EKIP– Expert Club for Economics and Politics A Different Opinion
Author: Kaloyan Staykov
They say that violence is the last refuge of the incompetent. This phrase seems like a very accurate analogy of the moratorium imposed on the financing of new drugs and new medical activities by the NHIF in 2018. The reason for the restrictions is the inability of the ruling party to limit the steep increase in health insurance costs in recent years. Although the previous government had about two years, and the current one has almost a whole year, if not to cope, then at least to take the first steps to solve the problem, no progress has been observed. Instead, extreme measures are resorted to that contradict logic, the regulatory framework and do not yield results, because there is always an opportunity to circumvent the restriction.
In 2015, a ban on concluding new NHIF contracts for performing new medical activities came into force for the first time. A year later, in addition to the budget limits for hospitals, limits were also introduced for the activities they can perform, and in the meantime, a number of technical restrictions were in place, taken by decisions of the NHIF Supervisory Board. The effect of all this is that in 2015, hospital care expenses were over BGN 240 million higher than those voted in the NHIF Budget Act, which is an increase of 16.5%. Although expenses in 2015 were about BGN 1.5 billion, the 2016 budget provides for hospital care to receive about BGN 1.35 million, or BGN 150 million less than what was actually spent in the previous year. Hospital care expenses in 2016 were over BGN 1.6 billion. BGN, which is about 17.5% above what was voted in the budget law.
The funds from the NHIF contingency reserve form over 80% of the additional costs in both years, i.e., even with the adoption of the fund's budget, it is clear that overspending is inevitable. However, the remaining part is allocated at the discretion of the NHIF Supervisory Board as a result of internally compensated costs or higher revenue collection. That is, in addition to the fact that at the beginning of the year it is clear that the funds allocated for hospital care are too small, which is why funds are provided for supposedly unforeseen costs, during the year the NHIF allocates additional funds. In other words - on the one hand, measures are adopted to limit the growth of hospital care costs, and on the other hand, they grow during the year in a relatively non-transparent manner.
The same effect can be expected from the moratorium on the financing of new drugs. It affects 17 drugs and is expected to lead to savings of about 25-30 million leva, which is negligible against the background of a planned budget for drugs of 1 billion leva. The health committee in parliament defended the decision as a temporary measure until changes in the regulatory framework are adopted that would allow financing of a therapeutic outcome, rather than individual drugs. However, this is a strange justification, considering that a number of restrictions have been introduced for the pharmaceutical sector over the past three years, such as the requirement for the lowest price at the manufacturer level in the European Union, price referencing for drugs paid by the NHIF with the lowest prices in other EU countries, a mandatory discount of 10% of the price of generic and patent-protected drugs paid by the NHIF, health technology assessment, etc.
All this shows that the legislative branch is rather wandering among a number of possible solutions, but still fails to find the right blend of regulatory amendments. The constant justifications for the need for more time and the imposition of temporary measures already sound banal, as they still do not give the desired result, on the contrary - costs continue to grow, and consumers continue to be dissatisfied with health services.
However, one thing is certain – the reforms in the health insurance system in Bulgaria in recent years have been aimed solely at centralizing the management of the system without caring for the users of health services. All this is happening against the backdrop of:
- the experience of a number of countries that have transformed their post-socialist-type health systems;
- heaps of international reports on good practices in healthcare management;
- hundreds of thousands of leva spent on consulting services to assess the state and prepare plans for reform of the healthcare system in Bulgaria.
The problems, both in this and in a number of other public sectors, have been known for years. All that is needed is a little political will to start solving them. It will not happen within a year or two, but it has to start somewhere. However, this will not happen by imposing moratoriums and restrictions on healthcare, because they only show the inability of those in power to deal with the problems in the same way that ostriches bury their heads in the sand.
