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 primary care
• unstable financing (health care budget depended on central budget situation) No any algorithms were used to reallocate moneys between regions and then between units.
• 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 care)
• 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:

Parameter	Poland (1996)	European Union
Physician for 1 000 inhabitants	2,4	3,1
Beds for 1000 inhabitants	5,5	6,9
Average length of hospital stay	10,6	11,8
Average bed occupancy (%)	71	79,7
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

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 limited role
• 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 government noticed:

• 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
• debts.

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 situation:

• 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 Public Health,
• and last but not least Health Department in Municipality were able to manage the change.

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:

1. To improve and equalize access to specialized care and diagnostics especially for citizen from suburbs (local regulation – free access and money transfer)
2. To strengthen primary health care (by implementing family physicians – called GP’s)
3. To connect volume of patients and services with unit budget (by contracts with units and GP’s)
4. To improve quality of services (by patients surveys and evaluation)
5. To calculate cost of the services (using standardized formulas in all facilities)
6. To rationalize costs, to manage the costs (outsourcing, staff reduction)
7. To develop human resources (workshops for health care workers and policy makers)
8. To promote changes – PR campaigns and lobbing in City Council, Physician Chamber, Nurses Chamber and Trade Unions
9. 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
10. 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 age.

Per capita rates weighted by age-adjusters

Algorithm:

B = X* (P1*W1 + P2*W2 + P3*W3 )

where

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:

1. provide the possibility to be registered by phone,
2. provide the possibility to chose physicians and date of visit,
3. increase the scope of services and the number of specialists in outpatient units,
4. decrease waiting time,
5. improve communications between patients and physicians or nurses,
6. provide better cleaning in outpatient units,
7. provide phone access, coffee and press kiosk in outpatients units,
8. 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 times.

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.