National Health Fund: The Next Step to Reform

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1 National Health Fund: The Next Step to Reform Country: Poland Partner Institute: Institute of Public Health, Jagiellonian University Medical College, Krakow Survey no: (5)2005 Author(s): W. Cezary Wlodarczyk Health Policy Issues: Political Context Current Process Stages Idea Pilot Policy Paper Legislation Implementation Evaluation Change 1. Abstract On August 27th, 2004, the Polish Parliament (Sejm) passed an act concerning healthcare that was funded publicly, which constituted a further step towards the organisation?s reform. However, the act was not the result of a wellthought-out initiative, but merely an immediate reaction to the problems left over by the Tribunal?s decision from the previous year. 2. Purpose of health policy or idea Public Aims The mission of the public authorities, and hence the state, in organising a healthcare scheme that was universally accessible, incorporated: the creation of certain conditions of the functioning of a healthcare system; analysis and judgement of health needs and the factors causing their change; health promotion and prophylaxis in order to create favourable health conditions; financing by the correct procedures, i.e. by those laid down in the act concerning healthcare provision. Functions of the Self-Governing Administration In order to create a universally accessible healthcare system, selfgoverning authorities at various levels had to: draw up and implement health programmes employed for health needs and evaluate them as well as the state of general health of residents of the given voivodship after consultation with authorities at the local district (powiat) and borough (gmina) levels; pass information on to the principal governor of the voivodship on health programmes implemented in the territories of the self-governing authorities; create and implement other programmes that relate to healthcare

2 Functions of the Government Administration In order to create a universally accessible healthcare system, principalgoverning (voivodship) authorities had to: evaluate the security of healthcare in the territory of the voivodship; evaluate the realisation of healthcare provision given by self-governing administrative units with regards to aims set out by the government administration; hand over to the Minister of Health quarterly information on health programmes on the 15th day of the month after the given quarter has ended. 3. Political and economic background The Polish health system has been given up to several pressing reforms. In 1989, the Chamber of Physicians was reinstated and two years later in 1991, new regulations concerning healthcare institutions were put in place. In the nineties, more rules were laid down that allowed the introduction of private healthcare providers. New administrative divisions as well as a new payment structure came into being in 1999, which resulted in the creation of 16 regional healthcare funds. 4. Purpose and process analysis Idea Pilot Policy Paper Legislation Implementation Evaluation Change Origins of health policy idea In 2003 the separate funds were merged into the one centralised National Health Fund. This move was so harshly criticised that the Constitutional Tribunal pronounced the act that merged the funds together illegal. Adoption and implementation The Minister of Health was obliged by the act to: lead and take part in instruction concerning the prevention and solving of problems connected with the negative influences on health caused by environmental and social factors; evaluate, in consultation with the self-governing authorities of the voivodships, accessibility to healthcare. draw up and finance health programmes, as well as their supervision and evaluation; finance highly-specialised healthcare under the regulations of the act; co-operate with non-governmental organisations dealing with health issues both at a regional and national level; - 2 -

3 exercise supervision over health insurance as stated in the act; endorse financial plans as put forward by the Ministry of Finance; exercise his opinion on the Fund's financial report; put forward information and an annual fiscal account to the Sejm by the 30th June of the following year concerning healthcare provision funded publicly; The Minister of Finance was obliged by the act to: exercise supervision concerning the financial position of the Fund as stated in the act; approve the financial report of the Fund, after having gained an opinion from the Minister of Health. Receivers (eligibility) In accordance with the basic objective (which itself was a continued model of the reformed system) of the act, the basis of entitlement to healthcare provision was by way of insurance. Persons who were contagiously ill, soldiers, persons with addictions, persons who were being helped by social assistance and prisoners were also eligible for healthcare. Yet persons who: were not yet 18 years of age, women who were pregnant or at the maternity leave were also eligible for healthcare, just like those who were insured. This eligibility extended to doctors, nurses and hospital visits, institutional care, as well as medicinal products and other beneficial items. Proof of eligibility was to be the provision of a "Health Insurance Card" which would be used in order to confirm such status with regards to healthcare as defined by European regulations, and would be issued by the regional Fund of the relevant voivodship. In emergency cases essential healthcare provision would be given immediately, even if the provider would not have a contract with the National Health Fund. Healthcare providers that did not have a contract with the Fund had the right to reclaim monies for given healthcare provision. Waiting Lists Long waiting lists were one of the major problems of the Polish health system. In accordance with the new act, healthcare provision in hospitals and specialist out-patient clinics was to be given according to ordered lists by date and time. The entry of a person to the waiting list was a guarantee that the required healthcare would be provided. The waiting list for healthcare provision was going to be an integral part of medical documentation, and would be run in a just, equal, indiscriminate and transparent fashion, in turn fulfilling medical criteria. In the case of a change of client's health, resulting in the need for earlier healthcare provision, the patient should inform the healthcare provider, which would in turn change the date of provision and inform the patient if medical criteria allow to do so. RangeofServices Insurance gave the right to medical healthcare free of charge for medical staff, and included hospital care, diagnostic services, pharmaceuticals and the supply of medical equipment. However there were many instances of various surcharging and charging, meaning the patient would have to pay more towards the financing of the system. Apart from reconstructive medical practice, which was the most accented, there were also three further areas, being: health preservation, disease prevention and identification of illnesses at the early stages of development. In further detail, this included: - 3 -

4 propagation of pro-health behaviour, especially aiming at individual health responsibility; initial, multi-specialised and comprehensive healthcare for children in danger of disability or who already have disabilities; prophylactic medical examinations in order to identify any illness threats at the early stages, with particular emphasis on the circulatory system and cancerous diseases; health promotion and prophylaxis, including dental prophylaxis for children and young persons up until the age of 19; prophylactic examinations for women who are pregnant, including prenatal tests advised for those at high risk and for those over 40, as well as dental prophylaxis; prophylactic health care for children and young persons in education; provision of immunisation vaccinations; research in sports medicine, involving children and young persons who take part in amateur sports up until the age of 21. Having gained the opinion of the Chairman of the Fund, the Supreme Medical Council and the Polish Pharmaceutical Council, the Minister of Health was obliged to form a register of basic and supplementary pharmaceuticals, their cost, materials and medicinal dosages. Whilst taking the decision the Minister should take into consideration: the need to protect public health in society, accessibility to pharmaceuticals and the safety of their usage, the significance of a drug when fighting diseases of a definite epidemiological nature that may cause damage to society, the influence of a drug on the direct costs of treatment, and also the payment possibilities of the subject obliged to finance treatment from public funds. These registers should be updated at least once every six months. For those patients suffering from contagious or psychological illnesses, including those who are mentally disabled or chronically ill (innate or acquired), drugs and other medical products are supplied free of charge, at a blanket price or are paid for only in part. Patients staying in a special care unit (for nursing and rehabilitation) that provides healthcare 24 hours a day, must cover living and accommodation costs themselves. The monthly fee was set at 250% of the lowest retirement sum, with the condition that the fee also had an upper limit of a sum not higher than 70% of the client's income. For children (up until the age of 18) and young persons in higher education (up until the age of 26) who are staying in a special care unit (for treatment, nursing and rehabilitation), the monthly fee for living and accommodation was set at 200% of the lowest retirement sum, with the condition that the fee also had an upper limit of a sum not higher than 70% of the income of a family member. Health Programmes Health programmes could be drawn up, implemented, realised and financed by ministers, self-governing units of the territories, or the National Health Fund. The health programmes would take into concern the following: - 4 -

5 important epidemiological occurrences; health problems (but not those outlined in section 1), their eradication or constraint, that concern all or a group of clients; the implementation of new medical procedures and prophylactic activities. Health programmes should have been a statement of active participation by the representatives of the health system that they are concerned with health problems. Principles of Usage Insured persons kept their right to choose their GP. If they make use of provisions given by other healthcare providers, they should first be given a referral. However, a referral was not needed for the following visits to a/an: gynaecologist, obstetrician, dentist, dermatologist, venereologist, oncologist, ophthalmologist, and a psychiatrist. Those suffering from tuberculosis, HIV, war invalids and repressed persons also did not need a referral. Alcoholics, narcotic and psychotropic addicts did not need a referral if treatment was given for disaccustomising purposes. For most insured persons the level of contribution for health insurance amounted to: from the implementation of the act up until the 31st December 2004 inclusive % of the base rate; from the 1st January 2005 to the 31st December 2005 inclusive - 8.5% of the base rate; from the 1st January 2006 to the 31st December 2006 inclusive % of the base rate. After this period health insurance contributions will be set at 9% of the base rate. Contributions are to be paid on a monthly and unconditional basis. Health insurance contributions for farmers were to be set at the sum of half a quintal of field rye from each hectare allotted for agricultural use in each farm. Functions of the Fund The working of the fund included: the classification of quality and accessibility as well as the analysis of necessary healthcare treatment costs, needed for correct contractual procedures and for healthcare provision; the execution of tenders for offers, negotiations and creation of contracts for healthcare provision, as well as their monitoring and accounting; the financing of healthcare provision to clients who are not insured and fulfil the income criteria (the criteria of the act on social aid); the drawing up, implementation, realisation and financing of health programmes; the carrying out of given directives concerning the realisation of health programmes, including those funded by the Minister of Health; the monitoring of doctors' ordinations. the promotion of health the running of the Central Registry of Insured Persons; the publication of materials that inform about and promote health awareness. The Fund was not able to run a commercial business and be the owner of healthcare institutions, neither was it allowed in any way to have the right to have tenure over any subjects concerned with the running of healthcare - 5 -

6 institutions. Fund Authorities The management of the Fund would be run by the Chairman of the Fund, who would be elected in and dismissed by the Council of the Fund, and would have the proposal of the Minister of Health, who represents the Fund publicly. The Council of the Fund decide on the Chairman's earnings. The Chairman was obliged to: run the commercial financing; effectively and safely manage the monies and property of the Fund, including the management of the general reserve; take out financial obligations, such as loans and credits, on behalf of the Fund; prepare and present to the Council of the Fund annual balance sheets of incomings and outgoings; draw up a fiscal plan for the Fund on the basis of financial projections and plans of the voivodship administration units of the Fund; compile the annual fiscal plan of the Fund after having gained the opinion of the Council of the Fund, the relevant commission concerned with public finance and the Health Commission of the Sejm; compile the projected work plan of the Fund; realise the annual fiscal and work plans of the Fund; compile a project planning investment expenditure for the following year; compile a report on the execution of the Fund's fiscal plan for a given year and swift presentation of it to the Minister of Finance; compile periodical and annual reports on the operation of the Fund; supervise resolutions concerning the execution of regulations on co-ordination; compile analyses and evaluations on the basis of information handed over from the voivodship administration units of the Fund; present to the Council of the Fund a salary scheme for employees of the Fund; fulfil the function of employer for persons in employment in the central office of the Fund; elect in and dismiss voivodship Fund directors, after having gained the opinion of the Council of the relevant voivodship Fund; dismiss the director of a voivodship Fund on the recommendation of the Council of the relevant voivodship Fund; pass acts of the Council of the Fund; present to the Council of the Fund other information (as stipulated by the Council, including form, in what capacity and in which period) on the activity of the Fund; hand over acts passed by the Council of the Fund to the Minister of Health within three working days of their acceptance; supervise the realisation of the activity of the voivodship Funds; - 6 -

7 organise co-operation between the Fund and administrative government departments, institutions taking part in health protection activity, social security institutions, self-governing authorities of medical professions, trade unions, employers' organisations, clients' organisations and insured persons; relay health programmes (under instruction from the relevant minister) for execution to administrative units of the voivodship Funds; draft up uniform methods for the realisation of acts by administrative units of the voivodship Funds. In the administrative units of the voivodship Funds there were to be in activity ten-member Councils of the voivodship Funds, assembled of: two members elected on the sole initiative of the sejmik; two members chosen from a greater number of candidates by the relevant principal governor of the voivodship; one member chosen from a greater number of candidates by the Council of Districts (konwent powiatów) from a given voivodship; two members chosen from a greater number of candidates by relevant local voivodship commission on social dialogue; one member chosen from a greater number of candidates by the Council of the Public Benefit Organisation; one member commonly chosen from a greater number of candidates by the relevant officer of the voivodship military staff, the chief of police of the voivodship Police and the fire chief of the voivodship State Fire Brigade. The term of office of the Council of the voivodship Fund was to last for four years. The administrative unit of the voivodship Fund was to be led by the Director of the unit, elected in and dismissed by the Chairman of the Fund, having first gained the opinion of the Council of the voivodship administrative unit. The Director's responsibilities would involve: effective and safe management of the regional Fund's monies; preparation and presentation of annual reports and projections for incomings and outgoings to the Council of the voivodship unit; preparation of the unit's fiscal plan; creation of the unit's work plan; realisation of the unit's work and fiscal plans; compilation of reports on the unit's fiscal plan for a given year; compilation of periodical and annual reports on the unit's activity; attainment of contracts for healthcare provision, including highly-specialised healthcare provision; choosing contractors for the undertaking of health programmes, on behalf of the relevant minister; attainment and settling of contracts for healthcare provision, including highly-specialised healthcare provision, as well as for the realisation of health programmes; the handing over of funds to healthcare providers and pharmacies for services rendered to entitled persons not - 7 -

8 having insurance; the control and monitoring of: medical ordination, the realisation of health care provision contracts; carrying out controls of healthcare providers and pharmacies; monitoring of the functionality of healthcare provision undertaken by a given contract; fulfilling the function of an employer with respect to employees of the administrative unit of the Fund; making of individual decisions as to matters concerning health insurance; handing over information on demand on the voivodship unit's activity, either to the Chairman of the Fund, or to the Council of the voivodship Fund. The Director of the voivodship Fund had to take individual cases on health insurance into account. Amongst other things, this involved matters concerning health insurance cover, and what degree of cover would be made available. Decisions made could be overruled by the Chairman of the Fund, whose decision concerning individual matters on health insurance could also be appealed to the administrative court. Financial Plan The Chairman of the Fund was under obligation to compile a fiscal plan for the Fund, both taking into account the incomings and outgoings based on the fiscal plans of the voivodship Funds. The plan would include: the sum of planned outgoings: 1. for the running of the central office, including expenses for the realisation of activity due to regulations on coordination, 2. for the specific regional voivodship Funds, including the running of them; the sum of income and expenditure of the Fund. The general principles on the division of monies between the voivodship Funds is stated in the act. The planned outgoings of the Fund for the financing of healthcare provision for insured persons are divided between the voivodship units, thus taking into account the following: the basis under which monies are divided depends on the number of registered insured persons with the voivodship Fund, bearing in mind health risks of insured persons belonging to a given group according to boundaries of age and sex, with reference to a standard group, the sum of these monies is corrected by the migration of insured persons from one voivodship Fund making use of healthcare provision in other voivodships and indications that arise from the amount, and types, of specialised healthcare provision in the years up until the year when the said plan is formed. It is stated in the act that planned expenditure for the financing of healthcare provision within the administration of a given voivodship Fund cannot be lower than the sum planned for expenditure for the same purpose the year before. It is also stated that the Minister of Health, in agreement with the Minister of Finances, having gained the opinion of the Chairman of the Fund, clearly identifies how and by which criteria monies are divided between the central office and the voivodship Funds

9 The Chairman of the Fund could make changes to the fiscal plans of the Fund in the case of any situations that might have arisen from the realisation of the current Fund's plan that were not able to have been forecast when the plan began to be executed. He is also able to shift monies from one division to another with prior consultation with the Minister of Health and the Minister of Finance. The Chairman of the Fund, in order to ensure the smooth running of the Fund's finances, was allowed to draw upon credits and loans, with the agreement of the Minister of Public Finance and the Minister of Health. The instalments at which credit and loans would be paid back in a given year would not be higher than the sum of funds in the general reserve for that given year. The Fund was obliged to compile periodical reports concerning the realisation of it's fiscal plan and to present them to the relevant ministers - the Minister of Health and the Minister of Public Finance. Information on healthcare provision was transparent and in the public domain, as well as to the following administrative units: The Supreme Medical Council, the Main Council of Nurses and Midwives, as well as representative organisations of the healthcare providers. A clear list of representative organisations of healthcare providers should be maintained by the Minister of Health. Contracts made by the Fund (in accordance to the civil code) for the provision of specialist healthcare (hospital) would be of a competitional nature, or after negotiation with the healthcare providers. Contracts concerning other types of healthcare provision (basic healthcare, additional items and medical products, such as orthopaedic equipment) would be drawn up externally to the procedures as above. Contracts for healthcare provision could not be for an indefinite period. Contracts for a period longer than three years would need to be ratified by the Chairman of the Fund. Monitoring and evaluation Waiting lists for healthcare provision are evaluated periodically as to the number of admissions by the healthcare provider. The Minister of Health supervises the creation of waiting lists for patients needing narrowly-specialised healthcare. The Council of the voivodship Fund would have a supervisory and evaluative role. 5. Expected outcome The approval of the act in this form has calmed down social upheavals. However, it is difficult to take to mind that this act is of an ultimate nature, and it certainly might not be the final answer in searching for a better health system. Author/s and/or contributors to this survey W. Cezary Wlodarczyk Suggested citation for this online article W. Cezary Wlodarczyk. "National Health Fund: The Next Step to Reform". Health Policy Monitor, 4 July Available at -

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