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Crisis in the Hungarian health system


Brian Edwards CBE
Emeritus Professor of Healthcare
University of Sheffield
(European Hospital and Healthcare Federation)

The Hungarian health system is in crisis – that is now official, with a report about reform currently under discussion with ministers. Health fund expenditures in 2006 exceeded income by more than 30%. The national pension fund faces a similar deficit. The choice the Hungarians face is either to open up the health insurance market or to return to a tax-financed, state-run, Beveridge-type system. Opening up the market looks to be the most likely outcome.

The 1990s saw big changes in Hungary. GPs are now funded on a capitation base. Diagnosis-related groups are thought to have worked well in secondary care, as has national planning, including nationwide disease management and centralised collection of morbidity and drug consumption data. An experiment that introduced a health maintenance organisation framework for two million people via an outsourced geographically defined clinical network is also judged to have been a success. What is considered to have gone wrong – and needs to be fixed – is the health insurance system. The plan is to create a new health insurance authority that will issue licences to commercial insurance companies. The authority will also monitor price developments and independently assess hospital quality standards. Co-payment for hospital care was recently introduced at a nominal amount. Waiting lists are now managed. One type of list (transplantations) is held centrally, with the rest being managed locally. The national basic benefit entitlement, only loosely defined at present, will have much sharper contours in future, based on three pillars. The first one, focusing on public health, prevention and blood collection, will be funded by the Ministry of Health. The second one, which covers basic and routine care, will be met from mandatory private, for-profit health insurance. The third one, which covers catastrophic care and long-term illnesses such as mental health, will be covered by state insurance paid for out of payroll taxation. Dangerous sports injuries (for example, those incurred in bungee jumping) will not be covered, and the patient’s freedom to go to any hospital will be curtailed. If patients go to a hospital without proper referral they will have to pay full costs. Financial support will also be withdrawn for inefficient medical technologies, drugs and medical appliances. Medical examinations for driving and hunting licences will no longer be eligible for payment. Hospitals will in future be permitted to run their own ambulance cars rather than rely on a chaotic and expensive private sector. Doctors, nurses and pharmacists will be directly affected by planned changes. Mandatory membership of professional chambers is to be abolished, which, it is thought, will open the door for many new organisations to emerge in all three professions. Hungary is also planning to downsize radically its acute hospital sector, from 60,000 to 44,000 beds, but increase its rehabilitation and continuing care beds by 7,000. The number of hospitals providing cancer care is to be reduced from 400 to 52. It is the minister of health who has the power to determine the size of every hospital, whoever owns it.

The pharmaceutical market has also seen radical changes, and more is on the way. Price cuts are being demanded in 2007, as is a contribution to any sales overruns beyond that budgeted for by the Health �Insurance Fund. Every prescription has to be verified via an online connection to a central database. Sales teams will require a very expensive licence to operate, and physicians are being offered incentives to use cheaper drugs and generics. Patients have to pay a minimum prescription charge of 300 Hungarian forints (e1.18). There are no longer any free prescription drugs. Pharmacies have lost their monopoly on nonprescription drugs, which can now be sold by any store with a licence. Not all of these reforms are popular, particularly the plans to downsize the secondary care system. The government, however, appears determined to sort the problems out before they get worse.

Meanwhile, in Poland the Ministry of Health is planning to introduce voluntary supplementary insurance, which would entitle patients to better accommodation in hospitals, a priority in their choice of doctors and additional nursing care. There is significant opposition to the plan. Both countries are learning fast that changing health entitlement and systems is a fiercely political process.

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