3.4 Out-of-pocket payments
OOP payments in the Hungarian health care system can be divided into three main categories. First, patients pay user charges for services and products that are only partially covered by HIF (cost-sharing). Second, some products and services are not covered by HIF and are financed out-of-pocket (direct payments) and, third, some patients pay physicians and non-medical health professionals informally for services, even if these are covered by HIF (informal payments). This phenomenon, also known as under-the-table, envelope or gratitude payment, is a legacy of the state-socialist health services and has continued to play a role in the Hungarian health care system despite 20 years of continued health care reforms.
According to the OECD (2010), the share of OOP payments in total health expenditure increased from 16.0% in 1995 to 23.7% in 2009 (Table3.1). In total, 56% of OOP spending in 2007 was on pharmaceuticals and medical aids, and 42.8% was on medical services. The overall magnitude of OOP expenditures has also been controversial: according to the National Health Accounts, the household budget surveys underestimate not only informal payments, but also total OOP payments (Table3.7). The structure of OOP payments is similar if data reported by households are used: in 2007, 56% was spent on outpatient medical goods and 44% on health services, including informal payments. In any case, the various data sources agree that OOP spending increased more than twofold in real terms, and by 80% as share of GDP between 1993 and 2007, and within that informal payments at least stagnated both in real terms and as a share of total OOP expenditures.
3.4.1 Cost-sharing (user charges)
The concept of user charges was acknowledged as a possible source for financing health services as early as 1972 (1972/1) and some symbolic amounts were charged already, but user charges themselves were introduced in 1989 for a limited number of services, especially for pharmaceuticals (1988/3). Co-insurance and co-payments are currently required for (a) medical goods, such as pharmaceuticals (1995/1), medical aids and prostheses (2000/5) and dental prostheses and (b) health services, such as balneotherapy (1997/6), treatment in sanatoria (except for rehabilitation after acute illnesses), long-term chronic care and some hotel services in hospitals. Co-payments may also be required when patients fail to observe the rules of service utilization and seek specialist care without a referral (1997/9, 1997/18) (Table 3.7). The methods applied to determine the extent of co-payment differ depending on the group of services or products, but all decisions are made by the central government.
Medicines and medical aids and prostheses have set prices as basis for reimbursement, which are negotiated between the NHIFA and the producers or traders. The amount of user charges depends on the price subsidy provided by the NHIFA, either a fixed sum or a certain percentage of the agreed price (1997/9). The extent of the subsidy can differ for the same substance, depending on whether it is prescribed by a family doctor or a specialist (see also section 5.6). Outpatients must have a valid prescription from the medical doctor, and must purchase the medicine at a pharmacy with an NHIFA contract to be eligible for subsidy. It has to be emphasized that there are no user charges for medicines dispensed for hospitalized patients, given that inpatient care includes the cost of medications. Before 1990, drugs were heavily subsidized by the state and consumers paid only a symbolic amount. In contrast, patients paid one-fifth of pharmaceutical expenditures of the outpatient sector in 1992, one-third in 2000 and 40% in 2007, according to National Health Accounts data. There is an exemption system in place for persons with very low income, who can get the necessary medications without user charges. Eligibility is based on means testing administered by local governments (1993/1) (see also section 5.6).
User charges for dental prosthetic treatments and above-standard hotel services can be determined by the providers themselves, within the limits of certain rules set by the Act LXXXIII of 1997. In contrast, the government centrally sets the amount of co-payments for long-term and chronic care, as well as for services that have been utilized bypassing the regular referral system (see also section 2.9.2). These fees equally apply to all providers. For instance, the co-payment for long-term chronic care has been around HUF 400 (€1.5) per day since 1998 (1997/18), which was equivalent to one and half litres of milk or one hour parking in the city centre of Budapest in 2010. Providers retain the revenue from any of these sources, but HIF reimbursement on these cases is reduced accordingly (1997/9).
In February 2007, health policy moved sharply towards introducing a flat co-payment in outpatient and a per diem in inpatient care (2006/9) in order to curb excess utilization. Exemption schemes were also implemented to protect vulnerable social groups based on their socioeconomic status and to reduce the public resistance in general towards these new types of user charges. Providers thus obtained an additional HUF 13.3 billion (€52.5 million), amounting to about 0.7% of total health expenditure (NHIFA, 2008). These measures became a point of substantial debate and were capitalized upon politically by the opposition parties. The referendum held on 9 March 2008 on user charges had a high turnout and overwhelmingly rejected the policy (2008/2). Thus, the new user charges were withdrawn, triggering the discharge of the Minister of Health, the subsequent collapse of the governing coalition and deep political crises within both governing parties.
3.4.2 Direct payments
Patients must pay the full price of services that are excluded from public financing, such as certification of health for the purpose of employment, sports or obtaining a driver’s licence (1997/18). The same applies to services that are covered in principle but are actually delivered by a private provider who has not been contracted by the NHIFA. By the same token, providers contracted by the NHIFA are not allowed to charge extra for covered services (1997/9).
3.4.3 Informal payments
The third source of OOP expenditure comes from informal payments, which became widespread in the state-socialist health care system. Despite several official campaigns against them, the regime not only tolerated informal payments but also included them in the calculation of salaries of medical doctors and even required that they be taxed. Since 1989, providers have had to declare informal payments as part of their tax returns. The overall magnitude of informal payments is debated, since various surveys, reports and expert opinions have come to contradictory results.
At the lower end of the range are percentages calculated by the Hungarian Central Statistical Office (HCSO). These vary between 0.06% and 0.11% of GDP (HCSO, 1992, 1993, 1994) and are based on data obtained from a regular household budget survey and adjusted to compensate for various methodological issues. At the upper end of the range is a figure provided by the World Bank, which estimates that informal payments averaged 0.6% of GDP (that is, 7% to 11% of total health expenditure) between 1989 and 1996 (Orosz, Ellena & Jakab, 1998). Based on another survey, informal payments were estimated at approximately HUF 30 billion (€113.6 million) for the same year, which would account for 4.3% of total expenditure on health (Bognár, Gál & Kornai, 2000; Kornai, 2000; Gál et al., 2003). The magnitude of informal payments was thought to be even greater according to some expert opinions. For example, one report estimated the amount of gratuities at HUF 41.4 billion (€156.8 million) for 1996 (Orosz, Ellena & Jakab, 1998). Gaal et al. (2006) argue that the household budget surveys of the HCSO underestimated the scale of informal payments, but these surveys remain the only regular data collection for this type of OOPs in Hungary. They estimated that the true magnitude of informal payments most likely was between HUF 16 and 50 billion (€60.6 million and €189.4 million) in 2001, or between 1.5% and 4.5% of total expenditure on health. Although overall this does not seem to be a substantial amount, informal payments do have a profound impact on the behaviour of health workers, since the money is not equally distributed among them. There are physicians whose income from informal payments is considerably higher than their official salary and others who do not participate at all. Physicians, in particular specialists such as obstetricians and surgeons, receive the bulk of informal payments. These are more widespread in the inpatient sector than in the outpatient sector, and may differ by type of service, for example, cardiac surgery, hip replacement or home visit (Ékes & Bondár, 1994; Bognár, Gál & Kornai, 2000; HCSO, 1988; Kornai, 2000).
The data on OOP payments presented in Tables 3.4 and 3.7 include estimates of informal payments calculated by the HCSO. The practice of making informal payments for health services is deeply embedded in the Hungarian health care system and is therefore persistent. Although the relatively low salaries of medical doctors and other health workers have been a major contributing factor, eliminating informal payments will require concerted action to restore the lost confidence in public services.
More than seven hundred doctors joined a Facebook group called “1001 doctors to abolish informal payment” within two days in December 2015. The group consists of medical doctors who do not accept informal payment. They believe that the problems of the Hungarian health system begin with informal payments and sent an open letter to the state secretary for health and the minister of human resources (who is responsible for the health sector), to raise awareness about the unsustainable situation in the health sector. This petition is also supported by professional organizations, such as the Hungarian Chamber of Doctors and the Hungarian Medical Residents Association. In response, the Ministry pointed out that the government is committed to raising the salaries and improving working conditions in the health sector.
After the introduction of the central registry system in 2013, the length of the waiting list became around 60 percent shorter, according to the Ministry of Human Capacities. In 2012, 70,710 patients waited for an operation, while in 2018 it has decreased to 28,245., The calculation method for waiting lists was part of a professional debate: some experts criticized, that it did not separate the expected and real waiting times, however the calculation problem seems to be solved as the real waiting times will be available on the online waiting lists platform as well.
Nevertheless, the intention of the decision makers and the priority of a well-functioned waiting list system seems very clear from other actions taken by the Ministry of Human Capacities. Starting in April 2019, physicians who try to make an appointment later than the earliest opportunity will receive an automatic error signal from the system. Additionally, if a patient jumps ahead without any professional reason, the expenses of the operation will not be covered by the National Health Insurance Fund, and the healthcare provider will be charged a 40,000 HUF (124 EUR) fine for the case. The aims of the intervention, in addition to making the waiting list system more effective, are to avoid informal payment and relation-based provision of care.
3874 HUF (or 12 EUR) a month was spent by the population for medical and pharmaceutical products and therapeutic appliances and equipment as well as for medical cares. According to the Hungarian Central Statistical Office, this number accounts for 4,7 percent of the monthly consumption expenditure.
59,1 percent of private health expenditures was spent for medicines, 15,5 percent for vitamins, medicinal preparations, herbal teas and medical water while 8,8 percent was spent for glasses, contact lenses or hearing aids. Interesting data, that out-of-pocket makes up for only 3,9 percent of the health expenditures, although it is meant to cause (or show) the biggest problem of the Hungarian health system. For medical and dental treatment 9,4 percent was spent, which evidences the increasing importance of private healthcare.
Private health expenditures were growing at every segment in 2017. The biggest growth with 9,7 percent was shown at catering and hospitability services following by the furnishings and housekeeping expenditures with a 9,3 percent growth.
On the basis of a survey amongst 907 physicians, 96% would prefer the health care free of informal payment. As Dr. Tamás Dénes, the president of the Labour Union of Medical Residents and Specialists (RESZASZ), informed the press.
In the opinion of Dr. Tamás Dénes, the key to the elimination of informal payment would be to make patients pay officially for a free choice of medical doctors, as well as publish quality of care indicators across providers, on which basis an informed choice by patients could be made.