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European hospital healthcare update: Member State profiles

Ferenc Varga
1 January, 2008  

Ferenc Varga
President

György Harmat
Member
Hungarian Hospital Association

The main problem in Hungarian healthcare, since the change from the old socialist system to a democratic one in 1989, is that there is no real healthcare insurance functioning in Hungary. The only system dealing with health provision is the National Social Insurance Company, which is not clearly separated from the country’s state budget. The basis for getting healthcare is to use a so-called “Social  Insurance Card”, which is provided to every person in employment or on a pension and all children and homeless people. The card is not withdrawn when a person’s employment ceases. However, these people are classed differently, since while in employment the employers contribute a certain amount towards an employee’s healthcare, as well as the employee themselves. Along with children, pensioners and homeless persons, ex-employees have no-one contributing to their healthcare and are considered a burden on the state. In addition, in Hungary the number of people working “black” (ie, not paying tax) is unusually high compared with other countries, and no-one is contributing to their health costs either. The result is that the insurance money is never enough to cover all the healthcare bills, and it needs to be topped up from the state budget.

According to recent statistics for 2005, 54% of hospitals in Hungary were bankrupt, 23% had zero balance and the other 23% had some reserve money. However, this situation has worsened, and since the summer of 2007 only about 10 institutions had some reserve money.

A typical characteristic of Hungarians is that they tend to go to the doctor very often, sometimes quite unnecessarily. Often old people who cannot be taken care of at home are kept in hospitals, even though it is not medically justified. Some people are treated in hospitals when special ambulatory care would be sufficient. The three levels of patient care are not separated enough. Primary care needs to be strengthened; only people who really need it should be sent for specialist care, and even fewer to hospitals.

There is another problem with Hungarian healthcare, namely the continuous overspending and underplanning of the state budget for medicines. It functions as a system open from above, into which state money flows steadily.

All of the factors mentioned above are reasons why a radical reform of the Hungarian healthcare system is necessary. The first and most important step should be to make the provisions stand on a real insurance basis. For this purpose, a series of changes have to be introduced. The Hungarian Parliament discussed some of these proposals, including co-payment, a decrease in the number of active beds, merging hospitals, and appointing so-called “weight-point hospitals” where every treatment is available.

The first steps in the reform have recently been announced: from 15 February, the so-called “visit fee” and the co-payment for stay in hospitals will be introduced: the visit fee will cost 300 Ft (about €1.20) for every visit to a doctor, and hospital stays will cost 300 Ft per day. The aim is not only to raise money for healthcare institutions but also to reduce the number of superfluous visits to the doctor. The increasing shortage of doctors due to the lack of financial and moral recognition of the medical profession, makes it even more difficult to satisfy the requirements for providing fast and efficient care.

There are over four million people (of a total of 10 million) who will be exempt from these payments, such as children under 18 years, people living below a certain living standard, homeless people and patients with chronic diseases.

However, the most important task now is to filter out those people who do not pay any insurance, and this is proving difficult to perform. Since Hungary, up to now, has had only one healthcare insurance company, the Ministry hopes that it can provide a list of people insured by this company, and thereby filter out the so-called “stowaway” people. Professionals claim that if this can be achieved the financial situation of the healthcare budget would improve significantly. It is estimated that the number of
stowaways is between 600,000 and 800,000 ( 5–8% of the total population).

Introducing more insurance companies, as suggested by the smaller coalition partner, has been postponed. General opinion is that before more companies are introduced the one existing insurance company should be capable of working as a real insurance company.

The transformation of the hospital network has also started. Thirty-nine hospitals have been designated as “weight-point” hospitals, which means that in these hospitals healthcare provision should be available 24 hours a day, in every specialist field. The fate of the other hospitals is not clear yet. Some may be partly turned into nursing homes, as there has been a very big shortage of this branch of healthcare in Hungary. This would also ensure that the active beds in hospitals are not occupied by people who do not need active hospital care. The other parts of these hospitals may have special tasks, such as caring for people with specific illnesses. Some hospitals will merge, as happened to the Madarász Street Children’s Hospital, which was unified with the Heim Pál Children’s Hospital.

All these changes will mean that about 1,500 doctors will lose or have to change their job. The National Institute for Psychiatry and Neurology, the Ágost Schöpf-Merei Hospital and Mother Protecting Society and the Children’s Hospital on the Svábhegy will all close. Their functions and patients will be taken over by other institutions. For example, the building, real estate and equipment of the Airforce Hospital at Kecskémét will become the property of the Kecskemét County Hospital, according to a joint agreement between both institutions, and, as a result, the sanatorium at Parádfürdö will not have to close and will operate as the rehabilitation and nursing unit of several hospitals.

The believers in the reform process have always claimed that there are already enough doctors in Hungary but that they are concentrated in Budapest. However, after a careful calculation by the Ministry of Health, it turns out that there is a shortage of about 2,500 doctors, including 200 family doctors. With the changes in the number of hospitals, about 1,500 doctors and 5,000–6,000 other medical workers may have to change their job, although the government has promised to assist them in finding new jobs, which may mean a move to another region. The search for employment will be mediated by the regional institutions of ÁNTSZ (State Service of Public Health), as well as by a committee organised by the Minister of Labour and the Office of the Prime Minister.

Another very important question concerning the future of Hungarian healthcare is the available money. The central budget will take over indemnifications payment, independent of the hospitals’ proprietors. A possible 7.5bn Ft (about €29m) will be available for institutions participating in the transformation – 800,000 Ft (€3,146) for creating new active beds, 600,000 Ft (€2,359) for new rehabilitation beds and 500,000 Ft (€1,965) for new chronic nursing beds. The budget for financing ambulant care will be raised, and the complementary fee introduced for certain specialties in October 2006 – oncology, emergency care, cardiology and intensive care – will nearly double. The basic fee for hospital care will increase from 136,000 Ft to 146,000 Ft (€574)/DRG case this year. Patients obviously want to know what will be their fate in the transition period. However, in the short term they will be able to stay with their current doctors: for example, mothers due to deliver may remain with their doctors who will be paid by the insurance company even if they have transferred to another hospital.

The other big “money-gulping” system in need of reform in Hungarian healthcare is the medicine budget. From January 2007, the free-of-charge medicines will have to be paid for (300Ft [€1.20]). People on public aid for their medicines will not have to pay.

At the beginning of April, the Minister of Health Lajos Molnár – obviously under pressure from the opposers to the reform – resigned. He was replaced for a short period by the Minister of Economics and Transport János Kóka, who is, apart from his past as a very successful businessman, an educated medical doctor. In addition, he has been elected President of the smaller coalition party, the Free Democrats. The Ministry of Health belongs to this party, who nominated Ágnes Horváth, former undersecretary, as the main person in charge of healthcare reform. In April she took the official parliament oath. This may mean that the future of medical insurance will be decided, if not in the near future, within a reasonable timeframe. The question is a debate point between the two coalition partners – the Socialist Party leans towards having one medical insurance company, whereas the Free Democrats are pushing for a competitive, more insurance company-based system. However, the Free Democrats agree that the current system needs to change, since the one insurance company in Hungary does not operate as a real insurance company.

The Hungarian Hospital Association played an active part in developing the new, hopefully better healthcare system. The leaders of the Federation participated in discussions with the Ministry of Health about introducing co-payment in form of the “visit fee”, and the daily fee for hospital care. They agreed these measures, but also expressed doubts about the hospitals merging and closing, which, in fact, has caused and could still cause a real problem. A series of concrete questions arises concerning this measure that have to be clarified. The authorised members of the Federation will also discuss the problem of whether one or more medical insurance companies should be allowed to operate. For the moment, the advantages and disadvantages of both systems are the focus of public and medical professional debate.