Statistical Office in Krakow Centre for Health Statistics Health care sector in Poland: the history of financing and organization.

Statistical Office in Krakow

Centre for Health Statistics

Health care sector in Poland: Health care sector in Poland: the the history history of of financing and organizationfinancing and organization

HealthHealth care system prior to 1989care system prior to 1989

SIEMASZKO MODELSIEMASZKO MODEL

Public health service model typical for eastern communistic Public health service model typical for eastern communistic countries - members of the Union of Soviet Socialists countries - members of the Union of Soviet Socialists RepublicsRepublics (ZSRR) (ZSRR)

Centralized health care – all decisions made on the state Centralized health care – all decisions made on the state level by Communistic Party leaderslevel by Communistic Party leaders

State-owned health care facilitiesState-owned health care facilities

Financing from general taxationFinancing from general taxation

ConsequencesConsequences

Chronic overstaffingChronic overstaffing

Low level of motivationLow level of motivation / / decline in moral standardsdecline in moral standards

Declining efficiencyDeclining efficiency

Insufficient salaries for healthInsufficient salaries for health care professionalscare professionals

((corruptioncorruption))

Quasi market of healthQuasi market of health care services between care services between 1990 – 1998 (1990 – 1998 (a period of transitiona period of transition))

Introducing the universal coverage with a comprehensive Introducing the universal coverage with a comprehensive program of health careprogram of health care

Distributing services through facilities owned and run by Distributing services through facilities owned and run by the statethe state

Financing from general taxation Financing from general taxation (the Ministry of Health)(the Ministry of Health)

Initial steps to decentralization of ownership and private Initial steps to decentralization of ownership and private ambulatory medical services ambulatory medical services

Implementation of “family doctor scheme”Implementation of “family doctor scheme”

ConsequencesConsequences

Over centralizationOver centralization

Over specializationOver specialization

Regional inequalitiesRegional inequalities

Regional rationing and misallocation of resourcesRegional rationing and misallocation of resources

Problem of informalProblem of informal payments to public health care payments to public health care providers providers

Lack of costs awareness Lack of costs awareness

AIM of the reforms:AIM of the reforms:

highly developed highly developed health care health care

financing systemfinancing system

meet the health meet the health care needs of care needs of population population byby

providprovidinging health health care servicescare services of of

high qualityhigh quality

Legislation’s ActsLegislation’s Acts

1989 Act on the Establishment of a Medical Chamber1989 Act on the Establishment of a Medical Chamber 1990 Local Government Act1990 Local Government Act 1991 Health Care Institutions Act1991 Health Care Institutions Act 1991 Nurses and Midwives Self Government Act1991 Nurses and Midwives Self Government Act 1991 Act on Payment for Drugs and Medical Materials1991 Act on Payment for Drugs and Medical Materials 1993 Law on Abortion1993 Law on Abortion 1994 Law on Nurse and Midwives Professions1994 Law on Nurse and Midwives Professions 1995 Regulations on transfer of budgets to self-managing 1995 Regulations on transfer of budgets to self-managing

institutionsinstitutions 1997 Law on Physicians Profession1997 Law on Physicians Profession 1997 Law on Universal Health Insurance1997 Law on Universal Health Insurance 1997 General Health Care Act1997 General Health Care Act 1998 Law on Universal Health Insurance – Amendments1998 Law on Universal Health Insurance – Amendments

1997 General Health Care Act 1997 General Health Care Act

Universal participatioUniversal participationn

Mandatory principle Mandatory principle

Social solidarity Social solidarity

Autonomous and self-governing schemeAutonomous and self-governing scheme

The state guarantees the security of the insurance The state guarantees the security of the insurance schemescheme

Reform of the aReform of the administration sdministration system in Polandystem in Poland

49 voivodships 16 voivodships

Health care system after reform Health care system after reform 11stst of January 1999 (1) of January 1999 (1)

National health insurance program based on BismarckNational health insurance program based on Bismarck’s’s social health insurance modelsocial health insurance model

Compulsory health insurance schemeCompulsory health insurance scheme ( (for all citizensfor all citizens))

Decentralization – transfer of decision rights from the Decentralization – transfer of decision rights from the state level to regional and local levelsstate level to regional and local levels

Sickness Fund as a third player - payer (Sickness Fund as a third player - payer (16 insurance 16 insurance foundfoundss

+ 17+ 17thth found for found for different groups of proffesionalsdifferent groups of proffesionals))

Introduction of the primary healthIntroduction of the primary health care institution (POZ) – care institution (POZ) – general practitioners play general practitioners play a a role of gate keepers role of gate keepers

Health care system after reform Health care system after reform 11stst of January 1999 (2) of January 1999 (2)

Financing: Financing: - health insurance contribution – 7,5% of income – monthly deducted by health insurance contribution – 7,5% of income – monthly deducted by

employer and paid directly to the insurance foundemployer and paid directly to the insurance found- unemployed and retired – contribution covered by the state unemployed and retired – contribution covered by the state - out-of-pocket out-of-pocket paymentspayments

Introduction of a hospital accreditation systemIntroduction of a hospital accreditation system

Patients’ right to choose healthPatients’ right to choose health care providercare provider

Contracting health care services as a new tool of Contracting health care services as a new tool of planning and controlplanning and control

Market competition between providersMarket competition between providers

Diversity of responsibility on governmental levels Diversity of responsibility on governmental levels (2)(2)

VoivodshipVoivodship (Regional level): (Regional level): secondary care in voivodship hospitalsecondary care in voivodship hospital providing acute care providing acute care pplanning healanning heallth th care care services, organizing the structure of services, organizing the structure of

health institutionshealth institutions aallocating foundsllocating founds

PowiatPowiat ( (District, local District, local level):level): the owners of health care organizations within their territory the owners of health care organizations within their territory district hospitalsdistrict hospitals

GminaGmina ( (MMunicipalityunicipality):): primary care primary care

ConsequencesConsequences

Misuse of market mechanism in terms of high autonomy Misuse of market mechanism in terms of high autonomy among Sickness Founds among Sickness Founds

Increase of public expenditures oIncrease of public expenditures onn inpatient care and inpatient care and drugs reimbursement drugs reimbursement

Wrong allocation of resourcesWrong allocation of resources

Inequalities between Sickness Founds Inequalities between Sickness Founds located in located in differentdifferent voivodships voivodships

Growth of out-of-pocket expenditures + Growth of out-of-pocket expenditures + informalinformal co- co-paymentspayments

Increase of public expenditures due to high rate of Increase of public expenditures due to high rate of unemploymentunemployment

Health care system after reform Health care system after reform 2323rdrd of January 2003 of January 2003 (1)(1)

Sickness Funds were replaced by Sickness Funds were replaced by the the National Health National Health Fund Fund (NFZ) (NFZ) with 16 regional branches + 1 central with 16 regional branches + 1 central

NFZ located out of the public budgetary finance NFZ located out of the public budgetary finance construction construction

Centralization of Centralization of responsibility for financial and responsibility for financial and humanhuman capitalcapital service plan realization service plan realization

The Insurance Law - insurance contribution will The Insurance Law - insurance contribution will increase from 8.25% in 2004 to 9% in 2007increase from 8.25% in 2004 to 9% in 2007

Many providers combine a private practice with part-Many providers combine a private practice with part-time employment in the public sectortime employment in the public sector

Health care system after reform Health care system after reform 2323rdrd of January 2003 (2) of January 2003 (2)

Creation of a Polish Health Technology Assessment Creation of a Polish Health Technology Assessment Agency Agency

Introducing a system of waiting lists but not for Introducing a system of waiting lists but not for emergency services emergency services

Introducing the National Drug Policy (transferring the Introducing the National Drug Policy (transferring the market share from branded to generic drugs)market share from branded to generic drugs)

Introducing the basic package of health Introducing the basic package of health care care services services

Hospital networks Hospital networks

Dimensions of the analysis of health care sector Dimensions of the analysis of health care sector financing in Polandfinancing in Poland

Financing of the health care services

Production of the health care services

Functions of the health care services

Insurance contribution

Taxes

Employer’s expenditures

Household’s disposable incomes

Financing sources

Financing agents

The National Health Fund

State budget

Households

Territorial self-government

units

Employers

Private insurers

Independent health care units

(SPZOZ)

Dependent health care units

(NZOZ)

Offices of physicians and dentists

Medical care centres (ZOL)

Nursing centres (ZPO)

Kind of cost Providers

Salaries

Pharmaceuticals and medical equipment

Non-medical costs of

treatment

Administration

Upkeep of infrastructure

Outsourcing

Functioning of the system Pharmacies

Investments

Prevention and public health

Long-term care

Curative and rehabilitative

care

Ancillary services to health care

Health administration

and health insurance

Provision of health care

services

Financing sourcesFinancing sources – – healthhealth insurance contributions insurance contributions

Health insurance contributionsHealth insurance contributions - the biggest financing source - the biggest financing source

• In Poland, In Poland, the universal health insurance system the universal health insurance system has been in effect has been in effect since 1 January 1999since 1 January 1999, when the health care contribution was introduced, when the health care contribution was introduced

• CContributions are ontributions are transferred to the transferred to the payer - payer - National Health FundNational Health Fund (NFZ)(NFZ) from the from the Social Insurance InstitutionSocial Insurance Institution (91% of the total, the real (91% of the total, the real growth of financial means acquired from this source in the period of 2000-growth of financial means acquired from this source in the period of 2000-2007 amounted to 48%) as well as from 2007 amounted to 48%) as well as from the the Agricultural Social Insurance Agricultural Social Insurance FundFund. The total growth of revenues higher than the GNP one.. The total growth of revenues higher than the GNP one.

• The The majority of Poles are subjectmajority of Poles are subject to to obligatoryobligatory health health insurance. insurance. Persons who are mentioned in Art. 66 item 1 of the Persons who are mentioned in Art. 66 item 1 of the Law on health benefits Law on health benefits

financed from public meansfinanced from public means are subject to are subject to obligatory health insuranceobligatory health insurance, , whereas persons mentioned in Art. 68 of the Law are subject to whereas persons mentioned in Art. 68 of the Law are subject to voluntary voluntary health insurancehealth insurance

From the moment, when system was introduced, the general revenues from contributions expressed in current prices has risen by 19 bilions of zl (around 80%) - tthe health insurance contribution’s rate has risen he health insurance contribution’s rate has risen from 7,5% of the base in 1999 to 9,0% in 2007from 7,5% of the base in 1999 to 9,0% in 2007

Financing sourcesFinancing sources (2) - taxes (2) - taxes

For some insured persons the health For some insured persons the health insurance insurance contributions arecontributions are financed financed directly directly from the from the

budgetary revenuesbudgetary revenues: : farmers, ufarmers, unemployed without the nemployed without the

benefitbenefit, p, persons receiving child-care ersons receiving child-care benefits and war pensionsbenefits and war pensions, so, soldiersldiers

Expenditure on health care, Expenditure on health care, which comes from the state which comes from the state

budgetbudget, is spent by: the Ministry of , is spent by: the Ministry of Health, the Ministry of Interior and Health, the Ministry of Interior and

Administration, the Ministry of Administration, the Ministry of National Defence, the Ministry of National Defence, the Ministry of Justice as well as the MinistryJustice as well as the Ministry of of

Labour and Social PolicyLabour and Social Policy

Level of financingLevel of financing; ; stablestable for 2004-2006 (around 4 bln zl), for 2004-2006 (around 4 bln zl),

some growth since 2007 – some growth since 2007 – financing emergency service. financing emergency service. The flow of funds mainly The flow of funds mainly in in form of the purposefulform of the purposeful

subsidiessubsidies

TThe stable level ofhe stable level of bubuddgetary getary financingfinancing is is predicted predicted in in the futurethe future

Financing sourcesFinancing sources (3) - (3) - employer’s expenditures

Law on Occupational Medicine ServiceLaw on Occupational Medicine Service: : employers (corporations) are obliged employers (corporations) are obliged to finance occupational medicine servicesto finance occupational medicine services (preliminary, periodic (preliminary, periodic

andand control medical examinations, as well as preventive care control medical examinations, as well as preventive care related to working conditions) for their employeesrelated to working conditions) for their employees

FFinancing of medical services including inancing of medical services including diagnosticsdiagnostics, often , often combined with combined with preventive medical examinationspreventive medical examinations, within , within

medical subscription packages purchased by employers medical subscription packages purchased by employers

at health care institutionsat health care institutions

Expenditure on preventive medical Expenditure on preventive medical examinations is employerexaminations is employer’s’s

costs of obtaining incomecosts of obtaining income

AA rapid growth of financial meansrapid growth of financial means: : from 545 mln zl in 2002 to 1,3 bln zl from 545 mln zl in 2002 to 1,3 bln zl

in 2007in 2007

Financing sourcesFinancing sources (4) – (4) – Households’ disposable incomes

EstimationEstimation: : basebasedd on on householdhousehold budgets surveybudgets survey, , household notes household notes its expenditure and incomes in its expenditure and incomes in a a special budgetary bookspecial budgetary book

Net incomeNet income = = combination of funds in household disposition combination of funds in household disposition –– ((prepayment for income tax from natural personsprepayment for income tax from natural persons + + contributions for contributions for social and health insurancessocial and health insurances) + savings) + savings

Net income Net income == disposable income + savings

TThe he average monthly expenditure on healthaverage monthly expenditure on health care per capita incurred care per capita incurred by households amountedby households amounted toto 36.57 zl in 200636.57 zl in 2006

The total amount of direct health care expenditure incured by The total amount of direct health care expenditure incured by households in 2006 amounted to: households in 2006 amounted to: 16,8 bln zl16,8 bln zl**

* stands* stands for for minimal direct health care (out-of-pocket) expenditureminimal direct health care (out-of-pocket) expenditure beard by households,beard by households, since since itit may not include the informal payments for health care services. may not include the informal payments for health care services.

Production of the health care services – costs in the health care system in Poland

The total costs of the The total costs of the health care health care system system has beenhas been rising rising steadsteadlyly:: from from 41,6 bln (1999)41,6 bln (1999) to to 70,4 bln (2007)70,4 bln (2007) – 70% – 70%

Main causes of rapid growthMain causes of rapid growth::

results of requirements regulated in the „ustawa 203” – results of requirements regulated in the „ustawa 203” – independent health care units (SPZOZ) had to incur debts in order to finanse the increasing value of personel salaries,

Law on Pubic Aid and restructurization of the independent health care units of 15 April 2007 was established to solve this problem. Additional costs for SPZOZ: preparation of Additional costs for SPZOZ: preparation of restructurization plans.restructurization plans.

Costs in the health care system – main trends

Significant increase in salaries-related costs and costs of drugs:Significant increase in salaries-related costs and costs of drugs: a growth by 12,2% in 2006 and nearly 8% in 2007 respectively. a growth by 12,2% in 2006 and nearly 8% in 2007 respectively.Rapid growth also for other kind of costsRapid growth also for other kind of costs: medical materials, orthopaedic : medical materials, orthopaedic equipmentequipment, electricity, out-sourcing, upkeep of infrastructure, non-, electricity, out-sourcing, upkeep of infrastructure, non-medical costs of treatment.medical costs of treatment.

The biggest part = personel salaries + cost of drugsThe biggest part = personel salaries + cost of drugsA recent domination: before 1999 – salaries, 2000-2006 – costs of drugs A recent domination: before 1999 – salaries, 2000-2006 – costs of drugs DrugsDrugs: 37% of the total in 2003, latter improvement – 31% in 2007: 37% of the total in 2003, latter improvement – 31% in 2007

!!! The most dynamic trend - financial liabilities!!! The most dynamic trend - financial liabilities in form of tax in form of tax charges and debts repayment;charges and debts repayment; a growth by 728% for 1999-2007. a growth by 728% for 1999-2007. Noticable improvement: a decrease by 16% for 2004-2007 – enormous hospital debt is decreasing.

Total health care expenditure – OECD comparisonTotal health care expenditure – OECD comparison

Where we are???Where we are???

Comparison with selected OECD countriesComparison with selected OECD countries

Total health care expenditure in selected OECD countries in 2007 (USD PPP per capita)

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Conclusion:Conclusion:

• level of total expenditure on health care in Poland, Mexico and Turkey belongs to the lowest among the OECD countries