The Shape of Polish Healthcare – a Decision Yet to Be Made.

The Working Group on ‘the health care system’ set up by the Minister of Health has not completed its mission yet, however, some initial, leaked, information seems to confirm what was generally expected.

This includes health insurance contribution deducted from Personal Income Tax to be replaced by … a share of personal income tax. The special-purpose assets remain, however, it is still unclear whether the Central Office of the National Health Fund will be functionally replaced by appropriate departments in the Ministry of Health or by specialised agencies established for this purpose. As it may be concluded from other announcements made, entitlement to health care is to be linked to the place of residence under the so-called citizenship entitlement to healthcare benefits.

It is not an entirely new idea for those following the state’s healthcare policy. In 1998 Professor Leszek Balcerowicz, the then Deputy Prime Minister and the Finance Minister from the liberal Freedom Union (Unia Wolności, UW- a liberal democratic political party in Poland no longer existing but many of its former members are in opposition parties now) proposed such a path for one of the four memorable reforms of the government led by Professor Jerzy Buzek. However, another concept prevailed – that of the right-wing Solidarity Electoral Action (Akcja Wyborcza Solidarność, AWS), from which at least some politicians of the Right and Justice party (Prawo i Sprawiedliwość, PiS), currently in power, belong and which consisted of establishing Sickness Insurance Funds – 16 funds dependent on provincial self-government authorities and a central entity for the officers and employees of the Ministry of the Interior and the Ministry of National Defence.

It seems, however, that at least in the current parliamentary term the concept of a health insurance institution independent from the government has not come back together with the people who built the system not even two decades ago. It is worth noticing that since the beginning of the National Health Fund’s existence each successive government reduced the powers of the public payer, consistently limited its competences and centralised decision making in the hands of the Minister of Health. The current proposal should be perceived rather as ‘dotting the i’s and crossing the t’s’ in the process begun 13 years ago by the government of Leszek Miller.

Problems and challenges:

• In order to maintain the current level of revenue it will be necessary to increase the nominal value of personal income tax by at least 1%, which despite being only an accounting operation will be difficulto implement on a political level. An alternative solution would be to include the changes in a broader reform of the tax and insurance system reform (encompassing contributions paid to the Social Insurance Institution (Zakład Ubezpieczeń Spolecznych, ZUS) and increasing progression in the personal income tax.
• The tax administration’s efficiency in Poland is amongst the lowest in OECD countries with its current cost reaching 1.6% of the amount of the tax collected. It will be necessary to improve the quality of the tax offices’ work in order to ensure sustainable tax revenues in the medium-term.
• Replacing the entitlement to healthcare based on the insurance with one based on citizenship and place of residence is more likely to discourage participation of the potential employees in the labour market. It also poses serious technical challenges resulting from quite high migration and mobility of Polish citizens.
• Increasing dependence on the state budget may have even further consequences. So far the Fund’s distinct legal personality and its own financial plan have acted as a specific buffer in the context of the macroeconomic situation of hospitals and primary health centres. In the time of acceleration of economic growth the increase of the funds was spread over the period, whereas during the economic downturn the reserve funds served as a cushion. The funds that were not used in a given year were not lost but could be used in the following year. These elements that allow the flexible management of the funding system may be now lacking, and, moreover, a considerably greater pressure may be exerted by other ministries, especially those dealing with social issues, when it comes to financial planning. As long as we are enjoying satisfactory economic growth, the threats mentioned above remain purely theoretical. Nevertheless, should the Polish economy slow down or, even worse, fall into recession, then the Minister of Health may be in an even more difficult and weaker position than he is now.