How far has healthcare reform come?

On June 16, after long debates, the Parliament adopted on second reading some of the amendments to the Health Insurance Act proposed by Minister Moskov. The main points of the amendment are as follows:

• The NHIF will divide the health packages into two - basic and additional, with the basic package including socially significant serious illnesses, for which the greater part of the available financial resources will be allocated. The additional package will include illnesses whose treatment is postponed, for which there will be a waiting list or the patient will pay for the treatment with their own funds.
• To restore health insurance rights, it will be necessary to pay the unpaid health contributions for the last 5 years, not for the last 3, as before.
• The state will begin to increase social security contributions for the persons it provides (children, students, pensioners, socially disadvantaged people) by 5% each year, and by 2026 the contribution should become 100% of the minimum (now it is 50%).
• It is planned to create a system for receiving "complaints" from patients, which will aim to control quality in medical institutions with which the NHIF has a contract.

They were rejected:

• The proposal for an amendment that would require pharmaceutical companies to return the money paid by the state for drugs that were recognized as ineffective. There is also a desire on the part of the Ministry of Health to "force" pharmaceutical companies to provide drugs at a mandatory discount. Such anti-market tactics never lead to anything good. The emerging vaccine shortage and the need for Turkey to donate about 100,000 units to us were indicative, because the minister cannot accept the fact that pharmaceutical companies work for profit, not altruism.
• The proposal to "nationalize" the NHIF by expanding the supervisory board to 11 people, 6 of whom would represent the state. The current composition of 9 people is maintained - 4 representatives of the state, 1 of the patient organization and 2 each from the unions and employers.

These changes make it clear that the long-awaited reform is once again proving to be “cosmetic.” We can see why by looking at each of the proposals and changes individually.

The reform: zero effects and negatives

The separation of health packages is an extremely counterproductive move. The decision of the state to single-handedly decide which diseases are socially significant and should be fully reimbursed and which are not is a classic example of central planning and irrational allocation of resources. The diseases included in the two packages have yet to be determined, but no matter how they are distributed, people whose conditions fall into the additional package will be severely disadvantaged.

Until now, those who paid lower contributions and those who paid higher ones were entitled to the same service – this goes against all normal logic. Although socialists like to say that health is a right and that health services should be the same for everyone, it is clearly unfair that those who pay less receive as much as those who pay more. However, with the current change, the ridiculous situation could arise where those who pay less receive even more, and those who pay more receive nothing.

Let's illustrate with an example: Ivan works for a minimum wage, pays lower contributions, leads an unhealthy lifestyle and suffers an acute myocardial infarction. Since this disease will most likely be in the basic package, he will be entitled to receive expensive treatment (cardiac catheterization and stenting) for over 3,000 leva. The money for this treatment, of course, comes from the contributions of other people, including Georgi.

Georgi earns approximately an average salary, has been paying his contributions regularly for the past 10 years, leads a healthy lifestyle, but gets an inguinal hernia. Let's assume that the hernia is not included in the basic package (because it is not life-threatening in itself until complications occur, nor is it a socially significant disease).

The real effect of the reform is that Georgi, who has contributed over 7,000 leva to the system over the past 10 years, will only be able to receive the treatment he is entitled to after a period of between 40 and 60 days. With his money, he has financed the treatment of other people, but since he had the bad luck to fall ill with an illness that is not included in the basic package, he is forced to finance his treatment with his own funds, “thanks” to the solidarity model.

The individuals and diseases in the example are fictional, but they show that the ministry still does not consider the individual principle in healthcare to be leading. In addition, Dr. Moskov demonstrates a strong desire to eliminate “payments under the table” and to make it so that patients do not pay anything extra (for the basic package). This extreme left-wing position speaks of a misunderstanding of the key rule that the most effective system is one in which the patient pays for the treatment out of his own pocket– this way he will be responsible and critical of the service provided to him and the unfair redistribution of resources will decrease. Unfortunately, however, the government continues to be guided by the socialist maxim: “From each according to his ability, to each according to his needs.”

Paying for 5 years back will not bring any significant improvement to the system as a whole. The positive point here is that uninsured persons will have to pay a significantly larger amount (about 2,000 leva) to restore their insurance rights, which may partially reduce the deficit in the Fund. [1]

The measure to increase state contributions will also be positive from a financial point of view, but extremely insufficient. So far, they are half of the minimum insurance contribution – 16.80 leva per month. However, the gradual increase will not solve the problems with the shortage and poor management of funds at all. The 5% increase for next year will increase the fund's budget by no more than 5 million leva, which is very small (against the backdrop of the NHIF budget, which amounts to over 4 billion leva) and in no case will it solve the structural problems or lead to the truly urgent reforms in the healthcare sector.

The “complaints” system is extremely vaguely defined – it is not known what the objective criteria will be, how complaints will be received and processed, and what measures will be taken. This part of the reform is still in the realm of “wishes”.

The idea of not paying for drugs removed from the drug lists is also counterproductive. As is known, centralized control over drugs limits the patient's right to choose and the opportunity to receive the best possible treatment. This is especially true for difficult-to-treat diseases, such as cancer, where it is important for the patient to have the opportunity to choose even experimental treatment on the basis of informed consent, which, despite the risks, has the potential to save his life.

The rejection of the “nationalization” of the NHIF is also contradictory. The NHIF is a state monopoly structure and its formal transfer under the control of another administrative department of the central government will not lead to any real improvement. Behind this proposal is the strong desire of the Ministry of Health to concentrate more power in itself and to be solely responsible for the allocation of resources. The “fight” over who will control the monopoly will in any case be to the detriment of the ordinary citizen.

In conclusion, we can say – in no way is the demonopolization of the Fund, liberalization of the market and complete deregulation of the sector envisaged, which are vitally necessary and in the shortest possible time. A purely formal change in the way of exercising total state control will not lead to a significant improvement, as market mechanisms continue to be missing from the long-term strategy. For some of the proposals (separation of packages), a negative effect on some of the regular payers can even be expected. In general, the Ministry of Health is giving contradictory signals about its future plans – on the one hand, a desire for stronger control and regulations, on the other hand, an intention was expressed to privatize state hospitals (but without deregulation of the sector). In any case, one thing is clear at this point – real reforms are being postponed indefinitely.

[1] Or, deciding that 2,000 leva is too high a price to pay for reinstatement, people will simply refuse to pay for reinstatement at all and save money for when they need medical care. In this scenario, the effect on the NHIF budget would be zero or negligible.

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