Private health vs.public concerns
By : Juliet D. Golden
Long before health-care reform began last year, a new breed of doctors had already started to change the face of the country's medical care.
When Anna Brzostowicz opened a private family practice in Klodzko in 1996 as part of a pilot scheme testing health reform options, she wasn't looking for either fame or fortune.
But four years on, she and her two partners have a little of both. Last year, she was voted the best family doctor by the Lower Silesian Patients' Fund, one of 17 regional institutions that has contracts with local hospitals, clinics and emergency services, both public and private.
The financing of these contracted services, which flow from Patients' Funds to medical centers, is based on individual 7.5% contributions paid under the national health-care insurance system.
Head start
Brzostowicz's family practice was a taste of the reforms that would eventually sweep the country. The reforms were intended to improve the quality of primary health care by introducing choices for patients, and by creating a system where private and public health-care providers compete for long-term contracts.
The idea was to move away from a system dictated by specialist care and move toward boosting the role of the family doctor, who would be trained and equipped to handle a range of health issues affecting family life. By placing the family doctor on the medical front line, reformers hoped to eliminate the process of parceling out basic treatment between specialists. Also, by concentrating on primary care, reformers aimed at improving the health of the population through long-term preventative medicine.
The family practice in Klodzko started as an experiment of how well the family doctor idea might work at a grass-roots level. In 1995, Brzostowicz and her team struck a deal with the head of the Walbrzych province, who agreed to hand over primary health care of some 7,500 people in one city district to the three doctors.
To get started, Brzostowicz and her two partners rented the ground floor of the former public baths in the center of Klodzko and received zl. 150,000 from Phare, the European assistance fund. The three doctors also pooled their own funds to cover the cost of sanitary installations and also equip the offices with basic medical equipment.
The result was a modern family practice with an outpatient treatment room. Each doctor had a large consultation room with adjacent examination and treatment rooms. When the clinic opened in 1996, it was still nominally part of the public health system, but the improved standards came as a surprise to patients. What worried most of them, however, was that the new practice would prove to be too expensive.
"They didn't know what this was supposed to be because this was the first (family practice) in the valley," Brzostowicz said. "People were really worried they would have to pay."
To keep their patients, the doctors had to work long, unsociable hours. Each received about 65 patients a day, which meant 1,200 a month or 15,000 visits a year. During the height of flu season, daily visits per doctor could reach up to 100 patients, which meant a new patient was being seen every 11 minutes for 12 hours.
As well as having a huge workload, Brzostowicz and her partners had to keep an eye on fiscal matters. "Unlike public clinics, we can't go into debt. If we don't pay rent they can throw us out, and if we don't pay social security for our nurses, we get penalized," said Agata Wronska-Kocab, one of Brzostowicz's partners.
But as one of the first of its type in the country, the clinic also became an example of the potential and risk of the health-care reforms that would follow.
"You have to have a strong will and a strong character," said Maria Einhorn, another partner at the Klodzko clinic. While the practice's budget is based on public funds, the three partners have made it work as a business. Today, Brzostowicz takes home a higher salary than those of her colleagues who are locked into fixed salaries in the nearby county hospital. She and her partners also have enough left over at the end of the year to invest in new medical equipment or upgrade the clinic. In a good month, Brzostowicz can set aside about 30% of her monthly allocation of about zl. 20,000 from the Patients' Funds to pay herself a salary and stash money for future investments.
But despite her success, she takes the accolades in stride. "This is a normally functioning practice and this is the way it should be everywhere," she said.
Shift change
In 1996, Krakow-based Szpital Bonifratrow Sw. Jana Grandego was returned to its original owner, the Order of St. John of God, almost 50 years after it had been nationalized. The 1949 ban on entering the hospital imposed on brothers of the order, whose mission is to serve the poor and suffering, was lifted. From that time on, two years before the government's health-care reform, the hospital had a new lease on life.
"For two years (1997-1999), our hospital was an island in Poland on which we had a legal opportunity to combine commercial and publicly financed services," said Marek Krobicki, the hospital's director.
At that time, Polish health care was dependent on the central state budget and public funds were often wasted by being transferred to hospitals without a prior assessment of their needs and capacities. At the same time, due to inadequate management and lack of funds, patients had to stay in corridors and bribe doctors to be let into a hospital or clinic. Eventually this misallocation of funds caused a financial crisis in the public health-care system producing debts of zl. 7 billion ($1.59 billion), which was eventually cured by the 1999 reforms.
The privatization of Szpital Bonifratrow first began in 1992, when the province's head signed the first of a series of agreements with the order. In 1996, the public hospital was closed down and Krobicki, as the receiver, sacked the staff, later re-employing some employees at the newly reopened private hospital. "I think that it was the only hospital liquidation on such a scale in Poland," Krobicki said.
From January 1997, most of the wards began functioning in a hospital with a new status. "From the very beginning (1997), being a private entity, we have been paying for publicly financed services," Krobicki said. At first, in 1997-1998, the hospital signed a contract for medical services with the province head.
From January 1999, Szpital Bonifratrow has based its activities on contracts with the Malopolska Patients' Funds. But to cope with insufficient public funding, the hospital pays for commercial services, which in 1998 accounted for 15% of the company's revenue (compared with 5% in 1997). "But we cannot rely exclusively on commercial services, since the order's mission is to serve the poor," Krobicki said. "Besides, to be able to compete in commercial services, you need to make huge investments."
For Szpital Bonifratrow, founded in 1609, the 50 years of central rule in Poland were probably its worst. Under the old system, the hospital, like hundreds of other public institutions, didn't have a manager who would take care of the allocation of funds and necessary renovations and investments.
"In 1991 (when Krobicki became the hospital's director), I inherited the hospital in a dreadful condition," Krobicki said. "The devastation had been a gradual process as most funds, over 50 years, which were assigned to the hospital's renovation, were spent somewhere else within Krakow's public health-care network."
There was also no basic medical examination equipment in the hospital. Buying gastroscopy or ultrasound machines at that time was out of the question. One of Krobicki's priorities after privatization was to renovate the building, but the hospital is still in desperate need of new equipment.
Investments, which also include costs of renovating specific wards, have been growing for the past three years. In 1997, Szpital Bonifratrow invested zl. 564 million ($128 million). This figure increased by 40% in 1998 and 67% in 1999. "But it's not enough, as the cost of an ultrasonograph, for instance, is almost zl. 350,000," said Anna Makaruk, deputy director and finance manager at the hospital.
Funding shortfalls make the commercial services paid for by the hospital more important for its budget. "We plan to expand the scope of our commercial services," Makaruk said.
In 1997, thanks to credit, the hospital was able to renovate a one-day surgical care ward, where patients had to pay not only for services but also for a room with accommodation (from zl. 200-zl. 300).
"It's an interesting ward because all the doctors there signed creative contracts with the hospital and their earnings depend on the number of services," Krobicki said. But it is only this year that the ward's revenue will start to cover all the costs and the bank credit will finally be paid.
Last year, money from this ward came to zl. 750,000 and accounted for 50% of the hospital's total revenue from commercial activities. "What we need is time to plan and implement each commercial investment," Makaruk said.
In the future, Szpital Bonifratrow plans to open a chain of small clinics throughout the Malopolskie province. "They will direct their patients to our hospital and will function under our logo," Krobicki said. "Such services might work under the system of private health-care insurance, for which the boom, in my opinion, will start in the fall."
Krobicki is also an enthusiast about medical services to be paid by companies, which should also help to provide a substantial slice of the hospital's revenue in future.
Price of innovation
Meanwhile, medical care providers such as Szpital Bonifratrow and Brzostowicz's family practice, which have set standards for others, have had to struggle against financial constraints because of controversial decisions made by the Patients' Funds. Doctors complain that these funds protect the losers instead of supporting companies, which have improved the quality of their services.
"Our situation is dramatic this year because the Malopolska Patients' Fund cut down the fee per patient on average by 20%," Makaruk said. Cooperation with Patients' Funds is painful. "Last year, instead of making investments or raising personnel's salary, we had to focus on handling a greater number of insured patients, which exceeded the scope of the contract," Krobicki said. This year, because of cuts made by the Patients' fund, Krobicki had to drop his staff's wages by 10%.
Szpital Bonifraterow signed a contract for 3,500 patients this year (zl. 1,800-zl. 7,000 per patient yearly), but, according to Krobicki, it could have been much more. "Last year, for instance, we could have received more patients than the contract allowed," he said. "But if we charged for extra patients, the Patients' Fund could cancel the contract."
Similarly, for the first three years of operations, Brzostowicz's clinic was on a fixed budget granted annually by the province. These days, however, doctors have to negotiate with the Lower Silesian Patients' Fund for money, something that has proved difficult since the launch of the reforms.
"For us the key issue is stabilization as far as the Patients' Funds are concerned," Dr Brzostowicz said. "The assumptions of the reforms are good, but the implementation leaves a lot to be desired."
One headache is that half of each year is now taken up by negotiations with the Patients' funds. Starting in September, doctors have to haggle for new contracts for the following year. Negotiations officially end with the signing of the contract, which this year happened in February. Not only do the doctors start a new year uncertain about their financial conditions, but they are also unable to make long-term investment decisions.
While last year private companies were only given occasional contracts and told by Patients' Funds that the ailing public companies needed the opportunity to restructure, this year they were supposed to get their chance.
"I wouldn't agree with the opinion that Patients' Funds favor public health care," said Zbigniewa Nowodworska, spokeswoman for Anna Knysok, the minister coordinating health-care reform. "It's true that last year the funds were obliged to sign contracts with all public health institutions regardless of their conditions, but they no longer have to do so this year."
But according to Krobicki, history repeats itself. "And the funds underestimate our achievements despite the fact that we tap financial gaps caused by the ailing allocation of public funds with our own resources," Krobicki said. "I think that we already proved that we are a quality and reliable partner." In 1999, Szpital Bonifratrow was granted a three-year quality certificate by the Quality Monitoring Center in Health Care, the only institution of its kind in Poland.
But according to Nowodworska, a Patients' Fund does not decide the future of a public health care entity on its own. "If you look at the results of contracting for 2000, you will realize that political pressure was so significant that most of the Patients' Funds gave up, particularly when their councils were dominated by local authorities' representatives," she said. "It's far easier to put political pressure on Patients' Funds' councils to sign contracts with losers than to decide to close them down."
Due to the reforms of 1999, public medical centers and hospitals are now owned by local authorities. "Last but not least, there is no public opinion pressure behind private medical care, whereas there is always someone ready to protest against closing down a public hospital no matter how big a loser such an entity is," Nowodworska said.
Szpital Bonifratrow's Makaruk hoped that the 2000 contract could still be renegotiated but as she admitted, prospects looked gloomy. "If you work hard and struggle to survive, it's hard to understand the Patients' Funds' policy," she said.
Working toward health
Despite the general frustration about the way public funds continue to be allocated and the other hiccups along the way, the system is working and improving the health care of patients.
When the family doctors in Klodzko received an offer last year from another laboratory in a neighboring town to handle blood analysis, they decided to send 40% of their blood to test the quality of services. When their local lab noticed the significant fall in business, they offered the doctors a 10% discount if 100% of the clinic's business returned to them.
Patients in Klodzko haven't overlooked such changes. "I see an enormous difference now," said Bartlomiej Tyrpula, a 68-year-old patient at Brzostowicz's clinic. "Society has started to be more thrifty. The reform has forced people to be sober."
And the doctors continually work to improve their position and the standard of their services. Every autumn, the three doctors in Klodzko pool their money to make a new round of joint investments. Two years ago, faced with high heating bills from the local district heating plant, the three took out a bank loan to buy a new oil heating system that cost more than zl. 20,000 and new EKG unit that cost zl. 8,000. To ensure a long-term presence in their centrally located clinic, last year the doctors took out another next bank loan to purchase their building from the city for zl. 180,000.
Szpital Bonifratrow, according to Krobicki, is already a respected name in Krakow. "Personnel underwent several training schemes and I am sure that old habits are now dying out," Krobicki said. "And we will create more opportunities for doctors to make more money in our hospital. But one shouldn't forget that they can work only 24 hours a day."
Indeed, keeping customers satisfied does take a lot out of the doctors, who sometimes yearn for the shelter of the state-run medical system. "I go through phases. Sometimes I am really tired of all the paperwork and bureaucracy. I know I could return (to the hospital) and they would be happy to take me back," said Wronska-Kocab. "But for me the most important thing is that I work for myself."
