World Bank Analytical Paper

Poland Health Decentralization

1 ACCRONYMS

GHI General Health Insurance HCE Health Care Establishments HM Health Ministry LG Local Government NHF National Health Fund PLN Zloty Polish currency RSF Regional Sickness Fund SF Sickness Fund UNUZ Health Insurance Supervision SEJM National Assembly ZUS Social Insurance Institution ZOZ Soviet Period Districts or Municipalities

2 TABLE OF CONTENTS

Executive Summary 4 1. Overview 6 2. THE DECENTRALIZATION PROCESS IN HEALTH CARE AND RE- CENTRALIZATION TRENDS 9 DECENTRALIZATION OF FINANCING SERVICES...... 9 Management Schemes...... 9 Financing Schemes...... 11 DECENTRALIZATION OF PROVIDING SERVICES...... 12 Management Schemes...... 12 Financing Schemes...... 13 ESTABLISHMENT OF THE NATIONAL HEALTH FUND- REVERSAL OF DECENTRALIZATION...... 13 3. EFFECT OF DECENTRALIZATION ON GOVERNANCE AND ACCOUNTABILITY OF PUBLIC FUNCTIONARIES 15 4. Analyzing the effects of decentralization in the context of governance and accountability 17 Basic Framework...... 17 Governance and Accountability in the Polish System of Health Care...... 17 Findings...... 18 Conclusions Formulated within Examined Categories of Entities...... 19 General Conclusions...... 33 5. DISCUSSION 35 CONCLUDING REMARKS...... 41 Selected References...... 42

TEXT BOXES Text Box 1. Functions of a Sickness Fund Council 10 Text Box 2. Management Board of a Sickness Fund 11 Text Box 3. Designing Decentralization 16 Text Box 4. Research Methodology 18 Text Box 5. 1999 Reforms—The New Look Local Governments 24

3 Text Box 6. In-Focus Issues 29 Text Box 7. An Estimate of 1999 Reforms 38 Text Box 8. GHI Act—Falling Short 40

FIGURES Figure 1. Barometer of Changes in Centralization and Decentralization Processes 6

ANNEXES Annex 1. Model of General Health Insurance

Annex 2. Questionnaire with Responses: Managers Annex 3. Questionnaire with Responses: Local Governments Annex 4. Questionnaire with Responses: Sickness Funds

4 EXECUTIVE SUMMARY

This paper addresses the problem of decentralization of health care in Poland. Although the concept of decentralization includes many aspects of management actions, we have focused on two basic dimensions, i.e. financing and providing of health services. The focus of this study is on whether decentralization of health care has been successful in the country, highlighting the efficacy of mechanisms that have been adopted by the law on general health insurance and various health care entities.

As decentralization is essentially a political process involving distribution of power and resources, both among different levels of the state, and among different interests in their relationship to the ruling elite, the outcome depends on whether influential groups are being co- opted or challenged, and how much resources are available for the newly created units to function.

The beginning of 1999 marked a major step in the evolving reform of Poland’s health system, the culmination of a nine-year transformation process from the Soviet style Semasko system. The new law established a system of universal and compulsory health insurance for most of the population. The insurance is to be administered by regional sickness funds and by branch funds for selected groups based on their employment status. The regional sickness funds serve as institutions of contribution recipients.

The National Health Insurance Law was designed to separate financing from the provision of services. The government has created 17 public regional sickness funds that are responsible for inhabitants of the geographic voivodships and one country-wide branch fund. Services are provided by both public and private health care institutions and group or individual practices. The insurance funds enter into contracts with providers and may select either public or private providers.

The funds are financed by a contribution of 7.5 % of income of most employed and farmers. The contributions are taken out of the existing tax liabilities. These are paid to the Social Insurance Office, an agency which collects for all types of social insurance, and is then transferred to the sickness funds. Regional funds receive contributions from the population within their jurisdiction and there is an equalization fund to compensate for regional differences.

The law on general health insurance does not accurately define the scope of responsibility of local governments in health policy in the regions. There is an imprecise division of governance fields along with a vague notion and scope of accountability of the main actors in the health care. Ownership of the most valuable resources, i.e. inpatient care is ascribed to the voivodship and powiat self-governments. But this ownership lacks substance as the local governments are confronted with the strong position of sickness funds as monopolist remitters.

Two general observations can be made regarding this arrangement. One, the lack of precise division of obligations between voivodship and powiat self-governments viz a viz the

5 sickness funds. Two, the matter of financial supply of the local governments, which determines the capacity of local governments to fulfill their health care tasks. There is an inadequate upward adjustment of the structure of income of local government in relation to the responsibilities defined for them.

Under the health insurance reform the position and role of the founding body and of the remitter is not clear. The functional links within the health care system among various entities (voivodship, powiat, gmina, health care establishments, sickness funds) and different levels of health care (primary care, inpatient care) are weak. As a result, there is no linkages of strategies of individual health care facilities with the strategy of voivodship and powiat self-governments. This constrains synchronization and coordination of effort and may result in duplication or absence of coverage.

Control and modification of the health care process is thus difficult to achieve. A control mechanism allows the flexibility of taking remedial measures in the event of undesirable developments. There is a clear need of sharply defining the relationship among ownership, management and financing in the health care system.

A pervasive problem is the political influence in the system. This is manifested through legal regulations and application of procedures making room for political appointments. For instance, appointment of management boards and councils of sickness funds, and health policy personnel in the local government tiers is the prerogative of the health minister.

Overall the experience with decentralization of health care in Poland is patchy. But there are grounds for optimism as there are bright spots. In emphasizing the unsatisfactory state of affairs, however, it must be said that gaining autonomy by the health care facilities (decentralization of management) has by and large brought positive results. Modern tools of human resource management like budgeting and expenditure management are now being more frequently used by the health care facilities.

In the case of decentralization of financing, it is more difficult to draw up a list of achievements. The portfolio of services has changed considerably since the introduction of reforms, but it is difficult to assess the accessibility of services. Although the number of provided services are increasing, there is no convincing evidence that it has resulted in better access to health care.

Some strategic options are identified in the text. The relationship of ownership, management and financing in the health care system needs to be sharply defined. In conclusion although decentralization has not universally benefited , its potential for improvement cannot be disputed. Much of course will depend on how some strategic options are resolved and implemented.

6 1. OVERVIEW

1. The existing constitutional and political framework of a country determines the shape of its health care system. In most of the country settings, the health care systems exhibit varying degrees of a spectrum that move between the extremes of a totally centralized and a fully decentralized method of organization. The different systems, in turn, have their own respective governance and accountability components.

2. The centralized systems are largely geared toward serving the aims of their organizational structures. The provision of health services is linked with ensuring the operation of outpatient centers, hospitals, and other health care facilities, which dispense complimentary or subsidized specialized procedures. In centralized budgetary systems, where the state is the employer and the base (beds and people) is financed, there are no incentives for adjusting the employment level to the actual requirements. There is a lack of incentives for efficient and effective use of funds, and certainly it is not in the interest of an establishment to decrease the number of beds.

3. In many developing countries the compulsion of cost containment and the ensuing need for change has turned the attention of decision-makers to decentralization. This is because it is widely assumed that decentralization of the decision-making process in the provision of social services leads to improved efficiency in the operation of central institutions (for example, through the decrease in the number of cases and problems to be solved.)

4. At the same time, decentralization increases the role of local governments, importantly in matters confronting their own regions. Moreover, as the decentralized systems act as the most direct interface with the people they serve, they may be better placed in providing higher quality and lower cost services.

5. The bipolarity in defining centralized and decentralized systems is not, however, so vivid or rigid in the real world. In a centralized health care system of the kind that exists in France, many legal regulations allow for autonomous and independent pursuit of health policy in the regions.

6. On the other hand, the situation that occurred in Poland in 1990s is an example of decentralization of the system combined with numerous central government interventions. These were attempts to chip off powers of local governments, or impose central schemes on autonomous entities.

7. Decentralization is a process of shifting authority from the central level to lower local levels. The shifting of authority is meant to facilitate the response of the local institutions to the diverse needs of the community. Decentralization is a broad concept that encompasses many facets of public life and refers to various institutional levels.

7 Several types of decentralization can be defined of which two are more important in our context.

8. Geographic or territorial decentralization consists of the State delegating strictly defined accountability and authority to institutions operating within a specified territory. Whereas, functional decentralization is shifting of accountability and authority in the field of specific actions to specialized entities operating locally, and without defining the territorial boundaries of operation of these entities.

9. Besides, the literature review of decentralization distinguishes several other kinds of decentralization, such as political, administrative, financial, or market based. These types virtually do not occur independently. There are varying shades that combine proportions of individual types, depending on the sector-specific decentralization strategy.

10. There are many instances, where despite defined criteria of accountability and scope of authority, decentralization could not achieve the desired outcomes by not being fully responsive to the local needs. An example that illustrates this is the fate of school hygiene that was introduced in Poland as part of sickness funds in 1999. The absence of provisions on transferring accountability for this area of care led to its practical elimination from the pool of public services.

11. Similar effects may occur with the transfer of identical powers to more than one entity, with the idea of initiating a competitive mechanism among the entities. An illustration of this is from early 1999, when the powers of the founding bodies with regard to hospitals located in one city were turned over to the Voivodship1 Assembly and Powiat2 Councils. In many towns and cities throughout the country, like in Pruszków for instance, the hospitals have not been merged to date, and the provided services are not standardized.

12. The above instances show de-fragmentation in the health care sector, instead of the intended decentralization. The first example concerns the functions, and the other the structure of the system.

13. In cases where the structural (hierarchical) and functional (cooperation) links between existing and emerging entities is not properly defined, it leads to a situation where units occupy the positions that are most convenient for them. In the absence of a comprehensive model of the desired system, the detailed specifications concerning the shifted power and accountability alone would not suffice. This coupled with the leverage to form discretionary alliances characterizes the disintegration process.

14. This is borne out by the conduct of the self-governing and autonomous sickness funds, which led to the appearance of 17 different systems of financing health services, resulting in 17 different health care systems. Another distortion in the system is the price difference in the contracts for the services of the same kind.

1 Voivodships are the Polish equivalent of states or provinces in other countries 2 Powiat is the Polish equivalent of county 8 15. If we think of decentralization as a process that delegates centralized powers to the lower organizational tiers, which in turn are accountable not only to the center, but also to the people on behalf of whom they operate, this would be a progressive step towards the liberalization of the system. The delegation of powers, tasks and responsibilities requires definition of the target model, along with coordination of implementation and monitoring of the whole process. The model should incorporate functional links among the involved entities.

16. The non-fulfillment of these requirements leads to distortion and fragmentation of the intended system. The ideal premise of a decentralized system is greater flexibility and adjustment of the entities to the changing external conditions and demands. The ultimate expression of decentralization is privatization.

17. On the other hand, a centralized system requires definition of the structural and hierarchical links and their close supervision. A centralized system has high internal stability of organizations, but also greater inertia as regards change. The lack of motivation of individual entities is counter balanced by a large number of central executive directives, regulating most aspects of entity operations.

18. The rigid red tape and regimented hierarchy may invoke the resistance of units that wish to retain their autonomy, thereby leading to their breaking away from the system resulting in anarchy. The consequence of strong centralization of the system is nationalization.

Figure 1. Barometer of Changes in Centralization and Decentralization Processes

centralization decentralization

anarchy chaos

9 2. THE DECENTRALIZATION PROCESS IN HEALTH CARE AND RE-CENTRALIZATION TRENDS

19. The welfare-state model prevailing in Europe imposes certain limitations on decentralization of health care systems. In the European Union countries, health care has become the top most public value. Consequently, the manner of organizing health services has become a key element of political play. In late 1990s, the government of France was brought down as a result of attempted unpopular reforms in the health care system. In 2002, the electoral victory of the Social Democratic party in Sweden was in part due to their main electoral slogan guaranteeing all citizens full access to medical services.

20. More radical changes are taking place in the countries of the former Eastern Bloc. This arises from the necessity of introducing changes concerning the entire social system. In these countries decentralization process in health sector mainly consist of the manner of financing health services and of paying contributions.

21. The new financing method is mainly through health insurance, which introduces independent institutions for contribution collection. Through the manner of contracting services, the insurance companies affect the changes on the side of the contribution payers. The resultant negative effect on equity and coverage of the health cover often prompts East European governments to withdraw the earlier delegated powers.

22. In Poland, there have been many attempts at introducing re-centralizing regulations since the inception of general health insurance in 1999. These endeavors seek to eliminate existing anomalies in the system, rather than devising a strategic plan to improve the working of the new system. For instance, the general health insurance law imposes on employers the necessity of paying rises in the amount of PLN (Polish Zloty) 203. The implementation of this act became the subject of the verdict of the Constitutional Tribunal in December 2002, hence the financial effects for the health care system are still difficult to estimate.

DECENTRALIZATION OF FINANCING SERVICES

Management Schemes

23. Establishment of Regional Sickness Funds. The 1997 Act on General Health Insurance (GHI)3 called for the establishment of Regional Sickness Funds (RSF)– institutions of contribution recipients. In the time of vacatio legis this Act was greatly amended. However, its basic premise i.e. to make the contribution recipient independent and to separate the health care budget remained intact. In 1998, office of

3 Act of 6 February 1997 on General Health Insurance Dz.U.No. 28, item 153 with subsequent amendments 10 the government plenipotentiary for implementation of GHI was established, which reported directly to the prime minister.

24. As the Act on GHI called for the setting up of RSF, (within at least one voivodship), the government body appointed regional plenipotentiaries, whose responsibility was to establish RSFs. The regional plenipotentiaries had the powers of directors of the Sickness Funds (SF), and the government plenipotentiary performed supervision of their activity. This is an example of geographic administrative decentralization.

25. RSFs are the basic organizational units of GHI. Institutionally they represent the insured and have legal personality functioning on the basis of self-governance, geared at economic efficiency and rational operation. RSFs became operative at the same time as GHI, i.e. January 1, 1999. The SFs do not operate for profit, which in practice means that any surpluses may only be used for statutory purposes of the fund.

26. Responsibilities of Sickness Funds. The SFs have the statutory obligation of performing all functions concerning health insurance. These include in particular:

 Maintaining records of persons covered by health insurance  Approving and confirming the right of an insured person to services  Analysis of the execution of the obligation of GHI  Management of financial resources of the fund

27. The operation of SFs has made possible regional decentralization in acquiring contributions. The GHI Act allowed the operation of a SF outside the borders of the voivodship, i.e. to acquire insured persons residing and working in other voivodships. This would have, in effect, given rise to a market competition among SFs. However, in practice, the funds did not go for active recruitment of insured persons residing in neighboring voivodships, with the only exception of persons living near the borders. The SFs left implementation of the first three responsibilities largely on the service providers.

28. Governing Body Rules and Powers. The governing body of a SF comprises the council and management board. From 1999 to 2002, the voivodship assembly appointed the council members from among persons insured in the given fund,. This arrangement ensured that the authorities of the self-governing voivodship had some influence on the operation of the SFs. In May 2002, there was an important change in the structure of the councils, when the Health Minister (HM) acquired powers to appoint the majority of members.

Text Box 1. Functions of a Sickness Fund Council The responsibilities of a SF council include supervisory functions, of which the following are especially important:  Passing statutes  Appointing and recalling the Director  Appointing and recalling members of the committee for complaints and motions  Passing the financial plan and accepting and approving quarterly and annual financial reports  Approving the plan of work and considering and accepting quarterly and annual execution reports  Considering periodical reports on the operation of the Management Board and the committee for 11  complaints and motions  Passing the bye-laws of the Council and Management Board  Deliberation on resolutions concerning assets of the SFs, investments exceeding statutory powers,  acquisitions, and disposing of immovable property  Selecting representatives to the National Union of Funds Source: Act of 6 February 1997 on General Health Insurance Dz.U.No. 28, item 153 with subsequent amendments

29. The responsibilities shown in Text Box 1, are of key importance for the operation of the SFs, but were taken up by the councils as late as the end of 1999. At that time the voivodship assemblies appointed their members to the SF councils. This procedure of appointments led to the first two years of general contracting of medical services in Poland, without any social surveillance.

Text Box 2. Management Board of a Sickness Fund The Management Board of a SF is composed of the director and 2-5 members. It leads the operations of the fund and decides all matters outside the competence of the fund council. The following are the important responsibilities:  Execution of resolutions of the SF Council  Preparation of a draft plan of work and financial plan of the SF and their execution  Management of financial resources and assets of the fund  Investing the reserve resources  Drawing up reports on operations and compiling financial reports  Negotiation of contracts with service providers, conclusion and settlement of contracts, and control of their  execution Source: Act of 6 February 1997 on General Health Insurance Dz.U.No. 28, item 153 with subsequent amendments

30. The implementation and fulfillment of statutory responsibilities proceeded differently in various funds. On the one hand this was the result of the diverse financial situation of the individual funds (external factor), and on the other, of the manner of management and internal policy pursued in a given SF (internal factor).

Financing Schemes

31. Budget Creation and Financial Resources of Funds. The budget of the SFs is derived from the contribution of persons covered by the mandatory GHI. The contribution is 7.5% levied as part of the tax in the case of income tax payers. The state budget provides payments for individual farmers, unemployed and homeless persons.

32. Health insurance contributions are paid to the Social Insurance Institution (ZUS). ZUS is responsible for identification of insured persons, levying contributions and transferring them to the Office for Health Insurance Supervision (UNUZ). The latter apportions the financial resources to the RSFs and to the branch fund.

33. In the division of resources, the index of the number of insured persons in a SF and a mechanism for financial equalization are used. It is calculated by taking into account

12 the differences in income of insured persons and the number of people over the age of 60 in a given SF. The application of the equalization mechanism has led to Mazowiecka, Śląska and Branch sickness funds to lose over 10% of their revenue.4

34. Additional financial resources for SFs may be provided by income from investment deposits and securities, carrying out tasks commissioned by the Health Ministry (HM) and financed from the State budget. The SFs settle accounts for health services among themselves.

35. Rules of Financing Services. The SFs buy health services under contracts concluded with Health Care Establishments (HCE) or individual service providers. The contracts define the scope of provided services, the organization of work of the service provider, the persons eligible for services, the price for a unit service and the rules of settlement among the parties to the contract. The signing of a contract is preceded by competitive offers and negotiation of its terms. The contract types correspond to the categories of division of resources in the financial plan of a SF.

36. In all SFs the form of the contracts underwent changes in the course of execution. The reasons for this were three fold: technical - resulting from an authentic need to increase the number of services, economic - related to the efforts of service providers to increase remuneration, and political - causing increased financing of facilities run by persons from the same political group.5

DECENTRALIZATION OF PROVIDING SERVICES

Management Schemes

37. Establishment of Autonomous Public and Private Service Providers. The GHI Act allowed for signing of contracts for providing health services only with entities with legal personality. Public HCEs that were budgetary units could acquire such personality by becoming autonomous. The 1991 Act on Health Care Establishments, and particularly its later amendments, defined the procedure of gaining autonomy by budgetary units.6 Gaining autonomy allowed the unit to conduct its own financial management, staff policy and to define a strategy conforming to the demands for services and the capacity of HCE. The idea of gaining autonomy was to meet the needs of functional decentralization.

38. Under the GHI the private service providers could use financial resources apportioned for health care on equal rights. Indeed, after the introduction of general contracting of medical services there was a rapid growth in the number of private HCEs. This mainly involved outpatient and primary care.

39. Role and Responsibilities of Local Governments in Providing Health Services. The Act on the new administrative division of the country saddled all three levels of Local

4 Sowada Ch. 2001. “Financial Equalization between Sickness Funds. Social Policy” (Wyrównanie Finansowe Między Kasami Chorych. Polityka Społeczna),no. 10, Warsaw 5 Golinowska S. Et al. 2002. “Health Care in Poland after the Reform” (Opieka zdrowotna w Polsce po Reformie). Center for Social and Economic Research. Report 53, Warsaw. 6 Act of 30 August 1991 of Health Care Establishments Dz. U. 91.91.408 with subsequent amendments 13 Government (LG) in Poland, i.e. Gmina, Powiat and Voivodship, with various health care functions. Each of the three tiers is responsible for prevention of disease and health promotion of its citizens. In general, it can be said that Gminas supervise HCEs that provide primary health services, Powiats cater for specialist outpatient and inpatient services within the primary medical disciplines, and Voivodships are responsible for specialist treatment at all levels.

40. In the area of prevention and promotion it appears that relatively major financial capacity and resources are with the gminas, due to their tax base, whereas the voivodships enjoy the best organizational capacity. Due to the population size, powiat may have the biggest health care demand. Because there are no established principles of hierarchy of individual LG levels, it is difficult to prepare a standard plan of preventive actions that would link and make use of the potential of all LG units.

Financing Schemes

41. LGs finance the health care system in a two-track way. As founding bodies, they are obliged to repay the debt of HCEs that are going bankrupt. They may also apportion a targeted subsidy for them, for example for renovation or renewal of equipment. This is provided in the Act on HCEs.

42. The second track is apportioning part of their own budgets in the area of health promotion and disease prevention. This task results from the Act on the Powers of Self Government. We have, however, estimated that though sizeable funds are allocated for this purpose, they are not efficiently used. In most cases fund utilization is not properly planned, and the service provider selection procedure does not assure execution of the task.

ESTABLISHMENT OF THE NATIONAL HEALTH FUND- REVERSAL OF DECENTRALIZATION

43. Recently, there has been an upsurge in legislative efforts for creation of National Health Fund (NHF). The Sejm accepted this Act in December 2002 and forwarded it for deliberation to the Senate, where it is still pending. The roots of this proposed legislation can be traced to a document titled “National Health Care: Strategic Actions of the Health Ministry”, which came to light in 2002-03. This document, amended several times, contains a very general description of the system of health care recommending closing down the SFs, and an outline of the procedure for introducing changes.

44. This Strategy document raised many controversies. The main concern was evoked by the proposed setting up of NHF to supersede SFs. The opponents focused on the centralist trends of the proposed changes. The Health Minister would be the in charge of NHF according to the provisions of the Strategy and in the proposed Act on General Insurance in the National Health Fund.7.

7 Act of 17 December 2002 on General Insurance in the National Health Fund – website of the Sejm of Poland 14 45. The Strategy also proposes a plan for the creation of a national network of hospitals reporting to the health minister. This is intended to serve as a guarantee for obtaining from NHF an appropriate amount of resources to maintain a ready base for providing services. This can also be seen as a step towards re-centralization. 8

46. The plan for securing services in accordance with the provisions of the Act on Insurance in the NHF is the ground for buying a specific number of services by the Fund. The procedure of creating the plan, described in detail in the Act, designates the Health Minister as the authorized person to approve the drafts of the plan.

47. On the basis of the documents prepared by the staff of the HM, it is not easy to explicitly define the extent of reversal of the decentralization process by the induction of NHF. However, the examples given point to the establishment of a strong central institution, under the direct control of Health Minister. The extent of advancement of centralization can be determined only after analyzing the first year of operation of the NHF.

8 Sidorowicz W. 2002. “National Health Care of the Health Ministry – is this the right path? “(Narodowa Ochrona Zdrowia” Ministerstwa Zdrowia – czy tędy Droga?) Zdrowie i Zarządzanie volume IV, no. 3-4 15 3. EFFECT OF DECENTRALIZATION ON GOVERNANCE AND ACCOUNTABILITY OF PUBLIC FUNCTIONARIES

48. The issues of the impact of decentralization on governance and on the accountability of public authorities have already been elaborated in a separate paper9 and will not be examined in greater detail in this document.

49. Just to recap, the impact of decentralization on governance can be examined in the following categories.

 Transparency of practices and corruption  Participation of citizens  Improvement in social services  Improving access and equity  Ensuring efficiency

50. The impact of decentralization on governance does not lead to the formulation of explicit conclusions in practice as they do in theory. In theory, transparency and corruption are counter concepts, i.e. with increased transparency, corruption declines and the other way round. Decentralization leads to greater participation of citizens in public life, but this positive development can easily be marred when different social groups with higher potential for organization and articulation of their interest, may acquire and strengthen their privileged position (e.g. doctors, hospitals, and insurance companies).

51. One of the effects of decentralization can be the improvement of providing social services in areas such as education, health, infrastructure or the natural environment. Decentralization may lead to leveling out of differences through public expenditures, tax policy and cash transfers. At the same time, intense competition in the form of a totally privatized system also does not lead to improved efficiency of the system of health care in the macroeconomic sense. This is borne out by the British and American experience.

52. On examining the influence of decentralization on accountability, one can distinguish two basic variables: mobility and the election mechanism. These two variables may (in theory) enforce the desired code of conduct on entities in the performance of their duties. However, in practice there are important prerequisites that need to be fulfilled for these variables to work. For instance the desire to participate in political life and elections, and availability of appropriate information. In practice, standard procedures

9 “Governance and Accountability in a Decentralized Setting. An Examination of Selected Issues”, December 5, 2002 - mimeo 16 of control are also applied in a decentralized setting (financial, budgetary and administrative accountability).

Text Box 3. Designing Decentralization

Decentralization is not a panacea for improved quality and access of service delivery. The process does not absolve the central government from all responsibilities. What it means is that the nature of this responsibility has changed from delivering services directly to regulating and monitoring the efficiency and equity of services delivered by others.

Decentralization requires a strong central entity to regulate, to provide an overall framework to manage the re-allocation of responsibilities and resources in a predictable and transparent way, and to assist local governments build capacity in the early stages. For instance, there is compelling evidence that some of the best progress against HIV/AIDS is in countries with strong central governments like in Thailand.

The solution to pitfalls of decentralization is empowerment of people through broader local participation, transparent governmental procedures, and protection of minority rights. It is important to answer the following questions in affirmative to realize the benefits of decentralization. Does decentralization provide for ordinary people to express their views and see them translated into future policy? Does it enable citizens to participate in policy formulation or only ratify pre-selected choices? The citizens should not be remote from these debates.

Accountability is paramount for the success of any decentralized system. Locally empowered actors should be downwardly accountable to their constituents. The citizens should be able to challenge the decisions of governing bodies. They can only do so if they receive accurate and timely information and are able to use this information in making their assessments.

17 4. ANALYZING THE EFFECTS OF DECENTRALIZATION IN THE CONTEXT OF GOVERNANCE AND ACCOUNTABILITY

BASIC FRAMEWORK

53. The basic premise of decentralization of the health care system rests on the twin pillars of governance and financing. This may be evaluated according to a number of criteria. This paper examines decentralization in the context of governance and accountability focusing on three selected entities of the health care system: autonomous Health Care Establishments (HCEs), Local Governments (LGs), and Sickness Funds (SFs).

54. In this paper governance is defined broadly, denoting phenomena relating to planning, managing and controlling health services provided within the framework of general health insurance and relating to the devolved responsibilities for implementation of public programs by the above three entities.

55. Decentralization processes are examined viz a viz their effectiveness in delivery of public programs, overall transparency of operations and general conformance to internationally accepted good business practices. Governance is described by taking into account such quality indicators as: (i) nature, type and scope of regulations referring to SFs and HCEs; (ii) implicit and explicit policies and actions related to informal payments in the health sector, particularly in public HCEs and (iii) nature and the level of economic and financial management of SFs and HCEs.

56. For the purposes of this paper, accountability is defined in qualitative terms by such indicators as: (i) application of such policy and strategy instruments to ensure that health services are generated and supplied to carry out the basic objective of improvement in the state of health of the people; (ii) financing and organizing health services in a way to ensure universal access for all, and (iii) adoption of such governance practices which are universally acknowledged to be acceptable in management of public funds.

Governance and Accountability in the Polish System of Health Care.

57. In Poland, the following are the important entities in health care governance: the Health Ministry, local government bodies, sickness funds and health care establishments. Each of these entities has a different scope of powers given to it by law. By the specific nature of the Polish model in governance the most important role is played by: SFs, LGs and HCEs.

58. As has been mentioned, the legislation does not adequately define the types and areas of decisions remaining within the competence of the individual entities. This is particularly true for the LGs at the voivodship and the powiat levels. The 18 decentralization model is therefore open to criticism. There is an imprecise division of governance fields along with a vague notion and scope of accountability of the main actors, which are entrusted with the implementation of the basic objectives of health care.

59. Text Box 4 outlines the research methods that have been employed in the pilot study to analyze the impact of decentralization on governance and accountability in the health care system. The following four areas of dependencies are selected to formulate general conclusions.

60. Decentralization of Management of Health Care in the Context of Governance Procedures. In this category the analysis includes the following: implementation of statutes and regulations that define the scope of governing powers of the main entities of the health care system, the governance procedures applied by them, with particular attention to the management of finances and resources and the practice of making informal payments by patients.

61. Decentralization of Management of Health Care in the Context of Accountability. It analyzes the scope and type of health services offered to eligible persons, expressed in a dynamic way. It is important here to examine how the portfolio of services has changed and whether the changes were necessitated by an actual demand for health services.

62. Besides, it is also significant to examine the extent to which the LGs and SFs are carrying out their functions as organizers of health care in the voivodships and powiats. This means ensuring access to services and openness of procedures.

63. Decentralization of Financing of Health Care in the Context of Governance Procedures. Within this topic an analysis is carried out on the governance procedures for resources apportioned for health, both at the central level (UNUZ), and for the RSFs and HCEs. This includes procedures for acquiring and transferring contributions, making budgets of RSFs, equalizing mechanism, and control of expenditures of SFs and HCEs.

64. Decentralization of Financing of Health Care in the Context of Accountability. In a situation where the dispenser of financial resources is a RSF, assuming monopolist proportions, an extremely important matter is to define the scope of its responsibilities for working out the appropriate portfolio of services and ensuring accessibility to them.

Text Box 4. Research Methodology Research Objectives and Scope: The purpose of the research is to define the consequences of decentralization in the health care system in the field of management and financing, with particular attention to governance and accountability, as applied in autonomous health care establishments, local governments and sickness funds. These phenomena will be examined at the time of the implementation of the 1999 social insurance reform and later. Research Sample: The pilot study covers six managers/directors administering health care establishments, nine local governments and two sickness funds. Research Tools: The study was carried out with questionnaires, adjusted to each of the three types of respondents (Annex 2-4). The annex also includes tables with the answers provided during the survey by the respondents.

19 FINDINGS

65. The conclusions from the survey can be presented in two arrangements, i.e. within each surveyed category, and as general inferences.

Conclusions Formulated within Examined Categories of Entities

66. Managers of Autonomous Public Health Care Establishments. The managers of public HCEs were asked questions regarding issues covering human resource and financial management.

67. MANAGEMENT PROCESS. The polled managers acknowledged that autonomy is wider now as regards staff and financial management, whereas it was very limited before the entity became independent. Nevertheless, there are certain limitations as LGs assert undue influence in matters like hiring, investment decisions, and acquisition of fixed assets.

68. The purview of manager’s decisions encompass matters like opening and closing of departments, purchase of equipment, staff policy, development of unit’s strategy, and most of the financial decisions. The HCEs require the consent of institutions like the Founding Body and Social Council in matters concerning changes in the organizational structure and statutes of the unit, disposing and acquiring fixed assets, and in making investment decisions.

69. Eighty percent of the respondents criticized the Social Council due to the protracted time it takes in arriving at a decision and the suspect competence of the persons that are appointed. They reflected that neither the 1999 administrative reforms nor the HCE autonomy has caused any changes in the structure or composition of the Social Council.

70. The meetings of the Social Council are held at varied frequency, being linked to the subject of deliberation. Bi-monthly meetings are held to discuss current matters relating to finances and provision of health services. When the Social Council is to prepare opinions on financial and restructuring plans and directions of development, the meetings take place twice a year. If required, the managers have no difficulty in convening extraordinary meetings.

71. The survey could not determine the existence of a management board.10 The respondents were of the opinion that the 1999 reforms did not affect the structure of the management board and management itself in autonomous facilities.

72. The scope of the operational management powers of the managers of the autonomous HCEs is evaluated as adequate. Limitations do occur in investment and asset

10 This may be termed as a deficiency in the translation of the questionnaire into Polish as the term “management board” is not found in the dictionary. Perhaps because of the imprecise translation none of the respondents answered questions containing this term (cf. Tab. II and Tab. III in Annex). The Polish version of management board should be: “zarząd” 20 management decisions. It is observed that the Polish model of management of autonomous HCEs is imperfect as it does not in itself lead to efficiently functioning institutions supporting operating management (such as management boards) or institutions that provide opinions, (such as social councils).

73. HUMAN RESOURCE MANAGEMENT. The employment decisions are made by the manager/director in each case. But the autonomy has not resulted in the introduction of new procedures in the field of staff management. Due to the situation in the labor market greater attention is focused on checking the qualifications and on direct contact with the candidates for work.

74. Although formally there are no external employment limits, the respondents point to indirect constraints stemming from the value of the contract with the SF or with the minimum norms of employment as regulated by the Labor Code or the MOH. Such norms regulate the number of duty hours, time of work of x-ray technicians etc.

75. The managers emphasized that the scope of freedom in employment is greater than it was before the reform. The remunerations are decided by the managers, who have greater freedom in modeling wages, as there is no upper limit.

76. The procedure for dismissing workers is in accordance with the provisions of the Labor Code and the Act on Trade Unions. There are no changes from the pre-reform period. The managers make the final decision on dismissal from the service. The Labor Code and the Act on Trade Unions define the circumstances when dismissal decisions must be consulted with the trade unions. The respondents felt that in half of the cases public opinion plays a certain role in arriving at the decision on dismissal.

77. The questionnaire responses show that the scope of freedom of managers in staff policy has increased. The still encountered limitations are budgetary and not systemic, i.e. they result from legislative regulation. The little use of modern tools of human resource management is striking since the role of professionals (mainly medical personnel) in contributing to the success of the unit may suggest that staff policy would be accorded a priority.

78. MANAGEMENT OF FINANCES AND SUPPLY. The HCEs report significant changes in the practice of preparing the budget, including the method of making the budget (one respondent stated that it was initiated from the bottom), and method of recording costs (currently the memorial method). New elements, like income from additional and financial activity, fixed assets as a value on the assets side, or cash flows have been added.

79. The HCEs monitor execution of the budget with monthly analyses or continuous controls. An account of costs is maintained and one facility uses the system of budgeting of individual organizational units.

80. In the event of exceeding expenditure limits (two respondents emphasized that they do not allow for such situations), remedial actions are taken. Only one respondent pointed to specific actions taken in such cases, naming diversification of revenue sources, loans for operations and cost reductions.

21 81. Three entities indicated that they could plan for external financing sources including loans, credits, and leasing. The same number gave a negative reply. One respondent pointed out that banks classify autonomous HCEs as a fourth risk group making it difficult to obtain a loan. All respondents confirmed that prior to reforms they were not able to plan external financing.

82. In efforts to obtain a loan, half of the respondents said that a guarantee from the founding body is used. One manager also mentioned assets of SPZOZs (Autonomous Public HCEs) and bills.

83. The HCEs prepare annual financial statements in accordance with the provisions of the Accounting Act. Two of the entities also mentioned monthly and quarterly statements prepared for the founding body. Surprisingly the respondents did not make any distinction between the pre and post reform period.

84. The social council (two cases), founding body (three cases) and the manager (one case) approved the statements. In a couple of cases a chartered accountant carried out the audit. Three respondents said that the accounts are audited once a year. Only one respondent stated that there was no audit in pre-autonomy days, and if carried out, it was done by the voivodship office. One respondent was of the opinion that the nature of the audit has not changed after autonomy. Another respondent emphasized the high transaction costs of this type of control and its limited value due to the peculiar nature of the health sector.

85. All respondents agreed that they could now transfer and utilize a financial surplus. One observed that it is better to show a loss or a zero surplus to avoid the cumbersome procedure of utilizing it after involving the social council and trade unions. The SPZOZ decided by itself on the manner of utilizing a surplus (according to four respondents), whereas one maintained that consent from the outside is needed without specifying the kind of consent. Before reforms, the HCEs were unable to keep and invest surpluses.

86. It is interesting that regarding responsibility for debts of an autonomous HCE, three responses pointed to the founding body, whereas two singled the facility itself.11 Previously the voivod was responsible for debts.

87. The decisions on allocation of resources and procedures of spending are made by the manager, and in one case by the voivodship. Only the manger makes the decisions concerning supply of goods and services. All of the surveyed establishments planned supplies and stocks, which did not exist previously. The respondents showed little understanding of the question on who makes decisions on supplying fixed assets. In one case the voivod was indicated, in another the establishment itself.

88. All HCEs had investment plans. The decisions on the suitability of these investments are made after identifying the needs and after consulting the managers of cells (two responses) as well as the founding body (two responses). Majority of responses

11 This may be explained by lack of clarity in the question; the founding body is ultimately responsible for the debts of the establishment, but operationally – the establishment itself bears responsibility. 22 indicated that the grounds for investment decisions are different from the pre-reform days.

89. The surveyed establishments reported significant changes in the manner of making budgets. More attention is now paid to factors and parameters recognized as appropriate for efficient management of resources. There is a limited scope of pursuing an active financial policy by the HCEs. The question of managing a financial surplus is only academic as majority of entities are running losses. The nature of an audit has not changed essentially, and the transaction costs in carrying it out are considered excessive. The investment requirements are high but are not fulfilled.

90. STRATEGIC PLANNING. One out of six HCEs did not have a strategic plan. The management prepared the plan in the remaining entities, (in one case a single person formulated it). Although a strategic plan was not required prior to reforms, in three (out of five) cases it was nevertheless prepared. A striking observation by a respondent was that the strategic plan had not been modified since becoming autonomous.

91. All establishments implement a strategic plan.12 In only three cases adequate examples of target goals from the strategic plan are given, and in one case the strategic goal is also defined.

92. The mere existence of strategic plans in the HCEs may be interpreted with great caution as their usefulness is limited and there is no linkage of the strategies of the individual units with those of the voivodship and powiat governments.

93. ENSURING PATIENT RIGHTS AND IMPROVING ACCESS. In five HCEs regular meetings are held with the representatives of the community, patients and members of associations. There was no such practice before reforms. The HCEs (with one exception) maintained that their strategic plan takes into account the needs of the community in which they operate.

94. All managers claimed that the portfolio of services offered by them has changed. Existing services have either been expanded or new ones introduced. However, only two gave specific examples of new services which are angiosurgery, neurosurgery, and video colonoscopy.

95. All HCEs, barring one, had a cell to deal with complaints of the patients. One-half of HCEs had this cell before reforms. The number of complaints over the past year ranged from 0 to 10. The number was equal (in two cases) or smaller than before autonomy (two cases). A respondent cited an increase in patient awareness as a reason for increased number of complaints.

96. The managers enumerated the courts, prosecutor, MOH, SFs, physicians’ chambers and the founding body, as appellate authorities in patient complaints. They were of opinion that after the 1999 reforms, patients have more avenues to lodge complaints regarding the operation of the health care system. In one case a patient had complained against

12 One respondent gave an affirmative answer to the question on implementation of the strategic plan, even though in an earlier question he had denied the existence of a strategic plan in his unit. 23 the establishment before the reforms, whereas no such complaint was registered afterwards.

97. In four cases (out of five) the HCEs were insured against malpractice. Such insurance did not exist before autonomy was gained.13

98. Three managers observed that the waiting time has become shorter. Four (out of six) respondents conceded that they were aware of the existence of informal payments in their units, though there was no material evidence for this. A manager explicitly denied any such practice. In two instances the management took action on these complaints, by dismissing an employee and issuing a warning to the other.

99. A manager claimed a decrease in the practice of informal payments, which was widespread before. Another suggested possibilities of “legalizing” such practices, for example, in the shape of private doctors’ offices outside the unit.

100. The responses to the questionnaire show that in the opinion of managers, the changes in the health care system have strengthened the position of the patient by better serving his rights. The patients are more aware of their interests and are more vocal in protecting them. Although the portfolio and number of provided services are changing, there is no convincing evidence that it has resulted in better access to health care. The existence of informal or “envelope” payments in HCEs is not questioned, and there is no attempt to introduce measures to eliminate them.

101. PROPOSAL FOR REFORM OF HEALTH CARE. There was a mixed response on the potential effect of the proposed NHF on operations of the HCEs. A manager evaluated the directions of these changes as definitely negative, whereas another construed it as a positive effect on his unit. Other respondents underscored the absence of detailed information on the form of introduced changes, to be able to form an informed opinion. Similarly, lack of adequate information on unification of the rules of contracting evoked a mixed response.

102. Local Governments. The LGs are involved in the health care sector as the founding bodies – owners of assets securing the relevant network of health care centers and carrying out public health responsibilities. Their responses are presented below.

103. MANAGEMENT PROCESS. The LG responsibilities include health promotion and protection, informing people of the rules of operation of the health care system, and plan for securing outpatient health services. Before the 1999 administrative reforms in Poland, the LGs in some cases were the actual organizers of health services, for instance, in Sosnowiec for outpatient care, and in Chorzów for inpatient services. Some LG entities ran public health care facilities where changes were introduced (creation of family doctor practices), in other cases the entire inpatient system was run by budgetary units controlled by the voivod.

104. Specialist care and rehabilitation, with occupational medicine and school hygiene, was financed from resources of the HM, while inpatient care was financed by the voivod in

13 This is another example of Polish translation blues. The word “malpractice” was translated as “etyka zawodowa” [English “professional ethics”]. Probably for this reason one respondent did not understand the question. 24 the case of Gdańsk, Poznań, Sosnowiec. There were also instances when the city was the founding body for hospitals, as in Chorzów. There were no powiats.

105. LGs have the following health care responsibilities:

 As a founding body establishing, transforming and closing down of HCEs  Monitoring health care problems  Analyzing health needs and access to primary health care  Drawing up plans for securing outpatient services  Implementing prevention programs  Running schools that promote health  Rehabilitating alcohol-dependent persons

106. In the structure of the town LG, the municipal council is the resolution-making body and the commission for health is the advisory and opinion-giving body. There is a health care department in the municipal office. In a powiat, the powiat council formulates local legislation on health care, ratifies financial resources, and enforces rules governing opening and closing of health units. The Health Commission provides opinions on draft resolutions of the powiat council. The Powiat Board manages assets of the powiat, executes its budget, and supervises personnel and financing policies of HCEs. The social council oversees responsibilities emanating from the Act on Health Care Establishments.

107. In cases where this was applicable (i.e. aside from powiats, which did not exist before 1999, and Świnoujście), the LGs were the organizers of health services (e.g. in Wrocław, Gdańsk, Poznań, Chorzów). In the surveyed LGs the meetings of the Health Commission are held at least once a month (6 responses), twice a month (2 responses) and once a week (1 response). The frequency of meetings is maintained from the pre- reform days.

108. Among decisions recently made by LG authorities, the respondents listed:

 Revamping LG health care, consisting of transferring health services to non- public entities (Gdańsk, Poznań)  Separation of primary health care from SPZOZ structures (Mielec)  Restructuring of HCEs (e.g. creation of new departments in hospitals, transformation of general hospital into hospital for the chronically ill, closing down of public health units - Chorzów)  Increasing the number of schools promoting health  Providing consent for transformation of several institutions into employee companies (Wroclaw)

109. Six respondents indicated that before 1999, the scale of deficit of resources for outpatient treatment was smaller, and therefore the LGs decided on the organizational and functional structure of outpatient care (Poznań).

110. The LGs carry out comprehensive health care units monitoring at least once a year (Wrocław, Nowy Targ, Świnoujście, Mielec), once every two years (Sosnowiec), and

25 once every quarter (Chorzów). Gdańsk LG felt that after privatization of outpatient care there were no legal grounds for such controls. The frequency of monitoring and evaluation carried out by the LGs before 1999 was the same. Most respondents felt that no significant changes have taken place in the manner of monitoring of entities even after the introduction of health insurance.

Text Box 5. 1999 Reforms—The New Look Local Governments

The respondents have indicated the following priorities adopted by the LGs after the 1999 reforms:  Cardiac disease prevention program for the population between 40-50 year  Financing the program for correcting posture defects  Launching cancer prevention programs  Rent reductions for family doctors and employee companies (Wrocław)  Creation of the National Medical Rescue system  Promotional programs in the field of social diseases and addictions  Modernization of 24 hour outpatient centers  Lowered rents for non-public entities who have taken over health services from autonomous  P Act on General Health Insurance (GHI ublic HCEs (Gdańsk)  Modernization and expansion of powiat hospital (Mielec)  Vaccinations for virus hepatitis B for children born before 1995  Vaccinations for epidemic parotitis (mumps) for children aged 4  Mammography screening (Poznań) Source: From the Laws of Poland’s Public Administration Reform

111. The respondents listed the following decisions related to health priorities that were taken before 1999,

 Implementation of cancer prevention, cardiac related, and alcoholism treatment programs (Wrocław)  Decision to build a new pediatric hospital building (Sosnowiec)  Network of healthy cities (Poznań)  Prevention of caries in children and young people (Poznań)

112. Most of the respondents (eight out of ten) think that LG does not decide in what health priorities to invest. For example, Sosnowiec stated that the LG has no influence on decisions in the field of rehabilitation medicine.

113. After the introduction of health insurance, the LGs no longer formulate health policy or organize health services. Although in many cases they currently serve as the founding body for HCEs, the change of the rules of financing health services has atrophied their significance. They, nonetheless, endeavor to actively influence health policies within their competence mainly through prevention and health promotion programs. LGs are also striving to steer the HCEs in their jurisdictions in the direction of privatization by creating competition in the market for outpatient services.

114. HEALT CARE MANAGEMENT AND STRATEGIC PLANNING. Of the 9 surveyed LGs, 8 have a strategic plan for the health sector. One respondent pointed out that

26 despite the powiat and voivod controlling some of the hospitals, in practice they can draw up and carry out strategies only for outpatient treatment. With the exception of Sosnowiec, the LGs had worked out such strategic plans before 1999 also.

115. Four LGs felt that they had only a minimal role in the operation of HCEs, their role being limited to supervision and indirect control. Before 1999, this role consisted of responsibility for access to services (Wrocław), supervision and consultation of management decisions (Sosnowiec), and organizing and financing services (Gdańsk, Poznań). Four respondents opined that especially in the case of entities where health insurance was introduced, the role of the LG was sharply reduced. From a leader in health care policy decisions, the LG turned into an entity passively functioning in the system (Sosnowiec).

116. To the question on the preparation of plans for supplying medical services to the primary, specialist and hospital levels, three respondents gave an affirmative answer, two pointed merely to participation in the preparation of such plans, and one reported that such plans were envisaged only by the voivod and updated once a year. Only two respondents stated that the LG had prepared a plan for supplying services in primary and specialist health care prior to the 1999 reform.

117. Eight respondents were positive that LGs affected the structure of the budget of HCEs. This may be in the form of financing health-oriented programs, giving subsidies for the purchase of equipment, and assisting in efforts to increase resources from the RSF. The LG had a greater influence on shaping the structure of the budget in the pre-reform era.

118. The LGs require the following reports from HCEs: financial statements on revenues and expenditures every month (6 respondents), and statements on execution of contracts once every quarter (3 respondents). According to two respondents, HCE reports to the LG are limited in scope (Wrocław), or there is no such procedure (Gdańsk). Before the reform, the LG had comprehensive, as in Wrocław, insight into the structure of services, their costs, and constraints etc.

119. Structural reforms have led to a decrease in the role and significance of LGs in the health care system. This has made the system inefficient in some ways. The placing of health care resources under various entities is counter-productive for coordination of health policy in the regions and in building cohesive strategies. The LGs, in performing ownership functions, make use of the standard tools for monitoring the actions of HCEs under their control.

120. ENSURING PATIENT RIGHTS AND IMPROVING ACCESS. The respondents rated the role of LG in the protection of patient rights as limited (the LG is unable to establish the number and type of contracted services). The most important activity in this respect was in performing efficient supervision and comparison of the results with the standards specified in the contracts. In Gdańsk the LG model for protection of patient rights was not worked out.

121. With the exception of Świnoujście, all respondents replied in affirmative to the existence of a cell dealing with queries and complaints of patients. Such institutions

27 had also existed before the 1999 reform. The respondents reported that the number of patient complaints in the last year ranged from 28 (Wrocław) to 1 (Poznań).

122. The respondents suggested that the number of complaints before 1999 did not differ significantly from the present. Figures were available only for Poznań, where the number of complaints was 16 in 1994 and 9 in 1998. Due to this the question on the reasons for the difference in the number of complaints addressed to the LG remained unanswered.

123. In the opinion of the respondents, patients whose complaints had not been acknowledged could address them to the SFs (7 responses), physicians’ chambers (3 responses), common courts (3 responses), the prosecutor, and the bodies especially created for this purpose, e.g. the Pomeranian Association for Patient Rights (Gdańsk). In the pre-1999 era, patients could appeal to the voivod, the city president, occupational self-governments, and the court.

124. To the question on awareness of the existence of informal payments in HCEs in their jurisdiction, the respondents said that either this was marginal (Wrocław), or non- existent (Gdańsk). Three respondents accepted such occurrences in their units, and two conceded that they had information that such payments are prevalent.

125. To the question on actions taken in the event of information about informal payments, either no answer was given (2 cases), or no notifications were reported (5 responses). Only one respondent mentioned a talk with the director of the unit. A mixed response was obtained to the question gauging a possible change in the informal payments scenario before and after the 1999 reform. One respondent suggested that the dimensions of this phenomenon have not changed, and another opined that competition among the service providers discouraged this practice.

126. After losing the capability to influence the provision and type of health services, the LGs also became less significant as institutions protecting patient rights. The LGs, like the managers, are usually aware of the existence of informal payments in the units working under their supervision, but the problem is not addressed. There is no reliable information on the prevalence of this phenomenon and there are no laid down procedures to counteract this practice.

127. IMPROVING STATUS OF HEALTH OF THE POPULATION. The average budgetary share of expenditures for health promotion ranged from 0.00011% (innovative) to 22.5% (Gdańsk). Compared with the situation before 1999, two respondents felt that the share of expenditures is growing (Wrocław, Sosnowiec), whereas others described this ratio as similar.

128. The number of LGs on-going health promotion programs financed from their own budget is much higher than before 1999. The respondents listed the following new programs:

 Mammography tests for women over 45  Stand up straight program  Health Education in School program

28  Health Promotion Program consisting of a number of undertakings  Community programs  Preventive-treatment program for cardiovascular diseases  Cancer prevention and treatment program  Diabetes early detection program  Educational program “Prevention of Cancer by Reducing Tobacco Smoking”  Addiction prevention programs carried out in schools. The examples of these are: “Aggression and how to control It”, “Good Life”, “Cheerful Class”, “Basics 2, “Program of 7 steps”, “Drugs or Life”, “Learn to say No”, and “Taming Aggression”.

129. Six respondents were positive on LG influence on the scope and type of services provided within its territory. One respondent described this influence as small, and one thought that the SFs have taken over the major functions. Two respondents felt that such an influence is expressed through the programs carried out by the LGs. For example, cytological tests for women, preventive tests for prostate for men, and preventive tests for cardiovascular diseases are carried out in Gdańsk. In Świnoujście, part of the costs of services is covered, in Chorzów there is a plan of ambulatory security, and in Mielec, LGs support service providers in exploring new areas of care.

130. Before the 1999 reform, the LG had a much greater influence on the scope and type of services (Wrocław, Sosnowiec, Poznań).

131. New services have been incorporated keeping in view the specific needs of the communities. The following are the examples of such services:

 Self-examination of breasts (breast cancer prevention) with financing of full oncological diagnosis for women taking part in the program (Wrocław)  Program to correct faulty posture of children (Wrocław)  Medical rescue system in mountains (innovative)  Prevention of cancer and cardiovascular diseases (Gdańsk)  School hygiene (Gdańsk)  Prevention of epidemic parotitis (Poznań)

132. Before the 1999 reforms, the LGs also incorporated services that were important for the needs of the local community into their plans, but answers from surveyed LGs suggest that the scope of this activity was small. Some respondents stated upfront that they did not carry out such programs (Gdańsk), others pointed to the particular needs of the local communities in the past (e.g. Sosnowiec: industrial medicine, Poznań: high incidence of virus hepatitis B among children under 4, dental caries).

133. The 1999 reforms stripped the LGs of many policy making and implementing tools to contribute to the state of health of the populations within their areas of operation. Notwithstanding, the surveyed LGs are considerably increasing their activity in conducting and financing preventive and health program within the powers still vested in them.

29 134. PROPOSALS FOR HEALTH CARE REFORM. The respondents did not formulate clear assessments of the impact of the NHF on the operations of health units working under their control. Four respondents indicated that they are unfamiliar with the details of the planned changes. Two others estimated that any influence would not be too strong or direct. Most of the respondents refrained from comprehensive evaluations of the proposed changes.

135. Poznań rated positively measures to standardize services throughout the country, whereas the creation of a network of hospitals, the issue of defining the financing sources for investments, regulations of the powers of LGs and reduction of resources for financing services of the NHF are rated negatively.

136. Sickness Funds. The SFs are the third and the last category to be surveyed. The questions covered similar aspects as in the last two categories, like governance, strategic planning and improving access to health.

137. MANAGEMENT PROCESS. According to the respondents, administrative matters in a SF were the responsibility of a member of the management board and the director of the organizational division. In matters concerning contracts, contracting services and refunds, the management board makes the decision.

138. The scope of real accountability of the management board and council of a SF comes out in somewhat different ways in the surveyed units. In one SF, the council exercises actual power, whereas accountability rests supra on the management board. This is because the new councils have replaced the old ones on the recommendations of the health minister. Another respondent estimated that the council as well as the management board have full powers and carry out the responsibilities prescribed for them in the Act on General Health Insurance (GHI).

Text Box 6. In Focus Issues

The issues that are frequently encountered during the meetings of the management board and the council of a sickness fund are:

Management board of SF:

 Conclusion and renegotiation of contracts  Conditions of contracting services (with draft contracts)  Motions regarding contracting services (e.g. new medical procedures)  Current financial condition of the SF  In special cases individual motions to refund costs of treatment  Trends in refunding drugs

Council of a SF:

 Financial plan  Plan for restoring financial equilibrium  Settlements with service providers (especially inpatient care)  Drug refunding  Periodical reports

30  Organizational structure of the SF  Appeals against decisions of management board Source: Act of 6 February 1997 on General Health Insurance Dz.U.No. 28, item 153 with subsequent amendments

139. Consent of the council of a SF is required, for instance, in making and amending a financial plan, restoring equilibrium plan, disposing of or acquiring immovable property, making major investments, and granting authorization to the management board.

140. Consent of the management board is required in: cessation of payment due to irregularities in settlement of medical services, changes in the financial conditions of contracts (renegotiations), announcement of a competition of offers, individual consent for providing services for insured persons, increasing outlays for medical services in case of exceeding financial limits, and taking over of services by newly established entities.

141. The respondents acknowledged that the role of UNUZ in the current operations of the SFs is overwhelming. This can be seen in its influence on the organizational structure, its capacity to issue instructions concerning contracting of specific services, expression of consent for refunding of certain medical services, the capacity to lodge objections to the financial plan of a SF. Besides, UNUZ often makes interpretations of the provisions of the Act on GHI.

142. The respondents assessed the role of UNUZ in a similar way when the SF makes strategic decisions. An incident was cited of UNUZ recommendations in terminating contracts with service providers (due to the new rules of contracting services in effect from 2003), and then counter-instructions to withdraw terminations.

143. The UNUZ calculation of the amounts of financial leveling out among the SFs has a great impact on the budgets of these funds. The consent of UNUZ is necessary to adopt a financial plan or to make amendments, and the plan for restoring equilibrium, and to approve the statutes of a SF.

144. The analysis and evaluation of management in the SFs – on the eve of their elimination – has merely a cognitive value. The statements of the respondents only confirm the strong political influences in the SFs, shown by the changes in the composition of the fund councils and their subordination to the decisions of the Health Minister. An issue which is still unclear is the position of UNUZ and the health minister in the new configuration, e.g. in the matter of contracting, contracting specific services, and lodging objections to financial plans etc.

145. STRATEGIC PLANNING. In both the examined cases the SF had a strategic plan for the health care sector. Notably, one respondent assessed the interest of the voivodship self-government in such a plan as none. The respondents conceded that the SFs indirectly influenced the current operations of HCEs. This takes place e.g. through speeding up of payments, definition of the conditions of providing services, and modeling the standards of the services and their structure. 31 146. The respondents opined that a SF also influences the structure of the budget of the HCEs (financial resources apportioned for providing services cannot be used for investment purposes).

147. The SFs expect to receive detailed reports on provided services from the service providers, delivered in electronic form in accordance with the standard defined by the fund (Pomorska RSF) and any changes in the manner of providing services (Opolska RSF). Moreover, declarations on the number of patients covered by primary health care are required, as well as information on the quantity of services provided to members outside SFs. Usually these are monthly reports. Data are also gathered in quarterly periods on the subject of the performed services according to disease units covered by treatment (ICD-9 classification), and according to school hygiene services (ICD-10 classification).

148. The Pomorska RSF does not require that service providers submit regular reports to outside institutions, but the Opolska RSF requires that service providers submit reports to the Opole Center for Public Health (information on hospital statistics), to sanitation- epidemiological field stations (information on epidemiological matters) and to the Voivodship Oncological Hospital (information on oncological matters).

149. Although the legal regulations do not have relevant provisions defining the role and position of the SFs in building health care strategy in the voivodship, in practice the SFs affect not only the form of the strategy, but also influence the current operations of HCEs.

150. ENSURING PATIENT RIGHTS AND IMPROVING ACCESS. The respondents maintained that monitoring quality control and access to health services is done in a multi-track form, through surveys of patient satisfaction, comparing offers of service providers with the actual results, and direct control of execution of services. However, there was no clear indication on the frequency of such controls, mentioning only that patient satisfaction surveys are carried out once a year. Technical reports on the number of performed services, their types, procedures, patient age etc. are furnished by the service providers every month.14

151. Examples of actions taken: The patients of one outpatient center of primary health care complained about the behavior of a physician, the time of his work and unwillingness to make house calls. Following a direct inspection and confirmation of the charges, the contract was terminated. Similar situations occurred in dental offices and some specialist outpatient centers (Pomorska RSF). Additional competition of offers have also been announced in specialties where there was deficiency of services and constrained access to medical services (Opolska RSF).

152. The respondents maintained that SFs ensured quality of services, though one claimed that it was inadequate due to the minute share of specialist supervision. One respondent required that service providers carry out assessments of the quality of services (Opolska RSF), another encouraged service providers to do this through propagation of good practices.

14 The data acquired by the sickness funds in this way does not allow for investigation of the actual accessibility of services. 32 153. The respondents claimed that regular meetings are held with local leaders, representatives of patients and members of local communities. In the Opolska RSF there are frequent meetings with organizations of service providers, especially preceding a competition of offers.

154. Both respondents conceded that the strategic plan of the SF reflected the need of the given population for health services. One added that there were also difficulties in carrying out such a plan.

155. Both respondents confirmed that the funds were financing expansion and changes in the type of services provided. Examples: Pomorska RSF introduced botulinum therapy for children with cerebral palsy, specific immunotherapy for insect bites, and new oncological drugs. Opolska RSF introduced specialist procedures not financed by the MOH like, coronary surgery (bypasses), and anti-virus drugs for hepatitis B and C.

156. Both SFs contained units and individuals to deal with queries and complaints of patients. Last year Pomorska RSF received 655 complaints, and Opolska RSF 103 complaints. In case the complaints are not heeded by the funds, the patients had the option of going to the physicians’ chamber, court of labor and social insurance.

157. The respondents conceded that they were aware of the existence of informal payments. One pointed to a peculiar inability to complete proceedings and formulate charges against a physician even when it was widely known in the medical circles and was given a broad press coverage. The respondents could not come up with examples of actions taken in the event of having information on the acceptance of an informal payment.

158. In the presence of institutions like commissioner for patient rights, such rights are protected. The SFs assures quality control of provided services. However, the budget constraint imposes a limit to certain services and may also lead to infringement of patient rights. As in the case of managers and LGs, the SFs are aware of the existence of informal payments, but this phenomenon is not investigated or registered, nor any concerted action taken to reduce it.

159. IMPROVEMENT IN HEALTH STATUS OF THE POPULATION. To the question on how the SFs made use of the health care programs prepared by the LGs, the respondents stated that the plans for securing outpatient care were analyzed and evaluated according to the financial capacity of the fund. These programs were started in the cities of Gdynia and Słupsk in Pomorska RSF. Opolska RSF made use of programs prepared by the voivod (“Minimum plan for securing outpatient health care for treatment of the Opolskie Voivodship” and “Plan for securing medical rescue actions”) and the voivodship self-government (“Opole Regional Plan for Health Protection”).

160. To the question on giving examples when the SF did not take into account the recommendations of the voivodship and instead financed other services, Pomorska RSF maintained that Pomorskie Voivodship did not have any such program. Opolska RSF, on the other hand, claimed that there was no significant difference between the actions of the fund and the programs of the LGs. If such a difference existed, it was

33 merely caused by the limited budgets of the funds and was only quantitative rather than qualitative in character.

161. The respondents also admitted that the SFs influenced the scope and type of services provided within their area. Beside influencing the contracts, the suggestions of the funds are binding too. In Opolskie Voivodship, for example, on the recommendation of the SF, two children departments were transformed into daytime departments, and outlays for inpatient care (internal diseases) were decreased through a change in the profile of four departments.

162. Only Opolska RSF gave examples of financing services that were of special significance to the inhabitants. Among other things RSF financed:

 New cardiac procedures (Carto ablation)  Home rehabilitation  Introduction of new forms of chemotherapy for rheumatoid arthritis and malignant lymphoma  Drug protection in intervention cardiology  Vaccinations for hepatitis for 6-year olds

163. The SFs are aware of their influence on the scope and type of health services provided within their area. They cited examples of expansion of health services financed from their budget.

164. PROPOSALS FOR HEALTH CARE REFORM. The respondents made selective evaluations of the proposed changes like setting up of NHF and establishing a network of hospitals. The unification of contracting rules is considered a positive step. The lack of flexibility in the adjustment of contracting of services to the local needs and capacity, and absence of any criterion for apportioning financial resources among voivodships are rated as negative influences.

GENERAL CONCLUSIONS

165. The character and scope of the research rules out incisive conclusions. However, on the basis of the obtained findings, one can attempt to point out phenomena that are more general in character and may serve to inspire towards further, more profound research.

Decentralization of Management of Health Care in the context of Governance Procedures.

166. The process of decentralization of management of the health care system in Poland before 1999 was without any clearly articulated strategy. Rather, it was a result of the initiative of a group of LG activists that belonged mostly to big cities. The actions of this group were not closely coordinated. This lack of coordination contributed to a multitude of schemes and procedures that were adopted in different regions.

34 167. HCEs, which acquired the status of autonomous facilities after 1995, were motivated to revise the existing management procedures and build new ones, to adapt to the changing conditions of operation. Most of these procedures (e.g. preparation of budgets and their control, creation of an account of costs, collective creation of strategic plans and staff policy) passed the test of time successfully, as the surveyed establishments were using them in 2002.

168. The LGs, in pursuance of the functions as organizers of health care in the region of their operation until 1999, worked out a number of management procedures to carry out these tasks. The preparation of health care plans was one such task.

Decentralization of Management of Health Care in the context of Accountability

169. The information on accountability acquired in the survey, though treating it with due caution, entitles us to say that decentralization of health care management has resulted in a change of both the scope of services and their quality. We are dealing here with considerable, and in some cases significant changes in the portfolio of services offered by HCEs. It is more difficult to precisely pinpoint the factor that led to the restructuring of the offer of services, as there is no convincing evidence to show that the factor generating change was the actual demand for health services existing in the given region.

170. Even less explicit is the matter of assessment of accessibility of health services. Here there are both positive developments (better access to a first-contact physician) as well as negative ones (reduction in the number of admissions to hospital wards because of small contracts with the RSF). But the effects of decentralization are apparent as far as improved access to information and transparency of the applied business practices are concerned.

Decentralization of Financing of Health Care System in the context of Governance Procedures

171. Decentralization of financing of the health care system brought a number of changes in the governance procedures both with regard to the payment remitter (SFs) as well as the service providers (HCEs). First of all, new institutions appeared (SFs) with their governing bodies (management board, council). Then new quality procedures were adopted (e.g. preparation of budgets of the SFs, the mechanism of leveling out differences, and negotiation of contracts).

172. Some procedures like, making budgets of HCEs, introduction of account of costs, and control of budget execution, were changed significantly. After carefully evaluating the organizational working of the SFs and operation of autonomous HCEs, one may observe that the four years experience with the SFs has not culminated in the formation of mature and efficient management procedures. This remark applies first of all to control functions. It may also be noted that the mangers of HCEs were constrained to operate in conditions of incessant financial crunch, which affected the nature of employment and investment policies pursued by them.

Decentralization of Financing of Health Care System in the context of Accountability

35 173. Decentralization of financing of the health care system has left its impression on the scope of accountability of the main players. It is universally observed that through the contracting system the SFs decided on the scope of health services offered to the populations. This remains in a certain inconsistency with the legal regulations, which ascribe accountability for health care mainly to the LGs.

174. The existing procedures of supervision of the SFs provided the voivodship self- governments with the legislative ability to influence their policy in contracting services. But due to rigid budgetary limitations, the shape of the health policy in the regions was defined by the financial capacity of the SF. By merely financing preventive and health promotion programs, the LGs are able to influence the portfolio of services only to a limited extent.

36 5. DISCUSSION

175. In this part of the paper, the conclusions from the pilot survey are synthesized with the findings of other relevant studies concerning health care reform in Poland.

176. In Poland the method that has been adopted for decentralizing health care system delegates authority to the voivodship, powiat and gmina levels. In this respect, no model was developed that could have been the theme of prior in-depth public or political discussion, nor a plan of implementation was chalked out for schemes that were adopted ultimately.

177. As has been emphasized in previous sections, decentralization is the implementation of a certain political ideal, in accordance with which local communities get an opportunity to participate and decide about themselves. Decentralization is accompanied by strengthening of accountability of local politicians towards the communities they represent.15 But this is dependent on the existing political model of organization of authority, especially if we appreciate that the actual model is neither rigidly centralized nor strictly decentralized.

178. In a given national model of health care we can thus find elements of a centralized as well as decentralized system. For example, in a centralized model of health care such as in Sweden, there are elements of the decentralized system (e.g. dental care). In a decentralized model, such as in Germany, there are arrangements typical for the centralized system (e.g. the sector of preventive public health).16

179. There was no model of health care during the two-tier administrative division in voivodships and gminas in the country. The same situation persisted after the introduction of the 1999 general administrative reforms when a three-tier administrative division was implemented in Poland.

180. The scholarly debates on reforms aiming at decentralization of state authority point out to the necessity of taking up a parallel research effort in public finances, political science and organization theory.17 While moving in the direction of decentralization the fulfillment of several social and cultural conditions is also a prerequisite:

 Appropriate administrative and management potential  Strong (ideological) belief in the fulfilled tasks  Readiness to accept a multitude of views and interpretations of the same problem

15 D.J.Hunter et al. 1998. “Optimal balance of centralized and decentralized management”, in: R.B.Saltman et al, (eds.), “Critical Challenges for Health Care Reform in Europe,” Open University Press, s.309 16 ibidem, s.310 17 S.J.Burki, G.E.Perry, W.R.Dillinger. 1999. “Beyond the Center: Decentralizing the State”, The World Bank, Washington, , p. 17 37  Appropriate change of institutions.18

181. The preparation of the draft on General Health Insurance in Poland did not fulfill the above analyses or conditions for decentralization.

182. An enabling environment of liberal orientation, consisting of regional and local leaders, who act as agents of change, spur the decentralization process. It is interesting to note that the first attempts at decentralization of health care management were made in Poznań and Łódź much before the political-economic transformation of 1989.19 These actions were intensified after 1990, at the passing of the Local Government Act20 and the Competence Act21 (the pilot program launched in 1993 aiming at taking over running of HCEs within “commissioned” responsibilities).22

183. The 1990 restoration of the institution of territorial self-government (local government) at the gmina level, with simultaneous weakening of administration of the voivodship level led to a dichotomous division of public administration into local (gmina) and central administration.23 This created an interesting topic for discussion on the lack of cohesion in the schemes and outlined model.

184. The passing of Act on Cities24 in 1995 was another important step in the progress of decentralization in the management of the health care system. Even though the agents of change cooperated and collaborated with each other and received technical support from western institutions and grant donors,25 there was a lack of vision for a decentralized system of management. As a result, the actions could not be synchronized leading to considerable variation in the adopted schemes. The research carried out in Bielsko-Biała, Chorzów, Koszalin, Kraków, Olsztyn, Poznań, Wrocław, Szczecin and in the Sądecka Zone of Public Services illustrates this in a convincing way.26

185. The experience of health care units (which were autonomous before 1999) in management practices showed that the managers of these units had begun to implement

18 D.J.Hunter et al. 1998. “Optimal balance of centralized and decentralized management”, op.cit, p. 316. These are also the conclusions of the paper: “ Governance and Accountability in a Decentralized Setting. An Examination of Selected Issues”, December 5, 2002, mimeo 19 A.Kozierkiewicz, M.Kulis. 1999. “Health protection in local government”(in Polish), Kraków, p. 21- 22. 20 Act of 8 March 1990 on Local Self-Government, Dz.U. No. 16, item 95 with subsequent amendments 21 Act of 17 May 1990 on division of responsibilities and powers between Bodies of the Gmina and Bodies of Central Government Administration, Dz.U. No. 34, item 198 with subsequent amendments 22 Please note that the original titles of all Polish footnotes are given in the “Selected References.” 23 J. Brożek. “Finances of local government – the first year of operation”(in Polish), op.cit. 24 Act of 24 November 1995 on Changing the Scope of Operation of Certain Cities and on Municipal Zones of Public Services, Dz.U. No. 141, item 692 25 Here mention must be made of the initiatives of the Harvard-Jagiellonian Consortium for Health, which operated in the years 1996-1999 and was sponsored by USAID/DAI. 26 A. Kozierkiewicz, M. Kulis. 1999. “Health protection in the local government”, op.cit. 38 tools and practices that can be described as Best Business Practices.27 Unfortunately, in a situation where these units had only de jure guaranteed autonomy and had to function in a system that was not restructured or reformed, it was difficult to achieve spectacular economic and financial success.28 This was compounded by the fact that along the way issues kept on cropping up that constantly needed explicit interpretations or statutory resolution (e.g. services guaranteed by the state, primary care, the list of patients and the manner of creating it, financing services in social assistance homes and small-child homes, reference levels of hospitals etc.).29

186. A striking feature of the implemented reform on GHI was the lack of a well thought out and coordinated effort. A typical example is the HCEs that gained autonomy. The arrangement was bereft of a mechanism that could motivate towards changes. The short and stormy history of management contracts in health care30 can be an example of compromising an essentially good tool through its improper use.

187. The negative fall out with the fragmentary reform effort of pre-1999, was not fully rectified when the four reforms, including the health insurance reform, were introduced in 1999. The charges against the newly introduced reforms may be arranged in two groups:

188. Manner of preparing and introducing changes. This had many weak areas. The manner of informing and introducing changes was not all-inclusive. The functional links among the four reforms could not be discerned. The mechanism dealing with control and modification of changes was not transparent. Above all, there was excessive political influence in the system.

189. Health insurance reform. The position and role of the founding body and of the remitter was not clear. The functional links within the health care system among

27J. Klich. 1996. “Building a strategic plan for health care units”, (in Polish), in: J. Skalik (ed.) “Current problems of health care management”, Research paper No. 719, Academy of Economics. Wrocław, M. et al. 1996. Planning processes in health care units”(in Polish), Research report, No. 11-12. “Current practice of planning and control in the health care system: outpatient and inpatient care :Report on execution of task D.1”(in Polish.), “Development of local initiatives for health care reform.”(in Polish), Conference material P.Campbell et al. 1997. “Process of planning in units of the health care sector in Poland”,(in Polish), Przegląd Organizacji 1997, No. 1

28 J. Klich, M. Chawla. 1999. “Operation of autonomous public health care establishments”(in Polish), Gospodarka Narodowa, , No. 1-2, M. Kautsch, J. Klich, M. Chawla, M. Kulis, B. Bulanowska, P. Campbell. 1999. “Autonomous public health care establishment: recommendations”(in Polish), Zdrowie i Zarządzanie, , No. 2, Volume I

29 Z. Król. 1999. “Further Transformations of Autonomous Public Health Care Establishments” (in Polish), Zdrowie i Zarządzanie, Vol. I, No. 5 30 A.Kozierkiewicz, J.Klich. 1999. ”Agreement – management contract”(in Polish), Zdrowie i Zarządzanie, , No. 1, Vol. I, J.Klich. 1999. Management contracts in conditions of market and systemic limitations” (in Polish) , Zdrowie i Zarządzanie, No. 4, Vol. I, M.Kautsch, J.Klich. 2002. Management contracts in health care” (in Polish), Gospodarka Narodowa, No. 4

39 various entities (voivodship, powiat, gmina, HCEs, SFs) and different levels of health care (primary care, inpatient care) were weak. Control and modification of the health care process was thus difficult to achieve.

Text Box 7. An Estimate of 1999 reforms

A.Wojtyna in commenting on the degree of conceptual preparation, the manner of introduction and the first experiences of the four reforms, points out that:

The individual reforms had different degrees of preparation that went into the making of draft resolutions. Only in the case of the pension reform a model was worked out that served as a point of reference in evaluating the variant that would be most appropriate for Poland. A cohesive document was thus prepared that not only served the propaganda and information purposes, but was also analytical containing cost/benefit calculation. Such a model was conspicuous by its absence in other reform areas.

The reforms were accumulated in time without any reasoning presented to support such procedure.

The external conditions of introducing reforms were not properly taken into account.

Source: A.Wojtyna, “Decentralization of public finances”, Gospodarka Narodowa, 2000, No. 7-8, p.13-14

190. The health insurance reform has been criticized because of the manner of introducing changes. There were discrepancies between the compulsions of organization and management theory and the practice of preparation and introducing the reform.31

191. Setting aside for a moment such issues as cohesion and internal logic of the schemes adopted, several features in reform implementation were striking. A prominent feature in public presentation was the lopsidedness of the assumptions and anticipated effects of reform. It was heralded as a panacea for all maladies of the health care system, which was supposed to fulfill the expectations and interests of all entities. This not only heightened the expectations of the public, but also of the managers of HCEs.

192. The introduced reform had no built-in control mechanisms. Such a mechanism would have allowed remedial measures to be taken in the event of undesirable developments. A pervasive problem was the political influence in the system. This was manifested through legal regulations and application of procedures making room for political appointments. For instance, appointment of management boards and councils of SFs, and health policy personnel in the LGs was the prerogative of the health minister.

193. Before taking up the main elements of criticism of the schemes adopted in GHI (which we can call a model created ex post), let us focus on two issues that should have been vetted prior to the adoption of concrete statutory provisions. Both concern systemic solutions, with the first having a more general significance, being linked with definition of the relation between ownership, management and financing in the health care system, and the other with definition of the fields that should not be included in decentralization.

31 J.Klich. 1996. “Reform of health insurance – its draft and amendments” (in Polish), Polityka Społeczna, , No. 4

40 194. In a regulated market, like that of health services, separating financing of services from ownership leads to sub-optimal results. Ownership of the most valuable resources, i.e. inpatient care, is ascribed to the voivodship and powiat self-governments. However, these entities are unable to fully exercise their powers, comprising the “positive” side of ownership, defined in law as(i) the right to use a thing, i.e. to its ownership, use, drawing benefits, and effecting actual disposal (utilization, processing, destruction), and (ii) rights to dispose of a thing(disposing of a right and burdening it with limited real rights).32

195. In the context of the political choices adopted in Poland and the reform of GHI, the LGs rights to use things are in practice limited (i.e. rights to draw benefits and make actual dispositions). This along with the ill-suited financing schemes of LGs and ownership divisions of inpatient care (i.e. either voivodship, powiat or municipal property), leads to significant disturbances in the fulfillment of corporate governance. It creates disturbances in the precise definition and execution of responsibilities for health services.

196. Holding the view that Act on GHI has not been the best of legislations, we may point out the areas that should not be included in decentralization. The experience of the European states is instrumental in indicating that the following should be excluded from decentralization: (i) the main assumptions of the health policy, (ii) the resources used in the health sector: skilled personnel(education, accreditation, registration), costly medical equipment, research and development, (iii) specific schemes concerning regulation and (iv) monitoring, assessment and analysis of the health of the population and performance of services.33

197. Unfortunately, in Poland when adopting successive schemes, the scope of responsibility of the health ministry was not defined very accurately, as regards items (i) and (iii), while leaving incoherent provisions as regards (ii) and (iv) above.

198. The shortcomings are also apparent in the detailed solutions that were adopted in the reform. The LGs being limited to exercising ownership functions, were confronted with the strong position of the SFs as monopolist remitters.

199. The provisions of the Act on GHI did not accurately define the scope of responsibility of LGs in health policy in the regions. It can be gauged by two observations. One, the lack of precise division of obligations between voivodship and powiat self- governments34 on one side and the SFs on the other.35 Two, the matter of financial supply of the LGs,36 which determines the capacity of LGs to fulfill these tasks. J.Brożek (2002) succinctly describes the situation by saying that: “local government

32 U.Kalina-Prasznic (ed.). 1999. “Encyclopedia of Law” (in Polish), Wydawnictwo C.H.Beck, Warsaw, p.850 33 D.J.Hunter,et al. Optimal balance of centralized and decentralized management”, op.cit, p. 316 34.J.Klich. 2001. “Building health protection programs in the voivodship” (in Polish), Zdrowie i Zarządzanie,Volume III, No. 1., cf. K.Czarniecka, A.Huk. 2001. “Program of health care restructuring”

35 S.Golinowska et al. 2002. Health care in Poland after the reform”(in Polish) Reports of CASE - Center for Social and Economic Research, No. 53/2002, Warsaw 2002, p.116 41 reform, although carried out from the political point of view, is legislative fiction in the economic aspect.”

Text Box. 8. GHI Act—Falling Short

The provisions of the Act on GHI did not accurately define the scope of the responsibilities of Local Governments in health policy.

An example here can be the procedures for creating plans for health protection in the region. The preparation of plans in the area of primary health care is the responsibility of the powiat self-governments. It remains unclear, however, who is responsible for the creation of plans for comprehensive securing of health services. Regional restructuring programs created within the ministerial plan in 2000 were the first forum where representatives of all those interested met to initiate the formation of a partnership for health in the region.

The sickness funds not only carried out the functions ascribed to them, but others were also taken over by the SFs due to the existence of a ‘competence vacuum’ or lack of adequate motivation on the part of the appropriate entities in the system.

Source: J.Brozek. 2000. Finances of local government—the first year

200. There was an inadequate upward adjustment of the structure of income of LGs in relation to the responsibilities defined for them. As pointed out by Swianiewicz, 37 the structure of tax income of LGs in Poland shows several visible weaknesses. Despite the proclamation made in Article 168 of the Constitution of Poland that “to the extent established by the state, units of local self-government shall have the right to set the level of local taxes and charges,” neither the powiats, nor the voivodships have a broad tax base that could increase their low incomes.

201. As compared to 2000, the structure of income of LGs in 2001 shows the predominant share of the general subvention for powiat and voivodship self-governments, which was 46.3% and 34.4% respectively. The targeted subsidies for the two levels of self- governments was 45% and 51.1% respectively for the year 2001.

202. Although the share of own income is relatively largest in gmina self-governments, as compared to powiat and voivodship self-governments, a declining trend is still discernable. It is shown by a drop of the share of own income, from 40.1% in 1995 to 33% in 2001. The pattern of gmina income is extremely fragmented.

203. Another disturbing development in the implementation of the reform was the relatively low quality of management in HCEs, SFs, and founding bodies. Although great efforts were made (with the use of foreign assistance) in training the staff of HCEs, SFs and

36,J.Brożek. 2000. “Finances of local government – the first year of operation” (in Polish), in Report on the financial status of the State in 1999, Institute for Finance of the University of Insurance and Banking in Warsaw, Warsaw, p.85 37 P.Swianiewicz. 2002. “Local taxes in the system of financing of tasks of local governments – theoretical topics and practice of schemes in Poland and in European countries” (in Polish), Samorząd Terytorialny, No. 12 42 LGs,38 the need in this area is still substantial. This is borne out by the findings of research on the quality of management in HCEs.39

204. Many practices have been observed that have a negative effect on the performance of the system. An example is the practice of shifting of part of the administrative costs onto the service providers by the SFs, or shifting part of the costs of primary care to outpatient specialist services and inpatient care.

205. SFs require that service providers send reports in electronic form, which in practice means that the task of maintaining records of persons covered by health insurance, determining and confirming the right of an insured person to services and analysis of the execution of the obligation of GHI has been transferred from the SFs into the hands of the service providers. Because of the poor control in the implementation of the reform, these practices have not been eliminated.

CONCLUDING REMARKS

206. The foregoing discussion and evaluation show that there have been significant lapses in all stages of health insurance reform, starting from its conceptual assumptions and planning procedures to its implementation.

207. In emphasizing the unsatisfactory state of affairs, however, it must be said that gaining autonomy by the establishments (decentralization of management) has by and large brought positive results. Autonomy combined with the introduction of Programs for Restructuring and Safety Shields in health care carried out since 1999 have made it possible to attain notable results in e.g. restructuring of the number of beds,40 creation of facilities and beds for long-term care, better use of resources, employment rationalization, and the emergence of an outsourcing market.41

208. The quality of the staff at the local level impacts the quality of policy advice and policy development on the one hand, and the quality of policy implementation and service delivery on the other. In this backdrop there is still scope for better incorporation and utilization of modern tools of human resource management like budgeting and expenditure management. A more concerted effort may be launched in training the staff of HCEs, SFs and LGs. This would improve the quality of management and free up resources for improved service delivery.

209. In the case of decentralization of financing, it is more difficult to draw up a list of achievements. There is no linkages of strategies of individual health care facilities with the strategy of voivodship and powiat self-governments. This constrains

38 e.g. the programs of the World Bank and Project HOPE in this respect 39 M.Kautsch, J.Klich. 2002. “Quality of management in health care establishments of the Małopolskie Voivodship. Results of pilot research” (in Polish), Kraków (article submitted for printing in periodical Organizacja i Kierowanie) 40 K. Czarniecka. 2002. “Effects of implementation of the Program of Restructuring of the Health Care System in Poland in the Years 1999-2001” (in Polish), Zdrowie i Zarządzanie, Vol. IV, No. 3-4, p.21 41 K. Czarniecka. 2002. “Complementary to publications related to NIK [Supreme Chamber of Control] report on the program of restructuring in health care” (in Polish), Zdrowie i Zarządzanie, Vol. IV, No. 3-4, p.23 43 synchronization and coordination of effort and may result in duplication or absence of coverage.

210. Long term service delivery may be enhanced by enhancing capacities like improving planning, risk appraisal and financial management. There is a clear need of sharply defining the relationship among ownership, management and financing in the health care system. Besides, there is a need to strengthen control functions so that there is transparent accountability for the responsibilities entrusted to the entities.

44 SELECTED REFERENCES

J. Brożek, Finanse. 2000. “Finances of Local Government – the First Year of Operation” (Samorządu Terytorialnego.– Pierwszy rok Funkcjonowania in Raport o Stanie Finansowym Państwa w 1999 roku), “Report on the financial status of the State in 1999”, Institute for Finance, the University of Insurance and Banking in Warsaw.

S. J. Burki, G. E. Perry, W. R. Dillinger. 1999. “Beyond the Center: Decentralizing the State” The World Bank, Washington.

P. Campbell, J. Klich. 1997. “The process of planning in units of the health care sector” (Proces Planowania w Jednostkach Sektora Opieki Zdrowotnej w Polsce”, Przegląd Organizacji), No. 1.

K. Czarniecka. 2002. “Effects of implementation of the Program for Restructuring of the Health Care System in Poland in the Years 1999-2001”(Efekty Realizacji Programu Restrukturyzacji Systemu Ochrony Zdrowia w Polsce w Latach 1999—2001), Zdrowie i Zarządzanie, Volume IV, No. 3-4.

K. Czarniecka. 2002. “Complementary to publications related to NIK [Supreme Chamber of Control] report on the program of restructuring in health care” (Uzupełnienie do Publikacji Związanych z Raportem NIK –u o Programie Restrukturyzacji w Ochronie Zdrowia), Zdrowie i Zarządzanie, Volume IV, No. 3-4.

K. Czarniecka, A. Huk. 2001. “Program of Health Care Restructuring” (Program Restrukturyzacji Opieki Zdrowotnej), Zdrowie i Zarządzanie, , Volume III, No. 1.

S. Golinowska, Z. Czepulis-Rutkowska, M. Sitek, A. Sowa, Ch. Sowada, C. Włodarczyk. 2002. “Health care in Poland After the Reform, CASE Reports” (Opieka Zdrowotna w Polsce Po reformie, Raporty) CASE No. 53/2002, Warsaw.

“ Governance and Accountability in a Decentralized Setting. An Examination of Selected Issues,” December 5, 2002 - mimeo

D. J. Hunter, M. Vienonen, W. C. Włodarczyk. 1998. “Optimal Balance of Centralized and Decentralized Management,” R. B. Saltman, J. Figueras, C. Sakellarides (eds.), Critical Challenges for Health Care Reform in Europe, Open University Press.

U. Kalina-Prasznic (ed.) 1999. “Encyclopedia of Law” (Encyklopedia Prawa), Wydawnictwo C. H. Beck, Warsaw.

M.Kautsch, J.Klich. 2002. “Quality of Management in Health Care Establishments of the Małopolskie Voivodship. Results of Pilot Research” (Jakość Zarządzania w Zakładach Opieki Zdrowotnej Województwa Małopolskiego. Wyniki badań Pilotażowych), Kraków (article submitted for printing in periodical Organizacja i Kierowanie).

45 M. Kautsch, J. Klich, M. Chawla, M. Kulis, B. Bulanowska, P. Campbell. 1999. “An Autonomous Public Health Care Establishment: Recommendations”) (Samodzielny Publiczny Zakład Opieki Zdrowotnej: Rekomendacje) Zdrowie i Zarządzanie, , Volume I, No. 2.

M. Kautsch, J. Klich, A. Mazur. 1996. “Processes of Planning in Health Care Units. Report on Research” (Procesy Planowania w Jednostkach Opieki Zdrowotnej. Raport z badań), Antidotum, , No. 11-12.

J. Klich. 1996. “Current Practice of Planning and Control in the Health Care System: Outpatient and Inpatient Care. Report on Execution of Task D.1. “Development of Local Initiatives for Health Care Reform.” Conference material. (Aktualna Praktyka Planowania i Kontroli w Systemie Opieki Zdrowotnej: Lecznictwo Otwarte i Zamknięte. Raport Wykonania Zadania D.1, „Rozwój Inicjatyw Lokalnych na Rzecz w Służbie Zdrowia”. Materiały konferencyjne), Antidotum , , No. 11-12.

J. Klich. 2001. “Building Health Protection Programs in the Voivodship” (Budowanie Programów Ochrony Zdrowia w Województwie), Zdrowie i Zarządzanie, Volume III, No. 1.

J. Klich. 1996. “Building a Strategic Plan for Health Care Units” (Budowanie Planu Strategicznego dla Jednostek Opieki Zdrowotnej), in: J.Skalik (ed.), “Current Problems in Health Care Management” (Aktualne Problemy Zarządzania Ochroną Zdrowia), Prace naukowe no. 719, Academy of Economics, Wrocław.

J. Klich. 1999. “Management Contracts in Conditions of Market and Systemic Limitations’ (Kontrakty Menedżerskie w Warunkach Ograniczeń Rynkowych i Systemowych), Zdrowie i Zarządzanie, , Tom I, Nr 4.

J. Klich. 1996. “Reform of Health Insurance – its Plan and Amendments” (Reforma Ubezpieczeń Zdrowotnych - Jej projekt i Zmiany), Polityka Społeczna, , No. 4.

J. Klich, M. Chawla, M. Kautsch. 1999. “Operation of Autonomous Public Health Care Establishments” (Funkcjonowanie Samodzielnych Publicznych Zakładów Opieki Zdrowotnej), Gospodarka Narodowa, , No. 1-2.

A. Kozierkiewicz, M. Kulis. 1999. “Health Care in Local Government” (Ochrona Zdrowia w Samorządzie Lokalnym), University Medical Publishers “Vesalius”, Kraków.

A. Kozierkiewicz, J. Klich. 1999. “Agreement – Management Contract” (Umowa - Kontrakt Menedżerski), Zdrowie i Zarządzanie, , Volume I, No. 1.

Z. Król. 1999. “Further Transformations of Autonomous Health Care Establishments” (Dalsze Przekształcenia Samodzielnych Publicznych Zakładów Opieki Zdrowotnej, Zdrowie i Zarządzanie), , Volume I, No. 5.

P. Swianiewicz. 2002. “Local Taxes in the System of Financing of Tasks of Local Governments – Theoretical Topics and Practice of Schemes in Poland and in European countries” (Podatki Lokalne w Systemie Finansowania Zadań Samorządów – Zagadnienia Teoretyczne i Praktyka Rozwiązań w Polsce oraz w Krajach Europejskich), Samorząd Terytorialny, , no. 12.

A. Wojtyna. 2000. “Decentralization of Public Finance” (Decentralizacja Finansów Publicznych), Gospodarka Narodowa, , No. 7-8

46 Annex 1 MODEL OF GENERAL HEALTH INSURANCE

no model

Preparation of changes

draft laws

Reform Of general health insurance - property - management as - financing a Position of founding body CHANGE

MODEL Role of payment remitter Implementation of change (EX POST)

Links between entities of health care system

Control and modification of process

47 Annex 2 QUESTIONNAIRE WITH RESPONSES: MANAGERS

Questionnaire for Managers of Health Care Facilities Introduction:

Dear Mr/Ms Manager,

We are conducting the study of decentralization in Polish health care. This study will describe, assess and evaluate the impact of decentralization in the health sector – particularly insofar as it relates to governance and accountability.

We define governance as the manner in which governments discharge their responsibilities, particularly insofar as it relates to effectiveness in delivery of public programs, overall transparency of operations, and general conformance with internationally accepted good business practices. Governance will be measured in terms of such qualitative indicators as: (i) the nature, type and level of regulation of the health insurance funds and health facilities; (ii) implicit and explicit policies and actions related to informal payments in the health sector, particularly in public facilities and involving public health personnel; and (iii) nature and level of economic and financial management and guidance for health insurance funds and health facilities. Similarly, we define accountability for the purposes of this study is defined in qualitative terms by such indicators as (i) adoption of such policy instruments and strategies as ensure that health services are produced and delivered so as to meet the ultimate objective of improving the health status of the people; (ii) financing and organizing health services in such a way so as to ensure universal access to health services for all; and (iii) adoption of such business practices as are deemed acceptable in the utilization of public funds.

In this study we want to capture the changes that occurred in Poland in the last few years following the enactment of major Acts and Regulations, such as: health facilities act from 1991, big cities reform from 1995, public administration reform from 1999, health insurance reform from 1999 and their impact on your health care facility.

Questions:

When did your institution become independent? If in year 1999, please respond to the following questions. If before 1999, we would request you to make a distinction on how the independence that happened before 1999 influenced your institution along the following dimensions and what was the impact of administrative and health insurance reforms on your institution as far as these areas are concerned.

Governance

48 1. How would you describe the nature and extent of autonomy that you have in managing your institution? In responding to the above, could you please refer to autonomy with respect to personnel and financial management, procurement of goods and services and day-to-day governance? 2. What was the nature of the autonomy before the “official” independence? 3. Could you please give some examples of the decisions that you are presently making yourself or within your institution? 4. Could you please give some examples of the decisions for which you need clearances from outside the institution? 5. From where do you need to get these clearances? 6. What is de jure and de facto role of the advisory board? 7. Who are the members of the advisory board? 8. Who performed these functions before your facility became independent? 9. Did the 1999 administrative reforms have any influence on the role of advisory board? 10. How often does the advisory board meet? 11. What issues are typically discussed during the advisory board meetings? 12. Can you request for an advisory board meeting if there are any urgent matters to be discussed? 13. In your opinion, what are the benefits and pitfalls of this kind of the advisory body? 14. Besides the advisory board, your facility also has a management board. In your opinion, what is the role of the management board? 15. What is the structure of the management board? 16. Are the members of the management board salaried or on managerial contracts? 17. Before independence, what was the structure of the managing body? 18. What was the influence of the 1999 administrative reforms on the structure of your institution management?

Human Resources Management The next few questions relate to Human Resource Management in your institution. 19. As you know, before independence, the number of FTE employed in health care institutions was predefined. Has this changed after independence, de jure and/or de facto? 20. What procedures are currently followed in personnel hiring? How has this changed since independence? 21. Who makes the decision to hire particular individuals? How has this changed since independence? 22. Are there any externally imposed limits in number of staff and the structure of the personnel? Did these limits exist before independence? 23. If yes, what are these? 24. And who sets them? 25. What are the procedures of firing the personnel? How has this changed since independence? 26. Who makes the decision to fire particular individual? How has this changed since independence?

49 27. Do you have to consult these decisions with trade unions? Has this practice changed since independence? 28. Is there any role for the public in defining who would be employed in or fired from your institution? For example, would you consider patient satisfaction surveys or any other tools examining public opinion in your decisions regarding the personnel? 29. Who decides salary and payment levels? Who decided them before independence?

Financial Management and Procurement Let me know shift to questions related to financial management and inputs management/ procurement in your institution. As you know there are a number of financial instruments that support management decisions. I would like to ask you about the practice of financial management in your institution. 30. As you know, the basis for the proper financial management is a well-prepared budget. Does your facility currently prepare a budget? Did it prepare a budget before independence? 31. Does your budget need to be approved by someone? If yes, by whom? 32. How has the practice of making the budget changed after independence? 33. What are the new elements of the budget now compared to before independence? 34. How do you monitor implementation of the budget? 35. What actions do you take if actual expenditures vary significantly from the budget? 36. Can you plan for external sources of financing such as: loans, credits and leasing? Does your facility plan for these? 37. Could you plan for these sources of financing before independence? 38. Is there any guarantee required from the owner or other party? If yes, from whom? 39. What kind of financial statements do you prepare on regular basis (monthly, semi- annually, annually)? What statements were prepared before independence? 40. Who approves them? Who approved them before independence? 41. Are these statements audited? If yes, how often? 42. Were these audited before independence? 43. In your opinion, has the nature of audits changed since independence? 44. If you have an end-year surplus, can you reallocate it in any manner? 45. If so, do you need any external clearances? 46. Prior to independence, could you retain and allocate surpluses, if any, in any manner? 47. Following independence, who is responsible for facility debts? 48. Who was responsible before independence? 49. Who makes decisions on allocating resources across services and expenditure- type? Who made these decisions before independence? 50. Who makes decisions regarding procurement of goods and services? Who made these decisions before independence? 51. Do you plan for supplies and stocks in your institution?

50 52. Did you plan for them before independence? Was that planning any different? If so, in what respect? 53. Who makes decisions regarding procurement of fixed assets? Who made these decisions before independence? 54. Do you have any investment plans? 55. How are these investment decisions made? 56. Is the basis for investment decisions different from before the independence?

Strategic planning 57. As you know one of the requirements of independence for the health facility is the preparation of the strategic plan. Does your institution have a strategic plan? 58. Who prepared it? 59. Was a strategic plan required before independence? 60. If not, did your facility have one nevertheless? 61. Since independence, did you modify your strategic plan? 62. Does your institution follow this plan? 63. Could you please give examples of few goals set by the strategic plan that you are currently implementing?

Ensuring patient rights and improving access to health care 64. Do you currently have frequent meetings with community leaders, patient representatives, society members etc.? Did you have these meetings before independence? 65. Does your strategic plan reflect the health services requirements of the people in the community that you serve? 66. Has this in any way changed the service mix that your facility provides? If yes, could you please give a few examples of this change? 67. Does your institution currently have a unit or person dealing with patient questions and complaints? 68. Did such an arrangement exist before independence? 69. How many complaints did you receive last year? 70. How many complaints did this facility receive in the year before it became independent? 71. If there is a significant difference, what do you think is the reason? 72. What other recourse does the patient currently have if you did not deal with his/her complaint satisfactorily? 73. What recourse did the patient have prior to independence? 74. Has your facility ever been sued by the patient/family before independence? After independence?? 75. Is the facility insured against malpractice? Did this insurance exist before independence? 76. Since independence, has there been a change in the time that a patient has to wait before getting health services? If so, what is the nature and extent of this change? 77. There is evidence of widespread informal payments in Poland. Are you aware of incidents of informal payments within your institution and to any health personnel working in your facility?

51 78. Can you give examples of actions that you have taken when you have been informed about informal payments being accepted by any of your staff? 79. In your opinion, has the prevalence of informal payments changed since independence? If so, what has been the nature and extent of this change?

Proposed health care reforms 80. As you know the current Government has just announced the strategy for health care reforms that includes the consolidation of Sickness Funds into one Health Fund, unification of the contracting rules and provider payment methods, and creation of the public hospital network. Do you think these changes will have any impact on your institution? If yes, what?

52 Annex 3 QUESTIONNAIRE WITH RESPONSES: LOCAL GOVERNMENTS

Questionnaire for Local Governments

Introduction:

Dear Mr/Ms Director,

In this study we want to capture the changes that occurred in Poland in the last few years following the enactment of major Acts and Regulations, such as: health facilities act from 1991, big cities reform from 1995, 1999 Public Administration Reform, health insurance reform from 1999 and their impact on your health care facility.

Questions:

When did you take a responsibility for health care? If before 1999, we would request you to make a distinction on how did you perform you responsibilities before 1999 and after the 1999 Public Administration Reform.

Governance

1. What is the nature of your involvement in health care sector?

53 2. What was it before 1999 Public Administration Reform (and Big Cities Act where applicable)? 3. Could you please give some examples of your tasks as a local regulator of the health care now? 4. Could you please give some examples of similar tasks from before 1999 administrative reforms (and Big Cities Act where applicable)? 5. What is the structure and responsibilities of health care authorities within the local government? 6. What was it before the 1999 Public Administration Reform (and Big Cities Act where applicable)? 7. If there is any, how often does the Health Care committee meet? 8. What was it before the 1999 Public Administration Reform (and Big Cities Act where applicable)? 9. By the law, local governments are responsible for local health policies. Could you please give few examples from your government of recent policy decisions that you have taken? 10. What was the situation before 1999 Public Administration Reform (and Big Cities Act where applicable)? 11. Local government as the founder and owner of the health care facilities has rights to monitor and control the health care facilities performance. How often do you monitor health care facilities performance? 12. How often did you monitor these facilities before the 1999 Public Administration Reform (and Big Cities Act where applicable)? 13. Did introduction of the health insurance cause any change in your monitoring practices? 14. Could you give any examples of your decisions related to health priorities setting in the recent years (after 1999)? 15. Could you give any examples of your decisions related to health priorities setting before the 1999 Public Administration Reform (and Big Cities Act where applicable)? 16. Does the Local government decide what health priorities to invest in?

Health care management and strategic planning

17. Does your local government have a strategic plan for the health care sector? 18. Did you have such a plan before 1999 Public Administration Reform (and Big Cities Act where applicable)? 19. What is the role, if any, that the local government has in day-to-day operations performed by health facilities? 20. What role did it have before the 1999 Public Administration Reform (and Big Cities Act where applicable)? 21. Did introduction of the health insurance cause any change in your involvement in day-to-day operations performed by health facilities? 22. As you know, the law requires that the local government prepare plan for primary care/specialist care/hospital services delivery. Do you prepare the plans? 23. How often do you update the plans?

54 24. Have you prepared them before the 1999 Public Administration Reform (and Big Cities Act where applicable)? 25. Does the local government determine the structure of the health institutions budget? 26. How was it before the 1999 Public Administration Reform (and Big Cities Act where applicable)? 27. Do you require regular reports from the health care facilities? If yes, how often and what is their nature? 28. How was it before the 1999 Public Administration Reform (and Big Cities Act where applicable)?

Ensuring patient rights and improving access to health care

29. What is the role, if any, that the local government has in protecting patient rights, and responding to patient needs? 30. How was it before the 1999 Public Administration Reform (and Big Cities Act where applicable)? 31. Does your government currently have a unit or person dealing with patient questions and complaints? 32. Did such an arrangement exist before the 1999 Public Administration Reform (and Big Cities Act where applicable)? 33. How many complaints did you receive last year? 34. How many complaints did this government receive in the year before the 1999 Public Administration Reform (and Big Cities Act where applicable)? 35. If there is a significant difference, what do you think is the reason? 36. What other recourse does the patient currently have if you did not deal with his/her complaint satisfactorily? 37. What recourse did the patient have prior to the 1999 Public Administration Reform (and Big Cities Act where applicable)? 38. There is evidence of widespread informal payments in Poland. Are you aware of incidents of informal payments within your local government operations? 39. Can you give examples of actions that you have taken when you have been informed about informal payments being accepted in any of the institutions reporting to you? 40. In your opinion, has the prevalence of informal payments changed since 1999 Public Administration Reform (and Big Cities Act where applicable)? If so, what has been the nature and extent of this change?

Improving health status of the population

41. As you know one of the main roles of the local government in the area of health care is to support development and implementation of the health promotion programs. On average what percent of your budget for health care do you spend on health promotion? 42. What was the situation before the 1999 Public Administration Reform (and Big Cities Act where applicable)?

55 43. Can you give examples of the health promotion programs financed from your budget now and before the 1999 Public Administration Reform (and Big Cities Act where applicable)? 44. Does your local government determine the services mix- scope and type of services provided in your area? 45. What was the situation before the 1999 Public Administration Reform (and Big Cities Act where applicable)? 46. Could you please give examples of the services that you included in your plans for health services delivery, that are of an important nature to your area residents? 47. Could you also give examples of such services before the 1999 Public Administration Reform (and Big Cities Act where applicable)?

Proposed health care reforms

48. As you know the current Government has just announced the strategy for health care reforms that includes the consolidation of Sickness Funds into one Health Fund, unification of the contracting rules and provider payment methods, and creation of the public hospital network. Do you think these changes will have any impact on your institution? If yes, what?

56 Annex 4 QUESTIONNAIRE WITH RESPONSES: SICKNESS FUNDS

Questionnaire for Sickness Funds

Introduction:

Dear Mr/Ms Director,

In this study we want to capture the changes that occurred in Poland in the last few years following the enactment of major Acts and Regulations, such as: health facilities act from 1991, big cities reform from 1995, 1999 Public Administration Reform, health insurance reform from 1999 and their impact on your health care facility.

Questions:

Governance

1. Who is responsible for day-to-day administration in your Sickness Fund? 2. Who takes strategic decisions on such issues as contracting, services contracted, reimbursement, etc.? 3. We believe that all Sickness Funds have a Management Board and Sickness Fund Councils. The roles of both these are defined in the Health Insurance Act. In your Sickness Fund and in your opinion, what are the real responsibilities and power of the Management Board and the SF Council?

57 4. What issues are typically discussed during meetings of the Management Board and Sickness Funds Council? Could you please give a few examples of these? 5. For what issues do you have to take prior clearance from the Sickness Funds Council? Could you please give a few examples of these? 6. For what issues do you have to take prior clearance from the Management Board? Could you please give a few examples of these? 7. Can you request for Sickness Funds Council meeting if there are any urgent matters to be discussed? 8. What is the de facto and de jure role of UNUZ in the day-to-day administration of the Sickness Fund? 9. What is the de facto and de jure role of UNUZ in strategic decision-making of the Sickness Fund? 10. For what issues do you have to take prior clearance from UNUZ? Could you please give a few examples of these?

Strategic planning

11. Does your Sickness Fund have a strategic plan for the health care sector? 12. What is the role, if any, that the Sickness Fund has in day-to-day operations performed by health facilities? 13. Does the Sickness Fund determine the structure of the health institutions budget de jure and de facto? 14. Do you require regular reports from the health care facilities? If yes, how often and what is their nature? 15. Are you required to submit regular reports to any external agency? If so, what kinds of reports and to whom?

Ensuring patient rights and improving access to health care

16. Sickness Fund as a financier of the health care services has rights to monitor and control the health care services quality and access to health care services. How often do you monitor it? 17. Could you please give few examples of the actions that you have taken recently when the results of the monitoring of patients’ access to health services were not satisfactory to you? 18. In your opinion, how does your Sickness Fund ensure quality of health service? 19. Do you encourage or demand any quality assurance assessments and patients’ satisfaction surveys? 20. Do you have frequent meetings with community leaders, patient representatives, society members etc.? 21. Does your strategic plan reflect the health services requirements of the people in the community that you serve? 22. Has this in any way changed the service mix that your Sickness Fund finances? If yes, could you please give a few examples of this change?

58 23. Does your institution currently have a unit or person dealing with patient questions and complaints? 24. How many complaints did you receive last year? 25. What other recourse does the patient currently have if you did not deal with his/her complaint satisfactorily? 26. Do you have any regulations that you impose upon the provider related to the time that a patient has to wait before getting health services? 27. There is evidence of widespread informal payments in Poland. Are you aware of incidents of informal payments within providers that you finance? 28. Can you give examples of actions that you have taken when you have been informed about informal payments being accepted by any of those providers?

Improving health status of the population

29. As you know one of the main roles of the local government/voivod in the area of health care is to support development and implementation of the health care programs. To what extent do you use those programs in your decision on financing health services? 30. Could you give few examples of situation when you did not use the recommendation of the voivod health program and financed other services? 31. Do you determine the services mix- scope and type of services provided in your area? 32. Could you please give examples of the services that you financed last year, that are of an important nature to your area residents?

Proposed health care reforms

33. As you know the current Government has just announced the strategy for health care reforms that includes the consolidation of Sickness Funds into one Health Fund, unification of the contracting rules and provider payment methods, and creation of the public hospital network. Do you think these changes will have any impact on your institution? If yes, what?