Health sector modernisation in Hungary ILONA GL Secretary of State for Economics Ministry of Health

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Health sector modernisation in Hungary ILONA
GÁLSecretary of State for EconomicsMinistry of
HealthRepublic of Hungary

• Business Policies and Mechanismsin the
  Healthcare System in Central and South-Eastern
  EuropeBucharest, 25-27 September 2007

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Issues to be discussed

• The starting point
• The reform process
• Hospital capacity restructuring
• New forms of co-payment
• The new act on the efficient supply of
  pharmaceuticals
• On-going activities
• EU structural funds health sector modernisation
  programmes
• Health insurance model decision the present
  compromise model

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The starting point
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Misshapen structure, unlimited demand Acute care
hospital beds and GPs per 100,000 population, 2003
Source WHO HFA Database 06/2006
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Misshapen structure, unlimited demand
Acute hospital admissions per 100 population
Source European health for all, January 2006
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Misshapen structure, unlimited demand
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Poor outcome
Life expectancy at birth of males in the EU-15
and EU-10 Member States
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Poor outcome
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The reform process
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Main objectives of the Government

• Accelerate public sector reform
• Main general objectives
• improve public finance balance
• better effectiveness, efficacy
• ensure sustainable financing
• meet EU convergence requirements
• Health sector reform key area
• specific short term objectives
• control excessive use of health services
• control overspending in the National Health
  Insurance Fund

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Immediate measures by the new Government in
the health sector

• 9 June 2006 the new Government inaugurated
• End of July 2006 special government meeting
  taking fundamental decisions on main elements and
  timing of health reform
• August 2006 publication of the Green Paper on
  Healthcare, open consultation
• Autumn 2006 Presenting to and passing by
  Parliament of the five reform acts
• End of 2006 beginning of 2007 preparing and
  passing government and ministerial decrees
  specifying implementing provisions
• End of 2006 beginning of 2007 elaboration of
  technical procedures of implementation

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The five acts adopted in 2006

• Act XCVII of 2006 on professional chambers
  functioning in the health sector
• Act XCVIII of 2006 on safety and efficient
  supply of pharmaceuticals and medical devices as
  well as on the general rules of pharmaceuticals
  distribution
• Act CXV of 2006 on modification of certain
  health-related acts
• Act CXVI of 2006 on tasks of the Health
  Insurance Supervisory Authority
• Act CXXXII of 2006 on developing the health care
  system

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Implementation

• January 2007 entering into force of the new act
  on pharmaceuticals
• January 2007 establishment of the Health
  Insurance Supervisory Authority
• February 2007 introducing visit fee and hospital
  fee
• April 2007 entering into force of the health
  care development act hospital capacity
  restructuring
• April 2007 mandatory membership in professional
  chambers discontinued

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Hospital capacity restructuring
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Hospital capacity restructuring in figures

• Number of publicly financed hospitals closed
  down 6 (out of 173)
• Number of hospitals where publicly financed acute
  care is discontinued 12
• Decrease in the number of acute beds 26
• Increase in the number of chronic beds
  (rehabilitation, long-term care) 35

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Hospital capacity restructuring in figures
Total 80125
Total 69421
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Structural adjustment and profile purification at
regional level
Special rehabilitation hospital
Small city hospital
Middle size city hospital
Basic specialties, emergency departments
Out-patient care, day surgery, screening
Regional priority hospital
County hospital
External premises
Long-term care, chronic care
Small city hospital
Progressive types of care, Emergency
Centre, Central operating facilities, Intensive
care
External premises
Primary health Care, out-patient care, screening
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Priority hospitals

• provide high quality services for patients with
  serious or specific illnesses (e.g. treatment of
  malignant tumours, organ transplantation)
• in case of disasters or epidemics, they are
  obliged to participate with a defined amount of
  capacity in providing protection and services
• participate in regional level capacity
  distribution procedures and compete for further
  contracted capacities.
• even distribution across the country (50 km)

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Distribution of priority hospitals
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Accessibility of priority hospital
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Territorial hospitals

• provide general medical treatment constituting
  the majority of all hospital treatments
• provide rehabilitation, chronic care, long-term
  care
• in cases, when they diagnose a serious illness
  necessitating higher level care, they should
  transfer the patient to the priority hospital
  responsible for providing higher level care in
  the given region
• decision on capacities of territorial hospitals
  is made by Regional Health Councils based on
  regional capacity figures specified by law

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Accessibility of hospitals providing care in the
basic specialities
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New forms of co-payment
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Introduction of the visit fee and hospital daily
fee

• Objectives
• limit unnecessary utilisation
• replace gratitude money
• enhancing controlled cash flow, transparent
  service provision
• Underlying principles
• comprehensive, set at a low rate, capped
• intended to cleanse the system and not to raise
  funds
• gratitude money is unfair, visit fee is socially
  sensitive

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First results(February April 2007)

• In-patient services
• decrease in the number of hospital days 20
  (average)
• revenue from co-payment 1 of hospital
  revenues
• Out-patient services
• decrease in the number of visits
  20 (average)
• decrease in insurance expenditure/month 10
  billion HUF(average)
• General Practitioners
• Decrease in the number of visits
  10
• (exact data not yet available)

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The new act on the efficient supply of
pharmaceuticals
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Main objectives of the act

• better control over public pharmaceutical
  spending and keeping the public pharmaceutical
  expenditures within the budget set by Parliament
  for 2007
• curb the growth in pharmaceutical expenditures,
  both public and private
• improve transparency of the reimbursement system
• ameliorate physicians prescribing practice
• promote the rational and economic use of
  pharmaceutical products

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Main objectives of the act

• improve access to pharmaceutical products by
  allowing the distribution (marketing) of certain
  pharmaceutical products outside of the pharmacies
  
• the legislator aimed at passing a new act that
  equally affects all players of the
  pharmaceuticals market
• manufacturers, both innovative and generic
• wholesalers
• patients
• physicians,
• Health Insurance Fund

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Changes affecting the reimbursement process

• aiming at substantial savings both by the
  patients and the National Health Insurance Fund
• ensure price competition among generics
• facilitating the inclusion of medicines with
  lower prices
• degressive maximum prices for generics is
  introduced 1st generic -30, 2nd -10, 3rd
  -10
• price negotiations are public, list of bids is
  updated on the webpage of the National Health
  Insurance Fund
• continuous establishment of fixed groups,
  published quarterly

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Monitoring physicians prescribing practice

• new software supports rational and economic
  prescription practice by physicians
• the use of this software is compulsory and
  specified the contracts between the Health
  Insurance Fund and the health service providers
• the main goal is to improve the cost and quality
  awareness of physicians by providing them with
• up-dated price information,
• statistical data ensuring comparison to country
  average data relating cost of treatment and the
  volume of prescribed drugs

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Main changes affecting patients

• The 100 reimbursement does no longer exist,
  instead a minimal 300 HUF fee/box shall be paid
  in case of medicines earlier granted 100
  reimbursement
• The reimbursement rates are decreased (90 85,70
  55, 50 25), however, the scope of medicines
  granted an increased reimbursement status is
  extended, covering the three main groups of
  patients suffering from cardiovascular diseases
  (such as high blood pressure, arrhythmia, angina)
  
• Reimbursement rates of medicines for certain
  groups of diseases, such asthma, epilepsy,
  Parkinson-syndrome, depression, remain unchanged
• The only exception to this general principle
  (minimal 300 HUF) is in case of those persons who
  are entitled to certain drugs free of charge on
  the basis of a specific medical card based on
  financial/social indication

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First results

• Quarterly open bids for price reduction
• From 1April No. of drugs with reduced price 1
  000
• savings patients 7,5
  billion HUF health insurance
  reimbursement 15 billion HUF
• From 1 July No. of drugs with reduced price
  548
• savings patients 3
  billion HUF
• health insurance reimbursement 7,2
  billion HUF
• From 1 October No of drugs with reduced price
  300
• savings health insurance reimbursement
  7 billion HUF
• (closed 25 June)
• Pharmaceutical expenditures of the National
  Health Insurance Fund
• months I-VI 2006 184,3 billion HUF
• 2007 158,4 billion HUF
• Budget for 2007 ? 320 billion HUF

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On-going activities
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On-going activities

• Continuous monitoring and evaluation of
  implementation
• Necessary refinement of legislation
• Necessary refinement of technical procedures
• Providing grants supporting the transformation
  of hospitals
• Health sector development programmes to
  up-grade services in line with structural
  adjustment health sector programmes as part of
  the National Development Plan
• Discussions on the future health insurance model

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EU structural funds health sector modernisation
programmes
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EU structural funds health sector modernisation
programmes

• The Social Infrastructure Operational Programme
  (976 M EUR)
• Main objectives of health sector programmes
• improve accessibility of services, mitigating
  regional differences,
• improve efficiency, support up-grading,
• support developing regional out-patient
  networks,
• support hospitals structural adjustment and
  related IT developments
• Main areas of intervention
• emergency care, perinatal intensive care,
  paediatric emergency centres,
• regional blood banks,
• comprehensive treatment and care of
  cardio-vascular diseases,
• infrastructural developments, up-grading of
  regional health poles (universities and
  selected institutions with the highest number of
  acute care beds 9 institutions),
• investments into digital technology,
  establishment of telemedicine systems and
  inter-institutional electronic communication
  systems including all care levels

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EU structural funds health sector modernisation
programmes

• The Social Renewal Operational Programme (221 M
  EUR)
• Main objectives and planned interventions of
  health sector programmes
• improve health status of the population, promote
  health conscious behaviour,
• mitigate regional differences in health status,
  especially in disadvantaged micro-regions,
  through supporting community development health
  plans,
• support early childhood health development
  programmes,
• support the establishment of a regional based
  national health monitoring system,
• improve adaptability of health personnel,
• support training and employment programmes for
  healthcare workers to retain them in the sector,
  to help their adaptation to labour market
  requirements corresponding to structural change,
  counter-balance regional differences,
• support the introduction of integrated
  controlling and management systems to improve
  cost-effectiveness of healthcare providers

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EU structural funds health sector modernisation
programmes

• Joint interventions under the Hungary Romania
  Cross-border Co-operation Programme 2007- 2013
• European territorial co-operation
• cross-border co-operation across EU internal
  borders, including Hungary-Romania,
• development of collaboration, capacity and joint
  use of health infrastructure is among eligible
  sectors,
• total budget of the Co-operation Programme is
  about 224,5 million euros,
• 96,5 million euros is allocated for strengthening
  social and economic cohesion in border regions,
  including health sector projects
• Intervention 2.4 Health care and prevention of
  common threat
• co-operation of health service providers,
• sharing health capacities,
• enhance co-operation in emergency situations,
  support to joint training programmes

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Health insurance model decision,the present
compromise model
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Health insurance model decision,the present
compromise model

• Main health policy challenge discussions on the
  future health insurance model
• Recent compromise proposal mixed model
• introduction of the multi insurance model
• establishment of county level insurance companies
  
• (22 all over the country, 18 in counties
  4 in Pest County and Budapest)
• shared ownership (state majority, private
  minority)
• competition
• Main guiding principles
• real solidarity and
• quality enhancing competition
• without extra payments

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Health insurance model decision,the present
compromise model

• How can we guarantee competition and security?
• Majority state ownership to be maintained in each
  county insurance company. This will guarantee
  security during transition as well as the
  prevalence of state responsibilities
• Private insurance companies might compete for the
  minority ownership to cover even the mandatory
  health insurance package
• Insurers contract the institutions providing the
  highest level of care

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Health insurance model decision,the present
compromise model

• How can we guarantee the prevalence of
  solidarity?
• Unified National Risk Pooling Fund is to be
  created on the basis of part of the National
  Health Insurance Fund
• Responsibilities of the Fund proposed to be
• supervision and distribution of resources gained
  from contribution payments collected by the
  National Tax Authority and from the central
  budget
• Distribution of resources
• according to a per capita system, calculated on
  the basis of the number and the demographic
  indicators of insured
• insurance companies receive adjusted per capita
  payments after their insured and not the real
  contributions paid by them
• Insurance companies obliged by law to contract
  each insured
• Insurance is mandatory for everyone

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• Thank you for your kind attention!