Draft healthcare law aims to inject quality into medical services

A new healthcare law is currently being drafted to allow private insurers to break into the health insurance market, which is currently controlled by public bodies. The new law is due to be ready in December. Additional provisions include changes to the legal status of hospitals, a stricter mechanism for dealing with pharmaceutical expenses and providing rural-dwellers with better healthcare coverage. The setting up of a national health card, electronic prescription and digital patient medical records system should also ensure more efficiency.

Ladislau Ritli, the minister of public health, described the current plight of the healthcare system, which is underfinanced and inefficient in spending its allocated funds. The comments were made at an event co-organized by Mediafax and the National Health Insurance House CNAS on the future of healthcare in Romania.

The management of care units (hospitals) can be improved and current demographic trends in Romania – the number of senior citizens is growing while many younger people are emigrating – will put additional pressure on healthcare financing in the years to come. In addition, local life expectancy at birth is eight years below the EU average, due to the high mortality rate of young adults and infants. Ritli said that around RON 4.4 billion would be spent on pharmaceuticals this year and that 2012 will bring further expansion in generic drugs. By the end of this year, a minimum package of medical services will be made available to the insured, through negative listing, allowing the standardization of medical services provided to patients.

Lucian Duta, president of the CNAS, highlighted that the gap between funding and consumption of medical services has widened to EUR 1 billion and that next year will bring balance in this area. For healthcare reform to succeed, public insurance bodies need to compete with private companies, added Duta, who believes that private competitors should be involved in all tiers of the healthcare system.

The new law will be completed in two or three weeks, in a joint effort that includes specialists from the Health Ministry, CNAS, Presidency and Public Finance Ministry. If Romanian insurance companies want to participate in the insurance business, but lack the adequate capital, an association between insurers may be allowed, said the CNAS president. The law took longer to draw up as the mechanism through which private health insurance players can access the market had to be set up. If the legal and public consultation processes go smoothly, and the law is passed without impediment, the private insurers could start signing up patients from 2013.

Ritli commented that the new law will introduce competition on the health insurance market, offer flexibility in the management of hospitals, which could become foundations, and improve the management of human resources. However, the exodus of medics to Western countries cannot be halted at present, added the minister.

Frans van der Ent, country manager at Eureko, which holds a 30 percent share of the Romanian health insurance market, added that companies ready to enter the healthcare insurance business will have to secure EUR 500 million as a buffer against risks and to ensure solvency, out of the EUR 3.5 billion that represents payments made by the CNAS today, and which should be turned into insurance premiums once the transfer to private operators takes place. Ent added that the profit margin in this business is 1 percent of the volume of annual written premiums. He noted that accessing the market means costs of at least RON 1 million for marketing campaigns and additional sums for IT infrastructure and other business expenses. At present, the voluntary health insurance market totals EUR 10 million.

Cristian Vladescu, general director of the National School of Public Health and Sanitary Management, who contributed to the new healthcare law draft, cited a survey showing that 79 percent of families with a household income that exceeds EUR 700 would take out private health insurance, while 55 percent earning EUR 230 would also do so. The survey results indicate that over 80 percent of companies would pay insurance premiums for employees if fiscal deductibility options were set up. Vladescu stated that a monthly payment of EUR 10 to 15 for these premiums would generate an additional EUR 1.5 billion in annual revenue for the healthcare budget.

Ovidiu Posirca