A prescription for critical change

The current cash crisis in Poland's healthcare sector is the result of numerous factors that are generating a constant increase in costs. Implementing efficient regulations aimed at limiting these costs is not simple. First, the implementation and functioning of these regulations costs money. Second, the economic groups that have a vested interest in growing costs are far stronger than those who will lose out because of these increases.

Modern medicine with modern prices

Above all, this process will take place because of the behavior of medical professionals. They are interested in applying new and costly medical technologies. The same expectations are shared by their patients, but in the system there isn't and there won't be any motivation to use efficient and effective medical procedures. These new technologies improve the quality of life of a patient. As Poles' quality of life increases, so too will the demand for such services.

Another element generating costs is a shift in how older people are treated, which in Poland is manifested as a growing process of institutionalization.

The development of a private medical sector paid for from private sources is related to competition on the basis of quality, which is expensive in medicine. We have already received signals that the demand for private services is not growing as rapidly as it did a couple of years ago, even though household spending on healthcare is still rising.

Private hospitals and clinics will now strive more decisively for public funds. There are too many obstacles to create alternative medical insurance, and the number of institutions searching for income and generating demand for their services is growing.

Tougher standards

For the last few years, regardless of the political constellation in power, we have observed a strengthening of the position of publicly funded institutions, particularly the National Health Fund (NFZ). It is increasing its demands on hospitals and clinics, which are now struggling to meet the NFZ's requirements.

The medical labor market and the mounting pressure for pay rises in the sector, which have been very low for years, will still be the driving force behind an increase in funding. In addition, we have many public healthcare providers that have different functions, both inside and outside the healthcare services market, and there is major social pressure to maintain the status quo. These institutions provide jobs and social care for older and disabled people, and raise the prestige of local authorities.

The pressing issues

There are several problems that should be solved as a matter of urgency. First, it is critical to make efficient and effective medical procedures more accessible. In addition, a system of information, monitoring and motivation is needed for medical professionals, along with a change in doctors' mindset.

The autonomy of the medical profession results in a situation that any supervision over medical aspects of their activities is regarded as an unreasonable attack on the freedom of the profession. However, tight supervision of expensive medical technologies is crucial and should be connected with the supervision of investments. Therefore, hospitals or clinics that do not guarantee benefits should not be allowed onto the publicly funded market.

In public healthcare providers, the rules of financial economy should be changed to limit soft budgeting, including those introducing the risk of bankruptcy.

Keeping costs in check

Preventing costs from rising excessively will not be possible unless demand for a number of services is limited, by lowering access to some services through co-financing. Similarly, it will not be possible to influence costs within a longer period of time unless we reduce the number of new institutions entering the market paid for by public funds. The risk of monopolization is a far lower risk than the negative effects of scale and a strong decomposition of the system.

Prof Katarzyna Tymowska is an expert on healthcare economics. This text was prepared as the basis of a presentation for the conference Poland on its way to the euro. Which reforms does Poland need? which took place on June 30 and was organized by the Democratic party.