Medical System in Romania

PRINCIPLES
for
REFORMING
THE MEDICAL SYSTEM
in
ROMANIA
Principles for reforming the medical system in Romania 2
FOREWORD
The first wealth is health.
Ralph Waldo Emerson
The most serious challenge facing the democracies in the Euro-At-
lantic area in the coming years is brought by their healthcare systems. The
main challenge could be summed up in the following statement: while states
are forced to cut public expenditure, providing healthcare to their citizens
costs more and more. One must buy something that grows more expensive
with less money. Governments react differently when faced with this chal-
lenge. The Romanian Government will very soon have to formulate its an-
swer clearly.
It is increasingly clear that states will no longer be able to afford pub-
lic budgets drawn up in the spirit of the years before 2008-2009. The sover-
eign debt crisis, as a specific development of the global crisis we are
experiencing, has turned states into debtors lacking credibility in the world
financial markets and thus one of the most important budgetary money sup-
plies has become increasingly more difficult to get. At the same time, our
living standard as European citizens has noticeably increased in comparison
to that of our parents. The general health of the population has improved,
the life expectancy has risen and the expectations European citizens have
from their countrys healthcare system are even more demanding. We live in
Principles for reforming the medical system in Romania
an age when the concern for ones health is widely spreading among citizens,
and the years of efforts to bring about a change in mentalities start to show
their effects, if only considering that prevention now holds an increasing
prominence in the general structure of the medical services. At the same
time, the costs with the medical infrastructure have risen together with an
amazing technological progress, the costs with training specialists has also
risen, the medical services have become more and more complex and ex-
tended their reach during the last decades. Adding to all the above the fact
that throughout their life people become productive at a more advanced age
(schooling and professional training now last longer than for the prior gen-
erations) and they need medical assistance earlier in their active life than
our parents or grandparents, we can see the complexity and depth of the
problem states have to solve with respect to the stability and predictability
of healthcare systems.
All the above are compounded by developments in the mind-set of
post-World War II European citizens, developments that became more ob-
vious after 1990. To the majority of citizens, the state has become a sort of
supplier of public services to which anyone is entitled under fair, equitable
conditions. The state has ever larger duties to citizens and they, in turn,
enjoy more and more rights in relation to states. The citizens expect more
from their state and this is not the place to discuss whether this trend benefits
socio-economic development or not. I will merely note this social fact. In
their turn, to get the peoples support, politicians keep promising more and
when they assume power also deliver more to their constituents. This general
trend in the evolution of the relationship between citizens and the politicians
they elect is extremely important for the debate on the future of the health-
care system in every European country and the EU as a whole. Thus, a con-
tinuous public pressure on the state budget and particularly on the
healthcare budget keeps developing.
The answer to these important challenges is, however, ideologically
determined. Although this could rather look like a purely technical issue,
devoid of ideological overtones, the fundamental choices on the basis of
which it is possible to frame a comprehensive answer to the developments
described above are and remain political. Left-wing thought puts the burden
on the shoulders of the state. To the left, it is more important than anything
4
that the public healthcare system be able to provide medical insurance to
anyone, for anything. Like everything the left-wing thought generates, this
is a utopia that eventually proves dangerous. First of all, because the exag-
gerated expansion of medical services leads to a decrease in their quality.
Secondly, because the state resources are far below what is needed should
this utopia materialize. Last, but not least, because unrealistic social expec-
tations would thus be created, thereby leading to social frustration that could
later morph into difficult to manage frictions. Right-wing thought is clear-
headed, realistic, and understands that the burden of the ever increasing
cost of healthcare must be carried equitably, in a partnership between the
state, citizens, and the private business environment. The very first respon-
sible for ones health is the citizen. The best social protection instrument
that includes ensuring adequate healthcare is a job. Let us concern with
leaving enough money in the citizens pocket so he can afford to take care
of himself. At the same time, the state will have to adequately fulfill its duties
to taxpayers, ensuring transparency and honesty for the medical services
market.
Just by simple comparison, it is obvious that the public healthcare sys-
tems in Europe are quite different to each other. In each case, a high degree
of national particularities is visible. Taking a look across the Atlantic will
result in noticing even more glaring differences. Still, what we need to pur-
sue is a system combining the advantages of all of these systems. Although
the challenges are of a general nature, the answer can only be specific.
In this context, it is the final hour for Romania. The reform of the pub-
lic healthcare system was repeatedly postponed from one year to the next
for political reasons. In the last attempt, the right-wing government was
forced to cease the passage of a legislative package that would have re-
formed the system because it could no longer muster political support in its
favor. After introducing radical reforms in the public pensions system, in the
public wages system, in the labor market, education, and the judiciary, under
the general conditions of the economic crisis Romanias right-wing govern-
ment ended up without the needed political energy to reform the healthcare
system. Now, the left-wing government prepares a reform that largely follows
the line of thought of the preceding government. However, we can see it will
miss the competitive element brought under the previous version of the law
by the multiplication of state health insurers, as well as the unrestricted ac-
cess to the market of private health insurers. What things are going to look
like in the future remains to be seen.
What is certain is that the debate on reforming the public healthcare
system is going on in Romania, and this paper is a useful contribution. The
Institute for Popular Studies has been taking part in this public debate for
many years, thus answering the interest shown by many people on the po-
litical right who expect viable solutions to such a complicated problem. Let
us hope we can bring our contribution.
Sever Voinescu-Cotoi
ISP Board Member
6
Chapter I
Weaknesses of the Healthcare
system in Romania
Author: Cristina Dobre
1
A. The current state of affairs
The national healthcare system has been too little restructured in the
past 20 years. Its organization is still over-centralized, and its development
has not been followed the principles of the market economy. Although health-
care, because it is a national priority, must be a market regulated by clear laws,
the current legislation has caused the system to be wholly dependent on state
institutions, the Ministry of Health and the National Health Insurance Agency.
Increasing decision powers of professional bodies like the physicians board,
the pharmacists board and the Nurses Order are noticeable, but this has not
brought benefits to the national healthcare system. The main causes of this
situation are the financing, mostly from public sources, and the lack of very
clear quality standards, enforced without exceptions. Another subjective cause
of the poor operation of the healthcare system is the lack of responsibility or,
at least, the low administrative, professional, financial and legal responsibility
of all the players involved, from physicians to nurses and from managers to
the owners of healthcare services companies.
Romania ranks last in Europe in healthcare expenditure, with 5.6% of
its GDP. The financing of healthcare expenses comes primarily from the
1. Cristina Dobre, a physician, was a member of the Chamber of Deputies, the lower house of the Romanian
Parliament, between 2008 and 2012, representing the Liberal Democratic Party of Romania. She was also the
vice-president of the Health Commission of the Chamber of Deputies.
public sector (over 80% in the last years) and, additionally, from the private
sector.
The consolidated budgetary income is far lower in Romania than the
EU average, a major constraint on the ability of the government to ade-
quately finance the public healthcare services. Budgetary income averaged
32.6% of the GDP in Romania between 2000 and 2009, while the EU-27
average was 44.5% of the GDP. This explains the low allocations for the fi-
nancing of the public healthcare sector in Romania. The fact that the share
of healthcare expenditure in the total public expenditure stayed flat in the
last years, at 10-11%, shows the amount of resources the public sector can
afford under the current fiscal-budgetary framework. In this context, increas-
ing the financing of healthcare expenditure from private sources appears as
normal, as well as a viable solution for solving the existing structural
problems.
The lack of operational standards in the healthcare system has led to
disastrous effects on the quality of medical services and consequently on
the general health of the population. At this time there is no standard for
medical services establishing the precise diagnostic protocol and treatment
for each disease. In practice, the physicians, simply because they have a
diploma, can do whatever they want from a medical point of view, and hold-
ing them accountable is extremely difficult. Moreover, standardizing all ac-
tivities in a medical unit is extremely vague. Even if under the current
legislation there are mandatory standards - sanitary, epidemiological, for
staff, circuits etc. these are either minimal, or not followed. Thus, their ef-
fect is insignificant. This is why there still are medical units (doctors offices,
hospitals) which should be closed or restructured.
The low responsibility of all the players is obvious and also an impor-
tant cause of its poor functioning. Things went so far, in what the public
opinion is concerned, as to blame the minister of health for medical errors
or administrative mistakes in any medical unit in the country. The lack of
clear rules and punitive measures in the primary or secondary medical leg-
islation leads to a significant decrease in the quality of the medical service
and the suffering of people. Administrative sanctions given to the medical
staff amount to a reprimand at the most, revoking the right to practice for
doctors or nurses is inexistent, and handing down financial damages for mal-
8
practice is a rarity, although medical errors or administrative mistakes are
increasingly multiplying.
The backbone of the national healthcare system consists in the primary
medical assistance, pharmacies, the emergency care system, and hospitals.
Unfortunately, there is a private monopoly for family doctors and pharma-
cies, and a state monopoly in the case of the emergency care system and
hospitals. Both types of monopoly are dangerous and lead to the malfunc-
tioning of the system.
The primary medical assistance is provided by the family doctors, who
are represented by a single owners association. Pharmacies and distributors
of medicines and sanitary supplies are exclusively private businesses and
this sometimes leads to disruptions in the supply of medicines to the popu-
lation. Ambulances and hospitals are mostly state-owned and do not have
any competition on their market, which leads to a decrease in the quality of
the services they provide. Measures to discourage the two monopolies are
desperately needed, so that the principles of the market economy could op-
erate in the national healthcare system.
Over 50% of the people accessing medical services are hospitalized.
From this point of view the hospital system is of a major importance. Hos-
pitals developed anarchically in Romania, based on two basic principles:
territorial-administrative and historical. Moreover, in university towns there
is an additional one: the university principle, according to which every
chair of the medical school should have as its counterpart a clinic in a state
hospital. Most of the times these principles collided with the actual need of
medical services requested by citizens, so there are many cases where hos-
pital beds are unused or are used for unnecessary admission to hospitals, or
cases where beds are insufficient and patients must share one bed.
Public health programs are poor because their final implementation is
mainly left to the family doctors. These doctors, who co-own private com-
panies, do not enforce these programs because they do not share a financial
interest in them and there are no drastic punitive measures for non-compli-
ance. In addition, execution and control procedures are either vague or in-
existent. This is why, for instance, the immunization program has a low
efficiency and the effect is the re-apparition of diseases that had long been
eradicated in Romania.
The health insurance system is at this time a full monopoly in the
hands of the state. The primary and secondary legislation regulating this sys-
tem has a wrong understanding of the principles of solidarity and subsidiar-
ity. Politics and populism led to income from contributions being collected
from a minority of the population, approximately 6 million people, while
expenditure covers the whole population. The current situation, where 6.8
million contributors finance all expenses for 19 million insured, is unsus-
tainable in the long term, especially when taking into account the indis-
putable trend in population ageing and the will to catch up with the
expenditure levels in the EU states. Hence, the low financing of the health-
care system through health insurance and the need to reform it. Private ini-
tiative in health insurance is very scarce at this time and measures to
encourage it are needed.
The salary income of medical staff is very low in Romania, at least in
comparison to other European states. Even worse, salaries are the same
across the board in state healthcare units, without the possibility to differ-
entiate them according to the quality of the work done. The causes are the
financing exclusively from budgetary sources, the lack of financing through
direct payments and excessive auxiliary staff working in state healthcare
units. Besides, salary income is especially low in state-owned healthcare
units, in the private system these being far superior. All these causes can be
eliminated through fair legislation, which will lead in the near future to an
increase of the salary income in healthcare.
B. Our vision
The national healthcare system must be resized to be able to cover the
medical services needed by the population, within the limits of the available
financing. In every area of medical assistance there should be a sufficient
number of medical services suppliers, according to the number of people
and the recorded morbidity and mortality indices. The law should establish
and impose a maximum number of suppliers for each region and clinical
area, so as the correct development of the system should be respected, cov-
ering the needs of the population and with easy access to healthcare. Thus,
the number of hospital beds, family doctors, ambulances, pharmacies and
10
other types of suppliers must be determined only according to the need for
medical services.
The financing of the healthcare system must be reformed. Financing al-
most exclusively from budgetary sources cannot cover the needed expenditure
in healthcare, in the context of the current financial and fiscal legislation.
There is an absolute need to introduce standardization on a broad scale
in healthcare. Imposing standards will result in increased accountability of
all those involved in the healthcare system. The law will impose mandatory
standards on:
1. Standardization of medical services through guides, diagnostic
and therapeutic protocols for any disease
2. Mandatory criteria for the accreditation and evaluation of any
medical unit where medical services are provided. All non-com-
pliant medical units will be closed
3. Quality and control criteria for medical services, and precise
and drastic punitive measures in case of non-compliance
4. Maximal cost standards for medical services, medicines, mate-
rials and medical equipment, correctly calculated and enforced
by laws.
Public health programs, fully financed from the state budget and not
from health insurance premiums, will be devised so as to be both efficient
and effective. Every program will be analyzed on the basis of needs and fi-
nancing possibilities. Inappropriately financing any kind of program means
not attaining the anticipated effects, that is, lack of effectiveness. It is prefer-
able to maintain and give additional financing only to the programs that
proved effective, provided there is increased efficiency.
Several measures are required in the healthcare system:
- Access for private insurers on the health insurance market, with the
same rights and obligations as state insurers.
- Uniform premiums for health insurance for all categories of contrib-
utors who have an income and the elimination of exceptions.
- The gradual return of the contribution for health insurance to 2005
levels, together with reaching 3% annual economic growth.
C. The specific targets we consider
are the objectives in the chapter on Healthcare
of the governments program
1. Improving the health of the population while harmonizing the Ro-
manian healthcare system with the European Union system.
2. Setting the national strategy for the development of health services
for a period of minimum 8 years.
3. Providing and guaranteeing the access to high quality healthcare
services for all citizens, by imposing mandatory quality standards on health-
care units.
4. The public financing of the national healthcare system must reach
12% of the annual budgetary expenditure and 5% of the GDP, to ensure the
functioning of a European level healthcare system.
5. To appropriately determine the medical services packages covered
by health insurance.
6. Eliminating state or private monopolies that exist in certain areas
of medical assistance.
7. Reorganizing hospitals according to the needs for hospital medical
services in each clinical area, without a reduction in the number of beds.
8. To develop and make more efficient the national healthcare pro-
grams, according to the morbidity and mortality indices of the major dis-
eases, and financing them fully from the state budget.
9. Restoring and developing outpatient care, especially in rural areas.
10. The emergency care system, the ambulance system, SMURD, and
the emergency care units of the state hospitals will be fully financed from
the state budget.
11. Eliminating the state monopoly on health insurance.
12. A fair determination of the cost standard and its implementation
throughout the national healthcare system.
13. Guaranteeing the access to free and subsidized medicines, accord-
ing to the morbidity indices and financing possibilities.
14. Increasing the salaries of the medical staff working in the public
system, according to education, competencies and the amount of work done.
12
15. The participation of the medical staff in a continuing education
program guaranteed by the state.
16. Ensuring transparency in public spending.
17. Amending the relationship between patient, doctor, and healthcare
unit, including its legal aspects.
18. Full and mandatory digitization of the healthcare system and the
gradual elimination of paper documents.
D. The public policy measures will include measures to drive
the appropriate development of the national healthcare system, in order to
cover the populations needs for medical services, measures to unlock the
existing blockages, and measures to make budgetary expenditure more ef-
ficient, together with increasing the budgetary expenditure on healthcare.
These measures will be implemented through the establishment of a legisla-
tive and institutional framework that allows the development of the Roman-
ian healthcare system in connection to the European one. The legislative
framework considers the following principles:
1. Eliminating all exceptions to the general rule.
2. The elimination of all interpretable language.
3. The punitive measures are clearly stated.
1. Mandatory standards:
- The introduction of mandatory quality standards at all levels of the
Romanian healthcare system and of a quality assurance system for medical
services.
- Establishing the standard for medical services by setting diagnostic
and therapeutic protocols for all clinical and surgical illnesses and condi-
tions.
- Integrating healthcare services into complex assistance networks,
from primary care up to hospital care, on the basis of mandatory protocols
and procedures, clearly stated in the legislation.
- Digitization of the healthcare system by creating single databases,
interconnected to those of other public institutions, and the elimination of
the required, signed and stamped, paperwork.
2. Developing the public healthcare:
- A continuing supervision of the implementation of the national im-
munization program and ensuring its financial support from the state budget.
- The extension of the national immunization program through the in-
troduction, free of charge, of new vaccines, according to EU practices.
- Correlating the actions undertaken in Romania to the Program of
Community Action in the Field of Health 2008-2013 established by the Eu-
ropean Union.
- Promoting partnerships with the civil society and the national edu-
cation system to develop health education programs and promote a healthy
lifestyle.
3. Hospitals:
- Building a network of emergency care hospitals that could cover the
need of hospital medical services for medical-surgical emergencies.
- Improving the short stay hospitalization system and home care, to-
gether with the elimination of wasteful long duration hospitalizations.
- Setting the number of the hospital beds needed for continuing hos-
pitalization according to regions and clinical areas.
- Developing the financing system on the basis of closed medical cases.
- Developing and expanding the externalization of non-medical activ-
ities and services, including through public-private partnerships.
- Finalizing the hospital accreditation process on the basis of manda-
tory quality standards, so that there will no longer exist hospitals unable to
ensure adequate workplace rules and conditions.
- State investment in multifunctional centers, especially in rural areas,
consisting of a permanent center for primary care, an outpatient care unit,
an emergency unit with an ambulance station or SMURD center, an outpa-
tient dental care unit and a pharmacy.
- Eliminating the state monopoly on the hospital system by stimulating
private investment and public-private partnerships in this sector.
- Implementing a national investment program, including through the
absorption of community funds that could allow the development of a new
infrastructure of the national hospital system.
14
4. Primary medical care:
- Eliminating the private monopoly on the primary care through the
creation of fully state-owned permanent centers.
- Developing primary care through an increase in the budgetary funds
allotted to it from the health insurance fund, allowing family doctors to en-
sure quality medical services and to participate in mother and child super-
vision programs, prevention and supervision programs for chronic illnesses
having an impact on public health.
- Setting clear sanctions for primary care suppliers in case for breaches
of professional obligations.
- Concession and/or selling the state-owned surgeries to the doctors
managing them.
- The involvement of family doctors in community care.
5. Outpatient care:
- Making over city and village hospitals into multifunction medical
centers.
- Developing public-private partnership and involving the business
community in the development of integrated medical networks.
6. Developing pre-hospitalization emergency care:
- Increasing the financing from the state budget of the emergency sys-
tem and developing SMURD-type services, so that these could cover the
whole country.
- Ensuring medical transportation, including by plane or by boat.
- The introduction of the community ambulance system to cover the
emergencies in the countryside, especially in the areas far from hospitals,
in cooperation with the local authorities.
- Stimulating private initiative in non-medical patient transportation.
7. Medicines assistance for the population and medicines policy:
- Elimination of the private monopoly on the pharmacies network by
establishing at least one fully state-owned pharmacy in every county.
- Guaranteeing access to subsidized and free medicines for the whole
year.
- Subsidizing 90% of the reference price of medicines for those having
an income under the minimum wage.
- Providing free medicines for children, high-school students, college
students, disabled persons, pregnant and nursing women, if they have no
other income.
- Stimulating the opening of pharmacies and pharmaceuticals units in rural
or isolated areas, including through the introduction of mobile pharmacies.
- Transparent pricing and subsidizing criteria according to efficacy
and efficiency.
8. The national health programs:
- The national health programs will be readjusted according to mor-
bidity and mortality indices.
- The national health programs will mainly target the diseases causing
the most illnesses, the most deaths and the loss of the most working hours.
- The national prevention and treatment programs will be fully fi-
nanced from the state budget.
9. Healthcare for the Romanian villages
- Developing a network of multifunction centers for primary care,
emergency care, specialist care, dental care, and prescription of medicines.
- The introduction of the health education program in all schools in
rural areas and of a prevention and prevention program in dental pathology.
- Involving mediators for the Roma population and of community so-
cial assistants in the healthcare system in rural areas.
10. The health insurance system:
- The fair application of the principles of solidarity and subsidiarity
in health insurance.
- Introducing cost standards at all levels and correct calculation of
these.
- Dimensioning medical services packages according to the healthcare
needs of the population and financing possibilities.
- Introducing private health insurers in the system, with the same rights
and obligations as the public health insurers.
16
- Complete digitization of the health insurance system to efficiently
monitor and to eliminate theft and corruption.
11. Human resources policy:
- The elaboration of the national healthcare human resources plan, by
planning in advance, for a period of 12 years, the need of doctors and nurses
for each clinical area.
- Stimulating the use of contractual medical staff with fixed-term con-
tracts, to provide personnel for geographic or clinical areas lacking such per-
sonnel, while the pay will be made on the basis of the efficiency and result
of the medical services provided.
- Hiring management staff at all levels of the state healthcare system
only on a management contract, based on strict performance criteria and an
objective evaluation system of management performance.
Therefore, the commitment of the political class and a fair manage-
ment of healthcare funds are needed.
Regarding the political will, the unanimously shared conclusion is that
the Romanian healthcare system is a sort of a "black hole"; even if more
money would be given for healthcare this would not lead to an increase in
the satisfaction of patients. A new vision for the whole system, one shared
by the political class as a whole, would be the only solution. Even if any
change meets resistance, the current customs in the healthcare system must
be eliminated. Politicians must set the objectives and the lines of action must
be agreed with the civil society.
Any kind of monopoly in healthcare must be eliminated (the system
must operate by balancing supply and demand while guaranteeing the right
to healthcare provided for in the Constitution).
There is a need for continuity in what concerns the decision making
process in the healthcare system. Once the objectives and the lines of actions
have been set, these must be completed regardless of who holds the office
of the Prime Minister or the ruling party.
Regarding the fair management of healthcare funds, the main issue is
the elimination of the monopoly in healthcare (whether they are state mo-
nopolies or private monopolies), together with broadening the contributor
base. The state should continue to be responsible for the public health and
prevention programs.
Also, copayment must be introduced, although 66% of the population
is against it, but this should work as a measure to stop abusing medical serv-
ices, not as a measure to restrict access to healthcare. Copayment levels
should be affordable and accepted by patients.
In managing healthcare funds we should take into account that the
medical staff is currently paid without consideration to clear differentiating
criteria (83% of the population believes the medical staff is underpaid). Pay-
ing salaries to health professionals should be done according to their level
of education, their competencies and the amount of work done.
Only when the concept of the new healthcare law focuses on the pa-
tient and his true needs will we be able to say that we took the right course.
18
Chapter II
Romanian healthcare
leaping to the 21
st
century
Author: Richard Walsh
2
Introduction
This policy paper was commissioned by ISP to inform the debate on
the reforming the Romanian healthcare system. It draws on desk research
and interviews carried out in Bucharest in November 2012. It covers:
Politics of health
Reforming financial flows
Reforming provision of services
Reforming commissioning
Regulation
Salaries
Insurance
The authors hope that readers will see it as a straw man for debate
in the new year
2. Richard Walsh is an Executive and Director at a Consulting Company in Great Britain. Previously,
Richard was the Head of Health at the Association of British Insurers (ABI), where he was responsible for de-
veloping and overseeing all aspects of ABIs policy on health and protection insurance. Prior to ABI, Richard
spent eleven years at the Department of Health, holding a number of positions before being promoted to the
Head of Strategic Planning (Senior Civil Service). Richard is an Executive Committee Member of the UK
Forum for Genetics and Insurance. In addition, he is an experienced conference chairman with extensive
media involvement.
The need for political commitment
The political debate on healthcare is polarized in four ways:
The President and Ministry of Finance have taken the view that the
health system is a black hole which spends everything extra it is given
with no sign on increasing efficiency or effect. This view is re-enforced by
historic episodes of budget deficits having to be bailed out e.g. for the Na-
tional Health Insurance House (NHIH)
The Department of Health attempts to counteract this by financing
large public health programs (according to the World Bank these now ac-
count for 20% of overall health expenditure over twice the expenditure on
primary care). Some of the programs are for prevention (such as vaccination)
but the more resource-intensive are for treatment e.g. cancer. This centralist
approach is highly unusual for EU health systems. It is also linked to ex-
emption from co-payments and use of generic drugs reducing income and
increasing expenditure for the system as a whole
Some argue that the NHIH should be split up into a set of mutual or
private insurers as exists in Belgium. Others prefer the UK model of an
NHS with the private sector operating, if at all, on the margins
Co-payments (formal and informal) are endemic in the system. There
is a lack of clarity on what patients should be required to pay and what they
get for their payments. The informal payments operate outside the tax system
(or indeed any accounting system. Some put this issue in the too difficult
box. Others have argued for trying to eliminate the informal element and
replace it with compulsion with exemptions for the poorest etc. So far this
issue remains un-tackled
The net effect of these polarities of opinion has been to result in health
policy and reforms being sidelined with:
Constant changes in Ministers and policy directions
Huge turbulence every time significant reforms are posited
A constant search for an ideal EU healthcare model currently
Belgium rather that working from the existing legacy and reforming it
such that it provides good care, efficient provision, funding streams that are
responsive to patient needs in a way which fits the traditions in Romania
20
What is needed now is the political will to make this last point happen,
Ministerial stability over at least 3 years to give time to effect change, a de-
veloping cross-party consensus for a the vision for the future and implemen-
tation plan.
Reforming the Financial Flows
The map below (produced by the WHO EU observatory) shows how
the current financial flows operate. It is slightly out of date in that (except
for the self-employed) contributions from the insured populations are now
collected by the Ministry of Finance rather than the District NIHs. In addi-
tion there is now a growing private hospital sector which is partly funded
by the DNIHs (along with state owned hospitals) and also by private group
insurance (funded by employers).
It is important to note that this map does NOT include fixed copay-
ments eg for drugs and informal payments.
Collection of and allocation of income
Currently the levels of and collection of income tax and health funding
contributions are separate. As a result of this (together with a very compli-
cated exemption system (see above on National Health Programs) there is a
big mismatch between the two. The effect of this is that (excluding co-pay-
ments and informal payments) Romania only spends around 5% of its GDP
on health compared to around 8% EU average.
There is a belief that the health insurance element should be treated
separately and ring-fenced for the NHIH but this has two perverse effects:
It artificially constricts the amount any government can choose to
spend on health
When this amount proves to be not enough it creates a vicious circle
of blame and bale-outs when budgets are exceeded.
To address this issue the government needs to:
Join the two funding streams together
Decided at Presidential and Ministry of Finance level what the
budget for health should be in competition with other spending Ministries
Simplify the exemption system: in essence it would be usual for ex-
emptions to apply to:
Working age people on low incomes or state income support
For everyone - public health prevention programs such as vac-
cination and screening e.g. for cervical cancer and heart dis-
ease (major issues in Romania) but NOT for treatment unless
the other categories apply
Pensioners, disabled etc. either on income grounds or outright
The Ministry of Health should then allocate the cash to the NHIH
(retaining a small maximum fixed amount for its own functions see below
for more detail).
The NHIH should allocate the cash to the local commissioning bod-
ies the DHIHs retaining an amount for emergencies and nationwide pro-
22
grams e.g. centers of excellence for high tech conditions like advanced
cancer treatment and heart surgery in children
The DHIHs should act as commissioning bodies for the hospitals
and primary care facilities in their areas. They should be collecting and using
data to rationalize spending for maximum health gain and efficiency. They
should be resourced to achieve this.
Copayments and informal payments
The current law reform envisages merging existing copayments (e.g.
for drugs) with informal payments to be set centrally. They would be de-
ductible from taxable income (of the insured) but from a doctors perspective
the effect would be a reduction in income unless salaries are increased and
that increase would in itself be taxable. The money raised would be fed into
the hospitals which carried out the treatments. Not everyone would pay
the exemption system would be extended.
However a 2011 IRES study showed that:
Introducing copayments as a policy is regarded as bad for 67% of
respondents, and good for 23%
A maximum amount of 600 lei/year is considered: too high by 61%
of respondents, adequate by 20%, low by 16%
Only 33% think that copayments will reduce informal payments in
the health system
83% of respondents believe that medical staff are poorly paid
It is also unclear the extent to which a co-payment scheme would
cover all informal payments besides payments to doctors there are also
hospital inpatient costs such as food and cleaning which can add consider-
ably to costs. This is especially so in Romania as a much larger than usual
number of people who go for diagnosis are subsequently hospitalized and
for longer than usual periods.
So what could be a better alternative?
First let us take the existing fixed copayment system for drugs. Currently
patients pay a cost based on the cost of the drug. This has the effect of forcing
poorer people to either not seek treatment or to negotiate with their doctor a
drug which they can afford regardless of is clinical effectiveness. In high in-
come countries like France this is not such an issue. Indeed the French drug
bill is out of control because GPs compete to offer patients unnecessary med-
ication there is a culture of as many drugs as possible for every illness.
The alternative would be to have a fixed cost for each prescribed drug
subject to exemptions. In addition patients who did not qualify for exemptions
but required regular treatment could purchase season tickets for their monthly
prescriptions at a lower cost than the individual prescription cost aggregates.
Second let us take the informal payment system. Rather than fixing
rates nationally each hospital could set its own arrangements as follows:
The hospital would set up an independent charitable trust with a
Board of Trustees drawn from local clinicians and patient group represen-
tatives etc. (lay members)
The charitable trust would set its own reference payment levels and
have its own discretion to waive them as happens in practice now for in-
dividual doctors
The payments would cover all aspects of informal payments includ-
ing hospitalization costs
The income raised this way would be exempt from tax at collection
and distribution
The charitable trust would decide based on a yearly plan how it
would allocate the money it could choose for example to pay doctors more,
reward particular doctors for merit (e.g. if they performed particularly com-
plex procedures), purchase equipment such as CT scanners
Income paid to doctors would remain tax free
Patients could choose whether to self-pay these payments or purchase
insurance to cover some or all of the cost. Typically such insurance schemes
are known as cash plans as they pay out a fixed amount for each day in
hospital up to a maximum number of days. They are usually provided by
mutual insurers often set up by local communities or unions.
24
Reforming provision of services
The issue of reforming service provision has been very controversial
in Romania as it is usually linked to hospital closures. There is however an-
other way of addressing this issue. The legacy position is of a large number
of hospitals that are not fit for purpose, a very weak primary healthcare sys-
tem, and exclusion of poor people from the system. Romania is not unique
here this is a common issue in other EU countries although the primary
care situation here is particularly bad. There is an opportunity to move from
the current situation to a system fit for the 21
st
century rather than adopting
the existing 20
th
century one that exists elsewhere. Here are some of the fea-
tures of what a 21
st
century system might look like:
Each DHIH should be responsible for producing a 5 year strategy of
their vision and action plan for producing a 21
st
century primary care sys-
tem for their area. This should include the resources that would be needed
to fund it with fall back options. They would bid for funding from the
NHIH.
The vision should include:
Telemedicine links to specialists for diagnosis and treatment
of conditions outside their expertise
Walk in primary care centers staffed by salaried doctors, nurses
and possibly others (such as physiotherapists) existing private
GP practices would have to option to opt in. Those who chose
not to could remain as they are now but there would be no guar-
antee that their current contracts with the state system would be
maintained. Indeed, over time, we could expect to see the private
sector end taking mainly self-pay or privately insured people
The centers to be responsible for health promotion eg vacci-
nations and cancer screenings etc.
Funding to be provided on a contract basis by the DHIHs
Data on activity and outcomes to be provided to the DHIH.
The NHIH could develop standard data sets. It could be part of
the new health card currently being developed by the NHIH.
This information would be published to allow better decision
making on resource allocation and to enable patient choice
Each center to have a governing Board of unpaid local people
to decide on local priorities subject to some duties such as im-
proved access to healthcare for hard to reach patients (e.g. men-
tal illness, minorities, rural etc.)
Each center to carry out patent satisfaction checks another
part of the data set
Each DHIH would also produce a 5 year plan for the development
of secondary care (excluding specialist teaching hospitals). This plan would
be led by local clinicians. The only way of achieving consensus on hospital
rationalization is if it is clinician led and seen to be based on providing the
best healthcare services for the local population. Otherwise it will be seen
as a bureaucratic exercise imposed on a reluctant population. Even so local
hospitals do attract intense loyalty regardless of their effectiveness
The NHIH should set out its strategy for developing centers of re-
gional excellence for tertiary care e.g. cancer. They should look carefully at
DHIH plans to ensure that the two do not contradict each other i.e. if region
X is to have a tertiary specialist center local hospitals would be unlikely to
get accreditation to carry out the same procedures
Finally we move to the increasing development of private hospital
provision. In many ways this is to be welcomed however it is important that
such hospitals are fit for purpose and do not simply provide hotel style fa-
cilities with inadequate back up if more advanced treatment is required
e.g. for mothers and babies in maternity units. One option would be to re-
quire private hospitals to have contracts with specialist centers of excellence
and to pay for treatments which they are unable to provide. They could re-
coup this money through their own charges and thence from private group
(employer) insurers.
26
Reforming commissioning
Whether or not Romania retains the NHIH and its district network, or
moves to splitting it up as in the Belgian model, there is an urgent need to
move from administration to commissioning for the health needs of the pop-
ulation.
In coming to a view on this it is worth remembering what a major up-
heaval moving to a Belgian (or other EU system) would be. Now is not the
place for a detailed discussion of the Belgian system but to summarize:
Compulsory insurance is provided by around 80 non-profit and non-
government local sickness funds, each with up to about 500,000 members.
In practice, these local funds are grouped into six national associa-
tions of sickness funds, including one fund operated by the public sector.
The market is quite concentrated with around 75% of the overall member-
ship being covered by two sickness funds.
The benefits covered under the compulsory insurance are set by the
Government and are thus the same across all funds. Members are able to
choose a sickness fund of their choice.
There is a complex risk equalization scheme to compensate insurers
who hold higher numbers of high risk patients on their books
The extent to which such schemes of themselves deliver better care
outcomes and value for money than single schemes (as currently in Roma-
nia) is open to debate.
Let us assume for the moment that we stick roughly with the current
system and seek to reform it within what could this mean in practice?
The Ministry of Health should be the policy arm of Government as
such it should lose all responsibility for setting contracts, salary levels, in-
spections etc. Its core functions should be to:
Set National policy based on Ministerial priorities
Set National resource priorities based on consultation with the
NHIH
Have a residual budget to fund organizations outside the remit
of the NHIH e.g. voluntary sector organizations (which may ac-
tually be in competition with some services funded by the
NHIH/DHIHs)
The NHIH should be a non-political organization charged with im-
proving the National commissioning of healthcare:
It should have a CEO who is responsible for all discussion on
operational issues except those requiring a clinical knowledge
with a National profile
It should have a Chief Medical Officer who deals with these
he/she too should have a National profile
It should collect and publish information based on defined data
sets
It should hold DHIHs to account for their own Commissioning
of services
It should set targets but these should be strictly limited.
League tables of performance can be as effective as targets for
poorer performers
Romania should have its own drug accreditation body (e.g. dealing
with which drugs are available, costs). Currently this is dealt with by MH
and to some extent by NHIH. The topic would be better handled by a sepa-
rate independent body as happens in many EU countries
Commissioning is a separate issue from regulation (systemic or of
individual clinicians). NHIH (and DHIHs) should not have a function here
more detail below on what should happen
DHIHs should be resourced to become true commissioners of health-
care for their local populations. They should not simply be administrators.
They should have strong links with clinicians and local authorities.
District Public Health Offices should be gradually replaced by the
walk in clinics. Issues that span local areas could be picked up by DHIHs
and local authorities
So overall we move to a system that has clearer roles and controls with
a clear remit for commissioning services at national and local levels. If such
28
a system were introduced it would also enable the Ministry of Health to do
what it is there for and remove it from the public limelight when things go
wrong although there will always be some issues where there will be a
political context.
Regulation
There are in essence two types of regulation: the regulation of profes-
sionals as individuals and the regulation of health institutions. The second
is NOT the same as commissioning services. Rather it is about accreditation
of institutions, checking they are up to standard (inspections) and dealing
with institutional failure (inquiries).
Let us take the regulation of individuals first. Currently there is a lot
of criticism of the existing system which is seen to be ineffective at ensuring
that clinicians carry out what they are capable of doing well and at dealing
with fitness to practice when things go wrong.
Another issue for Romania is the ability of doctors trained here to work
in other EU countries and then to return to practice here. Their ability to work
abroad is likely to become increasingly difficult unless Romania adopts in-
ternational EU practice on registration and (in the future) revalidation.
The present system of regulation by the Romanian College of Physi-
cians (at National level) and District Colleges of Physicians is historic and
not weighted in the public interest. In essence they are seen as doctors
clubs. A sure sign of this is the extent to which there is a high profile sep-
arate union/federation for doctors. Where there is not (as in Romania where
it is comparatively weak) this is a symptom of a regulatory system that es-
sentially acts as a union.
EU experience shows that such institutions tend to move to a separa-
tion between representation (the union) and professional self-regulation
and that professional self-regulation itself moves to regulation.
This change needs to happen in Romania too. In addition there are
consequences for other health professions (the largest group being nurses).
A move to regulation would typically involve reforming the College
(and its regions) such that it:
Would have a governing Chair and Board of trustees appointed by a
transparent independent process. Trustees would not be elected by their peers
The Board would have an equal mix of doctors and lay members
The Board would govern the regulator with would be staffed based
on the skill mix required it would have a CEO and for example a legal
team
Its role would:
Not be to represent doctors that would be for the union
and/or individual doctors legal advisors
To rule on fitness to practice issues and to impose restrictions
on practice, re-training and ultimately strike off poorly perform-
ing doctors
Registration of doctors including their areas of specialist ex-
pertise
Liaising with teaching hospitals and specialists on undergrad-
uate and post graduate medical training requirements
Revalidation and CPD
Producing guidance on controversial issues to help doctors
when they are faced with ethical problems e.g. end of life care
If it were possible to move to such a system (it will require political
will from the Minister of Health) not only would public confidence be im-
proved but the perception of Romanian doctors as professionals in other EU
countries would be enhanced. Doctors returning to work in Romania from
the EU would also return to systems more akin to what they were used to
when working abroad (this also applies to the implementation of other rec-
ommendations in this policy paper).
Second we move to systemic regulation. There are plenty of models
to choose from (National and local and combinations of the two) but the key
points are that they should be independent of government, commissioning
and individual fitness to practice issues. Their role is to ensure that institu-
tional providers of healthcare are fit for purpose and to pick up on generic
30
issues that may affect more than one of them e.g. hospital infections. As
such they will feed into the commissioning process but they are responsible
for checking, accreditation and dealing with systemic scandals when they
arise. Currently this function seems very underdeveloped in Romania and
this issue needs to be addressed in the public interest. Combining this with
individual regulation is bound to uncover many things going wrong that pre-
viously remained hidden. It is therefore vital that the systems that are set up
have a clear way of dealing with the issues that will arise.
Salaries of professionals
The low level of salaries for doctors etc. has been mentioned before.
In addition if the reforms mentioned before are to be implemented by DHIHs
etc. they will need a cadre of appropriately paid professional people. Cur-
rently there is too little freedom for hospitals etc. to reward excellence (as
opposed to time served). It is also difficult to see how there could be an
across the board salary rise given the current recession. The issue can be ad-
dressed in some part by the proposals on informal payments and charitable
trusts. Ideally hospitals should also have the freedom to award merit bonuses
within their normal budgets.
Private insurance
This paper has already mentioned three types of insurance:
Mutual compulsory insurance as in Belgium
Group private medical insurance (bought by employers) to fund
treatment in private hospitals. There could be scope to extend this for treat-
ment in public hospitals that gave potential patients a private room and/or
earlier treatment. Politically this is not so difficult as it is linked to early re-
turn to work and national productivity.
More difficult is individuals buying PMI for themselves. The
market currently is very small and this form of insurance is ex-
pensive. It is unlikely to become a major funding stream in Ro-
mania in the near future
Cash plans if the recommendations in this report on informal pay-
ments were implemented this could be a rapidly growing market. It could
also fund drug copayments if they are not moved to the fixed price model.
If it reached a critical mass the Government might need to consider regulat-
ing it. Similar issues could arise as with compulsory insurance guaranteed
acceptance, risk equalization etc.
One country which has a similar system to the current direction of Ro-
mania (i.e. a central NHS + copayments + supplementary insurance) is the
Republic of Ireland. Research on their experience could well be of more rel-
evance than the Belgian model.
Conclusion
Post-election Romania is at a cross-roads in terms of healthcare pro-
vision. This paper suggests policy options which are intended to inform that
debate. Given political will there is a real opportunity to move to a better
system that meets the needs of the population in an equitable manner. Its
time to move on from the old arguments, develop the existing system and
stop seeking panaceas from other countries. There are none. Instead every
EU country has its own system and legacy issues. We need to recognize ours
and adapt and reform for the benefit of patients and the staff who serve them.
32

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