o f appropriate action s can be grouped into four basic categories.
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The first one is to change the essential range of services offered by the public health care institutions. The greatest role is attributed here to the family doctor and the basic health service, being the only “entrance” into the system. The restructuring of the hospital base by adjusting it and its offer to the real dem and seems also very important. The most important goal is however to stress illness prevention and health promotion (according to the rule “it’s better to prevent than to treat”), as well as to adjust the activity of public health institutions to the current needs (restructuring of wards, creation of alternative forms of residential care), so patients can get adequate treatment close to their homes.
The second set of problems is expressed as a tendency to change organizational and financial form s o f health care, in the way expressed by the rule “m oney follows the patient” . T his means the abandonm ent of financing material and labour costs in favour o f financing services offered to patients, with the incom e of a particular institution directly related to the effects of its activity. H ere, the actions include the contracting out o f health services and creation of independent public institutions of health care.
The third range of activities are the tools to monitor and manage the health care system . The two most im portant tasks here are M edical Services Register and inform ation systems for hospitals.
The fourth set of issues is to change the way of gaining public funds for health care, to introduce health insurance aimed at the transition to the budget- insurance model o f financing health care.
The Common Health Insurance Act is coming into force in 1999. So there is little time to be properly prepared for functioning in this new system. An efficient introduction of new rules requires extra investments into new, appropriate equipment and the proper preparation o f medical staff. The Act initiates changes but does not perform them. It is good however, that it has been passed, otherwise the beginning of reforms might be postponed for a long time.
The fourth set of issues has already been prepared and now is in the im plem entation stage, though it is subject to a number o f objections (evidence for the im perfections of the Act could be the fact that already in May a team has been appointed to make necessary corrections). The realization of the other three sets o f issues is not so much advanced.
In the first set, the work to form an appropriate organization o f the whole system is still in progress, with the main accent on preventive actions, being the least expensive. It is also a very important task for the managers of health care institutions, who have to set cost levels.
T he seco n d set of issues c o n c en trate s on preparatory w ork to transform the w hole m edical staff (w hich w ill be a long-term p ro c e ss), to m ake them acquainted w ith principles o f co n tra cts and m ethods o f enterin g , and also
aims at co n fo rm in g the health c a re institutions to w o rk in the new econom ic co n d itio n s - as independent in stitu tio n s.
The realization of all these stages should result in the formation of a domestic market of medical services. This market, supervised by the State through the National Health Program and financed mainly by the health insurance system, would offer services by the best specialists under relevant contracts.
Fig. 1. Suggested scheme of fund flow for health care Source: Ministry of Health.
3. FINANCING MEDICAL BENEFITS IN THE NEW HEALTH CARE
SYSTEM
It is assum ed that in the new system the fin a n c in g o f health care w ill have a budget-insu rance ch a rac te r. The position o f a budget system is p re cisely defined. B udget funds will be spent on b a sic services, add itio n al train in g o f m edical staff, aid in larger investm ents o r ac tio n s u ndertaken in the ca se o f an epidem ic th rea t. T hese funds sh o u ld be stated as in the
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am ount, dep en d in g on current n eeds and capacities o f th e budget. So the m ajority o f health care expenses w ould be transferred to the health fund, financed by collected fees. It is easy therefore to fo resee th at all expenses having a preventive character w ould be of m arginal im p o rtan ce for these funds, as investing in prevention w ould be investing a g a in st them selves, investing to make people not apply for services. A d istin c t antinom y appears. O n the other hand, the co sts of prevention and th o se o f a series of specialized treatm ents are incom m ensurable. The w e ak n ess o f the proposed solution is also the lack of good co st effectiveness, e n su rin g the financial equilib riu m o f funds.
The in su ran c e part of the system is the collection o f fees to health funds, com ing fro m all potential p atien ts, as defined by the C om m on Health Insurance A ct (D ziennik U staw 1998). However, the question of the “ insurance c h a rac te r” of the sy stem should be raised, as the fee am ount depends on the income level o f the insured and not on the evaluation of costs and risks undertaken by the insurer. T he ac tu a rial calculus, successfu lly applied in the field o f b usiness insurance, is lack in g here. Such confin em en t in defining the fee am ount is probably d u e to the lack o f a reliable estim atio n of m eans sp en t on health ca re an d the difficult evalu ation o f risk level. O f course, it is possible and p ro b a b ly it would be w orthw hile to form system s w ith d ifferentiated fees, but then the base for such a fee should be on one hand the actuarial e v a lu a tio n of the risk connected w ith an insurance fo r a p artic u la r person, w h ile on the other hand the scop e o f services offered ag ainst this paid fee.
The sy stem being im plem ented is also not sufficiently p rotected against the in crease o f insurance prem ium s. T he calculations alre a d y perform ed by various in v estig ato rs show the in su fficie n t amount o f m ean s fo r the current operation o f future health care in stitu tio n s. Only in the in itial phase will the State B udget be involved into the transform ation o f the system . The cost of con tin uing reform s has to be co v e red by the funds th em selv es. W ithout any increase o f insurance prem ium s it seem s basically im p o ssib le. We surely cannot fo rg e t about the hitherto ex istin g increasing d e b ts o f health care posts, the consequence o f w hich has been the p ro ced u re o f debt trading. There has not been created any efficient barriers holding back such activities.
A lso q u ite im portant are the d ifficu lties in d e fin in g the requested standard o f health services. S hould it copy the well fu n c tio n in g system s, or establish a level according to o u r possibilities? W hat w ou ld be then the attitude o f patien ts tow ards the p ro posed reform s (th e level of services offered in o th e r countries is com m only known, though o fte n ex aggerated)? An average P olish citizen w ould like to have: social secu rity like in
S w eden, m edical services lik e in G erm any, th e access to new est te ch n o lo g ies like rich people in th e U nited States (T y m o w sk a 1996), all this with th e c o u n try ’s econom ic level and exp enditu res fo r health care m uch below the E uropean average.
W h ile try in g to ev aluate th e q u ality o f m edical s e rv ic e s , the M inistry of H e alth p rep ares the m edical treatm en t schem es fo r p a rtic u la r d isease sy n d ro m es. L istin g what a c tio n s should be done h o w e v e r, m akes only one part o f tre a tm e n t, w hile the o th e r is how they sh o u ld be do ne, and th is is d iffic u lt to e x p licitly d efin e. T o each action liste d in the re g ister of the M in istry so m e score value is a ttrib u te d , and to ea ch v a lu e co rresp o n d s in turn so m e defin ed am ount o f m on ey . This score sh o u ld lead to a m ore p recise e v a lu a tio n o f arisin g c o sts . T ill now it is o n e o f th e few elem en ts w hich in th e future should p re v e n t the increase o f e x p e n d itu re and costs.
4. THE PROBLEM OF THE DEBTS OF HEALTH CARE UNITS
T he tra n sfo rm a tio n p ro c ess b ase d on the C o m m o n H ealth In su ran ce Act a ssu m e s, as a prim ary c o n d itio n , the c le a rin g the debts and re c o n stru c tio n o f ca p ita lize d fix e d assets of health in s titu tio n s, using the budget an d self-governm ent fu n d s. Though ev e ry y e a r the funds are tra n sfe rre d to clea r the deb ts, th e question c o n c e rn in g the scope and co st o f re c o n stru c tio n rem ains u n a n sw e re d . For e x a m p le , the m ajority o f internal h e a lth care in stitu tio n s (h o sp itals) is e x p lo ite d m uch below th e ir ca p a c ity , w hich in the future m ig h t force eith er to c lo s e th em or to ch an g e th eir sp e c ia liz a tio n to som e o th er, m ore n eed ed in the region (as a m inim um th e co e fficien t o f sa tu ra tio n o f 60% is a s su m e d , w hile in m any in s titu tio n s if reaches only 50% ).T o g e th e r with the tran sfo rm atio n o f institutions th e re stru ctu rin g of th eir debts p ro c eed s. It is difficu lt to im agine starting a b u sin e ss in this very d ifficu lt se c to r with frequently huge debts. T he tria ls to cancel them in 1994 and 1995 gave no ex p ected results. The m istake th en was the flow o f funds w ith o u t sim ultaneous m echanism s p re v e n tin g the uncontrolled increase o f debt. The re stru ctu rin g o f debt is till now app lied only to the in stitu tio n s, fo r which the fo u n d in g organ is th e V oivode and the tran sfo rm atio n has started in 1997.
As soon as the institution is reg istered , the fo u n d in g organ repurchases all o b lig a tio n s done by budget u n its. At the sam e tim e, it undersigns the re stru ctu rin g agreem ent with in d ep en d en t institutions.
T he ag reem en t defines the conditions and in d ic e s concerning the o b lig atio n s w hich the in stitu tio n should have been re ach e d by 1998. T he
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necessary co n d itio n is that the level o f due obligations d o es not exceed in the tra n s itio n p eriod the 5% level o f the in stitu tio n ’s b u d g e t, and in the long term e n su re s both lack o f d e b ts and good fin a n c ia l liq u id ity , m aking the a c tiv ity possib le. As a g u a ra n te e of fu lfillin g th e ag reem en t the founding o rg a n issues 3 bills “in b ia n co ” draw n at th e in dep end en t in stitu tio n . In the bill ag reem ent it is stated un d er w h ich circu m stan ces the b ills ca n be filled in and re d eem ed . The m axim um su m up to w hich the in stitu tio n can be again debited, once th e bill agreem ent (c o m p e n satin g the debt) has no t been fulfilled, e q u a ls to the actu ally liquid ated d e b t. T ill the end o f 1998 the bills rem ain in th e p o ssessio n o f the fu n d in g organ. If the c o n d itio n s of ag reem ent a re fu lfilled , the unfilled b ills w ill be returned to th e institutions.
T he m eth o d o f calcu latin g the re stru ctu rin g tra n c h e s p erm its paym ent o f the deb t as due on 31/12/1996 (plus interest w h ich arose until the extinction o f the debt). The d ebt created after this date ca n n o t undergo the restructuring process. All funds for deb t com pensation are not transferred to the in stitu tio n , since it is the fu n d in g organ who buys th e d eb t.
A lso, the distribution of the m edical personnel n eed s ra tio n alizatio n (in some tow ns one medical d o cto r in a hospital serves in average only 7 patients, w h ile in others doctors are lacking). So a p re lim in a ry proposal o f m edical p ersonnel allocation has been prepared, ca u sin g o u trag ed reactions, due to the p o stu lated huge and o b lig ato ry changes in th is m atter.
Now in P olan d there are 1,149 specialized family d o c to rs, and including those w ho have an equivalent specializatio n the n u m b er o f practition ers able to u n d erta k e duties in the new system comes to o v e r 2000. It makes how ever only 12% of all m edical d o cto rs working in b asic h ealth care. T his num ber is ex p ected to increase to 25% starting from 1997, sin ce 12 regional E ducation C en tres are fu nctioning next to the M edical U niversities and P ostgraduate Education M edical C en tre.
The serv ic es o f family d octo rs w ill be offered m ain ly in independent health care in stitutions. Independent institution is the n am e given by Polish law to d efin e the form of fin an c ial m anagem ent o f p u b lic health care institutions. T ill the end of 1991 p u blic health care in s titu tio n s could do their fin an c ial econom y based only on the budget law (D zien nik Ustaw 1992; 1994; 1995; 1996; 1997). T h o u g h an evolution o f th is law took place, their auto n o m y was limited. T h ere w ere no m otivations fo r m ore efficient resource u tiliza tio n or taking into account the e ffic ie n c y indices w hile granting funds. Therefore in d ep en d en t institutions, h a v in g already these instrum ents, seem to have a ch an ce fo r real financial m anag em en t.
5. THE PROCESS OF UNIT TRANSFORMATION
T he d ec isio n s concerning th e transform ation o f ex istin g units into in d ep en d e n t institutions are taken by the funding o rg an s. The voivodes presen t a prelim inary ranking list o f units to be tran sfo rm ed (m ost often those h a v in g best ratios of total d eb t or current liq u id ity ) to g eth er with th e ir o b lig atio n s and estim ated costs o f restructuring a c tiv itie s (M onitor P olski 1995). T h e allocation of funds fro m the earm arked re se rv e s for these task s takes p la c e based on the so -called m ap of needs. T h e c h o ic e o f units to be tran sfo rm ed depends above all on th eir preparation lev el and the region, i.e. the d em o n stratio n of expected goo d financial p e rfo rm an c e or the p ossibility of o b ta in in g additional financin g sources.
To o b ta in any means for the realization of its sta tu to ry tasks, a new ly re g istered health care in stitu tio n has to prepare an ap p ro p riate offer and tender fo r a contract. T his is a public contract by te n d e r to offer health services in basic range, annou n ced in the n ew sp a p ers. The need o f an n o u n c em en t is contained in th e decree and is very im portant, though in fo rm atio n is very specialized . Public m oney is g iv en at so m eo n e’s d isp o sal, n o netheless this ten d er is not subject to the law o f public co n tracts (a cco rd in g to ju rid ical opinion). T he tender results in th e choice of the b est o ffer o f services. A fterw ards, a civil law ag reem ent fo r the delivery o f health serv ic es in the basic ran g e is signed and a p p ro p riate funds are tra n sfe rre d . T hese agreem ents are called contracts.
T h e strateg ic goal o f m aking contracts (T y m o w sk a 1996) is the re alizatio n o f a basic rule o f h ealth care system re fo rm - the separation o f the p ay e r (controlling the funds) from the executor o f m ed ical services. It is assum ed th a t contracts, by re in fo rcin g the general s e c to r, will suppress the u n c o n tro lle d flow of patients to higher referen ce lev els, as they co u ld obtain the sam e services at a lo w er level and at a lo w e r cost. The d ifferen ce could be used to im prove the q u ality o f services. T h o u g h the co ntracted services are delivered in independent in stitu tio n s (p riv ate p ractices), patien ts d o not pay for them , sin ce the fee is p aid in th e ir nam e by the public organ in the fram ew ork o f the contract. A t the sam e tim e the o rg a n iz atio n o f services is tran sferre d to the p riv ate sec to r, what releases the p u b lic sector from the tasks not necessarily a ttrib u te d to it. Investing into th e health care sector can sta rt from other than b u d g e ta ry funds.
T h e d ec isio n s concerning th e functioning o f fu tu re institution are u n d erta k en by the m anagem ent o f the present units. T h e future in stitu tion is not o b lig e d to keep the old stru ctu re , it may for e x a m p le buy som e serv ices
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from se p a ra te firm s, which in som e cases could lead to a low er cost o f a service. T h e possible organizational forms will be id en tical to those in econom ic activ ity . The only d iffe re n c e is that the u n its b e in g transform ed obtain „in ad v a n c e ” the legal statu s. Independent in stitu tio n s form ed as a result o f transform ation can th e re fo re take the form o f v ario u s com panies. In practice it is most often the lim ited liability com pany.
The process of preparing and conducting the changes is applied now to about 600 health care units. In the paper I used the former W rocław voivodeship as an example. T he most advanced transform ations taL' place at tl/o:
• H ealth C are Com plex in Jelcz-L askow ice,
• R egional C entre of L abour M ed icin e in W rocław,
• R egional H ospital-S anatorium C om plex for Lung D isea ses in O borniki Śląskie,
• L o w er S ilesian C entre for M ed ical D iagnostics D O L M E D (this C entre obtained the statu s of an indep enden t institution in July 1997).
6. CONCLUSION
The aim o f this process of a d ju stin g the health care sy stem to function in new co n d itio n s is to im prove the availability and q u ality of m edical services. It req u ires the introd uctio n of m arket m ech an ism s, rationalizing the use o f public resources, and the form ation o f a m ark et for m edical services w h ich would be capable o f responding to p a tie n ts ’ needs. T his process o f transform ation how ever needs substantial w ork and costs to ensure the continuous functioning o f the system an a p ro v id in g m edical services. U nfortunately, the m ost im portant elem ent fo r d e c isio n m akers is the profit g en e rated by health ca re institutions (w hich re lie v es the State budget) and not the basic aim for w hich they are created - im provem ent and m aintaining the health of society. S im ilar objections are often raised by p ractising d o cto rs: “there is no tim e for treatm ent, we sh o u ld earn m oney” . The p assa g e o f the Common H ealth Insurance Aci fo rc e d the necessary system ch a n g es to begin. Are they good or bad? Today w e do not know yet. The final e ffe c ts of the undertaken action can only be ev a lu a ted in a few years’ tim e. T he only consolation is the fact that n ea rly all countries, including rich ones, enco u n ter problem s co n c ern in g the efficient functioning o f the health care se c to r which results fro m the specific features o f th is sector.
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Tymowska, K. (1996): Samodzielne publiczne zakłady opieki zdrowotnej - nadzieje i obawy [Independent Public Health Care Institutions - Hopes and Fears], in: Tymowska, K., M alin, V. A.. Alaszewski, A., eds.: System umów w opiece zdrowotnej [Contract System in Health Care], Olympus, Warszawa.
Tymowska, K. (1996): Główne kierunki zmian w systemie opieki zdrowotnej w Polsce [Main Directions o f Changes in the Health Care System in Poland], in: Tymowska, K„ Malin, V. A., Alaszewski, A., eds.: System umów w opiece zdrowotnej [Contract System in Health Care], Olympus, Warszawa. Dziennik Ustaw 1991 no. 91, pos. 408; 1992 no. 63, pos. 315; 1994 no. 121, pos. 591; 1995, no.
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