Health Insurance and the role of Local Government in Poland
My presentation deal with polish local government activities in the period
1995-1998 this means BEFORE implementing health insurance. In this period on
the central level (health ministry and parliament) there were long discussions
about health care reform and on local level (local governments and local
councils) some health care system reform took place.
Few remarks about polish health care system let understand that
polish starting point was very similar to Ukrainian one. The system offered
universal coverage with comprehensive programme of health care benefits though
facilities owned and run by the state. Generally speaking system was:
over-centralized (almost everything were regulated by government and health
care units had no autonomy)
over-specialized (80% of physician are specialists) with limited role of
unstable financing (health care budget depended on central budget situation) No
any algorithms were used to reallocate moneys between regions and then between
there were no costs awareness (health care is free for everybody, costs
calculations were implemented in the beginning of 90’s)
there were a lot of regional inequalities (ambitious policy-makers build
regional hospitals to show their power)
there were public awareness of informal (under-table) payment
Services often had poor quality (nobody takes care and measured quality of
deficiencies in health care units (long-term under-investment, old equipment,
no modern procedures, no hi-technology)
And last remark concern to comparison between some parameters from
EU and polish health care system:
Physician for 1 000 inhabitants
Beds for 1000 inhabitants
Average length of hospital stay
Average bed occupancy (%)||
Potential years of life lost compared to EU
For male 5|
For female 1,5
Additionally public dissatisfaction from health care services had grown. In
such a situation there is only one way to get out – reform. We start our reform
in late 80’s as shown in table 1.
Table 1. A chronology of polish reform measures in health care
The Act or Regulation
The Act of Economic Activities enabled private practice
The Creation Act of Local Government (gmina) – ownership, financial and
management authority mostly of outpatients health care facilities to local
The Act of Health Care Facilities abolishing state monopoly in the health care
sector. Facilities could be set up and financing by wide range of entities.
Act of Payment for Drugs and Medical Materials and privatization of
Work on National Health Insurance.
The work on National Health Programme.
Ministry of Health sub-law of Strategy for Health (improving health status of
population, ensuring universal access to health care services, increasing the
effectiveness and quality of services. There was regulation but no money to
implement those strategies. Sub law of costs calculation in health care units.
The Act of Urban Pilot Programme – chosen heath facilities stay in local
The new Act of Health Care Units. Theoretical possibility to register
independent units operating according the provision of Poland’s commercial law
allowing private facilities to have contract with the government. No required
The Act of National Health Care Programme for 1996-2005.
Sub-laws on independent health care units.
The Act of National Health Insurance, which needed 36 other law regulations. It
is compulsory income-based health insurance. Premiums come from the eligible
population or from the state for those unable make such contributions.
Insurance premium is 7,5 % of taxable income. There were created 16 regional
Sickness Funds with own budget and autonomy. The Creation Act of two others
levels of Local Government (powiat and wojewodztwo) – ownership, financial and
management authority of almost all health care facilities to local governments.
Teaching hospitals stayed in hands Ministry of Health, few in hands of Ministry
of Defense, Ministry of Internal Affairs.
National Health Insurance Act came into force 1st January 1999.
New Act of National Health Insurance – recentralization. Instead of 16 regional
Sickness Fund there is one National Health Fund. All budget stay in hands of
Head of National Health Fund in Warsaw.
First action in our reform was decentralization – in 1990 local governments
(gminy) were created. All public services were given to local government but
come to force gradually. For example local government start to play significant
role in health care since 1999 excluding 46 bid cities they were involved in
Pilot Program since 1995. Municipalities in 46 big cities become to be owner of
health care units and had financial and managerial authorities as well as
political responsibility in 1995.
In fact around the world there are some distinguishable pattern of
local government role in health care system:
mandated for example Norway, Sweden, Finland and Denmark, where require all
local government play a major role in heath care
optional for example USA, where municipalities have to decided what role to
play in health care and how
constrained for example Germany, Austria and Canada, where municipalities play
excluded for example Great Britain and Australia, where municipalities’ s have
little involvement in health care.
Polish parliament decided to go follow Nordic countries examples.
In that time I was working in the Municipality of Cracow as the Heard of Health
Department City of Cracow therefore city of Cracow will be used as an example
of local government activities.
Since 1995 local government in Cracow become to be owner of 4 big
outpatient health care units with around 4500 workers. In the city lived 780
000 citizen, society is getting old and in older district population over 65
reach 23% and 24 %. The opening balance for Pilot Program was big shock for all
involved municipalities. In taken by community health care units local
no awareness of number of services
no awareness of cost of services (over-utilization of diagnosis and drugs)
no incentives to cost control
no relation between quality of work and salary
no educated managers
Because financial flows were not connected with performance nobody knows even
how many services was provided. Budget was given to units because units exist.
Nobody asked about number of services, costs of services and their quality.
Nobody care of patient satisfaction. In that time we experienced shortage of
central budget and big inflation therefore health care units pay only salaries,
so they are in debts. As a matter of fact the central government promised to
make reduction of liabilities but “in the future” and in 1998 they kept the
promise. Whereas local government has to deal with the problems right now
because citizen can’t wait for health services. In that situation local
government had two options:
to transfer municipal money to health care units
to prepare and implement reform of the units.
Since the beginning all polish local governments have difficulties with
covering priority tasks therefore idea to subsidy health care units was
unacceptable. So we had to prepare program to change our health care units
without subsidy from city budget.
City of Cracow was in that time is in unique and advantageous
City Board (especially Major and Deputy Major) were open-minded policy makers,
ready to take political responsibilities for rational activities,
Health Commission and their leader (from years director of hospital) were ready
to cooperate in preparing the reform,
Trade Unions were frustrated by lack of activities Ministry of Health which
provide only discussions since many years and ready to support changes,
in addition we had very good cooperation with Jagiellonian University School of
and last but not least Health Department in Municipality were able to manage
Using this situation and working together we prepare local health policy, which
was accepted as a City Council resolution.
The main goals in local policy related to health care were:
To improve and equalize access to specialized care and diagnostics especially
for citizen from suburbs (local regulation – free access and money transfer)
To strengthen primary health care (by implementing family physicians – called
To connect volume of patients and services with unit budget (by contracts with
units and GP’s)
To improve quality of services (by patients surveys and evaluation)
To calculate cost of the services (using standardized formulas in all
To rationalize costs, to manage the costs (outsourcing, staff reduction)
To develop human resources (workshops for health care workers and policy
To promote changes – PR campaigns and lobbing in City Council, Physician
Chamber, Nurses Chamber and Trade Unions
To implement above policy financial support for health care facilities in
special cases (to buy special equipment, to make adaptations for example
registration into reception, to prepare personal card for every worker, to
cover costs of workshops) was available
To implement such a changes Health Department of Municipality was obliged to
looking for international support.
Ad 1. In local law there was a free access to each specialist (with referral
from PHC or GP) together with reallocation of money. For example when citizen A
living in Krowodrza visited cardiologist from other district Srodmiescie, its
district unit Krowodrza had to send certain amount of money to Srodmiesie.
People used such a possibility rather slowly – percentage of reallocated money
in first year of such a regulation was only 3 % but after 3 years reached 12 %.
Ad 2. All community health care units – public units and GP’s - start to
collect the list of patients. In meantime GP’s finished education and open
their private practices. They work in our public units renting the rooms and
equipments but the practices were private. All of them have individual
contracts with Municipality similar to contract with our public units. All our
GP’s were not only gatekeepers but also fund-holders. This means that to go to
specialists patient have to have referral from PHC or GP’s. Self-referrals are
very limited (gynecologists, dentists, mental health, drug and alcohol abuse
and HIV). GP’s received whole budget for each patient from his or her list for
outpatient care. They have to pay specialists and diagnostic centers for
services. But patient have a possibility in every moment to get out from GP’s
list and come back to previous unit. So during every visit GP’s have to find
equilibrium between costs rationalization (referral means money) and demand
from patient to be refer) to specialist or to diagnosis (patient also mean
money. Policy makers were afraid of such a contacts – they assumed that GP’s
going to maximize their profit don’t send patients to specialist. But Health
Department controlled this - every month together with invoice and actual list
of patient GP’s bring the number of monthly referrals.
Ad 3. For outpatient care the best way to contract services seems to be
capitation with a risk-adjusted factors. In developed insurance systems there
are many information about patient therefore it is possible to calculate those
factors but at the start only information about name, address and
identification of patient were available. Looking for the best solution first
we checked in polish statistic the number of visit for patients in certain age
division and then we decided to use British factor as a statistical weights.
To run the contract algorithm to calculate money and patient data with date of
birth were required. In Poland every citizen has his own 11-numbers personal
identification code, where first 6 numbers there are date, month and year of
birthday. The date-base with names, addresses and identification codes are in
the hands of local government. So having this code physician knows patient’s
Per capita rates weighted by age-adjusters
Age (in years)
B = X* (P1*W1 + P2*W2 + P3*W3 )
Pi - number of people in district in adequate age (from city data-base)
Wi – age-adjusted weight
X – amount of money per citizen in a certain year Having the list of patients
and using above algorithm we calculated how much money to be owing to each
health care units and GP’s. Such an idea now in 2004 is obvious for all people
in health care sector in Poland but in 1995 it was a revolutionary step and
people do not believe it from the beginning. Later on (since 2000) similar
system was used by Sickness Funds.
Ad 4. At the same time when idea of new patient attraction was implemented,
health care units like to know patient satisfaction as well as their
expectations and opinions therefore surveys were make. In the surveys patients
from 4 public units and 16 family physicians took a part, in that way
comparison between units were possible. Finally patient, his opinions, his
expectations were in the center of attention not in verbal declaration but in
the reality. This was a new approach in health care sector. In our survey were
four kind of questions connected with access to services, communication between
physicians or nurses and patient, patient’s safety (level of patient’s
confidence to physicians, participation in decision about therapy and so on)
and patient’s satisfaction. Survey were made by questionnaire, people answered
themselves only for very old people help was possible. Survey was organized in
the same day in all units. Only people visited health care units or Gp’s were
asked to fulfill questionnaires. Surveys were performed by agency selected in
the process of tender procedure organized by Health Department of Municipality.
After first survey appears that patient’s are following:
provide the possibility to be registered by phone,
provide the possibility to chose physicians and date of visit,
increase the scope of services and the number of specialists in outpatient
decrease waiting time,
improve communications between patients and physicians or nurses,
provide better cleaning in outpatient units,
provide phone access, coffee and press kiosk in outpatients units,
change bus stop location and /or parking.
In order to fulfill some of those expectation only small organizational change
were needed. After the surveys City Council decided to buy new telephone
centrals to some units in order to open possibility of registration by phone.
Such an investigation of patient’s satisfaction and opinions were repeated many
Ad 6. When managers and workers believed that budget would be more
or less stable and depended only from number of patient and their age, they
started to think how to used a new possibility. Many options were considered
between this such as:
to attract more patient and connect them with facilities and physicians
to reduce staff
to used outsourcing.
to decrease costs of services
At the end all of them were used.
The staff reduction idea was most difficult. But because every year money for 4
units was calculated by using algorithm, salaries had to be paid but premium
depended on number of workers, some units decided to reduce the staff and have
premium in the end of the first year, some needed more time. Number of
physicians was reduced by 4,1 %, number of nurses by 5,4 %, administration by
12,9 % and technicians by 33,8 % (because of outsourcing) It is worth to notice
that health care units have free choice but decision have to be made with
agreement of Trade Union and Physicians and Nurses Chambers. It is worth to add
that what kind of services was outsourcing for example cleaning, laundry,
security, medical waste management, technical support (renovation,
modernization, adaptation) and IT.
Ad 7. In order to manage changes managers have to be educated. Implementing
changes without special professional education are impossible therefore in our
policy there were trainings for health sector workers and for policy makers. In
series of training for health sector workers many groups took a part - first of
all managers (in that time mostly physicians), accountants but also physicians
especially primary health care doctors, nurses and others for example
receptionists as a first contact persons. We provided also training for policy
makers – members of City Council especially Health Commission, City Board and
Municipality workers. Journalists were also invited to training.
Ad 8. During the reform the worst position have managers from units involved in
changes. From one side they feel pressure to implement changes, form other side
they are afraid what will be when cadence of local government will end and
local policy changed. Understanding the role played by manager’s e City of
Cracow supported their sphere of activity in several ways. First of all they
have contracts with some incentives to implement changes. From the beginning
all contracts were short-term. But with time in order to decrease their
uncertainty city of Cracow prepare long-term contract with managers. Besides we
attached importance to promote changes in health care units in both local and
central levels during press conferences, in local mass media as well as in all
cities documents like yearly reports, brochures and presentations. City of
Cracow was one of initiator of creation Local Government Health Forum – network
of polish cities involved in Pilot Program. We cooperated with Polish Health
Care Managers Association. Both institutions served us as forum to promote our
local health reform.
Ad 9. As was mentioned before the city budget is always limited and no
possibility to pay regularly extra money for health care units. But every year
some small subsidies were transfer to health care units in order to make
special tasks for example to buy new telephone centrals, to prepare personal
card for every health care worker or to re-arranged registration in city health
care units to reception. It was together with special training for
receptionists. Before the training session they had the meeting with Mayor of
the City and City Physician. Both VIP’s convince the ladies that they as a
first-contact person play extremely important role in the health care sector.
Like all workers the ladies received personal card to be carried on their
uniform, which help to change their behavior and relation to patients. The City
Council controlled the results of those donations.
Add 10. The local government was looking for international support. The Health
Department in the City of Cracow was involved into international cooperation
with USAID and World Bank programs. The Program Strengthening Local Government
in Health Sector financed by USAID was realized in few polish cities among
those also in Cracow. The main partner from American side in this Program was
Harvard School of Public Health. Experts from Harvard were involved in all
trainings organized in the City of Cracow and served as advisors in health care
units. The World Bank loan was used to make adaptation of first GP’s practices
and educational center for future family doctors.