An outline of needed reforms for the healthcare system: What has the COVID-19 crisis changed?

At the 169th mBank-CASE Seminar, an online event held on April 15, 2021, this question was addressed by a group of outstanding health economists:

Stanisława Golinowska, a professor of economic sciences and vice chairwoman of the CASE Supervisory Council;
Alicja Domagała, a PhD in public health and an assistant professor in the Health Policy and Management Department of the Institute of Public Health at the Jagiellonian University Collegium Medicum
Iwona Kowalska-Bobko, a habilitated PhD in public health and Jagiellonian University professor, director of the Collegium Medicum’s Institute of Public Health
Iwona Bielska, a doctor of epidemiology and an assistant professor in the Faculty of Health Sciences at Canada’s McMaster University
Christoph Sowada, a doctor of economic sciences and Jagiellonian University professor, deputy dean of the Institute of Public Health at the Collegium Medicum
Marzena Tambor, a doctor of public health and an assistant professor in the Institute of Public Health at the Jagiellonian University Collegium Medicum

Professor Golinowska opened the seminar by calling to mind that three years earlier (in 2018) at another mBank-CASE Seminar (LINK to the publication) the healthcare system’s very difficult situation was highlighted. At that seminar, a group made up largely of the same experts called for certain fundamental changes in the system: 1) increased spending combined with more effective allocation; 2) urgent investment in developing human resources; 3) introducing transparent rules, acceptable to Polish society, for individual co-payments and 4) introducing effective public management (governance) of the healthcare system, coordinated with other sectors of the economy that affect public health.

Professor Golinowska pointed out the negligible effectiveness of concepts and plans for healthcare reform based on a sober, comprehensive diagnosis of the problems and health challenges. She noted the importance of how the system functions in the shadow of political and business interests (the problem of centralization, autonomy, self-governance), which unfortunately brings with it unwelcome effects. According to Professor Golinowska, public health in Poland can generally be described as a neglected sector. A law addressing this was introduced only in 2015 – the latest among EU countries. Healthcare spending is low, and public health institutions are weak. The pandemic exposed a general tendency of downplaying infectious diseases, as well as weakness and underinvestment in the sanitary inspection system.

Professor Golinowska concluded her remarks with the observation that in Poland access to medical services varies widely and health inequality is high as a result of long-term behavior patterns and unfavorable social-economic factors (including variations in material wealth and poor living conditions). Additionally, we have low health consciousness in society, and a lack of health education in the family and the school, which translates into a very limited ability to carry out reforms, strategies, plans and concepts. At the end she pointed out the disconcerting results of research on changes in 2019-2020 in average life expectancy. In Poland, as in other Eastern and Southern European countries it declined (here by 1.4 years).

The problems of financing healthcare in Poland were discussed by Professor Sowada. “We’re still dealing with underfinancing in the country’s healthcare sector,” he said. “And as we said three years ago, so today we must state that we’re still using these insufficient funds inefficiently. We have an almost non-existent strategy of competition in compensation; we still have a hospital-centric allocation of funds despite – or because of – the introduction of so-called hospital chains; and we must remember that hospital treatment is the most expensive form.” It’s worth noting that in terms of healthcare spending in selected EU countries in 2016 and 2019, Poland hasn’t changed its position. Even though current spending on healthcare grew year by year, its relative level remained low compared to other developed countries at 6.5% and 6.3% of GDP respectively. This leads to an inability to ensure pay for medical staff that’s decent enough to dissuade them from emigration.

Another issue, which the managers of the healthcare system have been unable to address for years, is what Professor Sowada called the inadequate assessment of benefits. This has two ill effects: 1) a lack of security to cover the costs of creating long-term capital and development of facilities, and 2) the deepening indebtedness of public hospitals. In concluding his diagnosis, Professor Sowada presented the role of healthcare financing in the draft National Recovery Plan, which assigns 18% of the total budget to healthcare (PLN 4.3 billion). That’s not much, and what’s more one-third of these funds are to go to purchasing Covid-19 vaccines. This seems to be an effort to rescue the leaky state budget with EU funds, and has nothing to do with improving the financing of the healthcare system, he said. The remaining healthcare-related items in the Recovery Plan certainly don’t offer hope that they’ll change Poland’s healthcare system for the better.

Dr. Tambor focused on the question of how households finance healthcare. She stated that the relatively high, 20% share of direct household spending in financing health benefits reduces the ability to introduce co-payments for public benefits (as a tool for building greater consumer responsibility). She devoted the rest of her time to analyzing the structure of direct household spending in Poland in comparison to eight other EU countries, pointing out that private outlays are particularly high for therapeutic devices, while they’re lower but still high for dental care and medicines.

Dr. Domagała took up the issues of overcoming shortages of medical and associated personnel, placing them in the context of the Covid-19 pandemic. The situation of Polish medical personnel is exceptionally unfavorable, which can be seen if nowhere else in the terrible age structure: the share of people at retirement age, the lack of replacements from younger generations, excessive work burdens, unsatisfactory wage levels and economic emigration. Additionally, according to Dr. Domagała, Poland has a shortage of doctors (2.4 per 1,000 people, compared with the OECD average of 3.5) and of nurses (5.1 per 1,000, compared with 8.8). The pandemic laid bare further problems: shortages of staff in particular specializations; lack of funds for overtime; personnel working multiple jobs and overwork; a dearth of psychological support for the personnel fighting the pandemic; shortages of personal protective equipment; problems with information flow; and failure to coordinate during the pandemic.

Additionally, a lack of public trust was revealed: research in 26 countries on the level of confidence in various sources of information about Covid-19 showed that in all countries except Poland, medical personnel enjoyed the highest trust as a source of information about the pandemic (about 80%). In conclusion, Dr. Domagała stated that unfortunately the challenges and recommendations presented during the seminar in 2018 remain the same today, and as a result of the pandemic, more must be added to the list. And so in parallel with an increase in the supply of personnel, what’s needed is a modification of the roles and professions available in the system, to improve efficiency and the use of the system’s potential. An improvement in working conditions is essential, as well as a level of pay in the public healthcare sector that will halt emigration and departures from the profession. Developing healthcare workers’ digital skills is crucial, including those of administrative employees.

Professor Kowalska-Bobko addressed the complicated issues of decentralization/centralization in healthcare, concentrating on the two most important themes: the concept of so-called basic healthcare provision and that of hospital centralization. In the case of basic healthcare the issue is the local health system (within the boundaries of a county, county-level city or other administrative unit), and the core of the problem is the introduction of population-based management mechanisms, i.e. tools to ensure care is tailored to the population’s needs. In her summation, Professor Kowalska-Bobko stated that decentralization/centralization shouldn’t be treated as the only possible solution. Hybrid solutions can be an important element of effective system changes. She stated that the current trend in system changes in Poland is one of deconcentration/regionalization by local governments. The question is who will be the winners: the province governor, appointed by the central government, or the speaker of the popularly elected province legislature? It’s essential to strengthen the county on the basis of basic healthcare provision.

The final part of the seminar was devoted to questions from the public. Łukasz Jasiński of Maria Curie-Skłodowska University stated that simply increasing public spending won’t lead to an improvement in the efficiency of public systems, comparing them to “black holes” (in Milton Friedman’s usage). And thus, is it not justified to set this part of the economy on a market basis? Professor Sowada responded that market-based solutions also lead to inefficiencies in the healthcare system, citing the U.S. as an example. “There’s no evidence that private or public funding is by definition more or less effective,” he added.

Summing up the seminar, Professor Golinowska pointed out the issues that were known and raised earlier, and still unresolved, such as insufficient funding of healthcare, inadequate medical staff, the weakness of the institutional structure of public management in healthcare, the weakness of the sanitary inspection system – the key institution in preventing infectious diseases. She also mentioned several new aspects, whose importance was heightened by the Covid-19 pandemic, including the need to introduce health as a subject, and health promotion, in the education system.

Closing the seminar, Dr. Balcerowicz stated that a comprehensive analysis of the healthcare system’s weaknesses laid bare by the Covid-19 pandemic, as well as their consequences for health, will be possible only after a few years, when data are available for analysis.

Compiled by Dr. Ewa Balcerowicz