Over the past two weeks there have been strikes by medical practioners to raise awareness of their wages and working conditions. This seems a suitable time to discuss the heathcare services and healthcare reform. It is unlikely that the blind raising of wages, i.e. expenditures, will be the “panacea” to the current problems.

What is the current situation?

The adoption of the Bulgarian Parliament Health Insurance Act in 1998 introduced the system of compulsory and voluntary health insurance in Bulgaria. The compulsory health insurance is a system of social health protection of the population that guarantees a level of health services. The compulsory health insurance is administered by National Health Insurance Fund (NHIF), established in 1999. The voluntary health insurance is optional. It is carried out by licenced shareholder companies, registered under the Commercial Law.

The mandatory health insurance system is designed, and works, as a state monopoly. It has the exclusive right to grant mandatory health insurance and to guarantee the observance of the insurance rights in respect of all citizens. One of the arguments behind this is that the system is “socially oriented” and is one of the layers of social protection of the population.

Characteristics of the existing model

There are three parts to the exsiting healthcare system: the general practitioner (GP) is the first step in the process of health care treatment; the National Health Insurance Fund (NHIF) is the intermediary; and the final step of health services is the hospital.

What is the situation? 1) Mandatory participation. The health insurance model requires mandatory health insurance under a state-set contribution. The taxable income is also set by the parliament. 2) The state is practically a monopolist in the sphere of health insurance. The contributions are gathered by a sole health insurance fund- the National Health Insurance fund (NHIF) - which administrates the revenues and expenditures of the insured people.

However, the monolopy of the NHIF, guaranteed by law, has lead to:

an economically inefficient expenditures policy;
a lack of incentives for the search of qualified suppliers of health services;
non-market decisions maked on the NHIF’s behalf due to the lack of competition in the sector.

Some aspects of the (indispensable) health care reform

Taking into account the shortcomings of the existing model, the behavior it stimulates, and the fiscal burden for the taxpayers of financing health care services, a reform is necessary based on the following postulates:

Abide by the rules of the private and competitive supply of health care services
Establish the principles of the free market-based competition on the health insurance market
Bilateral individual contracts between financing organizations and suppliers of health care services
Minimum rate of the mandatory health insurance and extension of the choice for supplementary health insurance and saving for health
State financing of urgent medical aid

Such a reform requires a series of changes outlined below:

1. Privatisation and deregulation of the supply of hospital services.

A necessary condition for the establishment of a health care services market with independent participants is the privatisation of state-owned hospitals. Private ownership will enhance the process of optimisation of expenditures, which will result in lower prices under a competitive supply of health care services. Independent providers contract the supply of health care services with health insurance funds, insurance companies or directly with the patients.

2. The pensioners, the under-aged and all people who receive their incomes from different social programs shall have the opportunity to choose where to deposit their contributions (for children the choice shall be made by the parents).

The financing allocated from the budget is personalised and every beneficiary decides on the receiver (health insurance fund and insurance company). The contribution for under-aged shall be equalised to the contributions for all other insured.

3. The mandatory health insurance is provided by the health insurance funds and insurance companies.

The contributions are the same for every period and are based on the taxable income. One part of the contribution covers typical health insurance events. The rest of the contribution covers regular medical examinations. The first component of the contribution is directed toward an insurance company chosen by the recipient, and the second component goes to an optional health insurance fund, acting on solidary principle. The necessity of solidary funds is predetermined by the political consensus that everyone has the right to receive basic health care.

4. The contractual agreement for the supply and payment of health services is bilateral – between independent providers (doctors, dentists, laboratories, hospitals) and clients (patients, funds, insurers).

In order to improve the performance of both the health insurance fund and the hospitals, it should be initiated by the fact that health is primarily an individual concern. According to Mr. Krassen Stanchev statement (2006) this signifies several things:

a) People should be given incentives not to be sick, but to take care of their health;

b) When people have deposited some money in the Health Insurance fund, they should have the right to use them;

c) When somebody decides to take some of the deposited money, he should be required to ask those people for permission;

d) There should be a lot of health insurance funds, hospitals, and choice of doctors, so that people should have the option to choose;

e) In order for all this to exist, the doctors (specifically the doctors’ union) are not the proper regulator to participate in the management of the hospitals, to set the prices of the services and the health care itself. The doctors participate in health care not as bearers of the Hypocrites low- this is an individual responsibility, but just as a clique of interests, which needs more money together with less control and lower performance.”

However, the right way to tackle the problem is to make radical reform (taking into account the above mentioned points and world’s best practices) which is unambiguously connected with the political goodwill.