public health and the economy - WHO/Europe
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public health and the economy - WHO/Europe
EUR/ROM/POLC 02 02 02 ENGLISH ONLY UNEDITED E58459 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 TELEX: 12000 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 All rights in this document are reserved by the WHO Regional Office for Europe. The document may nevertheless be freely reviewed, 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 EUR/ROM/POLC 02 02 02 page 1 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. EUR/ROM/POLC 02 02 02 page 2 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. EUR/ROM/POLC 02 02 02 page 3 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? EUR/ROM/POLC 02 02 02 page 4 (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: EUR/ROM/POLC 02 02 02 page 5 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.” EUR/ROM/POLC 02 02 02 page 6 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) EUR/ROM/POLC 02 02 02 page 7 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. EUR/ROM/POLC 02 02 02 page 8 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. EUR/ROM/POLC 02 02 02 page 9 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. EUR/ROM/POLC 02 02 02 page 10 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. EUR/ROM/POLC 02 02 02 page 11 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%. EUR/ROM/POLC 02 02 02 page 12 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. EUR/ROM/POLC 02 02 02 page 13 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 page 14 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 page 15 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 page 16 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 page 17 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 page 18 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 page 19 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 page 20 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 page 22 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]