Racing toward real reform
By : Anna Kocinska
One year after the launch of a comprehensive reform, the national health care system is finally out of danger.
Despite grappling with funding shortfalls, clashes with the medical community and general frustration among the populace on how the reform was handled, clinic managers, executives with private health care firms and medical personnel now say the new system has a chance of surviving.
The biggest area of improvement, they said, is that the main charge of the reform giving patients choice by creating a system whereby private and public health care providers compete for long-term contracts is slowly being realized.
"One can already see that many managers of public hospitals and clinics realize they have to start the restructuring process if they want to survive," said Michal Pludowski, specialist for public contracts at private emergency company Falck.
The reform, which kicked off in January 1999, had ambitious goals. The idea was to transform the under-financed, almost entirely public system into a new scheme that would combine public and private health services. Under the reform, 17 regional Patients Funds would contract with local hospitals, clinics and emergency services both public and private to provide medical care for citizens within a certain jurisdiction.
The promise was that patients would be able to choose which clinics or hospitals they visited as opposed to the old system whereby the state dictated which outlets they had to go to for care. By combining public initiatives with private services, drafters of the reform hoped to eventually eliminate the long lines, bribes and poor conditions that much of the populace was subjected to in the course of trying to receive basic health care.
The reform was also supposed to lead to a better allocation of resources, having public money follow specific patients as opposed to funds being blindly dispersed to oftentimes empty hospitals and clinics. That method of funding had caused a crisis in the system, which had racked up debts of zl. 7 billion ($1.7 billion).
"The reform couldn't have been delayed," Pludowski said. "If it hadn't been introduced last year, the patient would have died and there would have been nothing to save."
The procedure has been painful. The reform, which was largely seen as being badly organized, caused massive confusion last year as individuals tried to figure out exactly which clinics they could visit and how their bills would be paid. At the same time, funding for the 17 Patients Funds trickled in slowly from the government, and once the money came, it was generally seen as being insufficient. That prompted debate about increasing the 7.5% individual contribution that currently pays for national health care to 11%.
Health Ministry officials, however, have said that tax increases are not the immediate answer. The first step, they said, is to properly allocate existing resources.
"There is no such (level of) contribution that would be considered as sufficient," said Zbigniewa Nowodworska, spokeswoman for Anna Knysok, the government-appointed coordinator of the health reform. "What has to be done is tapping the holes in the system. Cost-effectiveness, that's the hidden source of funding."
Doctors and nurses also took issue with the reform, which in the short term did little to improve their meager salaries. On the private sector front, companies objected to the way some funds contracted out services, saying the Patients Funds were biased toward public agencies.
The combination of these factors has given health reform a bad reputation, despite the fact that those working in the system say things are improving. According to a January survey by polling group Pentor, 77% of respondents said they thought the health care system today provided worse care than a year ago.
Shock therapy
Underneath the hum of criticism and discontent, private companies working with the newly established Patients Funds said they were beginning to see change in health care. They said that, faced with being left out of funding if they are not competitive, public hospitals and clinics are slowly beginning to restructure.
"We force improvement of service quality among our competitors," Falck's Pludowski said. "I don't think Michal Borkowski (director of the public emergency service in Warsaw) would have decided to lease new ambulances if it had not been for competition with us."
Falck, a subsidiary of the Denmark-based medical company, operates in Warsaw, Gdansk, Poznan, Szczecin and Krakow and handles about 120,000 patients nationwide. Falck provides a wide range of medical services including medical transport services and emergency calls. The company has operated in Poland since 1991.
Companies such as Falck are also providing jobs for medical personnel that public agencies are shedding as they restructure. Pludowski said that 90% of Falck's staff in the town of Zyrardow formerly worked for the state. "We wouldn't find better personnel elsewhere," Pludowski said.
Falck provides services to the town of Zyrardow through a contract it has with the Mazowiecka Patients Fund, which covers Warsaw and the surrounding area.
Pludowski said that competition, not increased taxes, will push up health care wages. At Falck, doctors who work in the emergency unit on average earn zl. 3,000 a month. In the public sector a surgeon with as much as 30 years of experience usually takes home around zl. 1,500 per month.
Ryszard Sliwinski, an anesthesiologist with 24 years of experience, works for Falck's Warsaw emergency service. The higher pay has kept him from having to find part-time work to supplement his salary a common occurrence in the health-care sector. "I am a full-time employee at Falck and I work nowhere else," he said.
Overall, though, competition is coming slowly to health care. Private companies accuse Patients Funds of favoring public agencies even if they are more expensive and provide lesser-quality services.
For example, Falck last year submitted to the Mazowiecka Patients Fund offers to provide emergency services for 48 different areas. In the end, however, the company only won one contract, for emergency service in Zyrardow. The company, however, has not given up hope of making more inroads in the future.
"Thirty percent out of the (total) market of 40-million people would satisfy us," Pludowski said. "But to achieve that we need good will on the part of Patients Funds. Today, nothing happens without their consent."
Last year, private companies said they were repeatedly told by the Patients Funds that the public companies needed a chance to restructure. The private enterprises were only to be given contracts on a sporadic basis, thereby spurring competition but not causing an overall crisis in the public sector.
But as health care reform enters its second year, Patients Funds are still showing a tendency to protect public bodies. That, Pludowski said, keeps inefficient, poorly managed clinics and hospitals alive.
"The only way to improve the situation in the health care service is to perform a surgical incision," Pludowski said. "The ailing hospitals and clinics have to be closed down."
For example, while private companies are pushing to win contracts with the Patients Fund covering the Wielkopolska region of western Poland, no single public medical center has closed its doors. This is in spite of the fact that several are close to bankruptcy.
"It would be good to close down the worst companies, but we have no impact on that," said Alicja Stachowiak, spokeswoman for Wielkopolska Patients Fund. "It's up to local governments, which so far have expressed no willingness to risk socially unpopular decisions."
Halina Roszkowska-Filip, a spokeswoman at the Mazowiecka Patients Fund, acknowledged that the fund faces a dilemma of whether to contract out to better-qualified private companies or protect the public institutions.
"We are constantly in the public eye, so it's hard to make unpopular decisions," she said. "And under various pressures we usually give up the idea of rejecting an offer of a public tender, thus saving it from a final economic disaster."
The reform has also been derailed by public sector employees, many of whom are afraid of losing their jobs. As many as 20,000 public sector employees will have to be shed if the public system is to become efficient, reformers have said. At the same time, doctors and nurses are still unsatisfied with their pay levels and are constantly threatening to strike. "Nurses can't understand the simple truth that they earn so little because they work in inefficient companies under an inefficient system," Pludowski said.
All of this stands in the way of true change, executives said. "As long as we don't close down companies that prove to be inefficient, we won't achieve the average European level of health care services," Pludowski said.
Pushed from the nest
Wielkopolska Patients Fund so far has been the only entity to actively push for public institutions to reform. The Patients Fund closed down many public health care clinics and asked doctors to open their own practices with leased equipment. That move resulted in the birth of almost 600 new, private-sector clinics.
"It's still too early to tell whether it's going to be a success," Wielkopolska Patients Fund's Stachowiak said. "The privatized entities need time to find their place on the market."
But many doctors criticize the program, saying that it forced too much change too soon.
Malgorzata Stranz, a pediatrician with 13 years' experience, last summer decided to give up her job at a public clinic and start her own practice. "Honestly, I didn't have a choice because the clinic was to be closed down and privatized anyway," she said. "I didn't want to be unemployed, so I decided to run the clinic on my own."
Stranz said what she failed to realize, however, is how difficult it would be to make the clinic work financially. "I wouldn't have done it if I knew what I know today," she said.
Stranz said that she based her business plan for the clinic on the amount of money the Patients Fund said she would receive per patient which at the time was estimated to be zl. 80-zl. 120 per patient annually. "But, to my surprise, during December negotiations it turned out that we will get 30% less than we expected," she said.
Her clinic has a contract to serve roughly 1,000 patients. The fund pays her zl. 60 per patient annually for 24-hour, seven-day-a-week health care. That means that Stranz has a total of zl. 60,000 annually to pay for her two nurses and the extra expense associated with X-ray machines or the use of other sophisticated equipment.
"My operating costs are simply too high, this business has no chance to become successful," she said. "Maybe large clinics can do better because they have far more patients."
