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Plan B - a lifebuoy for hospitals

Country: 
Poland
Partner Institute: 
Institute of Public Health, Jagiellonian University Medical College, Krakow
Survey no: 
(14) 2009
Author(s): 
Iwona Kowalska
Health Policy Issues: 
Role Private Sector, Political Context, Quality Improvement
Reform formerly reported in: 
Status of health care units - Project of Law
Current Process Stages
Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? no no no no yes no no

Abstract

The Law on health care units was blocked by the President in 2008. In April 2009, the Polish government adopted a Plan B called ?Save Polish Hospitals? which entails providing financial support for local governments in case of restructurization of public hospitals into commercial companies. The program was announced in the form of a government resolution entitled "Support for Local Government aiming at Stabilisation of the Healthcare System". It will be realised during 2009?2011.

Recent developments

In July 2009, the Minister of Health signed an agreement with the National Health Fund (NFZ) and the Bank Gospodarstwa Krajowego (BGK) specifying rules for cooperation in carrying out tasks included in the program. The agreement sets forth, for example, requirements for business plans that must be prepared by institutions willing to participate in the program.

The program comes in response to the Presidential veto concerning the introduction of new healthcare laws (health package) and is designed to support conversion into commercial companies (limited-liability company or joint-stock company replacing the form of  "independent public healthcare units" (SPZOZ). Such transformation is intended to change the management possibilities for  local governments concerning local hospitals (improved organization and financing). Financial support will be given to local governments voluntarily adopting a plan for restructuring healthcare units under their control (establishing a private capital company and submitting a business plan and proposal for the debts of the health care unit management). The local governments must also obtain a positive opinion from the National Health Fund (NFZ) and Bank Gospodarstwa Krajowego (BGK), as well as approval from their regional authority (voivodship). The funds are transferred under agreements concluded between the central government and the local government. Local governments assuming debts of the converted SPZOZ will receive targeted grants from the state budget for this particular purpose. They can also get some other forms of support.

To participate in the program the local government must meet the following conditions:

1. adoption of a reorganization program including:

a. rules and schedule for liquidation of the SPZOZ (including a schedule for the ending date) and establishment of a capital company to operate a non-public healthcare facility (NZOZ)

b. analysis of revenues obtainable from providing healthcare services

c. economic and financial analysis (business plan)

d. financial reports of the SPZOZ for the past three years, along with auditor's reports and opinions

e. proposal for restructuring and payment of the debts of the local government unit arising pursuant to liquidation of the SPZOZ, e.g. settlement of civil-law claims

2. positive opinion from the director of the National Health Found branch.

3. positive opinion from BGK.

4. request form for participation in the program with voivodship.

The Minister of Health will transfer the financial support to the local government unit pursuant to the agreement if all the following conditions have been met:

  1. notification concerning the participation in the program,
  2. deletion of the SPZOZ from the register of healthcare gacilities and the National Court Register and assumption of its debts by the local government unit,
  3. establishment of a private capital company owned by the local government unit,
  4. safe delivery of healthcare services due to the assignment of movables and real estate to the company established by the local government for the purpose of providing healthcare services, and entry of the NZOZ into the register of healthcare faciilities,
  5. signing of the agreement between the Health Minister and the local government unit.

Local government units implementing the program are required to provide the voivodship with a report concerning the use of the funds by 31 March of each year (after receiving the grant).

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Characteristics of this policy

Degree of Innovation traditional rather innovative innovative
Degree of Controversy consensual controversial highly controversial
Structural or Systemic Impact marginal fundamental fundamental
Public Visibility very low low very high
Transferability strongly system-dependent strongly system-dependent system-neutral
current current   previous previous

The proposed policy on the legal status of health care units is innovative for the Polish health system. It is also very controversial because of the possibility of SPZOZ privatization or liquidation. According to the new regulation, the local government has the competence to close hospitals operating as new companies in case of new debts.

The impact on the system will in any case be fundamental (the implementation depends on systemic law and other important regulations).

The public visibility of the described  regulation has changed compared to the stage of policy planning - it is not so publicly observed at the moment.

Purpose and process analysis

Current Process Stages

Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? no no no no yes no no

Initiators of idea/main actors

  • Government: The Health Ministry estimates that more than 400 hospitals are interested in participation in the program. The MoH initiated the implementation process of the program.
  • Providers: The positions of providers may differ depending on the legal status of a particular health care unit and on its financial situation.
  • Payers: NHF gives its opinion concerning the local government proposal for the reorganisation program.
  • Patients, Consumers: The public attitude, intensified by some political forces, could be described as extremely strong opinion that a transformation of legal status from public to non-public hospitals will automatically result in the necessity for out-of-pocket payments.
  • Scientific Community: The opinion of experts did not change since 2008. The only change is the critical opinion of the lawyers on the form of the new legal act - it is not a law but a regulation of the Government, which can not result in legal effects.
  • Media: The media did not express a strong interest on the subject anymore. Media found another interesting news concerning the aspects of health care e.g- AH1N1 flu at the moment.
  • Others: Poviat (local authorities) and voivodship (regional authorities) positions are still not clear. The Plan B aims to avoid a situation in which changes initiated by healthcare units that do not have any debts would be blocked by the political oposition.

Stakeholder positions

The most important role of the described policy plays the Ministry of Health (MoH) who was the main actor initiating and strongly supporting the described regulation. According to the regulation goals, the substantial number of Polish public sector hospitals will go down the commercialisation route. This may bring good news for the private outsourcing services. The change means that hospitals will move from being run by a single appointed chief executive, who is often a political appointee, to a board of directors in a limited company structure with an additional supervisory board for monitoring.  

Unfortunately, the interest, position and influence of the scientific community, especially lawyers and public health professionals, has decreased. Lawyers in their expert opinions noticed many legal errors and doubts concerning the resolution as a legal instrument for this particular purpose (not the usual way for such substantial, systemic issues) and warned of unexpected (and not so easy to forecast) legal effects of the proposed changes.

Actors and positions

Description of actors and their positions
Government
Ministry of Health (MoH)very supportivevery supportive strongly opposed
Prime Ministervery supportivevery supportive strongly opposed
Ministry of Finance (MoF)very supportiveneutral strongly opposed
Providers
Hospital with debtsvery supportivevery supportive strongly opposed
Hospital without debtsvery supportivesupportive strongly opposed
Private diagnostic providersvery supportivesupportive strongly opposed
Payers
NHFvery supportivesupportive strongly opposed
Patients, Consumers
Patientsvery supportiveopposed strongly opposed
Scientific Community
Public Health Professsionalsvery supportivesupportive strongly opposed
Health economics specialistvery supportivevery supportive strongly opposed
Lawersvery supportiveopposed strongly opposed
Media
National mediavery supportiveneutral strongly opposed
Local mediavery supportivesupportive strongly opposed
Local authorities
Poviat (local authorities)very supportivesupportive strongly opposed
Voivodship authoritiesvery supportivesupportive strongly opposed
current current   previous previous

Influences in policy making and legislation

The program comes in response to the Presidential veto against the introduction of the new healthcare laws package. The original proposal in form of a piece of legislation -  Law on Health Care units - has been changed  in the sphere of the hospitals participation in  the commercialization process. According to the vetoed legislation on health care units, the transformation of state-owned health care units (SPZOZ) into companies governed by the provisions of economic law (limited liability companies or joint-stock companies) was obligatory.

The new proposal - hereby described Plan B - provides that the hospitals may voluntarily participate in the governmental program.  

Legislative outcome

Hold

Actors and influence

Description of actors and their influence

Government
Ministry of Health (MoH)very strongvery strong none
Prime Ministervery strongstrong none
Ministry of Finance (MoF)very strongvery strong none
Providers
Hospital with debtsvery strongneutral none
Hospital without debtsvery strongneutral none
Private diagnostic providersvery strongneutral none
Payers
NHFvery strongvery strong none
Patients, Consumers
Patientsvery strongnone none
Scientific Community
Public Health Professsionalsvery strongneutral none
Health economics specialistvery strongstrong none
Lawersvery strongstrong none
Media
National mediavery strongstrong none
Local mediavery strongstrong none
Local authorities
Poviat (local authorities)very strongstrong none
Voivodship authoritiesvery strongstrong none
current current   previous previous
Hospital with debtsPrime Minister, Health economics specialistMinistry of Health (MoH)Hospital without debts, Private diagnostic providers, Public Health ProfesssionalsLocal media, Poviat (local authorities), Voivodship authoritiesNHFNational mediaMinistry of Finance (MoF)PatientsLawers

Positions and Influences at a glance

Graphical actors vs. influence map representing the above actors vs. influences table.

Adoption and implementation

The government expressed deep determination to implement the new policy on the transformation of health care units. MoH estimates that more than 400 hospitals are interested in participating in the proposed program.

Polish experts say that commercialisation will make a huge difference in the field of hospital management. Instead of being individually undertaken by managers (hospital directors), decisions in the transformed hospitals can profit  from a group of people designed for decision making process - often with better knowledge, skills and more experience. Commercialised hospitals with their limited ability to borrow money are also much more likely to make hard choices and opt for outsource providers based on cost-effectiveness, rather than retaining the existing structure.

Monitoring and evaluation

Looking from the overall policy perpective, at this stage it is not possible to evaluate results of the governmemental resolution. It will depend on the scale of the future privatisation process, i.e. the number of applying hospitals, the implementation of the instruments provided etc.

The other aspect of  monitoring and evaluation are the instruments provided for the involved institutions (KBG and NFZ)  for the evaluation of all the submitted documentation: it concerns business plans, analysis and presentation of main objectives of the restructurisation plan and other required by both institutions. In this respect, NHF adopted the unified rules and published them in a form of particular attachements to its communication. The forms have to follow the instructions that enable the coherent evaluation of applicants.

Expected outcome

Based on the findings from the previous HPM reports and having in mind different expert opinions concerning the changes described in this report, the overall assessment of the policy could be limited to the following recommendations:

1. a fundamental recommendation concerns the introduction of a clause on a voluntary  transformations of SPOZs

2. the ownership of health care unit (hospital) property should be separated from the newly established company (ie. local authorities should still be the owners of the property).

3. the SPZOZ liquidation process is the preferred method for the reorganization and legal transformation.

 

Impact of this policy

Quality of Health Care Services marginal neutral fundamental
Level of Equity system less equitable system less equitable system more equitable
Cost Efficiency very low neutral very high
current current   previous previous

The planned changes in the status of health care units are based on the assumption that the process will result in quality improvements. At the current stage the impact on equity and cost-efficiency cannot be judged unambiguously.

References

Sources of Information

Resolution No. 58/2009 of the Council of Ministers dated 27 April 2009 Establishing the Multi-Year Program "Support for Local Government Units in Actions to Stabilise the Healthcare System"

Reform formerly reported in

Status of health care units - Project of Law
Process Stages: Policy Paper

Author/s and/or contributors to this survey

Iwona Kowalska

Dr Iwona Kowalska, lecturer in the Institute of Public Health, Medical College, Jagiellonian University. She graduated in Political Science at the Faculty of Law and Administration, Jagiellonian  University. Her main areas of research are: health and social policy, European health policy and healthcare systems.

Suggested citation for this online article

Kowalska, Iwona. "Plan B - a lifebuoy for hospitals". Health Policy Monitor, October 2009. Available at http://www.hpm.org/survey/pl/a14/2