public health and the economy - WHO/Europe

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WHO
REGIONAL OFFICE FOR EUROPE
____________________________
PUBLIC HEALTH
AND THE
ECONOMY
Report on a National WHO Seminar
Bucharest, Romania
23–25 September 1997
SCHERFIGSVEJ 8
DK-2100 COPENHAGEN Ø
DENMARK
TEL.: + 45 39 17 17 17
TELEFAX: + 45 39 17 18 18
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E-MAIL: [email protected]
W EB SITE: HTTP://WWW.WHO.DK
1998
EUR/HFA target 27, 34
TARGET 27
HEALTH SERVICE RESOURCES AND MANAGEMENT
By the year 2000, health service systems in all Member States should be managed cost-effectively, with
resources being distributed according to need.
TARGET 34
MANAGING HEALTH FOR ALL DEVELOPMENT
By the year 2000, management structures and processes should exist in all Member States to inspire,
guide and coordinate health development, in line with health for all principles.
ABSTRACT
The WHO policy for health for all in Europe stresses the need to mobilize new
partners. Many sectors can help to improve health. WHO organized a seminar to
show the relationships between health and economics, and to allow leaders in
public health and the economy to share experience with health reforms in
countries. International experts provided various tools and frameworks for
understanding the interrelationship between the economy and health. Issues
related to the Health Insurance Law in Romania were discussed with an
international team and the Ministry of Health. Representatives from both
chambers of Parliament and from the ministries responsible for finance, industry,
internal affairs, commerce, labour and social protection, and transport were
invited to participate, although some could not attend. This highlighted the
difficulty of coordinating communication between the health and other ministries.
The Seminar faculty included international experts in the field of health and
economics and health care reforms, and Romanian experts. The seminar
participants reached several conclusions, including the need to better manage
tensions between calls for increased health care funding and for better use of
existing funds, and tensions between spending on health care and on healthenhancing measures in other sectors. The participants recommended a renewed
priority for primary care, increased attention to quality assurance mechanisms
and the careful design of any privatization of health care financing and delivery.
Keywords
PUBLIC HEALTH
ECONOMICS
LEADERSHIP
HEALTH CARE REFORM
HEALTH FOR ALL
EUROPE, EASTERN
© World Health Organization
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abstracted, reproduced or translated into any other language (but not for sale or for use in conjunction with commercial purposes)
provided that full acknowledgement is given to the source. For the use of the WHO emblem, permission must be sought from the WHO
Regional Office. Any translation should include the words: The translator of this document is responsible for the accuracy of the
translation. The Regional Office would appreciate receiving three copies of any translation. Any views expressed by named authors are
solely the responsibility of those authors.
CONTENTS
Page
1. Introduction ..................................................................................................................................... 1
2. Outline of the report ......................................................................................................................... 2
3. The relationship between health and economy .................................................................................. 2
4. Health care reform............................................................................................................................ 5
4.1
4.2
Action to improve health care .............................................................................................. 5
The public/private mix ......................................................................................................... 7
5. Recommendations and conclusions .................................................................................................. 9
5.1
5.2
5.3
Research and training........................................................................................................... 9
Health care reform and the Health Insurance Law ................................................................ 9
Intersectoral collaboration and improved communication ................................................... 10
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1. Introduction
The WHO policy for health for all for the twenty-first century in Europe (now in draft) stresses
the need to mobilize new partners if health is to be repositioned in development and health gaps
closed. There is a potential for many sectors to make major contributions to improve health, and
there are many opportunities for multisectoral activities to create living and working conditions
that will promote better health.
There is a need for improved communication between the economic and health sectors in all
countries. Typically, ministries of health and of finance do not share the same viewpoints:
•
finance ministries deal with fiscal crises and indicators whereas health ministries deal with
health crises and indicators;
•
finance ministries have expenditure control goals, whereas health ministries want to secure
more resources for expenditure on health services;
•
finance ministries believe that health care is an industry like any other and want to apply
standard forms of economic analysis and pricing; health ministries, on the other hand,
believe that health care has very special characteristics and standard forms of economic
theory can be very misleading and wrong;
•
finance ministries do not believe that health is always or necessarily the best use of
resources, whereas the mission of health ministries is to secure public resources to try to
meet needs.
With the aim of increasing the collaboration between the two sectors in working together for better
health for the population, the Romanian Ministry of Health hosted and supported a seminar in
Bucharest, Romania, from 23 to 25 September 1997. Participants included representatives of
Parliament, the Ministries of Finance, Trading and Industry, Internal Affairs and Health, local
government, hospital directors, chief executive officers from industry, trade union leaders,
academic leaders from schools and universities, and representatives of medical and nursing
associations, health insurance funds, the World Bank and UNICEF (list of participants in Annex 5).
The seminar was held in two parts. The first part was a one-day meeting for the economic sector,
aimed at developing a clearer understanding of the role of the health care sector and of existing
relationships between health and the economy. A second goal was to generate some creative
ideas about what the various economic sectors could do to improve health in Romania. Senior
parliamentarians representing health and other sectors from both chambers attended the Seminar,
as did the Romanian President’s adviser on social policy. Although few cabinet ministers
managed to participate, owing to other commitments, several sent officials from their ministries.
The second part was a two-day meeting for the public health sector, also aimed at developing a
better understanding of the relationship between the economy and health and of the economics of
health care. The discussions throughout the Seminar were led by Dr Pop and Dr Olsavsky.
The seminar was opened by Professor Dragulescu, Minister of Health. Dr Herbert Zöllner, WHO
Regional Office for Europe, described its scope and objectives as increasing the mutual
understanding between the economic and public health sectors in Romania and their understanding
of the interrelationship between health and economics, so as to promote health for all.
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Separate discussions were also held with Professor Dragulescu, Minister of Health, Dr Cristian
Vladescu, General Department for Reform, Programmes and Accreditation, Dr Victor Olsavsky,
International Relations Department, Dr Silviu Radulescu, Health Insurance Department at the
Ministry of Health, and Professor Nae Constantinescu, Adviser to the President of Romania.
They focused on the implementation of the Health Insurance Law and ways to improve the
effectiveness and efficiency of the health care system under the constraints imposed by limited
resources. In discussions with the Minister and Professor Constantinescu it was stressed that
complementary measures such as on public health, primary care, and accountability, quality
development and training needed to be considered. The President of the Health Commission also
recognized the need for a balance between expenditure on health care services (such as
physicians, hospitals and pharmaceuticals) and expenditure on improving the daily
socioeconomic environments in which people live, work and play, so as to prevent illness and
the need for health care. In this regard, expenditure to improve the daily environments of
children was awarded a very high priority.
During the seminar, a press conference was held to allow the media an opportunity to gain a
better understanding of the economic aspects of the health care reform in Romania. Progress to
date on the implementations of the Health Insurance Law for 1 January 1998 was reviewed, and
outstanding issues currently under study were identified.
2. Outline of the report
This report summarizes the major tools and frameworks that were provided by the Seminar
faculty with regard to the economics of creating health and health care reform. The italicized text
under each heading relates to current activities in Romania and highlights some of the input by
the Romanian faculty and participants. Section three provides a summary of the major tools and
frameworks for the relationship between health and the economy. In section four, the major tools
and frameworks with regard to health care reform are provided. The last part of the report
summarizes some of the specific recommendations made by international experts with regard to
current changes and activities in Romania.
3. The relationship between health and economy
The economic sectors in Romania are currently not actively involved or interested in health.
However, the Chairperson of the Financing Commission of the Senate highlighted the need for a
better understanding of the possibilities for all sectors to contribute to better living and working
conditions. He suggested, for example, that the cost of health care for accidents in workplaces
should be borne by private companies, and that expenditure on heat and energy could be
reduced by up to 40% in the districts. These resources could be used to finance investment costs
in health.
The WHO health for all policy stresses the importance of promoting equity in health among and
within the Member States. Countries can promote a healthy physical environment and healthy
living, improve health through reducing differentials in income, education and employment,
encourage multisectoral collaboration for health, and ensure that the health system functions well
and provides quality care.
Health policy and economic policies are interrelated. A healthy population is critically important
for economic development – “health is everybody’s business”, so to speak.
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There are two fundamental questions related to health and health care in a society, as pointed out
by both Professor Evans and Professor Stoddart:
1. Why do people fall ill?
2. Why do people get well again once they become ill?
The first question relates to society as a whole and the social and economic environments,
thereby including all ministries. The second question relates primarily to the health care sector
and the health ministry.
People’s health and wellbeing is influenced by their physical and social environments and their
lifestyles. The physical environment can be targeted through measures for cleaner air and water,
etc. Lifestyles can be targeted through education and information.
The relationship between health, health care and the economy is described in Figure 1.
Fig. 1. The relationship between health, health care and the economy
a
Health
Health Care
b
d
c
e
f
Economic performance
(e.g. economic growth)
The arrows represent how each element influences the others:
(a) A healthier population could be thought to require lower levels of health care (although this
has not been true in many societies).
(b) Good health care improves people’s health.
(c) A healthier population is more productive and therefore contributes to a better overall
economic performance (and to economic growth).
(d) A better economic performance in society as a whole contributes to a wealthier and healthier
population (given that it is relatively evenly distributed), through the social and physical
environment.
(e) Health care spending takes resources away from other purposes – the question is where are
they best spent?
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(f) A sound economy provides the capacity to finance and/or provide adequate health care.
On a macro level, many sectors are involved in and influence health directly or indirectly. Some
have health as an objective in their service provision, for others it may rather be an outcome. For
example, health is clearly the objective of the health care sector and usually one of the objectives
(although perhaps not the primary one) of the other health-related sectors, but it is not typically
an objective of other sectors. Nevertheless, all sectors share the common characteristic that their
policies and actions have health outcomes.
Fig. 2. “Health is everybody’s business”
Does the sector’s policy have… …
Health as consequence?
Yes
Health as
Yes
objective?
No
No
This creates opportunities for intersectoral collaboration. Different sectors should collaborate, for
example, at the regional level through regional managers in order to work together for a healthier
and more productive society.
Fig. 3. Intersectoral collaboration
Health care sectors
•
•
•
•
•
Home care
Hospitals
Physicians
Pharmacies
Community health
Other health-related sectors
⇔
• Social services
• Housing
• Child and family services
Other sectors
•
•
•
•
•
Economic development
Tourism
Environment
Transport
Education
On a micro level, a private company could, for example, find it profitable to invest in the health
of its employees. The relationship between a healthy working environment, the health of the
workers and the productivity and profitability of the company could be depicted as follows:
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Fig. 4. The health and profit circle
Income level &
economic growth
Working conditions
Profit level
Productivity
Health of
workers
Level of
morbidity &
mortality
Costs in
training, sick
leave etc.
Working conditions at the workplace affect the health of the workers, which in turn affects the
level of morbidity and mortality in the workplace. If workers are off sick or die prematurely, this
has a direct impact on the costs of hiring and training new workers, sick leave, terminal benefits,
etc. This, in turn, affects the profit level of the company, which has an impact on working
conditions, and in the long run it has a negative impact on income level and economic growth in
the country (when the company’s profits are being reinvested in the country). As Ms Cederlöf
demonstrated, the circle could be transformed into a healthy circle, where good working
conditions improve the health of the workers and reduce the level of morbidity and mortality.
This would affect productivity in a positive way, keep costs low and improve profits.
Both the physical and social environments affect health and prosperity in a country. There are
several ways in which the economic sectors could be made and/or encouraged to contribute to
better health. For example, could energy consumption and industrial pollution be reduced, or
transport options other than road traffic promoted? The basic policy mechanisms to promote
health include regulations, taxes, subsidies, incentives and education. These mechanisms could
be combined to achieve the biggest impact. There could, for example, be an interaction between
regulation and information campaigns. Some first thoughts of the participants on what could be
done by other sectors to promote health is provided in Annex 3.
4. Health care reform
4.1 Action to improve health care
The participants considered it a pressing need to find additional financing and resources for the
health care sector. The share of national income spent on health care should be increased, and
new monies mobilized for this. “The available infrastructure can provide less and less. There is
therefore a need to prioritize and focus limited resources.” “Resources have traditionally been
allocated on an historical basis, which means that there have been no incentives to improve.”
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Many participants during the second and third days felt that improved remuneration of physicians
was a key to cooperation and to improving the quality of healthy care, and that the current health
care reform might accomplish this.
Dr Radulescu introduced the principles of health care reform in Romania (see Annex 1) while
Dr Vladescu described the determinants of health.
There are several areas where policies and incentives could be implemented to improve health
care delivery. Professor Saltman pointed to the need to make a distinction between the demand
and supply side when looking at where to make interventions to improve the health care system.
Fig. 5. Supply versus demand side interventions
Demand
Funding
• tax
• social insurance
• private insurance
• self pay (including under-thetable payments)
Supply
Allocation mechanisms
• budget
• contract
• reimbursement
• prospective payments
• retrospective payments
Production
• hospitals
• health centres
• social/home care
Professor Saltman pointed to the difficulty in – and often danger of – intervening on the demand
side. It is easier to intervene in the areas of allocation mechanisms or production to create the
right incentives to ensure an equitable health care system.
Professor Evans pointed out that in any country there will always be people who argue for the
need to increase resources in the health care system and to increase physicians’salaries. Every
country faces the same set of analytical problems in the finance and delivery of health care, and
also the same choices. These are independent of the level of gross domestic product (GDP)
devoted to health care, but rather arise from the nature of health care as a “commodity”. The
need for health care, unlike other consumer products, is uncertain and is largely determined by
the suppliers of services. Furthermore, there are significant “externalities” associated with the
provision and consumption of health services – people care that others have access to necessary
services, and equity is as important a policy goal as efficiency in this sector. Expenditure is
always somebody else’s income: it has to be financed somehow, thus income and expenditure
must always balance (Fig. 6).
Fig. 6. An accounting identity
Money raised ≡ Expenditure on health care ≡ Incomes earned
T+C+R ≡ PxQ ≡ WxZ
T = taxes (including social insurance)
R = private insurance
C = charges to users (including under-the-table payments)
P = price
Q = quantity
W = rate of payment to inputs (e.g. wage rate)
Z = inputs (e.g. number of wage earners)
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Ideally, the need for health care should determine the quantities of various types of service used
(Q), which in turn determines the need for inputs (Z). In practice, however, Q is frequently out of
balance with need, sometimes more, sometimes less. Moreover, most health policy debates in
most countries focus on the first and third terms in the accounting identity – how much in total to
spend on health care (which is directly related to the number of providers and how much they
will be paid) and how the level of spending is to be financed. (A set of summary propositions
offered by Professor Evans concerning such debates, their origins in issues of distributional
equity and the role of markets in resolving the issues, can be found in Annex 2.)
Instead, the focus should be on how to increase health value for money, i.e. how to make better
use of the available resources. Some examples of how to improve the cost-effectiveness of health
care include decentralizing management, restructuring hospitals, building incentives into the
methods of paying health professionals, and focusing on primary care.
Cost-effectiveness can generally be defined as the least costly way of obtaining a particular
outcome, although information on cost-effectiveness does not by itself indicate whether the
outcome is worth obtaining. That requires assessment of benefits as well. Cost-effectiveness is
also not the same as cost-cutting or cost-shifting, neither of which takes account of effects or
benefits.
Efficiency could be measured through:
•
minimizing costs: preferring the least expensive of two identical alternatives;
•
cost-effectiveness analysis, where outputs are measured in physical terms through, for
example, life expectancy, and costs are measured in monetary units; the alternative with the
highest output per money unit is the most cost-effective;
•
cost-utility analysis, which is a form of cost-effectiveness analysis where costs are measured
in monetary terms, and outcome is measured using health effects adjusted for their impact
on the quality of people’s lives;
•
cost-benefit analysis, which measures both costs and benefits in monetary terms.
A good information system is needed to enable such an analysis to be carried out. Evidence
needs to be taken with care. Systematic reviews, such as the Cochran Collaboration studies,
could be used. It is important to remember, however, that the fact that an intervention is costeffective does not necessarily mean that it should be carried out – it might not, for example, be a
priority for the country.
4.2 The public/private mix
When talking about privatization and the public/private mix, it is important to make a distinction
between funding and provision, each of which could be private or public. In theory, a system
could have any mix between public/private funding and provision, as shown in Fig. 7.
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Fig. 7. Public/private mix
Funding/provision
Public provision
State
Regional
Municipal
Public corporations
Private provision
For profit
Not for profit (e.g. NGOs, religious, community-based care)
Public funding
Private funding
X
(X)
X
X
One reason often stated for privatization is increased competition. However, a distinction should
be made between competition, which is a process, and privatization, which frequently relates to
ownership. Competition is not restricted to the private sector; it could also be promoted in the
public sector, e.g. through public/planned markets.
There are some difficulties with financial market competition. These include adverse selection,
selective disenrollment, high administrative costs, heavy state regulation, de-emphasizing
prevention, and instability (e.g. bankruptcies).
Privatization is a means, but it is important to be clear on what the end is expected to be. Before
privatizing, it is important to ask: Why do it? Who would benefit? Who would pay?
The same sort of questions need to be addressed when implementing a national health insurance
system, i.e. what do we want to achieve, for whom (who will benefit) and how (how should it be
financed)? Possible pitfalls when introducing a national health insurance system include low
levels of revenues raised, inadequate coverage and problems in equity. A social insurance system
is more equitable than a private insurance system but less so than a tax-based system.
Privatization is seldom as simple as it is imagined to be. Prerequisites are a capital market (who
are the buyers?), working capital, state regulation and control (a regulatory environment needs to
be put in place before privatizing), and extensive training of managers.
Even in a deregulated system there will always be an important role for the state. The state will
need to monitor and evaluate any system, public as well as private, and to set the rules and
regulate the contracts between the public and the private sectors.
Although attention is often focused on the delivery/provision/ownership dimension of
privatization, it should be kept in mind that it is the public/private mix in financing that is perhaps
most difficult – and critical – to resolve. It is this dimension, requiring a significant public
component, that largely determines the performance of a health care system on expenditure control
and equity goals. In western Europe there has been a reluctance to rely on private funding.
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5. Recommendations and conclusions
5.1 Research and training
It became clear from discussions with the participants in the second seminar and with Ministry of
Health officials that there is a need in Romania for more applied research in the field of health
economics to support the current reforms, and for the reforms to be monitored and evaluated.
Participants agreed that collaboration with universities and institutes, and especially with their
economics departments, should be encouraged and developed. One way to go about this would
be to include students and researchers from these institutions in international teams of foreign
experts carrying out applied research studies in the country.
As regards training, high priority should be given to augmenting existing training programmes in
health economics and management and to implementing new programmes. The current health
care reforms will greatly increase the demand for skilled managers and economic analysts, both
centrally and in the districts. In particular, health economics training will need to focus not just
on methods of evaluating the cost-effectiveness of clinical services, but also on methods of
analysing expenditure control and the market behaviour of suppliers and patients. The ability of
the state as purchaser to monitor providers will also require improved information systems and
individuals trained to operate them.
5.2 Health care reform and the Health Insurance Law
Health care reform has brought into the spotlight the choice between using the existing monies
allocated to health care more effectively and raising new monies to increase the share of national
resources going to this sector. While the solution will have to respect local values, it was
emphasized in the seminars that increasing the share of resources does not remove the need for
increased attention to assessments of effectiveness and efficiency. Obtaining the best value for
money should be a policy objective at any and all levels of national spending on health care.
Participants also agreed that renewed priority should be attached to primary care, which is the
most critical factor affecting system-wide cost-effectiveness. In addition, more attention should
be paid to a population-based system of quality development that routinely monitors quality at
the delivery level as well as investigating cases which may come to the attention of colleagues of
providers. Further, attention should be given to specifying the expected health benefits of the
current reforms. What specific health goals are the reforms intended to achieve (and for which
groups) in the short (3–5 years) and longer term? Procedures also need to be put in place to
monitor and report on the equity of the new system, particularly as it affects rural areas.
With respect to the new Health Insurance Law, participants were warned against the risks of
allowing a private health insurance system to work in parallel with the social insurance system.
If there is a parallel private health insurance system, the Government should make sure that the
same services are not covered in the private insurance as in the social insurance or public system.
If the same services are covered, there is a risk that the private insurance will seek out those who
do not need care and only cover healthy people.
Another warning based on extensive international experience with privatization in health care
systems concerns the risks of allowing physicians to work in both the private and public sectors.
As Professor Periera showed, this gives them an incentive to do more private work and to
persuade patients to opt for private rather than public treatment.
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Overall, participants emphasized the need for the state to monitor any new arrangements
carefully and to be ready to make any necessary adjustments.
5.3 Intersectoral collaboration and improved communication
Tensions relating to the level of national resources spent on health care and the design of
arrangements for allowing an increased private component in health care financing and delivery
are not the only important questions, although they are the most visible at present. In the long
term, the balance of spending between the health care system and other social systems that affect
health (income security, housing, education, retraining programmes, safety programmes,
assistance to parents for care of children and the elderly, etc.) is perhaps even more critical to the
health of the nation. The social and economic environments in which people live, work and play
are the underlying determinants of health.
An important and currently unmet challenge is, therefore, to engage other sectors explicitly in
assessing the potential health-enhancing effects of investments in other social systems. Such
assessments should also involve participants from business and labour, as they would result in
important policy or production changes in the private sector. Also, significant opportunities
could occur at district level for balancing expenditure between health care services and other
public health or social services with the overall aim of improving health.
The Seminar underlined the need for improved communication intersectorally within
government. Consideration should be given to the possibility of creating interministerial
committees to improve communication and to coordinate policy efforts directed towards
improving the health of the population and that of specific target groups.
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Annex 1
THE HEALTH CARE REFORM IN ROMANIA
OVERVIEW
Romania lies in south-eastern Europe, covering an area of 237 500 km2 with Bucharest as its
capital. The 1992 census numbered 22 810 035 inhabitants, of whom 54.3% lived in urban areas.
The ethnic structure of the population was: 89.47% Romanians, 7.12% Hungarians, 1.76%
Gypsies, 1.65% other nationalities.
The official language is Romanian, the minorities being entitled to use their native language.
According to the 1992 census, 86.81% were Orthodox, 5.10% Roman Catholic, 3.52%
Protestant, 1% Greek Catholic, 3.57% other religions.
Romania is a republic, governed by a President and two Chambers of Parliament (the Senate and
the Chamber of Deputies), directly elected by the people for a four-year period. After 1989, the
political system changed and the country moved in the direction of liberal-democratic regimes.
The district (judet) is the basic administrative unit. There are 41 districts, with an average
population of 550 000 inhabitants (ranging from 232 951 to 874 219 inhabitants, at 1992 census).
Bucharest had a population of 2 339 156 inhabitants. Each district is divided into 3–6 territorial
areas, each of which has at least one hospital, one or more polyclinics and a network of
dispensaries. Smaller administrative units are the towns and communes.
The local authority is represented by the local council with the mayor holding the executive
power. Both the local council and the mayor are publicly elected, for a 4 year period. The district
council coordinates the activity of the local councils. their relationship is based on the
democratic principles of local autonomy, decentralisation of power and public services,
collaboration in solving common problems, and there is not subordination relation.
The Government is represented at local level by the Prefect. He is appointed by the Government
and his role is to coordinate and supervise the public services.
Since the 1989 revolution, Romania has gone through a period of rapid and major changes. In
every sector – administrative, social, health, education, etc. –reforms have been undertaken
against a background of economic crisis, with a steep fall in GDP and rising inflation together
with a sharp increase in unemployment. The indices of GDP fell from 113.0 in 1989 to 84.8 in
1992, than rose to 89.4 in 1994. The average inflation rate has known variations, as follows:
10.3% in 1991, 9.6% in 1992, 12.1% in 1993, 4.1% in 1994, 2.1% in 1995, and 1.5% for the first
two months of 1996. The unemployment rate rose from 3.0% in 1991 to 12.9% in 1994. The
unemployment rate at 20 March 1996 was 9.4%.
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THE HEALTH CARE SYSTEM
Organizational structure of the health care system
The health system is almost entirely owned and financed by the state. It is coordinated by the
Ministry of Health through 41 district health directorates and the Bucharest Health Directorate,
and consists of a network of hospitals, polyclinics, dispensaries and other health institutions. A
certain number of highly specialized or single specialty hospitals, medical institutes and centres,
and institutions for the continuing training of doctors and nurses are directly under the Ministry
of Health. As well as these, smaller networks of health facilities are owned by other sectors that
have responsibilities in health care services provision, e.g. the Ministries of Transport, National
Defence, Internal Affairs, Labour and Social Protection, and the Intelligence Service.
Medical services are provided by physicians and other types of medical staff trained and paid by
the state. Since 1990, the Ministry of Health has also authorized private practices.
The main functions of the Ministry of Health carried out through its specialized departments, are:
to set the national health policy, control and coordinate different activities, analyse and evaluate
medical outcomes, plan financial and human resources at national level, and assure national and
international collaboration in the health care field.
The basic administrative unit in the organization of the health services is the district (judet). The
local health authority is represented by the district health authority. Each district health authority
(including Bucharest) is headed by a council board. Executive power lies with the director of the
district health directorate, usually a physician who is appointed by the Minister of Health with
the prefect’s agreement. All public health care facilities are under the control of the district
health authorities.
Health status of the population
The mortality rate rose from10.6/1000 inhabitants in 1990 to 12/1000 in 1996, while the birth
rate fell from 16/1000 in 1987 to 10.5/1000 in 1996. As a result, the population has shown a
negative growth rate since 1992.
The birth rate is similar to that in other European countries but the mortality rate is one of the
highest in Europe. Life expectancy is thus almost six years lower than the average of European
countries. Life expectancy at birth is 69.5 years.
Infant mortality is, however, improving. In 1996 it was 21.2/1000 newborn children compared to
26.9/1000 in 1990. Even so, infant mortality rate is three times higher than the European average
and twice as high as the eastern European average.
The major causes of death are cardiovascular diseases, tumours, accidents and respiratory
diseases.
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HEALTH CARE REFORM
The Health Insurance Law
The main declared objective of the Ministry of Health is to reform health care. To attain this
objective, the Ministry has taken into consideration domestic and international experience of
health reforms, especially in eastern European countries.
The strategy of the health care reform started with assessing the health care needs in terms of
governance, regulations, resources and health issues and defining clear objectives of the health
care reform.
The main objective of the health reform is to define a new set of rules and regulations. The most
important change in the legal framework was the approval of the Health Insurance Law by the
Parliament, a law that was promulgated in July 1997.
The Health Insurance Law helps to establish more clearly the elements of a new health care
system. Under the Law there is universal coverage and a new system of collecting money is
going to be implemented. Local sickness funds are created and money is collected from
mandatory income taxes of employers and employees. For unemployed people and other
categories of the population (disabled and handicapped people, pensioners), the state pays a
monthly fee to the sickness fund of each district.
The Law stipulates the separation of purchasers and providers of health services, the latter being
the health insurance house that will act as a third party. The Health Insurance Fund (Sickness
Fund) will buy curative services, while services as health promotion, disease prevention and
national health programmes will be financed through the Ministry of Health.
The Law gives to medical doctors and hospitals autonomy and incentives to provide effective
and efficient services. The relationship between purchasers and providers (health insurance
houses and health care facilities) is based on a contract in which quality standards, prices and
services provided are listed.
The Law will also make the population and health care professionals more aware of the cost of
medical services. As the impact of economic and political factors will become weaker, the
overall level of health care funding will reflect more closely the options of society to allocate
resources to this area.
The Health Insurance Law, which was put into operation on 1 January 1998, will lead to the
decentralization of the health care system. Some roles and responsibilities of the Ministry of
Health will be transferred to other governmental and nongovernmental organizations like health
insurance companies, the Colleges of Physicians and of Pharmacists, and local authorities. Some
functions will be transferred once the College of Physicians (a professional, legally recognized,
association of physicians) is established. Among these are regulation of professional activities,
planning the number of medical staff (together with the Ministry of Health), and representation
of professionals (physicians) to third party payers.
Private primary and secondary health care practices are being set up, although these represent a
very small percentage of medical care. There has been a greater degree of privatization in the
dental care area.
EUR/ROM/POLC 02 02 02
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The Ministry of Health is coordinating and managing the decentralization process. A greater
degree of devolution is wanted, in the sense that responsibilities and organizational and financial
independence in decision-making should be transferred to regional and local levels.
At present, centralized planning has been rejected in favour of distinct programmes focused on well
defined and priority problems. Correlation of the objectives with the available resources is being
observed, and an adequate information system set up. Encouragement is being given to the
decentralization of planning, an increased role for the community, and the transfer of
responsibilities to new institutions such as the College of Physicians, insurance services, and
nongovernmental organizations.
Programmes are being drawn up within the general restructuring of the health system and in
collaboration with the World Health Organization, the World Bank, the European Union, and
agencies of the United Nations.
Reducing central administration and increasing local accountability and decision-making power is
one of the main objectives of the health reform. Planning is expected to be a mainly local process,
and to take the form of the best possible response to the population’s demands in the light of scarce
resources. Although formerly central planning (e.g. capital or manpower planning) was based on
proposals from the districts, planning at the local level would have the advantage of setting goals
and objectives in accordance with real local needs.
As hospitals will receive global budgets, they will have to plan their own activities within the limits
of those budgets. A new spending category in financing, independent endowment, has already
allowed for local procurement of equipment without Ministry of Health approval. An evaluation of
the draft strategy has, however, revealed poor financial support for the reform and weak
institutional capacity to implement it. The reform experiment run in eight counties from 1994 to
1997 did not attain its aims. The main changes sought – better health outcome and health care
performance by improving access to and acceptance, efficiency, effectiveness and equity of
medical services – were only partially achieved. This is not surprising, given that the initial
proposals made by the county health directorates and Romanian and foreign experts were not
observed, and the provisions of the Government decision underlying the project were not fully
carried out.
The project implemented in the eight counties tested various organizational patterns, as the
patient’s free choice of the family doctor was effectively put into practice along with alternative
pay mechanisms which depended on the number of patients a doctor cares for and the classes of
service provided. The experience gained and data gathered could be made good use of now that
the Health Insurance Law is being implemented.
EUR/ROM/POLC 02 02 02
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Annex 2
GOING FOR THE GOLD: THE RE-DISTRIBUTIVE AGENDA BEHIND
MARKET-BASED HEALTH CARE REFORM
by
Robert G. Evans1
SUMMARY PROPOSITIONS
1.
There is in health care no private, competitive market of the form described in the
economics textbooks, anywhere in the world. There never has been, and inherent
characteristics of health and health care make it impossible that there ever could be. Public
and private action have always been interwoven.
2.
The persistent interest in an imaginary private competitive market is sustained by
distributional objectives. These define three axes of conflict.
a.
The progressivity or regressivity of the health care funding system: Who has to pay, and
how much?
b. The relative incomes of providers: Who gets paid, and how much?
c. The terms of access to care: can those with greater resources buy “better” services?
3.
The real policy choices fall into two categories.
a. The extent of use of marketlike mechanisms within publicly funded health care systems.
b. The extent to which certain services may be funded outside the public sector, through
quasi-markets, and under a mix of public and private regulation.
4.
Proposals to shift toward more use of quasi-markets, through the extension of private
funding mechanisms, are distributionally driven. They reflect the fact that, compared with
public funding systems, privately regulated quasi-markets have to date been:
a.
less successful in controlling prices and limiting the supply of services (more jobs and
higher incomes for suppliers);
b. supported through more regressive funding sources (the healthy and wealthy pay less,
whereas the ill and wealthy get preferential access);
c. off-budget for governments (cost shifting in the economy looks like cost saving in the
public sector).
5.
Marketlike mechanisms within publicly funded health care systems constitute a particular
set of management tools that might be used along with other more established mechanisms
to promote the following generally accepted social objectives:
a.
effective health care, efficiently provided and equitably distributed across the population
according to need;
b. fair but not excessive reimbursement of providers; and
1
Journal of health politics, politics and law, 22: 2 (April 1997).
EUR/ROM/POLC 02 02 02
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c.
equitable distribution of the burden of contributions according to ability to pay; within
an overall expenditure envelope that is consistent with the carrying capacity of the
general economy, or rather of its members’collective willingness to pay.
6.
These general objectives seem to be widely shared internationally. Their specific content is
of course much more controversial – they are fundamentally political statements – and, as
usual, God and the devil are in the details. But the key point is that these social objectives
have their origins prior to, and at a higher level than, the choice of any particular set of
mechanisms for trying to attain them. The are ends, the mix and blend of public and private
actions are means to those ends. (Markets were made for and by me, not vice versa.)
7.
Marketlike mechanisms, as a class, have no inherent or a priori claim to superiority as
mechanisms for achieving these public objectives. Nor is there, to date, any overwhelming
empirical support for their widespread use. There are a number of interesting examples, in
different countries, of the use of economic incentives to motivate desired changes, and these
bear close watching. But this is still very much an experimental technology for system
management. Moreover, there are grounds for serious concern about negative side effects
from transforming the structure of motivations and rewards in health care.
8.
The central role of governments remains that of exercising, directly or more traditionally by
delegation, general oversight of and political responsibility for each country’s health care
system. Governments are increasingly acting as a sort of “consumers’cooperative” or
prudent purchaser on behalf of their populations. They should choose whatever managerial
tools seem to work best for this purpose, subject to the political constraints created by the
fundamental conflicts of distributional interests detailed previously. In particular, they may
delegate some parts of this role, but should not be permitted to divest themselves of it. In the
one country where a coalition of private interest has prevented government from taking up
this responsibility, the results have been spectacularly unsatisfactory.
EUR/ROM/POLC 02 02 02
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Annex 3
SOME IDEAS TO PROMOTE HEALTH
by
Seminar Participants
In one brief exercise the participants were asked to come up with their own ideas of what the
other sectors could do to promote health. The ideas were divided into the following categories:
1.
2.
3.
4.
5.
Infrastructure
Workplace
Products
Production methods
Other
Infrastructure
• Special lanes for cyclists in town
• Set up an “instalment-basis” system for buying necessities/household commodities at
workplaces
• Introduce free/inexpensive buses within the city centre
• Create small informal groups of school children who are neighbours for going to and from
school (in order to avoid accidents)
• Introduce open discussion fora for citizens through NGO’s/ombudsperson (both within the
cities and at working places)
Working place
• Flatten the hierarchy in firms/offices
• Introduce an exercise hour
• Introduce healthy catering in cafeteria (salads and other healthy food)
• Introduce free day care for employees’children
• Replace cigarette-vending machines with condom machines
• Accessibility to fitness centres for employees and their families
• Limit smoking to restricted areas (outside) only
• Introduce and follow health and safety regulations at the workplace
• Introduce first aid services at the workplace
• Introduce (subsidized) dental care services
Products
• Assign legal responsibility for faulty/hazardous cars
• Healthy lifestyles promoted by schools, mass media
• Initiate contests for Healthy School/Healthy Miss/Mr
• Good marketing for non alcoholic teenagers drink
• Promote modest wine consumption with means, otherwise ban alcohol and tobacco ads,
through legislation
• Ban films that promote violence
• Demand adequate labelling of food products to allow a healthy choice
• Forbid circulation of vehicles without a catalyser
EUR/ROM/POLC 02 02 02
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Production methods
• Restrict the release of pollution agents
• Safe blood for transfusion
• Subsidies/government guarantees for loans to companies investing in replacement of highly
polluting production methods
• Companies should support workers’common transport/lunch
• Introduce school buses
• Produce breakfast cereals with less sugar, less salt and therefore at lower cost
• Introduce good music at the workplace
Other
• Taxes on tobacco products should be used to invest in education for young people not to start
smoking
• Introduce health education in schools
• Inter ministerial committees to discuss health impacts of prospective policies in other
(economic) ministries
• Introduce a school hot line for children who are alone at home
• Introduce regional councils for healthy economic and social development
• Extend the possibility to stay at school till the parents can come and take the children home
EUR/ROM/POLC 02 02 02
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Annex 4
PROGRAMMES
ECONOMICS OF CREATING HEALTH AND REFORMING HEALTH CARE
Tuesday, 23 September 1997
08:30-09:00
Registration of participants
Ms Claudia Dima
Ms Connie Petersen
Chair: Dr Olsavszky
09:00-09:30 1.1
Opening remarks
The Minister of Health
09:30-09:45 1.2
Scope and objectives of the seminar
Dr Herbert Zöllner
09:45-09:55 1.3
Viewpoints of health and economic sectors
Prof Greg Stoddart
09:55-10:45 1.4
Health for All and the interrelationship of
health, health care and economy
Dr Herbert Zöllner
Prof Robert Evans
Ms Caroline Cederlöf
11:15-12:00 1.5
Health care reforms
Prof Richard Saltman
Prof Robert Evans
Prof João Pereira
Prof Greg Stoddart
12:00-12:30 1.6
Implementing the reforms
Prof Greg Stoddart
14:00-15:00 1.7
Inter-sectoral action and accountability
Framework for thinking
Prof Greg Stoddart Prof
Robert Evans
Prof Richard Saltman
Ms Caroline Cederlöf
15:30-16:30 1.7
17:00-17:30 1.9
Continued
Opportunities for economic sectors in Romania
Seminar summary and conclusions
Ms Caroline Cederlöf
(Moderator)
Prof Robert Evans,
Dr Herbert Zöllner
(Moderators)
EUR/ROM/POLC 02 02 02
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ECONOMICS OF CREATING HEALTH
Wednesday, 24 September 1997
08:30-09:00
Registration of participants
Dr Claudia Dima
Ms Connie Petersen
Chairperson: Dr Pop
09:00-09:15 1.1
Introduction and objectives of the seminar
Dr Herbert Zöllner
09:15-09:25 1.2
Viewpoints of health and economic sectors
Prof Greg Stoddart
09:25-10:30 1.3
Interrelationship of health, health care and
economy
International overview
Prof Robert Evans
Ms Caroline Cederlöf
Situation in Romania
11:00-12:30 1.4
Determinants of health
International experience and research
Discussion
Dr Silviu Radulescu
Prof Robert Evans
Prof Richard Saltman
Prof Greg Stoddart
Dr Cristian Vladescu
(Moderator)
ECONOMICS OF HEALTH CARE REFORM
Wednesday, 24 September 1997
14:00-15:30
1.5
Health Care Reform – Part I: Improving
the cost-effectiveness of health care
Overview of selected international efforts and Prof João Pereira
lessons
Prof Greg Stoddart
Efforts to improve cost-effectiveness in
Romania
16:00-17:00 1.6
What makes the health care sector
different – implications for reform
Theoretical background
Discussion
Dr Silviu Radulescu
(Introduction and
Moderator)
Prof Robert Evans
Prof Richard Saltman
Dr Stelian Pop
(Moderator)
EUR/ROM/POLC 02 02 02
page 21
Thursday 25 September 1997
Chair: Dr Cristian Vladescu
09:00-10:00
2.1
Health Care Reform – Part II: Changing
the private/public mix
International experience
Prof Richard Saltman
Prof Robert Evans
10:00-12:00 2.2
Group work
Prof Greg Stoddart
Group moderators (reports)
12:00-12:30 2.3
Implementing the reforms
Prof João Pereira
14:00-15:00 2.4
Health for All in the 21st Century –
a new vision
Dr Herbert Zöllner
(Introduction and
moderator)
15:00-15:30
Training and research in health economics
Prof Greg Stoddart
Seminar summary and conclusions
Prof João Periera
Prof Greg Stoddart
2.5
16:30-17:00 2.6
EUR/ROM/POLC 02 02 02
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Annex 5
NATIONAL PARTICIPANTS
PAGE 1 0F 4
Dr Rodica Sandor Mr Nan Adrian
Public Health and Health Management Resident Finance Ministry
Institute of Health Services Management
Dr Radulescu Serban Dr Bucur Alexandru
Director, Sanitary District of Cluj Director, Floreasca Emergency Hospital
Ms Corina Alexe Dr Cristian Atefan
Computer Assistant, Secretary Institute of Health Services Management
Institute of Health Services Management
Dr Amariutei Grigorescu Aurel Dr Ortensa Barsan
Department of Chemical Industry Deputy Director, Sanitary District of Suceava
Ministry of Trading and Industry
Dr Stefan Bartha Mr Dumitrescu Bazil
Director, Sanitary District of Bucharest Senator at Health Commission
Dr Ion Berciu Dr Razvan Buaneag
President of Health Commission International Relations Department
Deputies Chamber Ministry of Health
Dr Larisa Ionescu Calineati Ms Liliana Care
Dilema Journal Computer Assistant, Secretary
Institute of Health Services Management
Mr Viorel Catarama Dr Streinu Cercel
President of Senate Economic Commission, Senate Director, Colentina Clinic Hospital of Infectious
Diseases
Dr Virgil Ciobanu Dr Gheorghe Constantin
University of Medicine and Pharmacy Timiaoara Director, Sanitary District of Calaraai
Mr Blejan Constantin Professor Nae Constantinescu
Senator Secretary for Work and Social Protection Councilor of Romanian President
Commission Presidency
Mr Dumitres Cubazil Dr Miron Deliu
Deputy, Deputies Chamber - Health Commission Director, Sanitary District of Giurgiu
Dr Claudia Dima Dr Irina Dinca
Institute of Health Services Management Deputy Director at Health Promotion and
Programmes Department
Institute of Health Services Management
EUR/ROM/POLC 02 02 02
page 23
NATIONAL PARTICIPANTS
PAGE 2 0F 4
Dr Udrea Doina Professor Stefan Iosif Dragulescu
Deputy Director, Sanitary District of Cluj Minister of Health, Ministry of Health
Dr Rene Duda Dr Dan Enachescu
Professor of Public Health and Health Management, Professor of Public Health and Management
University of Medicine and Pharmacy Iaai Romanian Association of Public Health and
Health Management
Dr Eugenia Erhan Dr Chriia Felicia
Economist at Budget Department Inspector, Department of International Relations,
Ministry of Health Informatics, Protocol, Public Relations and
Administration, Ministry of Health
Ms Adriana Galan Dr Romulus Gazdac
Engineer, Institute of Public Health of Bucharest Director, Sanitary Distric of Covasna
Dr Vintea Georgeta Mr Avram Gheorghe
Director, Sanitary District of Neam Senator Health Commission, Senate
Dr Emilian Imbri Mr Dumitriu Ioan
Director of Public Relations Department Cartel Alfa Syndics
Ministry of Health
Mr Creu Ioan Dr Ionescu Ion
Senator Health Commission, Senate Specialty Inspector at Special Problems
Department, Ministry of Health
Dr Sinescu Ionel Dr Irina Ispaaescu
Deputy Director Medical Programme Coordinator
Fundeni Clinic Hospital
Professor Francisc Jeszenszky Dr Pasca Liviu Titus
Director, Medical Center for Health Services and Senator, Senate
management - Targu Murea
Ms Aurora Liiceanu Dr Savu Madalina
Schering Inspector,
Department of International Relations, Informatics,
Protocol, Public Relations and Administration,
Ministry of Health
Dr Mihai Marcu Dr Vissarion Maria
Lecturer at Public Health and Management Councilor of Minister
Department from University of Medicine and Ministry of Health
Pharmacy - Carol Davila Bucharest
Institute of Public Health of Bucharest
EUR/ROM/POLC 02 02 02
page 24
Dr Dan Mihai Marius Dr Ioan Mihetiu
Department of Medicine, Ministry of Internal Director, Sanitary District of Suceava
Affairs
NATIONAL PARTICIPANTS
PAGE 3 0F 4
Dr Dana Minca Dr Carmen Moga
Lecturer, Public Health and Health Management Specialist of Public Health and Management
Department from University of Medicine and Institute of Public Health of Bucharest
Pharmacy Carol Davila Bucharest
Ioana Muaat Mr Florin Muscanu
Secretary, Institute of Health Services Management Sanitas Syndics
Dr Adrian Neacsu Dr Victor Olsavszky
Director, Sanitary District of Bucharest Director of International Relations Department
Ministry of Health
Dr Marinescu Paul Dr Georghe Peltecu
Deptuy Director, Responsible for reform Deputy Director
Sanitary District of Giurgiu Institute for Postgraduate training
Dr Petrovitz Petru Dr Stelian Pop
Director, Sanitary District of Braaov Director, Institute of Health Services Management
Dr Radu Pop Dr Silviu Radulescu
President, Romanian Association of Physicians Director of Health Insurance Department
Ministry of Health
Dr Amalia Ritivoiu Dr Vlad Romano
International Relations Department, Director, Sanitary District of Bucharest
Ministry of Health
Professor Ion Romosan De Gabriela Scantee
Minister State Secretary, Ministry of Health Specialist of Public Health and Management
Institute of Public Health of Bucharest
Mr Tim Schaffter Dr Florin Sologiuc
Health Programmes Officer, UNICEF Director of Health Promotion and Community
Health Department
Ministry of Health
Dr Paveliu Sorin Dr Ursoniu Sorin
Director, of Socio-Economic Department Lecturer, University of Medicine and Pharmacy
College of Physicians Timiaoara
Dr Erno Szigarto Dr Luminia Tronaru
Deputy Director, Responsible for Reform, Senior of Public Health and Management
Sanitary District of Covasna Institute of Health Services Management
EUR/ROM/POLC 02 02 02
page 25
Dr Constantin Victor Dr Kirileanu Victor
Deputy Director, Sanitary District of Calaraai Deputy Director, Responsible for Reform, sanitary
District of Neam
NATIONAL PARTICIPANTS
PAGE 4 0F 4
Mr Gavanescu Vinceniu Dr Ochiana Viorel
Senator Budget and Finance Commission, Senate Specialty Inspector at medical Assistance
Department
Ministry of Health
Dr Luminita Vitcu Dr Cristian Vladescu
Senior of Public Health and Managment Director of General Department for Reform,
Institute of Health Services Management Programmes and Accrediation
Ministry of Health
Dr Cristina Vladu Mr Varujan Vosganian
Councilor, World Bank President of Finance Commission, Senate
EXPERT FACULTY
Ms Caroline Cederlöf
Karolinska Institutet
Division of International Health Care Research
(IHCAR)
SE-171 76 Stockholm
Sweden
Tel:
Fax:
E-mail:
+46 8 302 050
+46 8 315 403
[email protected]
Professor Robert Evans
Centre for Health Services and Policy
Research, University of British Colombia
Room 429, 2194 Health Services Mall
Vancouver, B.C. V6T 123
Canada
Tel:
Fax:
E-mail:
+1 604 822 4692
+1 604 822 5690
[email protected]
Dr Victor Olsavszky
Director
International Relations
Ministry of Health of Romania
Str. Ministerului 1
70052 Bucharest
Romania
Tel:
Fax:
E-mail:
+40 1 323 1287
+40 1 312 4916
Professor Joao Pereira
Assistant Professor
Department of Health Economics
National School of Public Health
Tel:
Fax:
E-mail:
+351 1 757 5599
+351 1 757 3536
[email protected]
EUR/ROM/POLC 02 02 02
page 26
Av. Padre Cruz
P-1699 Codex Lisbon
Portugal
Dr Stelian Pop
Director
National Institute for Health Services
and Health Care Management
Bucharest
Romania
Tel:
Fax:
E-mail:
+40 1 642 7378
+40 1 250 3014
Dr Silviu Radulescu
Director
Health Insurances
Ministry of Health
Str. Ministerului 1-3
70109 Bucharest
Romania
Tel:
Fax:
E-mail:
+40 1 323 8755
Professor Richard B. Saltman
Professor of Health Policy and Management
Department of Health Policy and
Management
Rollins School of Public Health
Emory University
1518 Clifton Road, N.E.
Atlanta, Georgia 30322, USA
Tel:
Fax:
E-mail:
+14047278743
+14047279198
[email protected]
Professor Greg L. Stoddart
Centre for Health Economics and
Policy Analysis
Clinical Epidemiology and Biostatistics
McMaster University
1200 Main Street West
Hamilton, Ontario L8N 3Z5
Canada
Tel:
Fax:
E-mail:
+1 905 525 9140
+1 905 546 5211
[email protected]
Dr Cristian Vladescu
Director of General Department
Health Programmes and Accreditation
Ministry of Health of Romania
Str. Ministerului 1
70052 Bucharest
Romania
Tel:
Fax:
E-mail:
+40 1 613 7061
World Health Organization
Regional Office for Europe
Scherfigsvej 8
2100 Copenhagen
Denmark
Ms Connie Petersen
Tel:
Fax:
E-mail:
+45 39 17 1539
+45 39 17 1870
[email protected]
EUR/ROM/POLC 02 02 02
page 27
Dr Herbert F.K. Zöllner
Tel:
Fax:
E-mail:
+45 39 17 1347
+45 39 17 18 70
[email protected]