Health Care Institution Debts

• Abstract
• Purpose of health policy or idea
• Characteristics of this policy
• Political and economic background
• Purpose and process analysis
• Expected outcome
• References

Abstract

In 2005 the Law on public assistance and restructuring of health care institutions was passed to release growing debts. The arrears accumulated under: public law regulation (e.g. contributions to social insurance), civil law (e.g. money owed to medical partners or suppliers), obligations to own employees (rewards imposed by the Parliamentary law, no financial transfers, institutions paid). In 2006 a preliminary report on implementation of the law was issued.

Purpose of health policy or idea

Chaotic changes implemented in the Polish health services system contributed to an uncontrolled increase in (actual) spending. Formally, it was a problem of many, officially autonomous institutions providing services. However, because the institutions were publicly owned their growing obligations were seen as a politically relevant issue. It was one reason why politicians (the Parliament) made the decision to help the institutions and to alleviate the financial burden. It was also intended to prevent the institutions from continuing the same, very loose and rather irresponsible financial policy.

Main points

Main objectives

1. With regard to obligations concerning the employees, the institutions were encouraged to take a loan from the state's budget. Individual agreements defining specific conditions were concluded with the employees.
2. With regard to obligations rising under public regulation it was possible to apply for a relief (both the basic sum and interest rates were annulled). It was necessary to assume an agreement including a set of conditions concerning the restructuring.
3. With regard to obligations rising under public law regulation, the institutions were encouraged to assume agreements with individual debtors. The agreements could allow the partial annulment of debts or to divide the global sum and repay it in parts.

Groups affected

Health care institutions, individual employees, partners in the public system (like insurers), partners in the system (providers of medical services, other providers), patients

Innovationsgrad	traditionell		innovativ
Kontroversität	unumstritten		kontrovers
Strukturelle Wirkung	marginal		fundamental
Medienpräsenz	sehr gering		sehr hoch
Übertragbarkeit	sehr systemabhängig		systemneutral

Even if debts may occur in health care institutions in many countries there are a lot of specific features which do not appear elsewhere such as rather weak financial discipline and a belief that in oppression "the government will help".

Political and economic background

The law was passed when the left-wing coalition dominated. According to its political rhetoric it was ready to assume responsibility for a prospect of the public sector which consisted of institutions governed by either MoH or local governments. At that time debts generated by health care institutions were believed to be the most dangerous factor. Meantime the government changed (result of the Parliamentary election that was held in Autumn 2005). A right-wing coalition took power and felt obliged to continue formerly established duties.

Paradoxically the new government actually revealed more support for the public institutions than its predecessors. Generally, the right-wing coalition is a strong follower of the state's direct involvement in many activities addressing social needs. They  believe that institutions governed by the state (state administration) can be more efficient - and people oriented - than institutions belonging to other sectors.

Change of government

Change based on an overall national health policy statement

There is no one approved health policy document. However, we may refer to the list of priorities as declared by MoH and presented on the MoH Web site. It was also presented by the Minister in his Parliamentary speech provided in June 2006.

Purpose and process analysis

Current Process Stages

	Idee	Pilotprojekt	Strategiepapier	Gesetzgebung	Umsetzung	Evaluation	Veränderung/Richtungswechsel
Implemented in this survey?

Origins of health policy idea

The problem of debts appeared many times in the past and the government felt itself powerless to interfere and help. Many believed that the gap between influx of many - allocated via contracts negotiated by the payer - was too small to balance expenditure generated by health needs (or rather a high number of patients). 

Some analysts believed debts to be unavoidable. Nevertheless politicians urged to undertake measures at both the national and institutional level - to contract. Strong pressure exerted by institutions' managers to relieve the situation was felt. Health care institutions were encouraged to apply for relief of their debts, being obliged to meet a set of consented conditions (usually referring to performance). In time when the law was passed debts amounted to 6 086,7 million PLN.  At the end of the year the debt was reduced to 5 027 million PLN (reduction of 17.4%).

Initiators of idea/main actors

• Regierung: The Government understood that the hard financial conditions of (public) health care providers partially resulted from restrictions in money allocation (by the National Health Fund) and partially from institutions? poor organizational conduct, demanded governmental intervention and budgetary support. But the government was also concerned with a need to improve performance (institutional efficiency) and tried to combine two goals (efficiency and financial support).

• Leistungserbringer

Approach of idea

The approach of the idea is described as:
renewed:

Innovation or pilot project

Else - Many managers of health care institutions lobbied for governmental initiative aiming at improving the financial conditions (by means of money) under which institutions operated. Legal changes resulted from these efforts.

Stakeholder positions

There was very strong pressure from the institutions' employees to solve the problem of debts (especially with regard to individual sums unpaid, but not underscoring public obligations). Also, managers of the institutions were interested in solving problems as they wished to present themselves as efficient executives and to ease conditions in which they operated. The government wants to demonstrate that the health system is functioning properly.

Actors and positions

Regierung
MoH	sehr unterstützend		stark dagegen
Leistungserbringer
(Public) Health care institutions	sehr unterstützend		stark dagegen
Employees of health care institutions	sehr unterstützend		stark dagegen

Influences in policy making and legislation

As commented in the previous report in the very last minute the Parliament changed the draft submitted by MoH.

Legislative outcome

success

Actors and influence

Regierung
MoH	sehr groß		kein
Leistungserbringer
(Public) Health care institutions	sehr groß		kein
Employees of health care institutions	sehr groß		kein

Positions and Influences at a glance

Adoption and implementation

Considering formal aspects of the process the results are as follows:

1. 572 applications to start the procedure for assistance and restructuring were submitted.
2. 565 procedures were initiated (in 7 cases applications were rejected due to formal failures.
3. 108 health care institutions, being legitimised, refused to apply.
4. In 514 cases final (positive) decision on restructuring was made.
5. In 34 cased the procedure was temporarily suspended.
6. In 20 cases procedures were terminated without final (positive) decision.  

Considering the composition of institutions applying for assistance and restructuring the results are as follows:

1. As many as 446 institutions assumed agreements under civil law regulation (amounting to the sum of 1.900 million PLN).
2. As many as 326 institutions assumed agreements allowing the relief of debts or repayment from the state budget (amounting to the sum 1 300 million).
3. As many as 432 institutions negotiated rewards for employees (with the help of loans from state budget amounting to the sum of 763 million).  

The above figures cover institutions applying to both MoH and voievodship authorities.

Monitoring and evaluation

In most cases health care institutions signed contracts (agreements) including many specific conditions that had to be met by the institutions. Because there was a direct link between institutions' performance and possibilities to acquire subsequent shares of money an internal monitoring mechanism was set up. 

Review mechanisms

Halbzeitevaluation

Dimensions of evaluation

Prozess, Ergebnis

Results of evaluation

Up to now only partial evaluation has been conducted and covers the period between 22 August, 2005, and 7 April, 2006. It focused mostly on formal and quantitative aspects of the process, although actually it was the intention to improve performance of health care institutions. The procedure was finalised in 14 institutions and led to a reduction of 1.12% of the original debts although the global burden was reduced by 17.4%. Supposedly, very relevant will be a set of conclusions drawn from the experience. Some preliminary recommendations were included in the draft amendment submitted to Parliament on 12 April, 2006.

Expected outcome

For the time being the final evaluation is not possible. Firstly, because the process of debt release is still going on and therefore ultimate results remain unknown. Secondly, because a comprehensive evaluation has not been worked out (only preliminary comments are available).

Impact of this policy

Qualität	kaum Einfluss		starker Einfluss
Gerechtigkeit	System weniger gerecht		System gerechter
Kosteneffizienz	sehr gering		sehr hoch

Up to now results of the innovation are not visible. Contracts and agreements have been signed but institutional performance has not improved. Institutions are likely to improve performance if they are pressed to do so. To judge realistically, they must face a risk of being closed down. Because such a prospect is being unfolded one can hope the better performance.

References

Sources of Information

• Informacja z przebiegu realizacji ustawy o pomocy publicznej I restrukturyzacji publicznych zakladow opieki zdrowotnej, www.mz.gov.pl (accessed 26.10.06)

Author/s and/or contributors to this survey

Cezary W³odarczyk

Empfohlene Zitierweise für diesen Online-Artikel:

Cezary W³odarczyk. "Health Care Institution Debts". Health Policy Monitor, November 2006. Available at http://www.hpm.org/survey/pl/a8/1