EKIP– Expert Club for Economics and Politics A Different Opinion
Yesterday, MPs finally adopted legal changes indicating the creation of the long-discussed National Health Card and selectivity of the NHIF in terms of which hospitals it will contract with. The new reform was enthusiastically welcomed by the ranks of the Reformist Bloc, while the opposition was firmly against it.
The goals of the reform
The first of these is the drastic increase in the number of hospitals in the country. According to NSI data, there were about 350 hospitals in Bulgaria at the end of 2014, and there is a tendency for their growth. Since each hospital can conclude a contract with the health insurance fund and receive reimbursement for its activities without real quality control, the deficit in the NHIF budget is becoming larger and larger, already exceeding 1 billion leva on an annual basis. It is obvious that there is a problem in this model of functioning, but will it be solved in the way proposed by Moscow?
At first glance, we might think that limiting the funding of private hospitals could actually reduce the deficit in the Treasury budget. But the positive effects seem to end there.
Quite often, the media mistakenly shifts the emphasis to private hospitals as the main culprit. But the fault lies not with private hospitals, but with the state monopoly. Being a state monopolist, the NHIF has a huge financial resource, which, however, is not subject to market control. In these conditions, the management of the Fund can afford to spend foreign money generously, knowing that the state will always help when the bills are not paid. The owners of private hospitals easily take advantage of this model and begin to perform overdiagnosis, unnecessary procedures, and sometimes fictitiously report activities for which they receive money.
Since the NHIF is not a private structure operating on a competitive basis for profit, it has no interest in checking (and does not have the necessary resources) how and for what its money is spent. In this line of thought, it is incorrect to claim that only private hospitals abuse funding. State hospitals in Bulgaria absorb a huge financial resource. Of the 74 state and municipal hospitals, 63 operate at a loss, having accumulated over 400 million leva in debts. Of the 1.6 billion leva spent by the NHIF, 900 million leva were spent precisely in the 65 state hospitals. These figures refute the myth that only private hospitals are the problem of Bulgarian healthcare. At the same time, no one takes into account the fact that overdiagnosis, unnecessary hospitalizations, and work that is partially, poorly or not done at all are also observed in state medical institutions. It is unlikely that anyone can calculate the real economic losses from these phenomena.
What will be done about this?
The minister's plan is to introduce a National Health Map, which would determine in which city the population's health care needs are and, based on this information, assess whether there is a need for new hospitals with which the NHIF should conclude a contract. First, this approach is a classic example of central planning, which is always doomed to failure. It is completely impossible for employees in a ministry to take into account the individual needs of each person and to align them with the financial capabilities of the state. It is not at all clear on what criteria this map will be drawn up, and it would not be surprising if significant deficits, queues and arrangements with ties – phenomena characteristic of socialism – result.
Second, the change does not exclude the financing of private hospitals at all, but rather their careful screening from here on out. That is, private hospitals that will remain in areas where there will be no need for new ones according to the health map will enjoy a comfortable lack of competition, provided to them by the state.
The managers of the RHIF will be the people who will decide whether a given hospital will sign a contract with the NHIF or not. This situation of centralized sole control is a sure prerequisite for corruption schemes, since the future of the hospitals in the area they control will depend on one person.
The second goal of the reform is an attempt at quality control. The minister's idea is not to pay for individual activities, but for the complex treatment of the patient. This concept is quite vague at this point. It is not specified anywhere who and how will define complex treatment and what difficulties this will bring to some medical institutions. The planned merger and accession of small medical centers to larger ones is suspiciously reminiscent of the effects of Obamacare in the USA, where quite a few small private practices and medical centers were forced to join larger ones, thanks to the left-wing policies of President Obama.
The main problem, however, remains. The NHIF continues to be an absolute monopolist, and the Minister has clearly stated that demonopolization is not on the agenda for it. In the conditions of a state monopoly, quality healthcare cannot be obtained at a reasonable price. The lack of a free market and competitive relationships between hospitals will continue to lead to a desire for minimal work in order to absorb easy state money. Patients will continue to have no choice whether and how to insure themselves, and will be forced to comply with the moods of the Minister and the NHIF manager, hoping that they will receive adequate medical care.
The government's claim that the new reform puts the patient at the center of attention is absolutely false. The reform puts the state at the center again, and the patient - in its ownership. Therefore, this reform is another historical compromise. Once again, the "right" parties are running away from the idea of real reform - privatization and deregulation (Moskov's proposal for privatization of state hospitals was one of the truly productive ones, but unfortunately GERB categorically refused to support it), which the sector desperately needs, and instead they are offering us a leftist idea in a rightist package - another dose of regulations and central planning.
