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The Project Law on Healing Activities

Country: 
Polen
Partner Institute: 
Institute of Public Health, Jagiellonian University Medical College, Krakow
Survey no: 
(16)2010
Author(s): 
Iwona Kowalska
Health Policy Issues: 
Rolle Privatwirtschaft, Politischer Kontext, Finanzierung, Zugang, Patientenbelange
Reform formerly reported in: 
Status of health care units - Project of Law
Plan B - a lifebuoy for hospitals
Current Process Stages
Idee Pilotprojekt Strategiepapier Gesetzgebung Umsetzung Evaluation Veränderung/Richtungswechsel
Implemented in this survey? nein ja nein nein nein nein nein

Abstract

The Polish President's death has put the commercialisation of public hospitals back on the agenda. A critical struggle has focused on the problem of the hospitals' commercialisation. On 14th of October the government accepted the project of the Law on Healing Activities with special concern dedicated to health services delivery in hospitals. The government states that the commercialisation will make the financial management of health care facilities efficient (debt decrease).

Neue Entwicklungen

The Transformation of hospital ownership into entities governed by commercial law has been taking place contemporarily - despite the absence of specific legislation. The process has been based on a number of executive regulation provisions concerning the local authorities as well as health care institutions. The process is being called the "commercialization" rather than "privatization". The Ministry of Health announced data concerning these changes for the period 1999-2008 showing the scale and the impact of regulation so far.

Table 1: Healthcare institutions ownership status (1999-mid-2008)

All public healthcare institutions     

Total        Hospitals  Hospital Units*         Ambulatory

 2581       665                         1916

Independent Public healthcare institutions (NZOZ)

Total        Hospitals  Hospital Units*         Ambulatory

1635        634                         1001

Transformed healthcare institutions (commercial law entities)

Total        Hospitals  Hospital Units*         Ambulatory

280          65 (9.7%)               50            165

 Source: Ministry of Health

 *in some hospitals certain units have the status of independent units        

 

 

 

 

 

 

 

 

 

 

 

 


The largest number of transformations (about 2/3 of all) were implemented by district and city councils - the ambulatory facilities dominating the picture in cities and hospitals and hospital units more frequently transformed in districts. The transformation process occurred less often at the gmina (sub-district level) and the provincial level and accounted for 28% of transformations.

Local governments have been interested in such form of management (commercial law entities). Some districts expected investors to be interested in renting the hospital and in looking after patients on the specific territory. In case such a solution would not work for them they would then hope to restructure. The local governments have suspended the process of hospital restructuring, however, they are waiting for the new regulations and for further government funds.

Aims of the commercialization

The government believes that commercialization may be the effective mechanism for the efficiency improvement and for the progressive debts increase. The need for decisions may be illustrated by the draft legislative initiative of the Members of Parliament from the Citizens Platform (Platforma Obywatelska (PO) - the major party in the governing coalition). It has been submitted in January 2008 (described in HPM reporting rounds 11, 13, 14). The project of the Law on Health Care Institutions contained the provisions for the transformation of the public health care institutions into shareholder or limited liability companies governed by commercial law. It has been expected as a means for the financial management improvement and for the debt reduction in the near future. The legislation has been vetoed by late president Lech Kaczyñski (killed in the air crash in April). The future of the health care reform depends on the outcome of the presidential election set for 20th of June.

During the presidential election campaign the different candidates dramatized the adequate policies of their opponents aiming at gathering the voters. It has even been the matter of the Polish court judgement concerning the accusation for the support of the public hospital's privatization (the case brought to court by one of the candidates - a contender for the President of the Republic of Poland - proved false for the second time by the courts in the fast track litigation due to the elections requirements, so that these statements must now be withdrawn).

Taking the above into account the MoH prepared the package of health reform with one of the laws specifically dedicated to public hospitals - the Law Project on Healing Activities. The project contains the new regulations concerning the hospital activities and their transformation into commercial companies.

Will the commercialization be effective?

In the opinion of the MoH the hospital's debt clearing without a change of their ownership status will not bring any effect. So far, the local governments are the "fictional" owners of their facilities and such solution would allow the progressive indebtedness. The commercialization provides the application of the commercial code rules and the adequate instruments, hitherto unavailable to local governments (essential for the proper financial management). The fact that the facility can become bankrupt may positively influence both management and employees. The local authorities will still be responsible for the availability of health services for their citizens, independently of the issue of the facilities ownership.

The new provisions in the law project concern the following:

-          The restructurization of public hospitals would not be obligatory and therefore the problem of inadequate financial management and instruments may still remain unsolved;

-          The local authorities as the establishing bodies for the hospitals decide on the transformation. If they decide to not transform within three months after having approved the financial plan they have to cover the hospital debts. If the local authorities do not have resources to pay the hospital´s debt - the hospital has to be changed into the commercial law company or into a "budget unit" within 12 months. This regulation also includes, apart from the hospitals of the local authorities, clinics (university hospitals), and the latter are in the deepest debts.

 Suchhilfe

Characteristics of this policy

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

The proposed policy concerning the change of the legal status of health care units remains innovative for the Polish health care system. Also, the policy is very controversial because of the possibility of the transformation of the Health Maintenance Organizations´ (SPZOZ) transformation (or liquidation if they do not undergo the change of their legal status), the new financial responsibilities in respect of the local authorities and the other establishing bodies of the public hospitals (like medical academies). The impact on the whole system will in any case be fundamental (the implementation depends on the systemic law and on the other following important regulations). The public visibility of the proposed changes is low at this particular stage of policy planning. 

Purpose and process analysis

Current Process Stages

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

Initiators of idea/main actors

  • Regierung: The MoH underlined that the government is not aiming at privatisation. The MoH showed the extreme activity concerning the planned changes in the healthcare sector: e.g. the legislation initiative concerning the package of health care laws projects.
  • Parlament: The idea of the new project concerning the healing activities has been accepted by the Citizens' Platform (a party in the government). The government coalition partner - the Polish Farmers Party (PSL) - accepted the commercialisation as well.
  • Leistungserbringer: The attitudes within this group may differ depending on the legal status of the different health care units, on the specific financial situation and on the particular professional staff category within the group: managers, doctors, nurses and others.
  • Kostenträger: NHF aims at cost decrease of the contracted health services (achieved for instance with the co-payment instruments introduction) due to the application of the cost-effectiveness criterion.
  • Patienten, Verbraucher: The public perception of the issue has not changed at all. It could be described as the strong opinion that the legal status transformation into non-public entity results in the unavoidable introduction of out-of-pocket payments within the public system.
  • Bürgergesellschaft: The Trade Unions and Physicians Chamber consider the proposed legislation inconsistent with the Polish health care system rules like: The possibility for the limitation of health services by the National Health Fund (NHF) which negatively influences any market oriented reforms.
  • Wissenschaft: Rectors of the medical academies have no instruments of control nor do they have the real financial accountability to transform the hospitals into commercial law companies.
  • Andere: The powiat and voivodeship authorities (authorities of the county and the administrative districts) are opposed to the introduced change. They do not wish to and are not prepared to cover the hospital debts.

Stakeholder positions

Position of the government

The MoH underlined that the government is not going to privatize public hospitals and showed the extreme activity concerning the planned changes within the healthcare sector. She initiated the idea of a new package of different health care laws projects. The Citizens Platform believes that the current situation allows financial failure, closure or "wild privatization" and that the proposed change will give health care institutions a chance for improvement of the financial situation.

In the opinion of the Ministry of Health the hospital's debt clearing, without a change of their ownership status, would allow repetitive indebtedness. The establishment of companies governed by the commercial code ensures the application of commercial code rule and provides the proper legal instruments, hitherto unavailable to local governments. Such process is expected to lead to the proper and rational financial management. The fact that the health facility can become bankrupt may positively influence both management and employees. The local authorities will still be responsible for ensuring the health services´ availability at the local level independently of the hospital's ownership question. 

The government had to face a tough opposition and was accused by the major opposition - the Law and Justice party (PIS) - of breaking their election pledge that they would not privatize hospitals. Moreover - the PIS stated that the PO intended to perpetrate the similar fraud as the "wild privatization" of state assets in 1989. They fear that the privatized facilities will insist on patients to pay additional charges. The President, associated with the PO, stated that he will support the commercialization of hospitals. The other minor opposition (leftist) parties also underlined their opposed position towards the privatization (expressing the fear that private facilities will aim at positive financial results only, and not at the interests of patients), they also expressed the intention to establish a "Stop Hospital Privatization" committee and claimed that the PO "has no vision of the reform". 

Positions of other organizations

The Association of Polish Districts (Zwizek Powiatow Polskich) stated that the local authorities will not be able to cover the hospital debt. Many of them will restructure their facilities according to current regulations simply to avoid having financial problems on their own. In their expert's opinion, accordingly to the projected Law, the transformation process has to be described as voluntary in theory, but obligatory in practice.

The trade unions also do not want any changes. Health care employees want to keep the privileges and the status quo. The Solidarity Trades Union plan a protest action stating that the profit of the hospitals will become the priority for providers. In this opinion such change will infringe the right of equal access since richer local governments will provide better care than poorer ones. The OPZZ (All Poland Trades Union) felt cheated and questioned the purpose of the earlier consultation since such an unacceptable course had been decided upon.

In the opinion of the Physicians and Dentists Chamber (representing medical and dental practitioners) their disapproval concerns the lack of wide social consultations on the draft law. They further stated that they had been calling for the establishment of principles governing the ownership transformation for a long time. They expressed their support for the creation of the possibility for healthcare facilities companies to transform. At the same time they worried that until the systemic solutions to the debt problem is unsolved the transformation may be dangerous to both, staff and patients.

The responses to the government proposals presented by experts differ quite a lot. Some claim that the change is clear privatization, others say that if the local authority keep to be the owner - the new entity (commercial law) still is a public unit. The transformation of the legal status is seen as a useful instrument aiming at management improvement. They state that the cases of earlier transformation proved that the selling off of the facilities is a rare situation. Privatization as a result of the following restructuring process cannot be excluded, but the local government will continue to be the responsible organ for the availability of health services in an area. The provincial governor will still have the right to approve the closure of any hospital department. Privatization does not involve the private payment for services since the existing private facilities can contract the publicly financed services (National Health Fund - NFZ). Currently such contracts constitute the major source of income for the majority of the non-public hospitals.

The Rectors of the Medical Universities expressed a very opposed attitude towards the new legislation. Medical Academies are not prepared to finance the clinical hospital's debts. The question is what may happen if the medical school would not pay the financial obligation of its hospital? What will be the influence on the teaching and scientific activities in such a case?

Actors and positions

Description of actors and their positions
Regierung
Ministry of Health (MoH)sehr unterstützendsehr unterstützend stark dagegen
Ministry of Finance (MoF)sehr unterstützendsehr unterstützend stark dagegen
Prime Ministersehr unterstützendsehr unterstützend stark dagegen
Parlament
Citizens' Platform (party in the government)sehr unterstützendsehr unterstützend stark dagegen
Polish Farmers Party (PSL)sehr unterstützendunterstützend stark dagegen
Social Democrats (opposition)sehr unterstützenddagegen stark dagegen
Right and Justice (opposition)sehr unterstützendstark dagegen stark dagegen
Leistungserbringer
Health care units managerssehr unterstützendunterstützend stark dagegen
Medical Professionalssehr unterstützenddagegen stark dagegen
Other personnel (e.g. administrative staff)sehr unterstützendneutral stark dagegen
Kostenträger
National Health Fundsehr unterstützendunterstützend stark dagegen
Patienten, Verbraucher
Patientssehr unterstützenddagegen stark dagegen
Bürgergesellschaft
The OPZZ (All Poland Trades Union)sehr unterstützenddagegen stark dagegen
The Solidarity Trades Unionsehr unterstützenddagegen stark dagegen
Physicians and Dentists Chambersehr unterstützenddagegen stark dagegen
Wissenschaft
Rectors of the medical academiessehr unterstützendstark dagegen stark dagegen
Local authority
The poviat and voivodship authoritysehr unterstützenddagegen stark dagegen
current current   previous previous

Influences in policy making and legislation

The original proposal has not been changed yet. The MoH initiated the idea of the new Law project and the project is undergoing the stage of social consultations. The MoH has to answer the submitted comments suggested by different groups. It is expected to introduce all necessary corrections and to then submit the project to parliament.      

Legislative outcome

n/a

Actors and influence

Description of actors and their influence

Regierung
Ministry of Health (MoH)sehr großsehr groß kein
Ministry of Finance (MoF)sehr großsehr groß kein
Prime Ministersehr großsehr groß kein
Parlament
Citizens' Platform (party in the government)sehr großsehr groß kein
Polish Farmers Party (PSL)sehr großgroß kein
Social Democrats (opposition)sehr großgering kein
Right and Justice (opposition)sehr großgering kein
Leistungserbringer
Health care units managerssehr großgroß kein
Medical Professionalssehr großneutral kein
Other personnel (e.g. administrative staff)sehr großgering kein
Kostenträger
National Health Fundsehr großgroß kein
Patienten, Verbraucher
Patientssehr großkein kein
Bürgergesellschaft
The OPZZ (All Poland Trades Union)sehr großgering kein
The Solidarity Trades Unionsehr großgering kein
Physicians and Dentists Chambersehr großneutral kein
Wissenschaft
Rectors of the medical academiessehr großneutral kein
Local authority
The poviat and voivodship authoritysehr großgering kein
current current   previous previous
Ministry of Health (MoH), Ministry of Finance (MoF), Prime Minister, Citizens' Platform (party in the government)Polish Farmers Party (PSL), Health care units managers, National Health FundOther personnel (e.g. administrative staff)PatientsSocial Democrats (opposition), The OPZZ (All Poland Trades Union), The Solidarity Trades Union, The poviat and voivodship authorityMedical Professionals, Physicians and Dentists ChamberRight and Justice (opposition)Rectors of the medical academies

Positions and Influences at a glance

Graphical actors vs. influence map representing the above actors vs. influences table.

Adoption and implementation

The government expressed its strong determination to implement the new policy on health care units transformation. This particular project is expected to be the instrument of the main change concerning the whole healing activities issue. At this stage (the project of a new law formulation) it is impossible to recognize the indirectly or directly affected stakeholders. One of the main losers can be local authorities and medical universities because they are the funding bodies for the public and academic hospitals.

Monitoring and evaluation

At this stage no monitoring and evaluation instruments have been foreseen.

Expected outcome

The health care system lacks the financial resources, this is the obvious statement. It is, however, important to remember that before any additional funds are mobilised there must be certainty that the funds available are used responsibly and efficiently. Experience has shown that indebtedness still grows continuously. The information available from different sources allows for the opinion that the current organisation and structure, as well as the legal status of the health care institutions, lack adequate solutions taking into account the purpose of health care units activity.

There is a need for greater accountability and governance. Successive debt clearing actions have created a perverse incentive for hospital managers; there is no need to strive for efficiency when third parties cover debt as a reward for poor management. When there is no accountability and no negative consequences for those who are in charge, there are very limited incentives for effective and efficient management.

The commercialisation, a flagship policy of the present government, is the officially (by the governement) accepted remedy for the difficult situation, although there is no clear definition of the terms "commercialisation" and "privatisation" - the legal codification of these concepts does not exist. This causes unneceessary disputes of the different parties. In addition, there is no certainty that the restructuring process itself will lead to improvement. Further, in terms of public communication, the policy has not been promoted sufficiently to convince the public or the health sector employees of its importance. Since commercialisation requires the initial step of a hospital´s closure, some opinions concern the danger of the limitation in access to services, or the introduction of out-of-pocket payments. While government experts and many hospital managers are in favour of these changes, the opposition and trade unions remain not only sceptical, but firmly against any of such changes viewing them as the "de facto privatisation process".

Since the last report on the issue of the transformation of health care units the political situation has changed. After the presidential election there are no opponents from the President´s environment to the new MoH Law projects.

The new elements may be described as the following:

-  the restructuring of the public hospitals process would not be obligatory and therefore the inadequate financial management and instruments problem would remain unsolved.

- the local authorities as the establishing bodies will decide about the public hospital transformation themselves.

This regulation changes the situation of the local authorities: they are forced to change the legal status of hospitals due to the introduced provisions concerning the obligation of the debts repayment by the local authotity in case of the hospital legal status quo.

Impact of this policy

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

The planned changes concerning the new law on health care units included into the proposed project are based on the assumption that the process will result in quality improvements of health care services, improvement of the hospitals´ management, and debt decrease.

References

Reform formerly reported in

Status of health care units - Project of Law
Process Stages: Strategiepapier
Plan B - a lifebuoy for hospitals
Process Stages: Umsetzung

Author/s and/or contributors to this survey

Iwona Kowalska

Empfohlene Zitierweise für diesen Online-Artikel:

Iwona Kowalska. "The Project Law on Healing Activities". Health Policy Monitor, October 2010. Available at http://www.hpm.org/survey/pl/a16/1