One hospital's turnaround foreshadows work needed at other institutions

Grabbing a plastic bag hidden in a corner of his office, the Swieta Zofia hospital director shows off an old water pipe, rusted through and nearly completely blocked with corrosion. Replaced recently by new, plastic pipes, the decaying piece of metal is symbolic of the way this hospital has been refitted through Puzyna's fiscally tenacious management methods.
"Money must go after patients, and patients must decide who's better and who's worse," said Dr. Puzyna, director of the Swieta Zofia Obstetrics and Gynecology hospital. "It's a business. I sell services and each service costs."
What may seem to be a rather enterprising, and unique, attitude for a hospital director will soon become a necessity for many administrators. The country's ongoing health care reform is supposed to force the institutions to become more economical and effective - and hopefully also increase the quality of care - by taking away static government subsidies and replacing them with funds given in accordance with the number of patients treated.
Instead of receiving lump sums from the state, hospitals and clinics now receive payments from regional insurance funds who can contract with a variety of institutions for services. Hospitals that fail to meet quarterly treatment forecasts called for by the contract can have their funding cut or eliminated.
Thus, in a radical change from the former health care structure, money follows patients in a newly competitive health care system. No longer are hospitals paid for empty beds, and patients have the new freedom to choose where they are cared for instead of being forced to go to their designated clinic or hospital.
"Medical care has to become a good and sold as a good," said Jolanta Baszczewska, head of the neo-natal department at Swieta Zofia. "We will earn more money and help our patients more. If a patient comes to a hospital, everybody in that hospital will try to prove that it's the best."
Those words ring true for director Puzyna, who has led Swieta Zofia's restructuring for the last seven years. To him, health care reform forces his hospital to continue its aggressive efforts to remake itself into a modern facility while potentially flowing more of the overall tax money Swieta Zofia's way.
"We were preparing ourselves for competition with other hospitals," Puzyna said. "The market must select. Some hospitals will close because they can't compete, and we will get their patients."
In about one to two years, Puzyna sees the current 16 obstetric hospitals and departments in the Warsaw region shrinking to a total of around 10 or 12. One hiccup in that process, however, is the possibility of strikes by health care workers. The Health Ministry estimates that as much as 10% of the 600,000 people who work in health care will have to be let go.
Out in front
Puzyna said his entrepreneurial methods should keep his hospital afloat, even as the health sector quakes amid the reform.
"For us these reforms started in 1992," he said. " In this hospital we tried to change the face of obstetrics in Poland."
"Initiating change so early was an exception," Puzyna said. "For most hospitals it's much more difficult."
When Puzyna became hospital director seven years ago, normal practices at Swieta Zofia included isolating women from their families during delivery and allowing mothers to see their newborns only during feeding. Delivery rooms contained three beds, and payoffs to nurses and doctors in the form of "gifts" abounded.
"This hospital was the least popular in Warsaw," Puzyna said.
Krystyna Smula, 63, was in Swieta Zofia 30 years ago right after the birth of her daughter. "It was a very bad hospital," Smula said. "I just can't say how terrible it was here, just really dirty."
Within five years of taking over as director, Puzyna managed to improve conditions, and the number of births nearly doubled. In 1991, patients delivered 1,800 babies at Swieta Zofia.
By 1996, that number had grown to 3,200. Last year the hospital had 120 patients from 30 countries, including the United States, France, Spain, Germany and the U.K. And during the first three months of the year, 762 babies were delivered.
Walking around the hospital, a visitor gains a sense of how far Swieta Zofia has come. The bone-white wards bear a sense of calm. Rooms, holding anywhere from one to five beds, are decorated with rainbow and cloud imprinted curtains. Patients have access to private phones. Single-bed delivery rooms, themselves a novelty, are named and decorated after different colored fruits and berries, gooseberry to apricot. Husbands are allowed to participate in deliveries.
"These changes were based on my opinion that sooner or later we would start (having) a market in the health service sector," Puzyna said.
The doctor-patient relationship has also evolved. "We inform patients about what we plan to do," said Dr. Jerzy Rodzen, senior resident at the hospital.
Procedures from starting an IV to administering medications are discussed with patients. "I hope that other hospitals will change in the same way but it's a long process," he said.
Before taking over as head of the neonatal unit, Dr. Baszczewska worked at the obstetrics clinic at the Warsaw Medical Academy, a teaching hospital used for training medical students where conditions contrast sharply with the reality at Swieta Zofia.
"That place was absolutely enormous and giving birth there was anything but intimate," Baszczewska said. "Women come here to give birth and not be an object of observation. It is absolutely a family experience."
She said that she was encouraged by the idea behind health care reform, even if it might take a while for quality, personalized care to become a reality. "It was absolutely necessary," she said. "It is striving for normality."
A ways to go
Despite Puzyna's attempts at reform, though, Swieta Zofia still faces problems. "We still have extremely low salaries and that's the biggest problem," Puzyna said.
Doctors at the hospital make a gross salary of zl. 800-zl. 2,000 per month. That compares with the national average of about zl. 650-zl. 1,400.
To provide his doctors with extra cash, Puzyna opened a private, evening clinic. A young doctor can make an additional zl. 2,500 working in the clinic for approximately 20 hours per month, he said.
"In the ambulatory clinic, I earn three times more than in the hospital," Dr. Rodzen said.
Funding is also a difficulty. In the U.K., a hospital similar to Puzyna's would receive 20 times more than Swieta Zofia's annual 1998 budget of zl. 6.5 million ($2.43 million), he said.
Under the new system of contracts with Patients Funds, Swieta Zofia has a total annual budget of zl. 8.5 million ($2.2 million), paid out in 12 monthly installments. Each month the hospital receives 80% of an installment and later obtains the final 20% if it reaches its pre-set patient forecasts. This year's goal calls for 5,500 patients and 3,500 newborns. The budget works out to about zl. 1,200 per obstetric patient, zl. 500 per newborn and zl. 1,300 for a gynecological patient for an average four-day stay, Puzyna said.
The bulk of this budget, about 70%, goes toward employee salaries. The rest is spent on daily hospital functions.
To raise money for hospital renovations and other investments, Puzyna offers additional patient services and attracts patients from outside the hospital's region or voivoidship. These efforts generated an additional 30% beyond last year's budget and are expected to raise about 20% more than this year's forecast total, he said.
Extra services, which make up about 70% of the hospital's additional income, range from zl. 500 for private delivery rooms to zl. 500 for an epidural. Epidurals are not covered under the public health system unless a patient has a medical ailment that would require one.
Puzyna also has formed agreements with privately run clinics such as the American Medical Center. These clinics pay as much as zl. 5,000 for a client to deliver a baby at Swieta Zofia.
Funding is only one issue, however. One of the first practices Puzyna said he had to stamp out was the omnipresent gray market. Under this system, which plagues much of Polish health services, patients bribe doctors to jump waiting lists for operations or pay extra money for premium care or services.
Puzyna estimates that squashing this unofficial market generated about 15% extra income in addition to the hospital's annual budget. Instead of patients paying doctors directly for additional services, they now pay the hospital.
"We were lucky that it was possible to close all aspects of the gray or black market in this hospital and all money flowed over the table rather than under the table into private pockets," Puzyna said. "This resulted in a large modernization of the hospital because we had much more money."
Ending the gray market also makes for a healthy doctor-patient relationship. "The situation is clean, it's absolutely healthy," said Magda Mencwel, a 28-year-old from Warsaw in Swieta Zofia for her second child's birth. "I feel good that I don't have to ask (for things)."
Getting out the scalpel
Slicing into that gray market was no easy task. To rid his hospital of the system of bribes and to push through his own reforms, Puzyna said he had to fire 90% of his staff.
"The staff didn't have enough motivation to do good work," he said.
Puzyna said the transition was much easier because the hospital did not have trade unions in place capable of blocking the initiatives.
In 1992, Swieta Zofia was separated from the giant Zaklad Opieki Zdrowotnej, an umbrella health organization that included two hospitals and about 2,500 employees. At the time of the separation, Swieta Zofia siphoned off a mere 200 people and left the trade union behind for the other hospital to deal with. Puzyna said the absence of a trade union gave him a free hand at putting together a staff of committed employees.
He said that putting together that team was a difficult process, particularly because he came from the outside and was considered to be a staff "enemy." Puzyna said he hired people he knew and during the first month placed all doctors on limited, monthly contracts.
"They were so frightened at the beginning that they accepted this," he said.
Once these contracts expired, he dismissed those who were not performing up to par. "Most of the previous doctors didn't want to participate in this (family birthing) system," Puzyna said. "They didn't want to be friendly to patients."
The hospital also became independent two years ago, along the pattern of the semi-independent trust hospitals in the U.K. While the independence gave Puzyna a freer hand to shape the hospital's development strategy, the institution still had to grapple with the same low budget. Giving the hospital independence also meant that its administrators had to deal with past debts and legal problems. Those two difficulties kept Swieta Zofia from beginning to sell private services, he said.
"This was an important step in preparing us for the new system because we had to organize our financial system differently," he said.
Despite the financial challenges he still faces, Puzyna is pushing ahead with expansion plans. The director is seeking a partner, possibly an insurance company, to construct an additional building for patient overflow. The project will cost about zl. 20 million ($5.1 million).
"Step by step we are going toward realizing our goals," Puzyna said. "I want to show that it's possible to change the system."
The improved level of care and more intimate service also has women coming back. "We (women) had heard so many negative things from our mothers (about their experiences)," said patient Mencwel. "I had such a good experience with my daughter. I really trust them."
That feeling is something Mencwel said she was ready to pay for. When Mencwel gave birth to her first daughter before the reform, she paid Swieta Zofia zl. 900. Since the reform that amount has gone down to zl. 500, the difference being paid by the Mazowiecka Patients Fund. "If you can pay, you can have the conditions you want," Mencwel said. "We are aware that there is a choice."