EKIP– Expert Club for Economics and Politics A Different Opinion
For 2021, an increase in the budget of the National Health Insurance Fund (NHIF) by approximately BGN 312 million is planned. Unlike the previous year, this time it is nominal - within 7.2%, for comparison in 2019 - 2020 it was 9.1%. The main items on which these revenues are expected to be directed are hospital care and medicines. As a percentage, the increase for hospital care will be within 6.3%, and for medicines (including medical devices) it will be approximately 7.1%. The more conservative increase in the budget has its logical explanation. According to unofficial data, reduced revenues from health insurance are expected, which will lead to a deficit of BGN 100 million in the revenue side. An increase in the number of citizens without health insurance by about 15% is also expected by the end of the year, according to NRA data. Despite these fiscal constraints, the healthcare system should be compensated in view of the financial and healthcare crisis that Bulgaria is in. Although there is an apparent increase in costs, in practice it is insufficient in several areas:
Hospital care
The increase in the hospital care budget is symbolic for several main reasons. First of all, in the annex to the National Framework Agreement, an increase of an average of 10% in the prices of clinical pathways was signed, which will be valid until the end of 2021. This will inevitably lead to higher costs, the case here is the existing activity limits. Economic logic says that if you increase the base, you should also adjust the ceiling, otherwise hospitals will receive the same money, but they will be able to perform much fewer activities, which will harm patients. On the other hand, financing hospital care in years of health and financial crisis is key to maintaining a sustainable health standard - both for medical specialists and for patients. As for the correct distribution of this resource, it currently works on a semi-market principle. What this means is that the income of medical institutions depends on clinical pathways (about 90% of their income comes from payments for clinical pathways). The patient can decide where to be treated, therefore the health insurance fund pays for the path of this medical facility. However, what happens when certain medical facilities are not visited - revenues dry up and they are unable to make capital expenditures, pay contractors, or pay employees. The natural end of all this is bankruptcy, which can be a recovery, but should be a last resort. That is why optimization must occur through consolidation of the medical facility or its privatization, so that access to treatment for the local population can remain.
The medicines
According to studies by the European Commission, as well as other domestic and international institutions, Bulgarian citizens pay the most for healthcare compared to patients from other European countries. When the co-payment is broken down, it turns out that it is highest in the field of medicines – between 60% and 70%. In detail, this concerns medicines for the most common diseases related to the circulatory system – cardiovascular and cerebrovascular, colitis affects approximately 1.5 million patients. Unlike other groups of medicines, the state has decided to pay for the most common only 25% of the reference value, which in itself leads to disparities and unequal treatment of patients. Separately, about 85% of patients in this category are mainly in the age group of 50 and above. They also include Bulgarian pensioners, who are the most harmed by the discriminatory price treatment. The NHIF Budget Act for 2021 should include a phased increase in the reimbursement rate for these medications in view of the looming crisis and the provision of risk groups of the population, such as Bulgarian pensioners.
Additional problems for the same patients are created by the unsubstantiated inclusion of a “prescription fee” (what the NHIF pays pharmacies for a unit of processed prescription) in the budget of the group of drugs for home treatment. It turns out that their budget has been reduced compared to the previous year, despite the apparent overall increase this year, since the costs for the “prescription fee” amount to about 24 million leva. This amount should be on a separate line – in order to have transparency and not harm patients.
Another issue on the agenda is the overregulation of drug consumption and what companies must return to the NHIF if they exceed the budget. This is about the predictability and sustainability mechanism, the purpose of which is to limit the growth of the drug budget. From a fiscal point of view, limiting growth is a logical policy in view of reducing revenues, but on the other hand, this leads to an outflow of companies interested in offering their pharmaceutical products on the Bulgarian market.
The over-regulation of prices starts with price referencing (external and internal), which drives the price down to the lowest among the reference countries. This is followed by the mandatory discounts that companies must make, as well as the specific ones (according to the type of product), and then the mechanism that punishes growth is added. As a result of all the price regulation, it comes to the point that many key medications are withdrawn from the Bulgarian market and patients are left without the possibility of treatment. A significant part of the medications can be re-imported, bypassing the regulation, entering “unauthorized for use” – where there is no symmetry of information regarding the price, and it also swells between 5 and 10 times compared to the one with which it was on the positive drug list.
The state
The state continues to be a bad payer – out of the 8% that must be paid for the 9 groups of the population it provides (including children, pensioners, administration, military, etc.), about 5% is paid. Although the increase in this percentage is set by law – it is happening too slowly and with many conditions. In view of the foreign loan withdrawn by Bulgaria, the state can set an increase in the percentage until it reaches its legal values. This will lead to revenues of about 900 million in the budget of the Fund and to equivalent treatment of employees in the private and public sectors. On the other hand, there are also budget-neutral ways to increase revenues in the system – through targeted allocation of excise taxes (which we at the EKIP have already proposed). Their use for their intended purpose could increase revenues to the NHIF budget by about 550 million on an annual basis (10% targeted allocation) other things being equal.
The budget should be tailored to the needs of the Bulgarian state in years of crisis - namely, providing finances for the treatment of the most widespread socially significant diseases. Creating green paths for the introduction of therapies for rare diseases, as well as increasing the salaries of medical specialists.
