Feature Health Reform

Poland’s painful market reforms

BMJ 2010; 340 doi: http://dx.doi.org/10.1136/bmj.c2837 (Published 15 June 2010) Cite this as: BMJ 2010;340:c2837
  1. Peggy Watson, senior research associate
  1. 1Department of Sociology, University of Cambridge, Cambridge
  1. pw125{at}cam.ac.uk

    The death of the Polish president has put the mass commercialisation of the country’s hospitals back on the agenda. As new elections approach, Peggy Watson reports on the difficult course of health reform

    News of US health reforms dominated the international media earlier in this year, yet the equally contentious reforms taking place throughout post-communist Europe have been virtually ignored. In Poland, the largest of these countries, reforms have contributed to a new healthcare divide by hitting the people who most need health care the hardest—a situation now exacerbated by the financial crisis. A critical struggle has centred on compulsory commercialisation of hospitals. The move was vetoed by late president Lech Kaczyński, who was killed in an air crash in April. The fate of the reform hangs on the outcome of the presidential election set for 20 June.

    Post-communist countries of Europe have seen dramatic transformation in healthcare systems with a move away from socialised medicine to the introduction of capitalism. The changes—the break-up of central state structures, the introduction of the market and private health insurance, coupled with the propagation of the idea of individual responsibility for health—have been dictated by principles laid down by the World Bank. But dissatisfaction has been intense. Although Poland has not witnessed the violent protests that were seen on the streets of Lithuania, Latvia, Bulgaria, and Romania early last year,1 there is considerable discontent. In a recent Eurobarometer survey, 67% of respondents in Poland rated their national care as “fairly or very bad”—only Greece and Hungary had higher rates.2

    Market reforms

    What lies behind these statistics? Dissatisfaction is correlated with low income, low levels of education, and unemployment, but the real problem has been the effect of health reforms.

    Poland replaced central state funding of health care with a social insurance system in 1999. The changes were radical but insufficiently thought through. Importantly, the original contribution rate was pitched deliberately low at 7.5% of taxable income. The idea was that the subsequent fall in healthcare provision would lead to people seeking more private care and that private health insurance would somehow develop to fill the new gap. Public spending on health dropped to below 4% of gross domestic product, less than it had been under state socialism.

    After the reform, the number of people having to pay privately for previously free care rose sharply. The new costs of private care, taken together with the fact that very few people were exempt from prescription charges and that exemptions and reimbursements were in any case capped, meant that out of pocket payments for health care increased to among the highest in Europe. At the same time, incomes were generally too low for private health insurance to get off the ground. The biennial Polish social survey Diagnoza Społeczna (which in 2009 included 12 381 households and 26 178 individual respondents) found that only about 5% of respondents had health insurance, typically as part of a remuneration package.3

    The reforms have introduced new inequalities of access to health care that come on top of already widening health disparities. Income inequalities in Poland outstrip those in the rest of Europe, and the 2009 Diagnoza Społeczna survey provides striking evidence of the way the reforms have excluded people on the lowest incomes from health care.

    According to the survey, just over 47% of people with no source of earned income were unable to afford the drugs they needed, compared with 7% of self employed people—a generally affluent grouping including the new business owners. For people on old age and disability pensions, who like unemployed people have health care needs greater than most, the figures were 26.4% and 43.4%, respectively. The survey also found new social differences in the way money is used to secure access to care. Self employed people spent 24 times more than those without earned income on accessing care through informal payment, such as backhanders to circumvent queues. They also spent more on formal payments for treatment and tests.

    Hospital problems

    The limited health budget also had to accommodate rising drug costs. In 2003 total expenditure on drugs outstripped the combined wage bill for all categories of healthcare staff by 29%.4 Hospital underfunding translated into downward pressure on staffing costs and hospital debt. One outcome was the birth of debt trading firms, which purchased hospital debt at a fraction of its nominal cost and then exacted repayment—if necessary by calling in the bailiffs—or claimed full repayment from the government.

    Despite underfunding, hospitals remain the least commodified and most widely accessible part of Poland’s healthcare system. The struggle over privatisation, which the public and healthcare unions largely oppose, has lasted for over 10 years. Months after winning the election in 2007, the ruling Civic Platform Party broke its pre-election promise and introduced radical legislation for compulsory hospital commercialisation. The legislation had been opposed by social organisations on the grounds that privatisation would widen further the gap between rich and poor. There was concern too that some privatised hospitals might be allowed to fail so that their considerable land value could be realised. The legislation was vetoed by President Lech Kaczyński of the opposing Law and Justice Party.

    With just under 93% of non-psychiatric hospital beds still public at the end of 2008,5 a fall-back plan, known as “plan B,” was introduced in April last year. This offers financial incentives to local authorities for commercialising hospitals and is now recognised to have failed.6 Only 11 of the 598 public hospitals reached the point of receiving government funds during the first year of the scheme, far fewer than the 300 predicted by the Ministry of Health.6

    The world financial crisis has meant that the value of contracts signed with the National Health Fund has been cut, deterring local authorities from taking on full commercial responsibility for hospitals. In the face of the cuts, the National Security Bureau—normally focused on military concerns—carried out a survey of hospitals this year.7 Of the 734 hospital directors approached, 506 (70%) replied. The survey found that the value of the planned contracts for 2010 between hospitals and the National Health Fund had fallen by 2.4% compared with 2009, when about 40% of hospitals had already had to limit hospital intake because of lack of funds. Almost 60% of the hospitals were unable to pay utility bills or loan interest on time.

    About 90% performed services beyond contractual limits, but only 14% of the total cost of those services had been refunded. Some hospitals had received a full refund, while some had received none, and the criteria according to which the National Health Fund took decisions regarding extra funding were unclear. In sum, three quarters of the hospital directors believed that the functioning of their hospitals would be under threat in 2010, and over one third thought that the main danger was further restricted access to care. Meanwhile, private healthcare companies have recently expressed optimism that continuing crisis will encourage local authorities to privatise.

    With the death of Poland’s president on 10 April this year the struggle over hospital privatisation has taken a new turn. The government has indicated that it intends to revisit the legislation vetoed by Lech Kaczyński in 2008. New legislation will require presidential approval, but on this subject the two main presidential candidates are diametrically opposed—Jarosław Kaczyński is against privatisation and wants a referendum, while Bronisław Komorowski, the acting president, is for. And so the fate of health reform hinges on the outcome of June’s Polish presidential election, just as it did in the US presidential election in 2008.


    Cite this as: BMJ 2010;340:c2837


    • The author acknowledges the support of the British Academy.

    • Provenance and peer review: Commissioned; externally peer reviewed.