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Chapter 2: Health reforms in Croatia from the user perspective
Miroslav Mastilica
Introduction
Apart from the general changes in Croatia’s political system and economy, a principal motive for health reforms in Croatia was a prevalent dissatisfaction with the functioning of the previous health system. All the main actors of the system were dissatisfied: the government was dissatisfied with the economic inefficiency of the system, physicians were dissatisfied with their income, and citizens were dissatisfied with access (long waiting times), the behaviour of health personnel, and periodic shortages of medicines (Oreskovic 1995; Šarić and Rodwin VG. 1993)
Changes in Croatia’s health system, which began in 1990 with the introduction of a new system of social health insurance, and have continued in various forms ever since, were primarily oriented towards solving the problem of financing the health system, rationing health services, and introducing private incentives for the provision of services. Health reforms started with changes and amendments to health legislation which led to two new acts: the Health Care Act and the Health Insurance Act, both passed in August 1993.
The ultimate goal of the reforms was to reduce health expenditure without jeopardizing the health status of the population. In the situation of economic decline which characterised the early 1990s, public investment in health services fell to just two-fifths of the level achieved in 1990, with gross domestic product (GDP) at only half the level of 1990 (Hebrang, 1994). Under these circumstances, most reforms aimed at restricting spending and controlling the cost of providing health services. In 1994, government expenditure on health services amounted to 7.3% of GDP, increasing only slightly to 7.8% in 2008 (WHO 2011a).
The first health reforms that were introduced were the centralization of financing and a clearer definition of the ownership of health facilities. Health care institutions had previously operated under a regime of ‘social ownership’ within the former Yugoslav system of ‘self-management’ (see Chapter 1). Under this system of communal ownership the owner of assets was ‘society’ as a whole, not the state or the private sector. Under the reforms, this system was transformed into public ownership, and assets were taken over by the state and placed in the hands of either central or local government. A central health insurance fund (the Croatian Health Insurance Institute - CIHI) under direct control of the government was established in 1993. The CIHI was responsible for the financing and control of health service utilisation. New standards and norms of health service coverage for the insured population were established in 1994. The volume of services covered by the compulsory health insurance scheme was limited to up to three visits in primary health care, five prescriptions, two referrals to a specialist, and two dental consultations for each insured person per year. The list of prescribed drugs was also reduced, and a uniform sick-leave benefit was introduced.
Furthermore, an improved system for the financial management of health services was implemented in order to control expenditure. Physicians were contracted by the CIHI to provide health services. Under their contract, these providers were only paid for providing a fixed standard of service, defined as the number of prescriptions and referrals per patient per year. Rationing was thus established as a control mechanism, mostly in primary health care, and physicians became responsible for any over-utilization of services, which resulted in a reduction of their salaries.
Cost-sharing (in terms of co-payments) was introduced for almost all health services and drugs. Exemptions were made for children and students, persons on minimum income, the unemployed, people aged 65 and over, veterans, military service personnel, and those with chronic mental illness or certain communicable diseases. Co-payments were also introduced for maternity care and preventive services (immunization). In 1995, this regulation was changed to provide exemptions for children up to 15 years of age, persons with an income below one-and–a-half of minimum salary, retired persons with an income of less than two minimum salaries, disabled people with less than three minimum salaries, veterans, refugees, and other exempted groups, as mentioned above.
In addition to compulsory health insurance, voluntary health insurance was introduced in 1994. Public voluntary insurance offered supplementary health insurance, covering a higher standard or quality of care, e.g. for additional services and drugs excluded from the compulsory insurance plan. Private voluntary health insurance offered a complete insurance plan outside the compulsory package, and access was limited to those with an annual income above 240,000 kunas (about €30,000).
The privatization of health services was another major goal of health reforms. It took two basic forms. Firstly, in 1996 private practitioners were permitted to work and provide services in public health care institutions. Secondly, in 1997 private practice was permitted in privately owned facilities, provided by self-employed physicians. General practitioners (GPs) enlisted patients under a contract with the CIHI and were also permitted to treat private patients. In 2000, 28% of physicians were established in private practice, as were 78% of dentists. Public health care facilities were rented to physicians who became private practitioners with a contract with the CIHI. By 2004 over one quarter (28%) of GPs were working in the private sector. Of those working privately, almost three quarters (74%) worked in rented offices. In 2009, the number of private sector GPs had decreased slightly to 27%, as some physicians previously working privately had returned to the public sector (Croatian Institute for Public Health 2009).
With the new Health Insurance Act adopted in 2001 the government aimed to solve the CIHI’s financial problems by introducing compulsory basic health insurance and a supplementary private health insurance scheme, a practice known as ‘cost-sharing’ (or ‘co-insurance’). Exemptions are made for socially vulnerable groups, such as children, low-income families, and the chronically ill, estimated to account for about 40% of the population. In the basic health insurance package, the depth of insurance coverage was reduced from 85% to 50% of the total cost in specialist and hospital care, and from 75% to 25% of costs for drugs. The difference is covered by supplementary health insurance for those who have it, or else paid by patients out-of-pocket. Preventive and primary health care services were covered in full.
In the last two decades since the country’s independence, the health reforms in Croatia, as elsewhere in Europe, were to a large degree a response to the need to contain costs in a situation of scarce resources (WHO/EURO 1996a; Saltman RB, and Figueras J. 1997; Mossialos E. and Le Grand J. eds. 1999). A number of measures aimed at cost containment (such as rationing of services, penalties for excessive over-prescribing or referrals, limitations on the positive drug list (the list of drugs that could be prescribed within the benefits package of compulsory health insurance without co-payments), reductions in health care budgets, and increases in co-payments) have been introduced over the last two decades in the Croatian health system, with only limited success and reluctant acceptance from providers and the public (Mastilica and Chen 1998; Vončina et al. 2007).
Reform outcomes and problems
Health reforms in Croatia entailed formal transformations in health policy and legislation. The re-organization of the health system was carried out through continuous alterations in health care regulations, the introduction of new laws on health care provision and health insurance, and a large number of additional regulations introduced each year by the Ministry of Health and the CIHI. Under the pressure of external factors (destruction of assets during the war, and subsequent economic difficulties) and financial deficits in the CIHI, the government constantly sought cost-containing measures that promised to solve the financial problems of the system, but with little success. However, in pursuit of the financial goals of the reform, the government often neglected the interests and needs of those whom the health system should serve in the first place – the patients.
One of the problems associated with health reforms in Croatia was that reductions of public resources for health, and the introduction of limits to the provision of health services and medicines have led to lower health care standards. This is particularly visible in the provision of preventive services. The drastic decline of preventive check-ups and home visits made by health care providers, with a decline of home visits by physicians of 60% between 1990 and 1995, had a negative effect on the health status of the most vulnerable groups, such as children, women, workers in hazardous occupations, unemployed people and older people (Orešković et al. 1997; Vončina et al. 2007).
At the same time, the increase in cost-sharing (co-payments and supplementary insurance), the reductions in the list of prescription drugs covered by compulsory health insurance, the rise of the private medical sector and other forms of out-of-pocket expenditure have shifted costs to health care users. Out-of-pocket payments for health care have increased to such an extent that they have become a significant burden on patients. In particular, a greater burden of health care payments has been falling on the lower socio-economic groups (Mastilica and Božikov 1999).
Privatisation and marketisation of health services have created a two-tiered system in access to and quality of services. In the growing private medical sector, which comprised 31% of health workers in 2004, compared to 23% in 2000, the rich have easier access and can buy better quality services, whereas in the public sector some patients must even wait for basic services, and have difficulties in obtaining necessary medicines. The result of this partial transformation of the health system, from one based on the supply of public goods and services to one based on the purchase of private goods and services, has been an increase in social inequalities in health care access and use.
Impact of health reforms from the perspective of users
In Central and Eastern European countries, as in more developed countries, health systems are rarely evaluated from the user perspective. The reason might be that the objectives of governments in reforming health systems are primarily related to financing and cost containment, which are often reduced to expenditure cuts (Maarse 1995), while patients’ interests are not that high on the political agenda. However, the Regional Office for Europe of the World Health Organization has established a set of health reform principles which puts a strong emphasis on consumer rights and patients’ views (WHO/EURO 1997; Vienonen M. 1995). Thus, the Ljubljana Charter on Reforming Health Care stressed, as a fundamental principle, that health reform must address patients’ needs, taking into account their expectations about health and health care. Patients’ voices and choices should make as significant a contribution to shaping health services as the decisions taken at other levels of decision-making (WHO/EURO 1996b).
To describe the impact of health reforms in Croatia from the perspective of users, this chapter presents the results of several studies carried out between 1994 and 2004 in all parts of Croatia. These studies comprise two surveys in 1994, one in 2000, and an analysis of the Croatian Adult Health Survey of 2003. The objectives of these studies were to analyze consumer satisfaction with the health system, elicit out-of-pocket expenditure and access to services and medication, and to describe patient attitudes towards health reforms. The studies also examined the differences among socio-economic and demographic groups regarding satisfaction, attitudes, access and expenditure. The full methodology and sampling used in these studies have been described elsewhere (Chen M. and Mastilica 1998; Mastilica and Chen M. 1998; Mastilica and Božikov J. 1999; Mastilica and Babić SB. 2002. Mastilica and Kušec S. 2005).
Patient experience, perceived health care costs and inequalities in access in 1994
The respondents of the first study (N=562), carried out in two large cities, Zagreb and Split, were asked questions concerning their satisfaction, perceived access to services and medication, and perceived health care costs (Table 1). The data were collected in 1994, a year after the main changes in the Croatian health system had been introduced. The data set contains information on the consumers’ opinion on the quality of health services, perceived health care expenses, access to services and medication, and attitudes toward health reform. It also contains data on health service utilization, self-perceived health status, and sociodemographic characteristics. The sample consisted of 562 adults, 280 from Zagreb and 282 from Split, randomly selected from households of all districts in these two cities. Croatia is a small, urbanized country, with only 7% of the population living in the rural area. More than half of Croatia’s urban population lives in Zagreb and Split. The selected adults were face-to-face interviewed by trained interviewers. The response rate for the survey was about 70%. There were 43% male and 57% female respondents in the sample, with no significant differences between the two cities.
Following the initial health reform of 1993, more than two fifths (44.4%) of respondents were dissatisfied with health services in general and almost half (48%) with the quality of health facilities and equipment. Among the reported reasons for dissatisfaction with health services, the most pronounced were 'unkind behaviour of health care personnel' (20.4%) and 'long waiting times' (18.5%). Among the reasons for satisfaction, the most often cited were the kind behaviour of health personnel towards patients (21.5%), and the quality and professional level of care (15.8%).
Table 1. Satisfaction, perceived health care costs and access in 1994 (N=562)
Satisfaction with health services in general %Very satisfied / satisfied 17.8
Neither satisfied nor dissatisfied 37.8
Dissatisfied / very dissatisfied 44.4
Satisfaction with quality of facilities and equipment %
Very satisfied / satisfied 11.3
Neither satisfied nor dissatisfied 40.7
Dissatisfied / very dissatisfied 48.0
Perceived problems in getting access to needed medication %
Not problem at all / not problem 27.8
Not problem / problem 25.6
Difficult / very difficult problem 46.6
Perceived costs of drugs, when buying over-the-counter %
Very low / low 9.8
Neither low nor high 16.1
High / very high 74.1
Perceived problem with out-of-pocket payments for health care %
Not problem at all / not problem 25.8
Not problem / problem 24.4
Big problem / very big problem 49.9
"In case of your illness, do you believe that you can receive all needed services and drugs %
Strongly believe / believe 32.6
Believe / not believe 28.3
Disbelieve / strongly disbelieve 39.1
"According to your experience, do you believe that some people have easier access to physicians and receive better care and medication than others %?"
Happens rarely / happens occasionally 12.2
Happens not rarely / happens not often 12.6
Happens often / happens very often 75.2
When asked about access to needed medication, almost half (46.6%) reported problems in obtaining them and almost three quarters (74.1%) reported that the prices of medicines bought over-the-counter were high or very high. Regarding out-of-pocket health care expenditure, such as co-payments for services and prescriptions, payments for medications, gratuities and gifts, half of respondents reported that out-of-pocket expenditure was a big or very big problem for them.