medical system in romania

PRINCIPLESfor

REFORMINGTHE MEDICAL SYSTEM

inROMANIA

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. Themain challenge could be summed up in the following statement: while statesare forced to cut public expenditure, providing healthcare to their citizenscosts more and more. One must buy something that grows more expensivewith 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 areexperiencing, has turned states into debtors lacking credibility in the worldfinancial markets and thus one of the most important budgetary money sup-plies has become increasingly more difficult to get. At the same time, ourliving standard as European citizens has noticeably increased in comparisonto that of our parents. The general health of the population has improved,the life expectancy has risen and the expectations European citizens havefrom their country’s healthcare system are even more demanding. We live in


Principles for reforming the medical system in Romania

an age when the concern for one’s health is widely spreading among citizens,and the years of efforts to bring about a change in mentalities start to showtheir effects, if only considering that prevention now holds an increasingprominence in the general structure of the medical services. At the sametime, the costs with the medical infrastructure have risen together with anamazing technological progress, the costs with training specialists has alsorisen, the medical services have become more and more complex and ex-tended their reach during the last decades. Adding to all the above the factthat 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 thanour parents or grandparents, we can see the complexity and depth of theproblem states have to solve with respect to the stability and predictabilityof healthcare systems.

All the above are compounded by developments in the mind-set ofpost-World War II European citizens, developments that became more ob-vious after 1990. To the majority of citizens, the state has become a sort ofsupplier of public services to which anyone is entitled under fair, equitableconditions. The state has ever larger duties to citizens and they, in turn,enjoy more and more rights in relation to states. The citizens expect morefrom their state and this is not the place to discuss whether this trend benefitssocio-economic development or not. I will merely note this social fact. Intheir turn, to get the people’s support, politicians keep promising more andwhen they assume power also deliver more to their constituents. This generaltrend in the evolution of the relationship between citizens and the politiciansthey 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 thehealthcare budget keeps developing.

The answer to these important challenges is, however, ideologicallydetermined. Although this could rather look like a purely technical issue,devoid of ideological overtones, the fundamental choices on the basis ofwhich it is possible to frame a comprehensive answer to the developmentsdescribed above are and remain political. Left-wing thought puts the burdenon the shoulders of the state. To the left, it is more important than anything

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that the public healthcare system be able to provide medical insurance toanyone, for anything. Like everything the left-wing thought generates, thisis 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 shouldthis utopia materialize. Last, but not least, because unrealistic social expec-tations would thus be created, thereby leading to social frustration that couldlater morph into difficult to manage frictions. Right-wing thought is clear-headed, realistic, and understands that the burden of the ever increasingcost of healthcare must be carried equitably, in a partnership between thestate, citizens, and the private business environment. The very first respon-sible for one’s health is the citizen. The best social protection instrumentthat includes ensuring adequate healthcare is a job. Let us concern withleaving enough money in the citizen’s pocket so he can afford to take careof himself. At the same time, the state will have to adequately fulfill its dutiesto taxpayers, ensuring transparency and honesty for the medical servicesmarket.

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 degreeof national particularities is visible. Taking a look across the Atlantic willresult in noticing even more glaring differences. Still, what we need to pur-sue is a system combining the advantages of all of these systems. Althoughthe 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 nextfor political reasons. In the last attempt, the right-wing government wasforced to cease the passage of a legislative package that would have re-formed the system because it could no longer muster political support in itsfavor. After introducing radical reforms in the public pensions system, in thepublic wages system, in the labor market, education, and the judiciary, underthe general conditions of the economic crisis Romania’s right-wing govern-ment ended up without the needed political energy to reform the healthcaresystem. Now, the left-wing government prepares a reform that largely followsthe line of thought of the preceding government. However, we can see it willmiss 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 looklike in the future remains to be seen.

What is certain is that the debate on reforming the public healthcaresystem is going on in Romania, and this paper is a useful contribution. TheInstitute for Popular Studies has been taking part in this public debate formany years, thus answering the interest shown by many people on the po-litical right who expect viable solutions to such a complicated problem. Letus hope we can bring our contribution.

Sever Voinescu-CotoiISP Board Member

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Chapter I

Weaknesses of the Healthcaresystem in Romania

Author: Cristina Dobre 1

A. The current state of affairs

The national healthcare system has been too little restructured in thepast 20 years. Its organization is still over-centralized, and its developmenthas 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 stateinstitutions, 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 notbrought benefits to the national healthcare system. The main causes of thissituation are the financing, mostly from public sources, and the lack of veryclear quality standards, enforced without exceptions. Another subjective causeof the poor operation of the healthcare system is the lack of responsibility or,at least, the low administrative, professional, financial and legal responsibilityof all the players involved, from physicians to nurses and from managers tothe owners of healthcare services companies.

Romania ranks last in Europe in healthcare expenditure, with 5.6% ofits 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 RomanianParliament, between 2008 and 2012, representing the Liberal Democratic Party of Romania. She was also thevice-president of the Health Commission of the Chamber of Deputies.


public sector (over 80% in the last years) and, additionally, from the privatesector.

The consolidated budgetary income is far lower in Romania than theEU average, a major constraint on the ability of the government to ade-quately finance the public healthcare services. Budgetary income averaged32.6% of the GDP in Romania between 2000 and 2009, while the EU-27average 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 shareof healthcare expenditure in the total public expenditure stayed flat in thelast years, at 10-11%, shows the amount of resources the public sector canafford under the current fiscal-budgetary framework. In this context, increas-ing the financing of healthcare expenditure from private sources appears asnormal, as well as a viable solution for solving the existing structuralproblems.

The lack of operational standards in the healthcare system has led todisastrous effects on the quality of medical services and consequently onthe general health of the population. At this time there is no standard formedical services establishing the precise diagnostic protocol and treatmentfor each disease. In practice, the physicians, simply because they have adiploma, 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 currentlegislation there are mandatory standards - sanitary, epidemiological, forstaff, circuits etc. – these are either minimal, or not followed. Thus, their ef-fect is insignificant. This is why there still are medical units (doctor’s 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 publicopinion is concerned, as to blame the minister of health for medical errorsor administrative mistakes in any medical unit in the country. The lack ofclear rules and punitive measures in the primary or secondary medical leg-islation leads to a significant decrease in the quality of the medical serviceand the suffering of people. Administrative sanctions given to the medicalstaff amount to a reprimand at the most, revoking the right to practice fordoctors or nurses is inexistent, and handing down financial damages for mal-

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practice is a rarity, although medical errors or administrative mistakes areincreasingly multiplying.

The backbone of the national healthcare system consists in the primarymedical 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 andhospitals. 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, whoare represented by a single owners’ association. Pharmacies and distributorsof medicines and sanitary supplies are exclusively private businesses andthis sometimes leads to disruptions in the supply of medicines to the popu-lation. Ambulances and hospitals are mostly state-owned and do not haveany competition on their market, which leads to a decrease in the quality ofthe services they provide. Measures to discourage the two monopolies aredesperately 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 thereis an additional one: the “university” principle, according to which everychair of the medical school should have as its counterpart a clinic in a statehospital. Most of the times these principles collided with the actual need ofmedical services requested by citizens, so there are many cases where hos-pital beds are unused or are used for unnecessary admission to hospitals, orcases where beds are insufficient and patients must share one bed.

Public health programs are poor because their final implementation ismainly left to the family doctors. These doctors, who co-own private com-panies, do not enforce these programs because they do not share a financialinterest 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 lowefficiency and the effect is the re-apparition of diseases that had long beeneradicated in Romania.



The health insurance system is at this time a full monopoly in thehands 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 collectedfrom a minority of the population, approximately 6 million people, whileexpenditure covers the whole population. The current situation, where 6.8million 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 theexpenditure 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 toencourage it are needed.

The salary income of medical staff is very low in Romania, at least incomparison to other European states. Even worse, salaries are the sameacross the board in state healthcare units, without the possibility to differ-entiate them according to the quality of the work done. The causes are thefinancing exclusively from budgetary sources, the lack of financing throughdirect payments and excessive auxiliary staff working in state healthcareunits. Besides, salary income is especially low in state-owned healthcareunits, in the private system these being far superior. All these causes can beeliminated through fair legislation, which will lead in the near future to anincrease of the salary income in healthcare.

B. Our vision

The national healthcare system must be resized to be able to cover themedical services needed by the population, within the limits of the availablefinancing. In every area of medical assistance there should be a sufficientnumber of medical services suppliers, according to the number of peopleand the recorded morbidity and mortality indices. The law should establishand impose a maximum number of suppliers for each region and clinicalarea, 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

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other types of suppliers must be determined only according to the need formedical services.

The financing of the healthcare system must be reformed. Financing al-most exclusively from budgetary sources cannot cover the needed expenditurein healthcare, in the context of the current financial and fiscal legislation.

There is an absolute need to introduce standardization on a broad scalein healthcare. Imposing standards will result in increased accountability ofall those involved in the healthcare system. The law will impose mandatorystandards on:

1. Standardization of medical services through guides, diagnosticand therapeutic protocols for any disease

2. Mandatory criteria for the accreditation and evaluation of anymedical unit where medical services are provided. All non-com-pliant medical units will be closed

3. Quality and control criteria for medical services, and preciseand drastic punitive measures in case of non-compliance

4. Maximal cost standards for medical services, medicines, mate-rials and medical equipment, correctly calculated and enforcedby laws.

Public health programs, fully financed from the state budget and notfrom health insurance premiums, will be devised so as to be both efficientand effective. Every program will be analyzed on the basis of needs and fi-nancing possibilities. Inappropriately financing any kind of program meansnot attaining the anticipated effects, that is, lack of effectiveness. It is prefer-able to maintain and give additional financing only to the programs thatproved 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 considerare the objectives in the chapter on Healthcareof the government’s 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 servicesfor a period of minimum 8 years.

3. Providing and guaranteeing the access to high quality healthcareservices for all citizens, by imposing mandatory quality standards on health-care units.

4. The public financing of the national healthcare system must reach12% of the annual budgetary expenditure and 5% of the GDP, to ensure thefunctioning of a European level healthcare system.

5. To appropriately determine the medical services packages coveredby health insurance.

6. Eliminating state or private monopolies that exist in certain areasof medical assistance.

7. Reorganizing hospitals according to the needs for hospital medicalservices 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 fromthe 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.

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15. The participation of the medical staff in a continuing educationprogram 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 drivethe appropriate development of the national healthcare system, in order tocover the population’s needs for medical services, measures to unlock theexisting 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 legislativeframework 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 medicalservices.

- Establishing the standard for medical services by setting diagnosticand 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 protocolsand 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 ofthe 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 healthylifestyle.

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 toensure 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 stimulatingprivate investment and public-private partnerships in this sector.

- Implementing a national investment program, including through theabsorption of community funds that could allow the development of a newinfrastructure of the national hospital system.

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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 illnesseshaving an impact on public health.

- Setting clear sanctions for primary care suppliers in case for breachesof professional obligations.

- Concession and/or selling the state-owned surgeries to the doctorsmanaging 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 thewhole 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 havingan income under the minimum wage.

- Providing free medicines for children, high-school students, collegestudents, disabled persons, pregnant and nursing women, if they have noother income.

- Stimulating the opening of pharmacies and pharmaceuticals units in ruralor isolated areas, including through the introduction of mobile pharmacies.

- Transparent pricing and subsidizing criteria according to efficacyand 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.

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- Complete digitization of the health insurance system to efficientlymonitor 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 nursesfor 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 resultof the medical services provided.

- Hiring management staff at all levels of the state healthcare systemonly on a management contract, based on strict performance criteria and anobjective 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 thatthe Romanian healthcare system is a sort of a "black hole"; even if moremoney would be given for healthcare this would not lead to an increase inthe satisfaction of patients. A new vision for the whole system, one sharedby the political class as a whole, would be the only solution. Even if anychange meets resistance, the current customs in the healthcare system mustbe eliminated. Politicians must set the objectives and the lines of action mustbe agreed with the civil society.

Any kind of monopoly in healthcare must be eliminated (the systemmust operate by balancing supply and demand while guaranteeing the rightto healthcare provided for in the Constitution).

There is a need for continuity in what concerns the decision makingprocess in the healthcare system. Once the objectives and the lines of actionshave been set, these must be completed regardless of who holds the officeof the Prime Minister or the ruling party.

Regarding the fair management of healthcare funds, the main issue isthe 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 andprevention programs.

Also, copayment must be introduced, although 66% of the populationis 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 levelsshould be affordable and accepted by patients.

In managing healthcare funds we should take into account that themedical staff is currently paid without consideration to clear differentiatingcriteria (83% of the population believes the medical staff is underpaid). Pay-ing salaries to health professionals should be done according to their levelof 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.

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Chapter II

Romanian healthcare – leaping to the 21st century

Author: Richard Walsh 2

Introduction

This policy paper was commissioned by ISP to inform the debate onthe reforming the Romanian healthcare system. It draws on desk researchand 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 debatein 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 ABI’s policy on health and protection insurance. Prior to ABI, Richardspent eleven years at the Department of Health, holding a number of positions before being promoted to theHead of Strategic Planning (Senior Civil Service). Richard is an Executive Committee Member of the UKForum for Genetics and Insurance. In addition, he is an experienced conference chairman with extensivemedia involvement.


The need for political commitmentThe 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 givenwith no sign on increasing efficiency or effect. This view is re-enforced byhistoric 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 financinglarge public health programs (according to the World Bank these now ac-count for 20% of overall health expenditure – over twice the expenditure onprimary care). Some of the programs are for prevention (such as vaccination)but the more resource-intensive are for treatment e.g. cancer. This centralistapproach is highly unusual for EU health systems. It is also linked to ex-emption from co-payments and use of generic drugs – reducing income andincreasing expenditure for the system as a whole

• Some argue that the NHIH should be split up into a set of mutual orprivate insurers – as exists in Belgium. Others prefer the UK model of anNHS with the private sector operating, if at all, on the margins

• Co-payments (formal and informal) are endemic in the system. Thereis a lack of clarity on what patients should be required to pay and what theyget for their payments. The informal payments operate outside the tax system(or indeed any accounting system. Some put this issue in the “too difficultbox”. Others have argued for trying to eliminate the informal element andreplace it with compulsion – with exemptions for the poorest etc. So far thisissue remains un-tackled

The net effect of these polarities of opinion has been to result in healthpolicy 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 itsuch that it provides good care, efficient provision, funding streams that areresponsive to patient needs in a way which fits the traditions in Romania

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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 FlowsThe map below (produced by the WHO EU observatory) shows how

the current financial flows operate. It is slightly out of date in that (exceptfor the self-employed) contributions from the insured populations are nowcollected by the Ministry of Finance rather than the District NIHs. In addi-tion there is now a growing private hospital sector which is partly fundedby the DNIHs (along with state owned hospitals) and also by private groupinsurance (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 incomeCurrently 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 abig mismatch between the two. The effect of this is that (excluding co-pay-ments and informal payments) Romania only spends around 5% of its GDPon health – compared to around 8% EU average.

There is a belief that the health insurance element should be treatedseparately and ring-fenced for the NHIH but this has two perverse effects:

• It artificially constricts the amount any government can choose tospend on health

• When this amount proves to be not enough it creates a vicious circleof 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:þ Working age people on low incomes or state income supportþ 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 unlessthe other categories applyþ 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 belowfor more detail).

• The NHIH should allocate the cash to the local commissioning bod-ies – the DHIHs – retaining an amount for emergencies and nationwide pro-

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grams – e.g. centers of excellence for high tech conditions like advancedcancer treatment and heart surgery in children

• The DHIHs should act as commissioning bodies for the hospitalsand primary care facilities in their areas. They should be collecting and usingdata to rationalize spending for maximum health gain and efficiency. Theyshould be resourced to achieve this.

Copayments and informal paymentsThe 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 doctor’s perspectivethe effect would be a reduction in income unless salaries are increased andthat increase would in itself be taxable. The money raised would be fed intothe 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% ofrespondents, 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 inthe health system

• 83% of respondents believe that medical staff are poorly paid

It is also unclear the extent to which a co-payment scheme wouldcover all informal payments – besides payments to doctors there are alsohospital 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 usualnumber of people who go for diagnosis are subsequently hospitalized – andfor longer than usual periods.

So what could be a better alternative?



First let us take the existing fixed copayment system for drugs. Currentlypatients 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 adrug 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 drugbill 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 exemptionsbut required regular treatment could purchase “season tickets” for their monthlyprescriptions at a lower cost than the individual prescription cost aggregates.

Second let us take the informal payment system. Rather than fixingrates nationally each hospital could set its own arrangements as follows:

• The hospital would set up an independent charitable trust with aBoard of Trustees drawn from local clinicians and patient group represen-tatives etc. (lay members)

• The charitable trust would set its own reference payment levels andhave 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 collectionand distribution

• The charitable trust would decide based on a yearly plan how itwould 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 schemesare known as “cash plans” as they pay out a fixed amount for each day inhospital up to a maximum number of days. They are usually provided bymutual insurers often set up by local communities or unions.

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Reforming provision of servicesThe 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 numberof 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 uniquehere – this is a common issue in other EU countries although the primarycare situation here is particularly bad. There is an opportunity to move fromthe current situation to a system fit for the 21st century – rather than adoptingthe existing 20th century one that exists elsewhere. Here are some of the fea-tures of what a 21st century system might look like:

• Each DHIH should be responsible for producing a 5 year strategy oftheir vision and action plan for producing a 21st century primary care sys-tem for their area. This should include the resources that would be neededto fund it – with fall back options. They would bid for funding from theNHIH.

• The vision should include:

þ Telemedicine links to specialists for diagnosis and treatmentof conditions outside their expertiseþWalk in primary care centers staffed by salaried doctors, nursesand possibly others (such as physiotherapists) – existing privateGP practices would have to option to opt in. Those who chosenot to could remain as they are now but there would be no guar-antee that their current contracts with the state system would bemaintained. Indeed, over time, we could expect to see the privatesector end taking mainly self-pay or privately insured peopleþ The centers to be responsible for health promotion eg vacci-nations and cancer screenings etc.þ Funding to be provided on a contract basis by the DHIHsþ 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 decisionmaking on resource allocation and to enable patient choiceþ Each center to have a governing Board of unpaid local peopleto 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.) þ Each center to carry out patent satisfaction checks – anotherpart of the data set

• Each DHIH would also produce a 5 year plan for the developmentof secondary care (excluding specialist teaching hospitals). This plan wouldbe led by local clinicians. The only way of achieving consensus on hospitalrationalization is if it is clinician led and seen to be based on providing thebest healthcare services for the local population. Otherwise it will be seenas a bureaucratic exercise imposed on a reluctant population. Even so localhospitals 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 atDHIH plans to ensure that the two do not contradict each other i.e. if regionX is to have a tertiary specialist center local hospitals would be unlikely toget accreditation to carry out the same procedures

Finally we move to the increasing development of private hospitalprovision. In many ways this is to be welcomed however it is important thatsuch 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 excellenceand 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.

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Reforming commissioningWhether 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 tomove 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 theplace 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 theGovernment and are thus the same across all funds. Members are able tochoose a sickness fund of their choice.

• There is a complex risk equalization scheme to compensate insurerswho hold higher numbers of high risk patients on their books

• The extent to which such schemes of themselves deliver better careoutcomes 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 currentsystem and seek to reform it within – what could this mean in practice?

• The Ministry of Health should be the policy arm of Government assuch it should lose all responsibility for setting contracts, salary levels, in-spections etc. Its core functions should be to:

þ Set National policy based on Ministerial prioritiesþ Set National resource priorities based on consultation with theNHIHþ 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 theNHIH/DHIHs) • The NHIH should be a non-political organization charged with im-

proving the National commissioning of healthcare:þ It should have a CEO who is responsible for all discussion onoperational issues except those requiring a clinical knowledge– with a National profileþ It should have a Chief Medical Officer who deals with these –he/she too should have a National profileþ It should collect and publish information based on defined datasetsþ It should hold DHIHs to account for their own Commissioningof servicesþ It should set targets – but these should be strictly limited.League tables of performance can be as effective as targets forpoorer performers

• Romania should have its own drug accreditation body (e.g. dealingwith which drugs are available, costs). Currently this is dealt with by MHand 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 ofindividual 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 thewalk in clinics. Issues that span local areas could be picked up by DHIHsand local authorities

So overall we move to a system that has clearer roles and controls witha clear remit for commissioning services at national and local levels. If such

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a system were introduced it would also enable the Ministry of Health to dowhat it is there for and remove it from the public limelight when things gowrong – although there will always be some issues where there will be apolitical context.

RegulationThere are in essence two types of regulation: the regulation of profes-

sionals as individuals and the regulation of health institutions. The secondis NOT the same as commissioning services. Rather it is about accreditationof institutions, checking they are up to standard (inspections) and dealingwith institutional failure (inquiries).

Let us take the regulation of individuals first. Currently there is a lotof criticism of the existing system which is seen to be ineffective at ensuringthat clinicians carry out what they are capable of doing well and at dealingwith fitness to practice when things go wrong.

Another issue for Romania is the ability of doctors trained here to workin other EU countries and then to return to practice here. Their ability to workabroad 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 andnot weighted in the public interest. In essence they are seen as “doctorsclubs”. 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 whereit 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 areconsequences 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 atransparent 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 legalteam

• Its role would:þ Not be to represent doctors – that would be for the unionand/or individual doctor’s legal advisorsþ To rule on fitness to practice issues and to impose restrictionson practice, re-training and ultimately strike off poorly perform-ing doctorsþ Registration of doctors – including their areas of specialist ex-pertiseþ Liaising with teaching hospitals and specialists on undergrad-uate and post graduate medical training requirementsþ Revalidation and CPDþ Producing guidance on controversial issues to help doctorswhen 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 politicalwill from the Minister of Health) not only would public confidence be im-proved but the perception of Romanian doctors as professionals in other EUcountries would be enhanced. Doctors returning to work in Romania fromthe EU would also return to systems more akin to what they were used towhen 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 modelsto choose from (National and local and combinations of the two) but the keypoints are that they should be independent of government, commissioningand 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

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issues that may affect more than one of them e.g. hospital infections. Assuch they will feed into the commissioning process but they are responsiblefor checking, accreditation and dealing with systemic scandals when theyarise. Currently this function seems very underdeveloped in Romania andthis issue needs to be addressed in the public interest. Combining this withindividual regulation is bound to uncover many things going wrong that pre-viously remained hidden. It is therefore vital that the systems that are set uphave 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 DHIHsetc. they will need a cadre of appropriately paid professional people. Cur-rently there is too little freedom for hospitals etc. to reward excellence (asopposed to time served). It is also difficult to see how there could be anacross the board salary rise given the current recession. The issue can be ad-dressed in some part by the proposals on informal payments and charitabletrusts. Ideally hospitals should also have the freedom to award merit bonuseswithin their normal budgets.

Private insuranceThis 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/orearlier treatment. Politically this is not so difficult as it is linked to early re-turn to work and national productivity.

þMore difficult is individuals buying PMI for themselves. Themarket 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 couldalso 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 – guaranteedacceptance, 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 theRepublic 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 thatdebate. Given political will there is a real opportunity to move to a bettersystem that meets the needs of the population in an equitable manner. It’stime to move on from the old arguments, develop the existing system andstop seeking panaceas from other countries. There are none. Instead everyEU country has its own system and legacy issues. We need to recognize oursand adapt and reform for the benefit of patients and the staff who serve them.

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medical system in romania

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