Chapter
three What is right has to be done Lajos MOLNÁR*
An Example: System Error In 2002 in Hungary 513 females died due to cervical cancer, while in Finland 49. Considering the difference in the population number (10 mn and 5.2 mn respectively), mortality was five times higher in Hungary. Even in the Czech Republic and Greece which have similar size of population, the number of lost patients due to the same disease, was substantially lower (399 and 80 respectively) than in Hungary. These are horrifying numbers. If we ignore facts and we do not think, analyse and take all possible actions, it is not only a professional blindness but also a sin against patients and those who died. This disease can be detected in its very early phase, with high certainty, by using cheap methods. Nor its diagnostics, neither its treatment requires expensive, rare, advanced technology. A particular feature of the disease is, that in many cases its actual appearance is preceded by benign symptoms. The appearance and development of the disease is less variable (although each case is special), compared to other malignant tumours, therefore it can be treated according to stable and approved protocols. Its surgical treatment only requires good surgical facilities and skills without using any expensive and special devices, implants. These are all available also in Hungary: pharmaceuticals, health professionals and surgical facilities, professional knowledge as well as hospital beds. As a matter of fact, financial resources are also available in this area, since the average income of health professionals concerned
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(gynaecologists) is significantly higher than it is usual in the health sector. What is the reason then, that the survival chance of a Hungarian woman suffering from cervical cancer is 500% lower than its Finnish fellow-sufferer? Why do hundreds of women die unnecessarily due to this disease annually?
Whatever We Call it, We Need Reforms The reason behind the problem is that money, professional expertise, pharmaceuticals, specialists and GPs, and all existing elements do not constitute a system, more precisely they do not constitute such a system, that could guarantee effective recovery with high certainty. What we can experience is that, due to the operational errors of the system, the actual outcome, recovery, of a professionally possible and economically affordable treatment fails to occur. Failures can only be eliminated by “correcting” the system. The comprehensive and simultaneous restructuring of major social systems, schemes is called reform. Nowadays, this word has become a curse, our saint cow, or as it is said by Tibor Liska: our saint ox. During recent years many ministers of health taking office, even the Government programme declared as a reassurance that there would not be any health reform. We do not insist to this word, neither. But we definitely believe that, irrespective of self-justifying self-judgements of certain players about their own professional area, a simultaneous and complex restructuring is needed, it is also inevitable in order to provide a chance for these patients to survive. This, the interests of patients can be the exclusive touchstone, the guiding force behind restructuring. And exclusively from this point of view should we examine what is right, and what is right has to be done. We can even call it reform. When politicians (and unfortunately many times certain “experts” as well) are speaking about health, they seem to lose their common sense. It is not rare that they promise free and high quality health care for everybody. However, the system has never been free of charge, and does not guarantee equal, fair care, since defenceless patients try to get better care through personal connections, gratitude money. They do not have the possibility of choice if they are unsatisfied with the current situation. The present health system was established in the beginning of the 50s, by a drastic centralisation, nationalization of the previous, European-level health care and insurance systems. Diversity of
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ownership (state, local, insurance and privately), at that time very modern and still operating institutional network, independent insurance companies with assets, self-employed and fairly paid medical doctors characterized the system which was ruined to the level of a still existing “socialist health system”. There is general agreement that the health system in Hungary, the health insurance system of the future should also be based on solidarity, it should be mandatory covering everybody, and dominantly publicly funded. The system cannot make human beings defenceless (especially when they are exposed to nature or sick), and it shall not limit, more than necessary, their freedom of choice. The fundamental principle is to make the system equitable, which does not differentiate between patients being in the same situation. Public financing, the spending of public resources justifies the requirements of transparency and efficiency.
The Future Health System Expected general characteristics of the health system to be established: • The state guarantees the circumstances for removing life-threatening conditions or severe health damages. • A state-system finances the operation of public health and epidemiological services, protecting the entire population. • The health insurance system covers everybody, staying permanently in Hungary, on a mandatory basis. • The basis for entitlement under the mandatory health insurance is contribution payment, which will be paid by income earners, while the social net (pension benefits, unemployment benefit, social assistance etc.), or in the last resort, the state budget will borne these costs for those, who do not have any income. • The fundamental financing source of mandatory health insurance is the contribution deducted from every income-source, its rate being defined by law, as a certain percentage of the earned income. • The collection of contribution payments is centrally organised by the state, which also holds the guarantee for contribution debts. • Spending of contributions shall be assigned to institutions being able to guarantee legal and efficient use, as well as having appropriate guarantees against any accidental or careless financial difficulties. • The mandatory health insurance system ensures equal access; under uniform, defined and published conditions; for all participants, to all
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services available for everyone (or almost everyone) in case of need within existing capacities. • It provides the possibilities for everyone to purchase those health services, or such conditions or circumstances, which cannot be generally expected, by ensuring controlled quality and equal conditions. • It allows for the insured the freedom of choice of the insurance company as well as the health care providers. • Eligible service providers, irrespective of their type of ownership are given equal opportunities for participating in providing publicly financed services. • It opens up manifold career opportunities for health professionals, allowing more successful expression of individual abilities and initiatives, while opening possibilities for wage competition on the specific health labour market, and at the same time, making the gratitude money not being compatible with the system. • It becomes an equal partner for players in the pharmaceutical sector. It is acting as a human service provider, when its partners do so, and is behaving as a business partner, if they do so. It is also a partner in shaping a pharmaceutical marketing system which guarantees for patients appropriate modern logistics, access as well as transparent pricing mechanisms, while not ignoring interests of its partners.
The Path of Reform A debate has been going on for a long time, and not only in Hungary, about how a health care (as well as other) reform should be carried out. There are persons (and those, who elaborated the reform in 2003 are supposedly belong to this group), who believe that the so-called shock therapy, immediately introduced radical changes can be effective. Others, on the contrary, think that “soft landing”, the smooth, evolutionary development or the gradually designed and introduced small steps strategy, slow transition can be accepted and reasonable. In our views, none of these techniques are appropriate on their own to solve the fundamental problems of the Hungarian health system. Mainly because it differs substantially from those systems, in which they were successfully applied. In fact, based on Hungarian and international experiences, the contradiction between the shock therapy and the slow, protracted health reform is not irresolvable, there is not a pressure of decision-making or of choice. The frame-rules shall simultaneously
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(in a shocking way) be stipulated by law, whereas the patients, providers, new insurers can decide individually about entering into the new system. The multi-insurance system, which operates on an insurance basis, creates competition, and provides freedom of choices for both the patients and the providers, does not have any real alternative. The question is how to create such a system?
Dismantling the Monopoly of State Control The most important question is how to dismantle the monopoly of state control in health insurance without causing any disturbances in the smooth operation. We are convinced that new insurance companies must be newly founded societies, the territorial operation of which is neither determined nor restricted by regulatory provisions. It should be their competence to determine their territorial scope of operation, based on their business strategy and philosophy. This solution will make it possible, that besides the national system, regional or even sectoral insurance companies are to be established. All these represent many similarities with the well functioning principle of managed care launched in a spontaneous way, regardless of administrative regions, and among which we can find societies of sectoral interest (e.g. Hungarian Railways Insurance Co.). This principle should inevitably be connected with guaranteeing free entry for the patients. From providers' point of view, these developments are very similar to the earlier establishment of pension funds, although, due to the different nature of pension and health care services, the new schemes may show different characteristics. It is an important objective that the new companies should offer possibilities to choose, real alternatives, (when starting their operation) compared to the National Health Insurance Administration (NHIA) 1 and later on, to other market players. On the other hand, it is desirable to ensure equal opportunity to access to the higher quality benefits, regardless of their place of residence and without burdening the insured with additional travelling. If there are more insurance companies in the place of residence of the insured, it will be natural, that the same service provider can offer different services and hospital conditions within a given institution. These conditions will exclusively depend on which insurance company the patient is affiliated with and not on the personal
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relations or gratitude money. Service providers, health care institutions, and physicians can contract with any insurance company according to their interests. The basic condition to be defined by law is the economic size, making the insurer able to start its operation. The availability of a secure service providing capacity is an important precondition, while the financial guarantee is an important requirement. The current health insurance monopoly, NHIA will remain indispensable after the restructuring of the health insurance system, even though it will operate in a new environment with changed tasks and competences. At the beginning, NHIA shall run and finance the health care system until new insurance companies start their activities. Following the establishment of these companies, NHIA will continue to act on behalf of the insured who either do not intend to change for another insurance company or do not want to make use of new ways of access to services. If several insurance companies function and provide health care services, it will be unavoidable that an independent authority would carry out their supervision, control. The authority being responsible for supervising insurance companies will have numerous tasks (the name of this institution can change, but we will use the “authority” working name). The authority will particularly be responsible for consumer protection of the insured and quality control of health services. Its primary role will be to verify the fulfilment of regulatory requirements by the organization desiring to take part in the system. Due to its competences, the authority will manage a guarantee fund established by the contributions paid by the insurance companies. In case of infringement of the behavioural rules, the authority can either impose sanctions or order a supervisor. If an insurer is bankrupted, the authority will make the necessary arrangements and ensure the continuous coverage of the insured, mainly via the NHIA under its obligation laid down in the relevant legislation. Defining the per capita quota will also be an important task of the authority. The content of the basic insurance package and basic fees should be defined in an act. However, the authority would give its approval for the specific insurance packages, any additional fees set by the insurers as well as the institutional prices of additional services. Having regard to the importance of the task carried out by the authority, it should be considered that the director-general of the authority is to be elected by Parliament for a period going beyond the Parliamentary cycles.
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Contribution and Related Tasks It is important that health insurance contribution is defined, levied separately from taxes, maintaining its current different denomination (i.e. contribution). Taking into account individual risks in the basic health insurance would contradict to the principle of solidarity. If the extent of individual risks could influence insurers in their decisions, they, by nature, would tend to avoid persons with high risks (the elderly, patient suffering from chronic diseases, gypsies living in the countryside, persons having the risk of syndromes resulting from genetic disorders). It seems reasonable to maintain the system, launched in 2000, according to which both taxes and social security contributions are collected and registered by the State Tax Authority. This mechanism could serve in the future as a safeguard against eventual tendencies of selection. If contributions are not collected by insurance companies, they do not have a direct, reliable, simple and cheap method to examine income conditions of their insured clients. Earned income as well as data on the employer, the working place and the actual scope of activities can usually more easily be identified through data on contribution payments transferred by employers as well as by registering contributions. Therefore the collection of contribution payments separated from the insurance companies is of utmost importance for data protection considerations. It has more and more frequently been suggested that, pursuant to the insurance principle, contribution should be paid for aiming at covering every single insured persons. In this regard, the majority of pensioners and unemployed people are of great relevance. The existence of state guarantee and its general redemption at the end of every year represents such public contribution which approximately equals to the contribution payments to be borne by these groups. However, it would ensure more transparency indeed if the state paid an average amount of contribution for members of these groups. It seems reasonable to increase pensions and unemployment benefits by the contribution amount which would be then deducted from the gross total benefit. Simultaneously with the undertaking of individual contribution payments for those who currently do not pay by the sate, state guarantee for financing health insurance debts should be eliminated. Taking the above mentioned similarities into account, the administration of the two systems should be further approached in order to facilitate the work of contribution payers and collectors. It could be achieved by including the contribution part paid by the employer into the gross wage
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of the employee. However, it can be deceptive, since this part is in fact part of the employee's income. By applying this method, it can easily be conceivable that the wage seems to be higher whereas the same amount of contribution in percentage seems to be lower, which is psychologically more advantageous, might increase the consciousness of service purchasing, and hopefully increase the willingness of paying contributions. The employer will consider the contribution as a part of the wage rather than a state deduction. Perhaps the employer might more willingly pay contributions to its employees than to the state, since it can require and receive a more concrete work performance which, in the employer's opinion, the latter fails to provide. The contribution imposed on the aggregated income would continue to be paid by the employer, as an advance contribution payment similar to taxation. It makes possible, that at the end of a year, similarly, or identically, to tax return, contribution payments can be ordered on the basis of non-working type income, too. Such a double return (final settlement of the account) can be more simple by unifying advantages, or at least approximating justified differences, in the two systems. By applying all these, it would solve a long-lasting problem of the health insurance: the registration of individual contribution payments. The current systems run by the NHIA and the State Tax Authority only controls the amount of charges paid by an employer for certain number of employees, but a clear and precise registration is missing on the individual payments and the exact amounts paid. Yet, the operation of any real insurance system cannot be realizable without creating an updated registration, which shows clearly who are insured.
Capitation The main characteristic of social insurance systems based on the principle of solidarity is that there is no connection between paid contribution and the disbursed amount, as well as that the groups of contributors and of beneficiaries are differentiated. The amount of contributions paid by 3,9 million employees (and their employers) covers, with the complementing state funding (embodied mainly as supplementing the debts at the end of the year), the benefits provided to beneficiaries (called euphemistically: the insured). Consequently, while a contributor’s average annual payment is 300,000 HUF, only an average amount of 100,000 HUF covers the benefits of a beneficiary per year. By using a not too nice expression, already
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introduced in managed care, therefore it is applied in practice, we can call this a per capita quota. It is important to know that this amount covers only the publicly funded health services. There are certain health services, out of which some parts are publicly financed while the difference is paid by the beneficiary as co-payments or the entire service is paid by him or her without any public financing.
Co-Payment It must be clearly seen, that even today not the entire scope of health services is available free of charge. In many cases, patients pay for part of the service to the provider when they receive treatment. This is the so-called co-payment, for which a significant and accepted example is when the price of a pharmaceutical product is partially paid by the patients. Widening the scope of co-payment is clearly needed. The demand for publicly financed health care services is practically unlimited, while their supply is always limited due to scarce resources. Co-payment aims at reducing demand by linking part of the public services to the patients’ copayment obligations. Today, co-payment occurs most frequently in hospital care and in receiving specialists’ services. Experiences confirm that the appropriate choice of co-payment results in the reduction of unjustified demand, without limiting access to needed services. It seems that we do not have to apply high fees, since the existence of the payment obligation itself and its administrative burdens represent sufficiently discouraging power.
The Basic Benefit Package The insurance funds are obliged to provide similar services to the insured persons for the contributions defined by the law. However, all this cannot be controlled without measures or standards. The measure could be defined through the basic service package. The basic service package of compulsory insurance is divided to three pillars: the state pillar, the risk pillar, and the basic pillar. The basic list of publicly funded services can function well only if it is set in an impartial, open expert procedure, and is updated according to the development of medical science. The appropriate organisation for this task to be carried out would be one which is independent from politics, lobbies and financing. This would be an important task of the health authority.
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The State Pillar A well-defined range of health services is even currently not part of the package financed by the health insurance fund. These health services are more important for the state than for the individuals or groups of individuals, as far as their supply with secure quality and quantity are concerned. Public health and epidemiology are such services. In other cases, due to the life-saving character of certain services, the continuous provision of unlimited accessibility of services and availability of service capacities means a serious financial burden, which cannot depend on the individual philosophies or the actual and changing financial capacities of service providers. That is why the ambulance and the blood supply should be separated from the basic insurance package. Furthermore, the state can set, according to its social values, such priorities to reach or to realise where effectiveness is considered less important than usually, and these priorities have higher state financing. Such fields are maternity and infant care. Direct state financing should also be maintained when health services involve immediate expenses but their individual and public advantages appear not on the beneficiaries’ side or on the side of the funding organisations, and are only visible usually at a long run. Preventive care and programmes, as well as screening are like that. In our view, it seems necessary to keep the above range of services publicly funded for the future, with certain reasonable modifications based on public consensus.
The Risk Pillar Extremely costly and highly risky medical interventions fall into a special category of health services. They are financed from a specially allocated budget also in the present health care scheme, and the budget, consequently, limits the number of services provided. This includes organ transplantation, costly examinations (e.g. PET) of or medicines against malignant tumours. There is also a separate budget to cover the costs of interventions medically recommended but not feasible to carry out in Hungary. Due to the high treatment costs, as well as because the number and distribution of occurrence is difficult to forecast, an occurrence higher than the average in a given population may even cause hardly controllable
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financial instability. That is why it is possible, even without the assumption of any bad will that in such cases decisions will be made far too cautiously in order to maintain the financial balance for the treatment of average cases. This could be a danger for patients because the risk of not receiving the necessary treatment is high. This risk can be eliminated by means of a risk fund administered by the health insurance authority. The fund would be established from a proportion of contributions generated from existing databases. The per capita quota would be determined after its deduction. The case-lump sum costs would be returned afterwards from this reinsurance fund by the health insurance authority to the insurer providing the service. Itemised accounting could also be used for the financing of cases with extreme costs reported in advance (it also exists in the present system).
The Basic Pillar The basic pillar of health insurance is constituted by all the services remaining after the division of the two above groups of health services (state and risk pillars), which services are provided also today. This is the largest group including the usual, generally accepted processes and interventions. Nevertheless, the content of each pillars needs to be analysed and changed if necessary, due to the development of medical science and the changing demands of the society. Processes today new, rare and expensive become routine after some time, and they are moved from the risk pillar to the basic pillar. But old, classical interventions may become outdated which leads to deletion from the financed basic pillar. All this results the continuous change of the basic package and its three pillars managed by the health insurance authority. Organising and financing the basic pillar is a primary task of insurers. But they organise the services falling into the risk pillar among the persons insured by them, too, with the financing difference described earlier. Any insurer providing basic services chosen by a patient is obliged to accept this applicant without any precondition, or requirement other than those application methods specified by law, or any administration and procedure (this could be called insurance obligation). As it was already mentioned, this obligation is an important guarantee against eventual selection efforts of the insurers. Supplementary special insurance may be connected to preconditions with prior consent and published conditions, on the contrary to basic insurance.
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Supplementary Insurance, Insurance Packages There is no doubt that a package of services with the same content and quality must be provided to all insured persons in return of the contributions stated by law. This comes from the idea of social solidarity as a fundamental principle of social insurance, and this is what differentiates health insurance from the fundamental idea of property insurance. But is it necessary to satisfy different individual needs, and if yes, how? The answer of the present system is ‘no’. It promises equally high level service to everybody, but it is false, it is an illusion. In fact, the health system today also allows individual efforts of claimants to receive better services than the average differently from general service conditions. But the system, due to its untrue character, does not provide a lawful possibility, so such efforts are realised in a hidden, half-illegal way. This leads to ’gratitude money’, better service for the privileged, but its price is that other participants pay for the over-consumption. However, not only false equality is the obstacle why the system of supplementary services, supplementary insurance has not evolved, although its elements are present in practice. If the system of basic insurance is not absolutely stable and predictable, and it is not in the interest of this state monopoly, then it is unreasonable to enter this market, not desirable from a business point of view. Profit-oriented insurers follow this activity only for marketing purposes, in order to widen their offers, as a supplementary bonus to keep their clients. Their business can not be successful as long as the cheaper possibility to buy medical services for under-the-counter payment remains. In the European social insurance systems, 15 to 25% of insured persons have supplementary private insurance beside the compulsory insurance. Private insurance may cover better service conditions: more convenient one- or two-bed hospital rooms, the right to treatment by leading physicians, financing of second medical examination carried out by specialists, or in certain cases, like in the UK, to shorten the waiting list. The supplementary insurance may also cover the costs of new, not yet publicly financed processes like PET/CT examination, becoming widely known in Hungary now. Such examinations are financed from private insurance in other countries, too, except when it is really indicated. This insurance may also cover co-payments to be paid by the patients for certain services. For many reasons, it is necessary also in Hungary to create the possibility to satisfy the individual needs over the compulsory standard
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health care in a regulated and planned way. Higher demands in health care are not only connected to higher income, but also to personal values. It is a question of individual decisions whether a part of one’s income is spent on passions and luxury-consumption, or to self-education, as well as more convenient, higher quality health services. Insurers providing basic health services shall make it possible to satisfy the individual needs as private commodities on a profit-oriented basis, while guaranteeing the safety of health care. Basic and supplementary services can be connected in a way that the package financed by the central health fund is separate, and beyond this basic package the supplementary (private) service packages can be purchased according to individual needs. Considering the current situation, this solution is suitable for many aspects. It creates a clearer and more transparent situation, directly connects financing to the different parts of the services, and it clearly divides, also technically, the publicly and privately financed services. Exactly that is why the system can be better controlled financially, and the creative reallocation of costs between different types of services becomes more difficult. This kind of separation is also important because it makes simpler for the insurers to collect the supplementary fees themselves, contrary to the centrally collected contributions. It reduces transfer costs and shortens the way of money, thus improving cash-flow. It creates a secondary control over the collection of contributions exercised by the insurers, by means of the obligation to establish the necessary IT database. Separating the two sources is also advantageous, since the independent management of the supplementary fee allows the establishment of a system of differentiated discounts. Prior consent of the health authority seems necessary for the structure of the services and the fees of the supplementary packages, nevertheless the administrative procedure must not constrain the realisation of business goals in this field. When the range of basic and of supplementary services is technically divided, then the next question is: who is entitled to provide supplementary packages? Most of the arguments support the concept that the supplementary packages should be managed only by the organisations dealing with basic packages. As it has already been mentioned earlier, they are able to offer a distinctive advantage, and with the additional income from it they are able to improve the safety and profitability of their operation. Furthermore, despite the financial division most of the supplementary services are connected with the basic services, with their circumstances of health care, which can be effectively guaranteed by the basic
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insurer. It can be assumed that the profit-oriented insurers having now a significant number of customers will participate in the management of those providing basic insurance in the future. They can keep these customers if their clients also choose them as basic service provider, and this portfolio will become more valuable. Other insurers will have to be offered reinsurance, and insured persons with supplementary insurance need to be offered the possibility to contract with another insurer or the necessary transition and time to cancel their contract at term.
Long-term Care Insurance Care, separated from curative medical care, is usually provided in most of the countries by separate long-term care insurance. This system has not been evolved in Hungary, so care services are provided within the frame of health services. In many hospitals care and so-called chronic wards provide care, usually in extremely low-level circumstances, for fixed daily fee, financed by the NHIA. In case of higher level care facilities legislation provides possibilities for co-payments. Many settlements operate also social insurance funded home nursing care services, providing home care for the elderly at their home. More and more private companies provide profit-oriented home care services. Such services are also provided by pensioners’ houses and care institutions, where the state provides normative financial support to the overall costs, independently from the NHIA. It is obvious that the structure and the financing of the Hungarian care system are fairly complicated. It is particularly unclear who is entitled to what kind of services and on what basis. Based on the above, to establish an organised system of care is of utmost importance. Personal needs in this field are probably much more important than in classic curative care. In order to recover, patients might a bit easily stand circumstances, which are other and sometimes worse than in their home for a couple of days, but if this worse situation is created involuntarily and would last for a long-term, until the patients’ death, it will definitely cause psychological disorders. Taking into account Hungarian traditions and the current situation, the establishment of a two-phased care insurance system seems to be reasonable. Its mandatory part entitles every insured person to receive unified care services, guaranteed by legislative instruments. It can be supplemented by voluntary private insurance according to individual needs. Private insurance can compile different service packages selected from many services meeting the needs and willingness for advance sav-
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ings of the individual. Beside institutional care, such a package can include home care services to different extents according to the individual personal status, needs and conditions, as well as it can combine all of these (in the case of temporary absence of relatives living together with the person concerned). It can also provide nursing attendance, occasionally special vehicle for leaving from home due to cultural, entertaining programme or doing shopping, and the package can also include shortterm institutional care aiming at changing the scenery. Similarly to pension insurance, both care insurance types would only provide services after a longer introductory, fee-paying period. The initial amount of care insurance contribution could be 1,0-1,5% of the income, while new service provisions would start after a 10-year period of time. Of course, the generation which will not benefit from the services provided by this new system, shall be exempted from contribution payment. In case of necessity, the current system would provide them with care services during this period. Contribution payment obligation would only apply to those who are at least 10 years younger than the retirement age. In case of private insurance, insurers might provide services even within a shorter period of time, generated by profound actuarial calculations.
Sick-pay Insurance In many states basic insurance does no longer cover income substitution resulting from illness, not even in countries operating classic social insurance schemes such as the founding state of solidarity insurance, Germany. At first sight it might be surprising or even shocking to raise the issue of introducing such a scheme in Hungary, although latently and partly we have already made several steps forward on this path. Employees pay their contributions on the basis of their total wage. 25% of our wage does not form part of the basic insurance, since sick-pay only amounts to 75% of the wage. Moreover, a following 25% of the wage (equal to one third of the sick pay) is paid by the employer. In turn, for a period of 15 days the wage does not form part of the basic insurance because this first period of the illness is officially called sick leave and paid by the employer. Consequently, in the past couple of years almost half of the sick-pay has been removed from the coverage of the basic insurance and most of it has become a financial burden on the employers. This concealed technique, that can be called sneaking sick-pay reform, is not really appropriate, since it makes the system unforeseeable
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for the insured. This process has already been described in general, namely, the shortage of resources is compensated by the latent worsening of the quality of services. Not the deteriorating of the financial situation of insured persons causes the only problem here. The illness of the employee puts an even heavier burden on the employer, too. The temporary and unforeseeable drop-out of the worker results in loss in itself, and if it is coupled with other direct costs, consequently, the employer will naturally more and more endeavour to get rid of frequently ill employees. In other words: the present system links the costs of the employer with the illness of the employee. It therefore seems to be reasonable to operate a system that separates these by establishing the neutral wage(cost) character of the sick-pay, and makes the cost-risk foreseeable and reducible. The classic system of reducing financial risks is insurance. It reduces the financial risk of both parties caused by an illness through the establishment of a separate sick-pay insurance. The sick-pay insurance contracted for the employee can consist of two elements, a mandatory and a voluntary one. The mandatory element shall not result in a worse financial situation of the insured person than the present one. The starting income basis of the mandatory sick-pay insurance can be established by sorting out the present resources, possibly with zero-balance. The sickpay coverage part of the current contribution system would form part of it. The budget would be increased by contributions paid by employers, the amount of which would be generated by taking into account a certain proportion of the obligatorily payable sick leave and sick pay costs. The basic form of the voluntary sick-pay insurance can be a progressively growing income substitution coupled with adjusted progressive insurance fees. In case of a rational construction, this insurance can ensure the existential security of the employee and the stability, calculability of costs for the employer. It would also guarantee increasing returns to higher costs, so it could possibly be easily accepted. It is worth examining thoroughly the role of employers in the health insurance system. If sick-pay is considered as an income-like source, it shall be paid by the employer. Therefore the employer shall be obliged to pay the full amount of its contribution. Taking into account of this, the restructuring of the current contribution payment system as well as the grossing up of wages shall be implemented. Higher sick-pay will more explicitly become higher wage, if the employer in order to motivate its employees can contract for higherfee sick-pay insurance. Considering these aspects, it seems reasonable to pick sick-pay insurance out of the scope of the insurers and finance it
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through funds which are operated by the health insurance authority. Further important arguments for this solution is that the actual number of beneficiaries receiving sick-pay is fairly low compared to the number of insured persons, therefore financing security is greater in case of a unified fund. It is also essential that disbursing sick-pay is clearly a financial action, while health insurance is in-kind service provision, thus different infrastructure, expertise, organisational and controlling methods are needed, which better fit to the scope of activities of the health insurance authority.
The Impact of the New System A part of the current hospital capacity in Hungary is redundant, while the professional and territorial distribution of capacities is rather accidental. Plans which were designed by sitting behind a desk, influenced by lobbies and implemented already in some-year periods, such as the bed-post act or the foursome committee, have not solved all these. Restructuring the health insurance system, the appearance of competing insurers will induce competition also among health service providers, resulting to a more rational capacity and more reasonable distribution. Competition of insurers for the patients will force insurers to purchase guaranteed quality services. Institutions providing services can sell their higher quality services with “quality overcharge” as well as to provide and increase their high quality services from investments of insurers, and of private capital. It is easier to involve private capital if current development sources such as ear-marked and targeted state aid, proprietary development sources are allocated proportionate to services, included into the prices (amortization). It promotes the inclusion of capital (and credit) if health care institutions become economic companies or societies carrying out activities of public utility and they operate on the basis of efficient management principles. Economic efficiency and financial stability can be increased if basic fees of the current performance-based financial system, which operates according to the same principles, will predictably be stable and determined for a longer run. This system will fundamentally change and widen the opportunities of medical doctors (and health professionals). Medical doctors with higher qualification, being more careful and regardful with patients, or those who currently perform their professional activities in specialties that face shortages of staff, will become more valuable,
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requested, better paid, since their previous defenceless position will be changed to be able to bargain in the competition of insurers and health care institutions. Career opportunities which are better adjusted to individual values will become more securely projected/planned, as the “market” price of a medical doctor’s performance will be determined by his/her personal, professional and human behaviour and not according to the method of his/her employment, and it will guarantee fair income even without receiving gratitude money. To become free-lance private medical doctors or a corporate enterprise, running an existential risk and expecting higher income since they are self-confident, safe public servants or honoured private insurance medical doctors will again be optional career opportunities. However, there will be losers of the new system as well. Medical doctors who try to benefit from defenceless patients, or hospitals where mortar falls down as a result of inappropriate management of careless owners will not be able to “survive”. But it will be beneficial for the patients. Changing is needed for them, which can even be called reform.
Notes: * At the time of writing (2005), Dr. Molnár was Director General of MÁV Hospital and Central Outpatient Clinic, the Budapest-based hospital of the Hungarian Railways. The original Hungarian version was published in Magyarország Politikai Évkönyve (2006) 1 In Hungarian: Országos Egészségbiztosítási Pénztár (OEP)
