Healthcare Reform

Economic News

22 Jul 2010
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Following a no confidence vote filed by right-wing opposition parties on the grounds of a poor health care policy and a lack of revenues, the government has agreed to increase wages and reform the sector. The government is also pioneering "e-health" with pilots of health identity cards.



The health care system in Bulgaria is managed by the National Health Insurance Fund (NHIF), which derives its revenue from compulsory contributions from employers and employees. It is responsible for the financing of hospital treatment, emergency care and certain drugs.



Health care expert Sveta Kostadinova of the Institute for Market Economics told OBG, "We think that health care reform has long been delayed. As I understand it, the demonopolisation of the NHIF will be delayed. We believe that competition is the only way to lower prices and improve quality, accountability and transparency by changing the incentives of those working in the sector."



In February, the ministry of health held a public discussion on "Strategic Directions in Health Care", during which Health Minister Radoslav Gaydarski insisted that breaking the NHIF's monopoly was not necessary for the next two to three years. However, plans for the privatisation of pre-hospital care and private concessions for hospitals were floated.



Last month, more than 5,000 nurses and doctors took part in a rally organised in Sofia by the Bulgarian Medical Association (BMA) demanding the resignation of Gaydarski and Deputy Health Minister Emil Ravanov. The BMA said that the healthcare system was in a state of "crisis" of human resources and financing.



According to the Bulgarian Doctors' Union (BDU), the number of health care professionals in practice is down 21% on 1990 figures, while 28% of those in practice do not have a specialisation. Areas of particular concern are pathology, paediatrics and anaesthesiology. BDU claims that 90% of their members are discontented, a figure disputed by the government.



Meanwhile, Prime Minister Sergei Stanishev admitted that the service is underfunded, stating that 4.3 % of GDP currently spent on healthcare is insufficient. The average European level is 7.8%. "The issue however should be politically solved - whether by cutting the budget of another economic sector or by pushing up the expenditure ceiling in the state budget," Stanishev told local press.



Kostadinova told OBG: "What matters is not the amount of money spent, but how effectively it is spent. We need first to be sure that the money allocated will be efficiently allocated. We believe that the current contributions to health care are sufficient."



Last week, in response to the parliamentary vote, Gaydarski stated the government would persevere with plans to open the "closed shop" agreement that currently requires all doctors in Bulgaria to be a member of the BDU. The move has met with strong opposition from the BDU, but Gaydarski insists that 90% of doctors in the country would still join.



Kostadinova told OBG that she agreed with the government's move on breaking the closed shop. She said, "This hampers competition. Anyone should be free to work if they have the qualifications and customers, without being a union member."



Gaydarski also announced that many of the lowest paid nurses - currently getting by on Bulgaria's minimum monthly wage of 92 euros - would receive a 20% pay rise backdated to January 1. He also announced financial incentives for doctors working in difficult conditions.



These are not the only signs of reform in the health system. Earlier this year, the NHIF launched a pilot of electronic health cards. The scheme aims to cut down on paperwork and prevent healthcare fraud, as well as ensure that the patient receives the right amount of the right drug. It is part of an "e-health" strategy launched at the end of last year.

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