EKIP– Expert Club for Economics and Politics A Different Opinion
Healthcare prices, as well as the issues surrounding its financing, are not a new phenomenon in the economic landscape of Bulgaria. Since the beginning of the healthcare reform in 1999 to this day, the main topic of discussion has been the methods of financing and redistribution of resources in the system. The elements of upgrading the basic model over the years mainly concern the increase in the healthcare contribution and the various models of demonopolization of the healthcare fund, without taking into account inflation, demand and supply as a starting point, as well as the ultimate goal.
This is why this report highlights several key cases that are both historically and forecasted in view of the consequences of price increases in the system, but also proposals for partially covering the annually increasing costs of healthcare.
In recent years, healthcare prices have consistently lagged behind the rest of the economy by more than two times. This lag has reached 13.6 pp. since the beginning of the Covid-19 pandemic to date. The changes in the Consumer Price Index (CPI) and the sub-index "Healthcare" are 24.9% and 11.3%, respectively. Seen from the angle of hospital care - the underfunding of clinical pathways leads to disparities in the cost of treatment and requires many of the differences in the cost of treatment to be covered by medical institutions. The data from the sample hospital taken into account in this study show that the difference between the average real cost of treatment and that set in the clinical pathways deviates between 1.5 and 2.5 times for 2022. The lack of sufficient price indexation leads to increased waiting times for medical care, passing on costs to the patient, roundabout methods for informal price increases, a decrease in the quality of the service provided, "additional treatment" outside of hospitals, a lack of certain medicinal products on the market, and staff overwork.
At this point, the political and economic situation does not suggest a short-term possibility of increasing indirect taxation through health insurance. In parallel, there are unresolved cases regarding the percentage that the state allocates for the nine groups of Bulgarian citizens that it provides by law, but there is also a lack of policies for the 700 thousand uninsured individuals. In such a deepening political and economic crisis, the right instruments to support the healthcare system are the only budget-neutral ones.
The EKIP offers several options for co-financing the healthcare system in the context of inflation and potential recession. In view of the needs for social incentives and traceability of the allocated funding, it is advisable to create vouchers for healthcare services and medicines. They would be a good solution for the healthcare sector, as they can guarantee targeted use of funds – be it in the form of tax relief for employers or funds allocated by the state for certain cases. As an instrument for transparent and long-term support, a policy of earmarking from excise tax revenues could be adopted. The earmarking of only 10% of excise tax revenues from tobacco, alcohol and fuels for 2022 would contribute an additional BGN 567 million, which would be distributed proportionally in the NHIF budget, as follows – BGN 110 million for outpatient care, BGN 254 million for inpatient care and BGN 140 million for for medicines, medical devices and food, and the remainder to be kept as a reserve for urgent needs. Last but not least, it is necessary to move towards the fiscally responsible long-term reform of regulating co-payments in medical institutions for hospital care. It aims to contribute to the transparent financing of undervalued activities, to ensure clarity of transactions between the patient and the system, by serving as a double check for the activity performed, as well as to improve the competitive environment. Last but not least, it would contribute to more objective financial reports to the principals (state and municipalities).
The combination of the three proposals would help reduce the gap between the real rising prices in the economy and those in healthcare, as well as create clear rules and specifics regarding the financial flows that additionally flow into the system.
