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Health Care Systems in Transition
Written by
Stayko Koulaksazov, Svetla Todorova,
Ellie Tragakes and Stoyka Hristova
Edited by
Ellie Tragakes
Health Care Systems in Transition
2003
The European Observatory on Health Care Systems is a partnership between
the World Health Organization Regional Office for Europe, the Government of
Greece, the Government of Norway, the Government of Spain, the European
Investment Bank, the Open Society Institute, the World Bank, the London School
of Economics and Political Science, and the London School of Hygiene &
Tropical Medicine.
Bulgaria
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Keywords:
DELIVERY OF HEALTH CARE
EVALUATION STUDIES
FINANCING, HEALTH
HEALTH CARE REFORM
HEALTH SYSTEM PLANS – organization and administration
BULGARIA
© European Observatory on Health Care Systems, 2003
This document may be freely reviewed or abstracted, but not for commercial purposes. For rights of reproduction, in part
or in whole, application should be made to the Secretariat of the European Observatory on Health Care Systems, WHO
Regional Office for Europe, Scherfigsvej 8, DK-2100 Copenhagen Ø, Denmark. The European Observatory on Health
Care Systems welcomes such applications.
The designations employed and the presentation of the material in this document do not imply the expression of any
opinion whatsoever on the part of the European Observatory on Health Care Systems or its participating organizations
concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its
frontiers or boundaries. The names of countries or areas used in this document are those which were obtained at the time
the original language edition of the document was prepared.
The views expressed in this document are those of the contributors and do not necessarily represent the decisions or the
stated policy of the European Observatory on Health Care Systems or its participating organizations.
European Observatory on Health Care Systems:
WHO Regional Office for Europe
Government of Greece
Government of Norway
Government of Spain
European Investment Bank
Open Society Institute
World Bank
London School of Economics and Political Science
London School of Hygiene & Tropical Medicine
ISSN 1020-9077 Vol. 5 No. 2
Suggested citation:
Koulaksazov, S. et al. in Tragakes, E. (ed.) Health care systems in transition:
Bulgaria. Copenhagen, European Observatory on Health Care Systems, 5(2)
(2003).
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Foreword ............................................................................................. v
Acknowledgements .......................................................................... vii
Introduction and historical background ......................................... 1
Introductory overview .................................................................... 1
Historical background .................................................................... 8
Organizational structure and management .................................. 11
Organizational structure of the health care system ...................... 11
Planning, regulation and management ......................................... 20
Decentralization of the health care system .................................. 23
Health care financing and expenditure ......................................... 25
Main system of financing and coverage ...................................... 25
Health care benefits and rationing ............................................... 27
Complementary sources of financing .......................................... 28
Health care expenditure ............................................................... 35
Health care delivery system ............................................................ 41
Primary health care and public health services ............................ 41
Secondary and tertiary care .......................................................... 50
Social care .................................................................................... 58
Human resources and training ..................................................... 60
Pharmaceuticals and health care technology assessment ............. 65
Financial resource allocation .......................................................... 67
Third-party budget setting and resource allocation ..................... 67
Payment of hospitals .................................................................... 69
Payment of physicians ................................................................. 71
Health care reforms ......................................................................... 73
Aims and objectives ..................................................................... 73
Content of reforms and legislation ............................................... 74
Reform implementation ............................................................... 78
Conclusions ....................................................................................... 89
References ......................................................................................... 91
Contents
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Foreword
T he Health Care Systems in Transition (HiT) profiles are country-based
reports that provide an analytical description of a health care system
and of reform initiatives in progress or under development. The HiTs
are a key element of the work of the European Observatory on Health Care
Systems.
HiTs seek to provide relevant comparative information to support policy-
makers and analysts in the development of health care systems in Europe. The
HiT profiles are building blocks that can be used:
• to learn in detail about different approaches to the organization, financing
and delivery of health services;
• to describe the process, content and implementation of health care reform
programmes;
• to highlight challenges and areas that require more in-depth analysis; and
• to provide a tool for the dissemination of information on health care systems
and the exchange of experiences of reform strategies between policy-makers
and analysts in different countries.
The HiT profiles are produced by country experts in collaboration with the
Observatory’s research directors and staff. In order to facilitate comparisons
between countries, the profiles are based on a template, which is revised
periodically. The template provides the detailed guidelines and specific
questions, definitions and examples needed to compile a HiT. This guidance is
intended to be flexible to allow authors to take account of their national context.
Compiling the HiT profiles poses a number of methodological problems. In
many countries, there is relatively little information available on the health
care system and the impact of reforms. Due to the lack of a uniform data source,
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quantitative data on health services are based on a number of different sources,
including the WHO Regional Office for Europe health for all database, Or-
ganisation for Economic Cooperation and Development (OECD) Health Data
and data from the World Bank. Data collection methods and definitions
sometimes vary, but typically are consistent within each separate series.
The HiT profiles provide a source of descriptive information on health care
systems. They can be used to inform policy-makers about experiences in other
countries that may be relevant to their own national situation. They can also be
used to inform comparative analysis of health care systems. This series is an
ongoing initiative: material is updated at regular intervals. Comments and
suggestions for the further development and improvement of the HiT profiles
are most welcome and can be sent to observatory@who.dk. HiTs, HiT
summaries and a glossary of terms used in the HiTs are available on the
Observatory’s website at www.observatory.dk.
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Acknowledgements
T he HiT profile on Bulgaria was written by Stayko Koulaksazov (Ministry
of Health), Svetla Todorova (Ministry of Health), Ellie Tragakes
(European Observatory on Health Care Systems) and Stoyka Hristova
(Zakrila). The HiT was edited by Ellie Tragakes. The research director of this
HiT was Josep Figueras.
The Observatory sends their condolences to the family of the recently
deceased Stayko Koulaksazov.
The Observatory gratefully acknowledges Antonio Duran (Tecnicas de
Salud), Gena Grancharova (Higher School of Medicine, Pleven), Dominic S.
Haazen (World Bank) and Emilia Tontcheva (WHO Liaison Office, Bulgaria)
for reviewing the HiT. We are also grateful to the Bulgarian Ministry of Health
for its support.
The current series of Health Care Systems in Transition profiles has been
prepared by the research directors and staff of the European Observatory on
Health Care Systems. The European Observatory on Health Care Systems is a
partnership between the WHO Regional Office for Europe, the Governments
of Greece, Norway and Spain, the European Investment Bank, the Open Society
Institute, the World Bank, the London School of Economics and Political
Science, and the London School of Hygiene & Tropical Medicine.
The Observatory team working on the HiT profiles is led by Josep Figueras,
Head of the Secretariat, and research directors Martin McKee, Elias Mossialos
and Richard Saltman. Technical coordination is led by Susanne Grosse-Tebbe.
Jeffrey V. Lazarus managed the production and copy-editing, with the support
of Shirley and Johannes Frederiksen (lay-out) and Jo Woodhead (copy-editor).
Administrative support for preparing the HiT on Bulgaria was undertaken by
Uta Lorenz.
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Special thanks are extended to the WHO Regional Office for Europe health
for all database, from which data on health services were extracted; to the OECD
for the data on health services in western Europe; and to the World Bank for the
data on health expenditure in central and eastern European countries. Thanks
are also due to national statistical offices that have provided data.
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Introduction and historical background
Introductory overview
Bulgaria is located in south-eastern Europe bordered by Romania to the north, the Black Sea to the east, Turkey and Greece in the south, and the former Yugoslav Republic of Macedonia as well as the Federal
Republic of Yugoslavia to the west. The national capital is Sofia. Enjoying a mild continental climate, the country covers 110 993 km2, and consists mainly of mountainous terrain with lowlands in the north and south east. Bulgaria’s location, between Europe and Asia, has played a strong role in shaping its political and economic strategies.
The population numbered 7 974 000 in 20011 (Table 1); 68.4% living in urban areas. The ethnic composition (a contested estimate) is: 85.8% Bulgarian, 9.7% ethnic Turks, 3.4% Roma and 1.1% other groups. The religion of the majority, 85%, is Bulgarian Orthodox, 13% are Muslim, and the rest a mix of smaller sects. The Bulgarian language comes from the Slavic group of languages and is written in the Cyrillic alphabet.
The Romans conquered the land of Bulgaria in 46 BC. A Turkic group, the “Proto-Bulgars”, arrived in the middle of the 6th century but were assimilated eventually by the more numerous Slavs. In 681, Khan Asparouk founded the first Bulgarian kingdom. Tsar Boris I adopted Orthodox Christianity in the 9th century and in 870 the Bulgarian Orthodox Church became independent, with its own patriarch.
1 This is a contested estimate. According to other sources the population is estimated to be lower on account of unrecorded emigration (1).
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Fig. 1. Map of Bulgaria2
2 The maps presented in this document do not imply the expression of any opinion whatsoever on the part of the Secretariat of the European Observatory on Health Care Systems or its partners concerning the legal status of any country, territory, city or area or of its authorities or concerning the delimitations of its frontiers or boundaries.
Source: The World Factbook, 2003.
Bulgaria has spent long periods as a vassal state to more powerful neighbours and was ruled by the Byzantine Empire in the 11th century. Five centuries of Ottoman rule began in 1386, although the Bulgarians remained largely self- governing agrarian communities and continued to practice Christianity. Turkish power waned in the 18th century and Bulgarian culture began to revive in the 19th century. A revolt against the Turks was brutally suppressed in 1876. Serbia then declared war on Turkey and was joined by Russia and Romania. Bulgaria was liberated by Russia, which forced Turkey to cede a large part of the Balkan Peninsula to Bulgaria in 1878 in the Treaty of Berlin, but the western powers later reversed most of these gains. The collision of geopolitical interests of Russia and western European nations led to their interest in “the Eastern question”. Independence Day is celebrated as 3 March 1878, marking the beginning of the modern Bulgarian state, with full independence from the Ottoman Empire in 1908.
The First Balkan War broke out in 1912, since the four Balkan states, Bulgaria, Serbia, Montenegro and Greece, claimed Macedonia, which had
0 50 100 km 0 50 100 mi
Romania Dan
ub e
Greece Turkey
Black Sea
Aegean Sea
Vidin Lom
Pleven
Ruse
Sofia
Blagoevgrad Plovdiv
Stara Zagora
Varna
Burgas Nesebur
Kurdzhali
Serbia and
Montenegro
The former Yugoslav Republic of Macedonia
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remained part of the Ottoman Empire. Bulgaria was defeated in the Second Balkan War and Macedonia was divided between Serbia and Greece. In an attempt to regain Macedonia, Bulgaria sided with Germany in the First World War, and again in the Second World War. An underground movement during the war opposed Tsar Boris III and his pro-German government. In August 1944, Bulgaria declared itself neutral in the face of the advancing Soviet Army, which entered Bulgaria in September 1944. The Bulgarian communists under Georgi Dimitrov overthrew the monarchy.
Bulgaria was declared a republic. In the elections of October 1946, Georgi Dimitrov was elected as the Communist Prime Minister. Soviet troops left the country and disputes with Greece were settled. In 1955, Bulgaria was admitted to the United Nations but remained isolated from the rest of the world under the influence of the USSR.
Collectivization of agriculture began in the 1940s and the country embarked upon major industrialization; these developments were accompanied by severe repression. Due to a relatively flexible approach to economic reform, despite general adherence to communist principles of organization, Bulgaria became one of the most prosperous countries in Eastern Europe. This prosperity began to falter by the end of the 1980s, however, due to sharply rising oil prices, reduced Soviet subsidies, delays in structural reforms, and unsuccessful attempts to finance simultaneously investment and consumption. Attempts to forcibly assimilate Bulgaria’s Turkish minority in the 1980s attracted international attention and led to the mass emigration of ethnic Turks, resulting in a serious depletion of the agricultural workforce. The Bulgarian economy was supported by massive foreign loans at this time.
With the advent of perestroika, the fall of the Berlin Wall and public disquiet about the political and economic policies of the country, Bulgarians staged widespread public demonstrations. Todor Zhivkov had been Bulgaria’s leader since 1956, but was deposed in November 1989 by an internal coup within the Communist Party. In 1991 he was the first of the deposed Communist leaders to be put on trial for corruption.
The Communist Party relinquished its monopoly, changed its name to the Bulgarian Socialist Party and won the free elections held in June 1990. A new Constitution was adopted in July 1991. There was marked political instability during the first seven years after the end of communist rule. Mass strikes provoked by price rises and unemployment resulted in the resignation of the socialist government. The Union of Democratic Forces (UDF), a coalition group, won the elections of October 1991 as the first non-communist government. A year later, the UDF government was defeated in the parliament and a new coalition installed. The Bulgarian Socialist Party won the elections in late 1994.
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Following anti-government protests, an early election was held in April 1997 and won by the UDF with an absolute majority. The policy priority of the new government was to stabilize the economy and pass important legislation based on the principles of privatization, decentralization and social protection of the poorest, with the support of large International Monetary Fund (IMF) loans. Parliamentary elections held in 2001 were won by the National Movement party of Simeon II, the former King of Bulgaria. A coalition government was formed, and the former King became Prime Minister.
The Constitution of July 1991 established Bulgaria as a multi-party parliamentary democracy, governed by a single chamber (National Assembly) of 240 parliamentarians directly elected for four years based on proportional representation. The head of state is the president, directly elected for a term of five years and a maximum of two terms.
Despite some decentralization initiatives since 1991, Bulgaria remains highly centralized. The state is now divided into twenty-eight regions (oblasti) including the capital, Sofia (an increase over the eight regions that existed until 1998), with prefect-type administrative personnel appointed at central level. A number of ministries, including the Ministry of Internal Affairs, the Ministry of Finance and the Ministry of Health, have deconcentrated administrative responsibilities to twenty-eight regional offices.
There are 262 municipalities, each of which elects a municipal council and a mayor. Since 1992, these have been delegated substantial responsibilities for health care, local services, education and social affairs. Municipalities are responsible for collecting local taxes (retained for local budgets) and republican taxes, some of which are retained, the rest passed to the Ministry of Finance. Central government also distributes revenue to the municipalities. Although there are guidelines from central government, municipalities have some discretion about the allocation of local resources.
Bulgaria applied for membership of the European Union in December 1995 but is not among the first wave of central and eastern European countries with which the European Union has opened negotiations (2). Nonetheless, there are expectations that Bulgaria will make a swift transition toward EU membership.
Social and economic indicators Throughout the 1990s the population of Bulgaria has been declining while the population has been ageing, due to natural movement and low birth and high mortality rates. Over 16% of the population is aged 65 years and over (Table 1), the same proportion as the European Union average. The birth rate has been dropping steadily since the second half of the century (3). Deaths have
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outnumbered births throughout the 1990s, and the population ageing process will continue.
Population loss is due also to migration. The National Statistical Institute of Bulgaria estimates that up to 600 000 people emigrated between 1989 and 1995. This included members of the ethnic Turkish community in the wake of attempts at forcible assimilation by the previous regime. Many young people have left the country in the past ten years, seeking better opportunities for education and greater job satisfaction. Since 1995, the average annual number of emigrating individuals has been estimated at 30 000. These demographic processes signal a process of depopulation of the country.
The Bulgarian population has achieved high literacy rates, averaging 98% (for ages 15 and above).
Table 1. Demographic indicators
Indicators 1990 1995 1996 1997 1998 1999 2000
Population (thousands)b 8 767 8 427 8 385 8 283 8 230 8 191 8 149 % population
under 18 yearsb 24.8 22.3 21.7 22.5 20.4 20.0 19.7 % population
aged 65+ yearsa 12.9 – 15.3b 15.6 16.0 16.1 16.3
Crude birth rate per 1000 populationb 12.1 8.6 8.7 7.7 7.9 8.8 9.0
Crude death rate per 1000 populationb 12.5 13.6 14.0 14.7 14.3 13.6 14.1
Source: a WHO Regional Office for Europe health for all database (4); b UNICEF TransMONEE database 3.0 (5); c National Statistical Institute (6).
Before the communist era, Bulgaria was a largely agricultural country of small rural landholders. Bulgaria nationalized its agriculture and industry to a greater extent than the central European countries such as Poland. Until the 1970s, Bulgaria was a leading producer of engineering and agricultural products. Living standards did not rise as quickly as expected, however, and the economy was in decline by the late 1980s.
Now one of the poorest countries in central Europe, Bulgaria has moved slowly from a command to a market-oriented economy. The population’s hopes of a better life have not been met during the last ten years. By the mid-1990s, real wages had fallen to less than half their 1990 level in real terms (Table 2). Bulgaria lacked the infrastructure necessary for sustained growth: dependent on imports of energy, continuing to accumulate substantial foreign debts, with trade ties predominantly with the former Soviet Union. The 1990 moratorium on debt accumulated during the communist era cut off Bulgaria from
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international financial markets until debt rescheduling in 1994. After the near collapse of the economy in the early 1990s, there were signs of recovery but this was not sustained. There was a sharp fall in real GDP in 1996 and 1997 together with triple digit inflation, associated with a currency crisis (Table 2). Slow progress on structural reforms, including the failure to privatize state assets, led the International Monetary Fund to cancel loans.
After the democratic government of the UDF came to power in 1997, significant efforts were made to reverse the negative trends of earlier years. Bulgaria restructured its foreign debts in 1997. The International Monetary Fund required Bulgaria to cut government expenditure, restructure the Soviet- style economy and set up a currency board. A key part of the structural reform programme in 1998, therefore, was the privatization of state enterprises. Economic development efforts focused on structural changes in the economy and agriculture, privatization and increased exports, which contributed to a rise in GDP. From very low to negative growth rates in most of the 1990s, Bulgaria has registered positive growth since 1998, reaching 5.8% in 2000 (Table 2). Inflation has been reduced dramatically and the banking system has stabilized. Since 1998 the Bulgarian economy has received much support from the International Monetary Fund and the World Bank.
By 1999 real GDP was 65% of the 1989 level, in common with countries in the Commonwealth of Independent States (CIS) (1). Even when adjusted for purchasing power parity, Bulgaria stood at PPP US $4959 in 1998 (7), compared to the central and eastern European average of PPP US $6923. There is a sizeable informal economy, based in part on barter, which is estimated to be 18–30% of GDP. Corruption on a sizeable scale is an additional serious social problem.
The consequences of the economic crisis are considerable for government services. As a percentage of GDP, government expenditure dropped from 65.9% in 1990 to 34.9% in 1997, increasing to only 44.5% in 2000.
Unemployment has increased dramatically, reaching 17.9% in 2000 according to government statistics. The International Labour Office (ILO) estimates actual rates to have increased to as much as 21% in 1993. Surveys by the National Statistical Institute reported that only 52% of the labour force (people of working age) was employed in 1996, with high unemployment among young people and women.
The economic transition has given rise to widespread poverty in the country, with an estimated 35% of the population living below the poverty line (8). There are regional variations in income distribution, the northern part of the country generally being poorer than the southern. According to a 1999 joint survey by Bulgarian academic institutes, 80% of the agricultural population lives in poverty (1).
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Table 2. Macroeconomic indicators
Indicators 1990 1995 1996 1997 1998 1999 2000
GDP growth rate in constant prices (% change)b -9.1 2.1 -10.9 -6.9 3.5 2.4 5.8 Annual inflation ratec 23.9 32.9 310.8 578.6 7.0d 11.3d 4.2d
GDP $ per capitac 2 180 1 559 1 189 1 224 1 484 1 510 1 459 Government expenditure % GDPb 65.9 43.0 47.6 34.9 40.3c 43.47c 44.5c
Real average wage index (1989=100)b 111.5 60.2 49.6 – – – – Average month wage index (1995=100) – 100.0 81.2 67.7 81.7 89.1 91.3 Registered unemployment ratec 1.5 11.1 12.5 13.7 12.2 16.0 17.9
Source: a WHO Regional Office for Europe health for all database (4); b UNICEF TransMONEE database 3.0 (5); c National Statistical Institute, Annual Statistics1998 (6); Sofia and Ministry of Finance figures (7); d National Statistical Institute (10).
Health indicators Health indicators generally worsened in Bulgaria as the economy deteriorated, with a greater deterioration in rural areas. Bulgaria is part of the growing east– west gap in mortality rates since the 1960s, especially among men of middle age. This trend continued in the transition years of the 1990s, as shown by life expectancy, which dropped from 75.1 years for women in 1989 to 74.6 in 1999 and 2000, and for men from 68.6 years in 1989 to 67.6 in 20003 (Table 3). Life expectancy in Bulgaria throughout the 1990s was similar to that of central European countries but better than the countries of the former Soviet Union. Mortality rates from chronic conditions such as ischaemic and cerebrovascular diseases have increased (strokes being six times the EU average), as have deaths from traumas. This pattern is associated with unhealthy lifestyles, unbalanced nutritional patterns, a worsening environment and increasing poverty. Rates of tobacco use have risen rapidly in recent decades with the proportion of smokers in the male population among the highest in Europe (11). Consequently lung cancer rates are rising steeply among middle-aged males. In addition, some communicable diseases that were previously controlled, such as tuberculosis, have begun to rise.
Infant mortality rates, under-5 mortality rates and maternal mortality rates also worsened during the 1990s (Table 3). These rates are worse than in the central European countries but better than the countries of the former Soviet Union.
3 Male life expectancy actually bottomed in 1995 and 1996 (at 67.1 years) and since then has shown a continuous though small improvement. Female life expectancy by contrast appears to have been more stable throughout the 1990s.
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Abortions have exceeded the number of births since at least 1980 (12), and Bulgaria has one of the highest abortion rates in Europe (13). In 2000 the number of abortions was smaller than the number of births for the first time.
Table 3. Population health indicators
Indicators 1989 1995 1996 1997b 1998 1999 2000
Female life expectancy at birthb 75.1 74.9 74.6 74.4 74.4 74.6 74.6 Male life expectancy at birthb 68.6 67.1 67.1 67.2 67.2 67.3 67.6 SDR ischaemic heart disease 0–64, per 100 000 malesa d 85.4 70.9 64.2 68.3 64.1 59.8 57.4 SDR cerebrovascular disease 0–64, per 100 000 malesa d 63.7 56.5 53.8 57.1 56.4 49.6 50.6 Infant mortality (per 1000 live births)b 14.4 14.8 15.6 17.5 14.4 14.6 13.3 Under 5 mortality rate per 1000 live birthsb 18.3 19.0 19.8 18.1 15.3 15.1 15.0 Maternal mortality (per 100 000 live births)b 18.7 19.5 19.4(â) 18.7 15.2 23.0 17.6 Abortions per 100 live birthsa 118.0 135.0 137.0 137.0 122.0 110.0 77.0
Source: a WHO Regional Office for Europe health for all database (4); b UNICEF TransMONEE database 3.0 (5); c Ministry of Health health statistics (14); d National Statistical Institute data (10). Note: for 1995–2000 the SDR is for the total population including male and female, NSI data.
Historical background
First half of the 20th century Collectively funded health care services were introduced in Bulgaria at the end of the 19th century following independence from the Ottoman Empire. Between 1879 and 1903 health care laws were enacted and facilities built. District and municipal physicians were appointed from among the local private physicians for all towns with a population of more than 4000 people. Doctors’ assistants (feldshers), based in villages, worked on a partly private basis too. Hygiene and sanitation improvements were made. State-funded free hospital care for the poor was established. Large state hospitals were built during the Russian–Turkish war, initially as military hospitals. The Bulgarian medical and dental associations were set up in 1901.
The first law on public health care was passed in 1903. Some private health facilities were constructed early in the century including hospitals, sanatoria and polyclinics. A social and health insurance scheme that integrated existing small funds was set up in 1923. All employees in government, public and private
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enterprises and on farms were legally required to have compulsory insurance against accidents and illness, and to insure for maternity care and retirement pensions. This single fund was similar to the Bismarckian insurance system. New hospitals and sanatoria were constructed across the country. The Bulgarian Red Cross also offered a range of health services. The medical university of Sofia was founded in 1918 and became a centre for medical research.
In 1929, the People’s Health Act was enacted. Responsibility for the maintenance of health facilities was passed from the state to the municipalities. Facilities for maternity care and for preventive care such as immunizations were developed along with school health care, health promotion and hygiene. A network of “domestic doctors” practised family medicine. The rural community gradually obtained better access to health care. Health insurance cover was widened, so that by 1948 nearly 70% of the population was covered, including all state employees. A Ministry of Health was created in 1944 to manage and coordinate the entire health care system that now consisted of a well-developed public sector and a smaller private sector.
From 1948 to 1990 In 1948, the communist administration began to replace the existing system with the Soviet “Semashko” health care model. Private hospitals and pharmacies were nationalized and brought under central state control. The health insurance system was abolished. Central government became the sole funder and provider of health care services. The Bulgarian Medical Association was abolished and replaced by a single trade union representing all health care workers. Training was increasingly centralized and postgraduate education taken over by the Ministry of Health. A network of health services was expanded, with health centres and maternity clinics built in the villages. The family doctor network was replaced by polyclinics, which were integrated with the hospitals. Primary health care was organized within a district (rayon) and patients allocated to polyclinic doctors according to their address.
From the 1950s, sanitary–epidemic stations were set up across the country. These public health services aimed to eradicate communicable diseases such as tuberculosis, malaria, typhoid and parasitic diseases. Extensive immunization was carried out, and dental services and a network of pharmacies developed. Improved access to health services and reductions in communicable diseases reduced infant mortality and increased life expectancy. Research institutes and hospital clinics were established in the main branches of medicine.
The 1960s and 1970s were characterized by the construction of new hospitals throughout the country and more doctors were trained after the establishment
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of five new University medical schools. The 1973 People’s Health Act set out the legal basis and principles for the health care system.
The Bulgarian health system achieved much during the communist period including the guarantee of free and accessible health care. A network of health services was established across the country and many communicable diseases were largely controlled. The inflexible and centrally controlled health system, however, lacked the capacity to respond to worsening indicators for chronic diseases, and contained few incentives for efficient provision of good quality health care. As the economy declined, the funds needed to sustain the health care system were not available and dema½nd exceeded the supply of services, although shortages were never officially acknowledged. Since the change of government in 1989, many of the elements of this model of health care had become thoroughly discredited in Bulgaria (15).
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Organizational structure and management
Organizational structure of the health care system
For the greater part of the 1990s the Bulgarian health care system was based mainly upon the Soviet Semashko model of public sector provision, tax-based financing, weighted towards hospital care, and with few
incentives for providers to improve the effectiveness and efficiency of health care. Reforms in the early 1990s began by returning to some earlier traditions. First, laws were passed to allow private health care services; second, medical associations were re-established; and third, responsibility for many health care services was devolved to the municipalities. Far more radical reforms were initiated toward the end of the 1990s, involving the introduction of a system of social health insurance, development of primary health care based on a model of general practice, and rationalization of the health care delivery network. All these areas of reform have impacted upon the organizational structure of the health care system (Fig. 2).
The Ministry of Health The Ministry of Health develops and implements national health policy, defines goals and priorities of the health system, works out national health programmes for improvement of the health status of the population, and develops draft legislation concerning the health sector. It retains responsibility for overall supervision of the health care system, also administered since 1995 by regional structures. Each of the 28 regions has a Regional Health Centre, an administrative office of the Ministry of Health, which carries out the ministry’s health policy in the administrative regions of the country.
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The Ministry of Health is responsible for the emergency care network throughout the country, as well as the public health network consisting of several national centres and the State Sanitation and Anti-Epidemic Control (a network of 28 Hygiene and Epidemiology Inspectorates with headquarters in each of the country’s 28 administrative centres).
The operational functions of the Ministry of Health include:
• analysis of epidemic situations and preparation of information for public relations;
• supervision of institutions under its control (the Regional Health Centres, Hygiene and Epidemiology Inspectorates, National Centres, health care
Fig. 2. Organizational structure of the health care system
Ministries of Defence, Internal Affairs and Transport
Ministry of Finance
Ministry of Health
Higher Medical Council
Ministry of Education
and Science
Parliament
Government
National Health Insurance Fund
Sector hospitals and polyclinics
Municipal governments
Establishments for outpatient
care
Municipal hospitals
Dispensaries
Medico-social homes
Hospices
Emergency care
networks
“Pirogov” National
Institute of Emergency
Care
28 regional emergency
centres
Public Health
Network
National Centre of Hygiene, Medical Ecology
and Nutrition
National Centre
of Public Health
28 hygiene and
epidemiology inspectorates
Blood Transfusion
Network
Universal hospitals
and medical school clinics
Higher medical schools
Health establishments
Regional health centres
National Centre of
Communicable and Parasitic
Diseases
National Centre
for Blood Transfusion
Regional centres for
blood transfusion
National health
establishments
Regional hospitals
Pulmonary hospitals
Hospital for mental diseases
Hospitals for
rehabilitation
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4 The changes in legal status of health care institutions referred to here will be discussed in the sections Health care delivery system and Health care reforms. 5 Whereas this is presently the responsibility of the Ministry of Health, there is some question whether the Ministry of Health or the National Health Insurance Fund (NHIF) will do this over the long run. 6 This refers to all primary care institutions as well as diagnostic and other health care institutions following implementation of the 1999 Law on Health Care Establishments, involving their transformation into trading companies.
establishments) with respect to implementation and enforcement of legislation, development of guidelines concerning activities of health establishments, etc.;
• registration of private health care establishments and transformed health care establishments for inpatient care in accordance with Law on Care Health Establishments;4
• accreditation of health care establishments;5
• working out contracts and carrying out privatization procedures of pharma- ceutical and health trading companies;6
• organization of tenders for central purchasing of life-supporting and life- saving pharmaceuticals, consumables, coordination and control of deliveries and distribution;
• registration of pharmaceutical producers, wholesalers and pharmacies;
• organization and control of maintenance and renovation activities of health establishments funded by the Ministry of Health;
• contracting for financing of health establishments and financial audit within the Ministry of Health;
• financing and payment of health establishments under its control;
• planning and supervision of ongoing structural reforms in the health sector;
• harmonization of health legislation with European norms in field of public health.
The Ministry currently owns and administers a number of national research centres. These include respectively the National Centres of Communicable and Parasitic Diseases; Hygiene, Medical Ecology and Nutrition; Public Health; Health Informatics, and Radiobiology. The national centres for tertiary care include 12 specialized university hospitals for acute care, 5 medical school hospitals,7 and 7 National Centres (Oncology Cardiovascular Diseases, Physiotherapy and Rehabilitation, Sports Medicine, Emergency Care, Prostheses and Plastic Surgery, and the Clinical Hospital “Lozenec”).
The Ministry of Health governs and administers 32 regional multi-profile hospitals for acute care, and a number of regional specialized hospitals including 11 psychiatric hospitals, 12 hospitals for pulmonary diseases, and 18 specialized
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hospitals of rehabilitation from chronic diseases. In addition, the Ministry administers the Executive Agency on Pharmaceuticals, which registers medicines and drugs, and controls the national pharmaceutical market.
The regional structures of the Ministry of Health in the 28 administrative regions include 28 Regional Centres on Health Care, 28 Centres of Emergency Care which provide emergency care for the population and also have branches in the smaller towns, and 28 Hygiene-Epidemiological Inspection stations which support the implementation of national health policy at regional level.
The Ministry of Health coordinates activities with other ministries, the National Health Insurance Fund, Bulgarian Medical Association, Association of Dentists in Bulgaria and the Association of Pharmacists in Bulgaria.
Other ministries that collaborate with the Ministry of Health include the following:
Ministry of Finance As the chief financing body in the country, the Ministry supervises financing of the health sector and contributes to identification of the aims and objectives of health policy and strategy. The Ministry of Finance is a party to the loans concluded for external financing in support of health reforms.
Ministry of Environment and Waters This ministry has responsibility for all aspects of the environment and to ensure reliable protection against chemical, physical and biological pollution, as well as waste disposal. It collaborates with the Ministry of Health on concerns of a healthy environment.
Ministry of Education and Science In the context of the National Health Policy and Strategy, the policy of this ministry is to provide schools and students with knowledge and skills necessary for the development of well-informed and independent judgement for the improvement of their health and safety. The introduction of modern health- education programmes in schools is to lay the foundations of new individual behaviour with respect to health and lifestyles, while the development of school sports will contribute to health promotion during school age and beyond.
7 Before 2000 university hospitals were autonomous institutions that were also involved with teaching activities. Medical school hospitals, by contrast, were inpatient clinics which were under the administration of the respective medical school. With the reform of hospital care in 2000/2001 (following the 1999 Law on Health Care Establishments) all these inpatient clinics were registered as autonomous trade companies, under the same principles as the 12 university hospitals.
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Ministry of Agriculture and Forests The main tasks of this Ministry in compliance with the aims of the National Health policy are to:
• guarantee the safety of foods for mass consumption;
• guarantee the yields, processing and sale of milk and dairy products according to EU standards;
• carry out activities against diseases originating from domestic animals (tuberculosis, brucellosis, salmonella, etc.);
• carry out tests to detect risks from food additives and methods for their elimination.
Ministry of Communications and Transport In connection with the high incidence of road accidents which cause numerous injuries, disability and death, the Ministry of Communications and Transport concentrates its efforts in three main areas:
• raising the level of public awareness for transportation safety
• devoting special attention to the most vulnerable in accidents: children and elderly
• implementation of road construction projects which are efficient and safe.
The Ministry of Communications and Transport, together with the Ministry of Internal Affairs, the Ministry of Education and Science and the Ministry of Health, will undertake a campaign for safety of children on the road under the slogan “Children and roads – how to reduce the danger of accidents.”
Ministry of Labour and Social Policy The tasks of the Ministry of Labour and Social Policy include the organization, coordination and control of state policy in the following spheres:
• revenues and living standards
• social security
• protection in case of unemployment and promotion of employment
• labour market
• social assistance and social services
• social support and protection of children
• increased control over securing healthy and safe working conditions.
The Ministry of Labour and Social Policy, the Ministry of Health and the National Health Insurance Fund are obliged to ensure a smooth transition to
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the new system of health insurance. This is being accomplished through the introduction of the health insurance system in a step-by-step fashion. In 2000, the health insurance system covered only outpatient care. Since 2001, coverage was extended to a part of hospital care. Every year the health insurance-financed portion of hospital expenditures is increased, reducing the amount of financing by the state and municipal budgets.
Higher Medical Council This consultative body, chaired by the Minister of Health, has 24 members. Eight of the members are representatives of ministries (five from the Ministry of Health and one from each of the Ministries of Transport, Defence and Internal Affairs); eight from the doctors’ and dentists’ associations; and eight from the medical universities. The council meets at least four times a year and acts as a consultative body concerning health policy, the hospital network, medical education and postgraduate medical training. This Council is also responsible for registration of private health care facilities for ambulatory and hospital care.
The Council determines the main priorities of national health policy and medical aspects of demographic problems in the country. It provides opinions about draft laws and the legislative regulations of the Ministry of Health and advises on financial and investment policy, medical technologies’imple- mentation and human resources planning and qualifications. It suggests criteria for quality assessment of diagnostic and preventive activities.
Municipalities Municipal Councils and mayors are elected under the 1991 Local Self- Government Law. The ownership of many health care facilities has been transferred to municipalities. Partial responsibility for financing was transferred to the municipalities in 1991, and ownership of most facilities devolved in 1992. Health care facilities were recognized as legally constituted entities under amendments to the Health Law in 1997. At present, the municipalities own a large number of diagnostic and consultative centres, municipal hospitals for acute care, some specialized hospitals and outpatient clinics, all of which predominantly serve the needs of the respective municipality. In addition, municipalities are responsible for specialized paediatric and gynaecological hospitals and for specialized regional dispensaries (for pulmonary diseases, oncology, dermato-venereology, psychiatry and sports medicine).
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Parallel health care services A number of ministries (other than the Ministry of Health) own, manage and finance their own health care facilities. These are the Ministries of Defence (for the military and their families), Internal Affairs (for the police and their families) and Transport (for its employees and their families). Each of these has its own hospitals and polyclinics; for example the Ministry of Transport owns eight hospitals, the Ministry of Defence owns 14. These parallel health care systems are in the process of re-organization: the Ministry of Health recently absorbed their parallel hygiene and epidemiology services, while the number of hospitals owned by the Ministry of Defence has been reduced significantly.
Changes within the parallel sector have been strongly influenced by broader health care reform trends, such as hospital bed reduction which is common for all health establishments and transformation into trade companies (see section Health care delivery system). Yet they continue to be financed by the budget of the responsible ministries, which are the owners of the respective hospital institutions. Some hospitals (for example the Medical Academy of Defence) are open to the broader public but only for private patients or patients with diseases from clinical paths contracted with the National Health Insurance Fund.
Health Insurance Fund The National Health Insurance Fund (NHIF) is an autonomous institution for compulsory health insurance that was established in accordance with Bulgarian legislation. The Health Insurance Law adopted by the Bulgarian parliament in 1998 introduced a Bismarckian type of health insurance system, with only one health insurance agency and mandatory health insurance payments deducted from personal income. Parliament decides the size of health insurance payments and each year determines the budget of the National Health Insurance Fund. The NHIF is the biggest purchaser of health care services, signing contracts with providers.
The main function of the NHIF is the management of financial resources for medical care of the population, with a view to the eventual total coverage of needs and guarantee of accessible, affordable and high-quality health care. Through its regional bodies, the Regional Health Insurance Funds (RHIFs), the NHIF finances the entire health care network for outpatient care, and since 1 July 2001 began to participate in the financing of those hospitals that have signed a contract with the Fund.8
8 As will be discussed in detail in the section Main system of finance and coverage, the National Health Insurance Fund currently funds only 20% of hospital expenditures, with the balance covered by budgetary financing.
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Professional organizations The Bulgarian Medical Association was re-established in 1990, as were professional associations of dentists and pharmacists. In 1998, the parliament adopted a Law of Professional Organizations of Physicians and Dentists giving legal status to these two organizations. These defend the rights and professional interests of their members and represent them in negotiations with the National Health Insurance Fund. They also participate in the development and endorsement of major legislative acts in the sphere of health care, proposed and adopted by Parliament. The two medical associations are parties to the National Framework Contract, which stipulates the conditions for provision and payment for health care in accordance with health insurance legislation. These organizations are responsible for continuing education and training of physicians and dentists, and exercise ethical and professional control for observing good medical practices and the ethical norms.
Organizations have also been formed to represent nurses, midwives and paramedical workers, although these have yet to exert much influence.
Universities The medical universities, including Sofia, Varna and Plovdiv Medical Universities and the Medical Schools in Pleven and Stara Zagora, are largely autonomous institutions, coordinated jointly by the Ministry of Health and the Ministry of Education and Science. Until 1991, the Medical University in Sofia administered 12 university hospitals within the territory of Sofia, but subsequently retained only a supervisory role over their activities as the Ministry of Finance directly financed the hospitals. Since the beginning of 1999 curative care in university hospitals has been financed and administered by the Ministry of Health; the Ministry of Education and Science finances teaching activities in these hospitals.
Until the endorsement of the 1999 Law of Health Care Establishments, the rest of the Medical Schools administered and financed their clinics from allocated funding received from the Ministry of Health and the Ministry of Education and Science. There were separate funds for curative care and teaching activities. With enforcement of the provisions of the 1999 Law on Health Care Establishments in 2000–2001, the hospitals of medical schools became registered as hospitals for acute care with the legal status of clinics of trade companies (see footnote 7).
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The private sector Private practice has expanded dramatically since it was legalized in 1991 (having been banned in 1972). At present, private practice involves mainly dental offices and physicians’ surgeries and consulting rooms, pharmacies, laboratories, and outpatient clinics and polyclinics. In addition there are about 18 inpatient health care establishments.
Following the introduction of the reform in outpatient care in 2000, many institutions (the single and group medical practices for primary care, outpatient medical practices for specialized outpatient care, medical and diagnostic– consultative centres, dental surgeries, laboratories, and consulting rooms for specialized care, etc.), started functioning as private entrepreneurs by signing contracts with the health insurance fund to provide medical care to the population. Support staff working for the private entrepreneurs are employed on a contract basis.
Before this reform, private doctors had to register with municipalities but were employed in the public sector and maintained a private practice using government facilities. Following the reform, all providers for outpatient care registered their practices in the Regional Health Centres of the Ministry of Health. Services in the private sector are paid for out-of-pocket by patients if the providers are not contracted with the National Health Insurance Fund (NHIF). Most of them (perhaps up to 95 %) now have contracts with the NHIF. Specialists working in the hospitals have fewer opportunities for private practice.
Physicians with private practices that were well established before the reform preferred to remain in private practice, because the fees from private patients are higher than those established by the NHIF. Additionally, due to the gatekeeper function of general practitioners which limits the number of visits to specialists, the income of specialists was reduced. No exact figures are available, but perhaps as few as 4–5% of outpatient doctors have no contracts with the NHIF. Doctors have been forced to sign contracts with the NHIF as the private market remains limited; most patients cannot afford to pay out-of pocket for medical care. Patients who choose to see a doctor privately do so mostly for specialists, less so for primary care physicians.
Most outpatient care, therefore, can now be considered as privately provided though publicly financed. Private hospitals involve only 6% of the total number of hospitals, and these concentrate only 0.5% of total bed numbers (2000 data). None of the private hospitals has contracts with the NHIF. The patient pays entirely for medical services in health care establishments that are not under contract with the NHIF.
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All outpatient care providers act as entrepreneurs. The municipalities own the premises in outpatient care. At the start of the reform the municipalities provided buildings and equipment from the former polyclinics at very low rents to diagnostic and consultative centres and single and group practices for primary and specialized outpatient care. New modern equipment for primary health care was provided by a World Bank loan and transferred as ownership of the municipalities for general practitioners working in municipal facilities. Once a doctor retired or left the profession, the facilities and equipment were offered by the municipality to another general practitioner.
Since the introduction of the 1999 Law on Health Care Establishments, physicians and dentists own their single practices for primary and specialized medical and dental care. Group practices, medical centres, diagnostic– consultative centres, laboratories and hospices are established as companies, cooperatives, shareholding or limited liability companies by the state and the municipalities, either independently or jointly with other persons.
In addition to the system of mandatory health insurance, the law also provides an opportunity for additional insurance with private health insurance funds. About ten private health insurance funds have been registered in Bulgaria to date, as yet only few have been licensed. Voluntary health insurance need not be only supplementary, as private insurance companies may offer insurance for a full range of services, including those offered by statutory provision.
The voluntary sector There are a number of non-governmental organizations in the health sector. These include organizations that existed during the communist period, such as those for the blind, the deaf and the disabled. In addition, a number of newer organizations have developed, representing people with multiple sclerosis, diabetes and cancer.
No other organized consumer groups as yet exist in Bulgaria. There is an association of nurses, but it is not an official association recognized by law as a partner in negotiation processes.
Planning, regulation and management
The Ministry of Health formulates policy, drafts legislation and plans programmes. Policy analysis capacity was supported by World Bank and Phare projects from 1996 to 1998. Other organizations are consulted on health
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planning either through the Higher Medical Council or directly, such as the medical universities and the National Association of Hospitals. The 28 regional health centres of the Ministry of Health also collect health statistics information for the National Centre of Health Informatics. These regional health centres are to implement national policy at local level and ensure communication between local and central authorities.
The Ministry of Health produced a National Health Strategy that was adopted by Parliament in 1995. This broad policy document contained little detail on how plans might be implemented (12). A new policy document of the Ministry of Health National Health Strategy “Better health for a better future of Bulgaria” and an action plan for implementation were developed with the support of WHO (11). The two documents were adopted by a decision of the Council of Ministers in April 2001 and outline the key priorities in government health care policy for the next ten years, including measures for overcoming some negative tendencies and improving the health of the nation.
By law the Ministry of Health has the power to regulate all health care facilities in the country, even those owned by other ministries or local governments. However it does not exercise a great deal of control over these institutions. The health care system still suffers from insufficiently effective co-ordination between the central level and the regions, despite the existence of the 28 regional health centres.
The Ministry of Health drafts standards, regulations and indicators for the accreditation of inpatient health care establishments. A large number of hospitals (both public and private) were accredited in 2000 and 2001, as a means of rationalizing the hospital network. Accreditation was performed by the Accreditation Board, a commission consisting of persons with special training and a certificate of entitlement to participate in the process. The 1999 Law on Health Care Establishments also foresees accreditation for outpatient facilities that would become diagnostic and consultation centres with more than ten different specialties and possessing at least one medical laboratory as well as X-ray equipment. Accreditation is an ongoing process.
The Ministry of Health directly runs its national institutes and administers other services through 28 regional health centres, in cooperation with the municipalities (see Fig. 2). The municipalities, as the owners of most health facilities, have yet to develop a management capacity.
The 1999 Law on Health Care Institutions allowed health care institutions to convert into legally and financially self-governing entities with managerial autonomy. Most of these are now registered as trade companies, and have become autonomous and self-governing.
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In 2001 the hospitals, too, were transformed into trade companies, though they still receive funding mainly from central or local budgets. In addition, as of 2001, they are also financed from the National Health Insurance Fund (see below), and private patients. Hospitals are only just beginning to develop financial autonomy, and it is very difficult to speak about results. Although legally free to manage their finances, at this first stage they are obliged to maintain salary levels commensurate with the public sector. They are permitted to hire staff, manage their finances, sign contracts with the NHIF, sign contracts for additional financing from donors, organize their services and establish inter- institutional rules, and to manage their overall activities. However, lack of administrative and managerial experience has led to difficulties among which is the accumulation of large debts, posing serious problems in regulation and administration of the inpatient sector.
The NHIF has introduced new planning, regulatory and hospital payment mechanisms. According to the 2002 National Framework Contract, more than 450 diagnoses grouped in 40 clinical paths are being paid through this fund.
The respective powers of the various bodies in the system, including the extent of central regulation by the Ministry of Health, the degree of autonomy of the self-governing health facilities and of the NHIF, and the extent of municipalities’ responsibility for the health of their population, have all been considered and defined in principle. In practice there are serious difficulties, arising from limited funds and lack of managerial experience, which do not allow the health institutions to manage their finances effectively and to coordinate smoothly the activities of the various agencies. The regional health insurance funds (RHIFs) are empowered to select providers on the basis of price and quality, but in practice lack both capacity and experience to base selection on these grounds, and so contract with all providers regardless.
The State has reserved the right to control the entire health insurance system. Toward this purpose, a Directorate for Specialized Health Insurance Supervision was established within the Ministry of Health, also responsible for control of the voluntary health insurance companies. A State Agency for Social Supervision was founded with a view to licensing private health and retirement insurance companies.
The National Health Insurance Fund (NHIF) exercises medical and financial control over medical care providers. Immediate medical and financial scrutiny of those who implement the contracts is carried out by officials at the NHIF and Regional Health Insurance Funds by medical auditors and financial inspectors. Medical auditors have the right to check compliance with the rules for good medical practice, type and volume of medical care provided according to hospital packages, and the correlation between the medical care provided
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and sums paid. Financial inspectors control the implementation of the financial part of the contracts, accounting documentation and reports of health care establishments. Medical and financial control is carried out in the form of planned and surprise inspections, inspections prompted by signals or complaints, and upon termination of a contract with a provider of health care before the expiration of the contracted term.
This process of medical and financial control differs from the accreditation process discussed earlier, which is carried out by the Accreditation Board. The accreditation evaluation is provided for a period of one to five years, depending on the decision of the Accreditation Board. By contrast, the medical and financial audit performed by NHIF inspectors is intended to be used as the basis for contracted medical services
While the system is operating, there are problems in building capacity and training auditors to be effective. The National Framework Contract contains the rules and requirements for health care providers and the activities that should be performed by auditors. In the National Health Insurance Fund and its regional branches there are special departments for medical and financial audit. However, there remain some serious questions as to their effectiveness at this early stage of implementation of the health insurance system.
The Ministry of Health exercises control over the production, trade, storage and use of narcotic substances. A specialized service on narcotics was set up within the Ministry.
There are many problems concerning planning, regulation and management of the health care system. Radical changes have been undertaken in the methods of planning and regulation without the management expertise necessary to allow the changes to proceed smoothly.
Decentralization of the health care system
The Bulgarian health care system was highly centralized and some decentralization has taken place since 1991. First, ownership of most health care facilities was devolved to locally elected municipalities from 1992. Following a 1997 amendment to the Law on Health, health facilities can become independent juridical entities. Second, the Ministry of Health decentralized much administration to the 28 regional health centres in 1995, allowing a flatter management structure. Third, there has been extensive privatization of pharmacies and physicians’ practices. Also, since 1991 the previously monopolistic State Pharmaceutical Company has been transformed into 28 separate state-owned companies, with the split performed on a geographical
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basis. More than 70% of their ownership is private. The Ministry of Health retains central control of national-level institutions and regional hospitals.
Some responsibility for monitoring standards has been delegated to professional associations in the Law of Professional Organizations. These organizations are responsible for observing professional ethics and rules for good medical practice, and for continuing medical education. They also participate in the preparation of the National Framework Contract under the 1998 Health Insurance Law, considered the main financial tool for financing medical care in Bulgaria.
Since July 2000 the health insurance scheme has provided the means to decentralize management through contracts between the regional health insurance funds and health care providers.
Further, health establishments have been granted financial and managerial autonomy under the 1999 Law on Health Care Establishments that transformed the health care delivery system.9
9 For more information see the sections Health care delivery system and Reform implementation.
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Health care financing and expenditure
Main system of financing and coverage
Until 2000 the health care system was financed mainly from general taxation from two main sources: the republican and municipal budgets respectively. In addition, health care financing includes a private, out-
of-pocket component, a significant portion of which involves under-the-table payments.
Following the enactment of health insurance legislation in 1998, social insurance contributions (split between employer and employee) began to be deducted by employers in 1999. The amount of revenue collected initially was limited by the low tax base (given low incomes and high unemployment) and tax evasion. In 2000 the National Health Insurance Fund (NHIF) covered 13% of all public health care expenditures (see Table 4). It is expected that the state and municipal budgets’ share of total public financing will gradually decrease over the years as the NHIF assumes an increasingly important financing role.
The health insurance contribution was set at 6% of income; employer and employee initially sharing the contribution in the proportion of 5:1. The participation of the employer is to decrease in subsequent years, by 2007 the proportion will be 1:1. Self-employed persons pay the entire contribution. Working members of families insure non-working members by paying an extra contribution for them. Contributions for the unemployed and poor, pensioners, students, solders, civil servants and some other vulnerable categories are cov- ered by central and local budgets.
The system of health insurance is compulsory for the entire population. In practice there are some marginal social groups such as Romas, other minorities, the permanently unemployed, etc., who are excluded from the system.
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According to a population survey undertaken at the end of 2001 (16), there was actually a 10% decrease of population coverage between 2000 and 2001, mainly attributable to lower participation by these minority groups. Of the respondents in the 2001 survey, 76% were insured with the National Health Insurance Fund, 18% were not insured, and 6% did not know. However, entitlement to statutory health care is by virtue of citizenship (rather than payment of contributions). Therefore, in practice, even those who have no coverage are still entitled to receive outpatient and inpatient care.
Social health insurance financing of outpatient care began in July 2000, inpatient care (though only partially) in July 2001. Currently health insurance revenues cover outpatient care, part of pharmaceuticals for outpatient care and about 20% of inpatient expenditure. It is planned that full coverage of inpatient care will be phased in over a five-year period as the finances of the NHIF improve. The Ministry of Health, the Ministry of Finance and the NHIF are responsible for coordinating the financing of health care so as to prevent shocks for the hospital sector.
The collection of contributions has improved since the inception of the system and was over 94% for 2000. However, despite plans to extend coverage of all services by social health insurance, contribution rates of 6% are acknowledged to be insufficient to cover health care expenditure. During the planning phase of social health insurance, Bulgarian and foreign experts estimated the necessary health insurance contribution to be 12% of income. In view of the difficult economic situation, and the simultaneous introduction of social insurance reform involving additional contributions, the government decided against imposing such a high tax burden and opted instead for the much lower 6% contribution rate (separate from the social insurance contribution). At present, any decision to change the contribution rate can be made by Parliament alone. There are no plans to increase the contribution rate, at least in the near term.
The state retains responsibility for the financing of medical education, emergency health care, state sanitary control, blood transfusions, the national health and prevention programmes, medical research, etc.
The 1991 Constitution of the Republic of Bulgaria guarantees the right to health care to the entire population. The 1973 People’s Health Law (amended 1997–1998) states that “All Bulgarian citizens shall be entitled to access to medical service and to health insurance” (Article 2.1 of amended legislation). Although the health care system has aimed to provide free comprehensive health care, in practice during the last decade patients have increasingly paid out-of-pocket for many health care services.
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Health care benefits and rationing
The National Health Insurance Fund (NHIF) guarantees the financing of a basic package of health care services whose scope and volume is subject to annual agreements signed with the organizations of the medical profession. The NHIF defines the list of services it will cover, agreed by the providers of medical services. A basic package of services was developed for primary health care, as were packages for each clinical specialty for outpatient care, and for 40 clinical paths of inpatient care, covering over 450 diagnoses for 2002. The packages of services provided are agreed upon between NHIF and the professional organizations of physicians and dentists as part of the National Framework Contract. The National Framework Contract also endorses the continually updated list of free or partially free medicines mainly for patients with chronic diseases (otherwise pharmaceuticals are fully paid for out-of- pocket, as under the previous regime). Some social groups (children, pregnant women and breastfeeding mothers, some socially disadvantaged ethnic groups, etc.) are included within a special health insurance policy, and the NHIF has developed special programmes for them.
Users pay for services not included in the packages. These can be paid for by voluntary (private) health insurance provided by private shareholding companies for additional health insurance. Citizens have the right to purchase packages of additional services from the private health insurance funds, thus guaranteeing a mixed system of public-private financing. In addition they are entitled to purchase packages offering a full range of health care services.
The basic package for primary health care contains the following services:
• ambulatory care (examination)
• surveillance, home visits, consultations
• health promotion and health prophylactics
• immunizations
• referrals for medical and diagnostic tests
• prescription of drugs, etc.
For the performance of services included in the basic package, general practitioners are paid by capitation on the basis of the number of patients on their list. In addition to the basic package of services general practitioners participate in special health programmes, called Management of Health Priorities, including:
• maternal and infant health care
• adolescent health care
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• health care for chronic diseases (diabetes, cardiovascular diseases, etc.)
• care for elderly persons
• health care for terminally ill.
These activities are not obligatory for a general practitioner, but additional remuneration for performing these interventions encourages general practitioners to provide such additional preventive and other services.
Complementary sources of financing
Table 4 shows the relative contributions of various sources of public financing. It can be seen that the national and municipal budgets provide the bulk of financing, with social health insurance providing 13% in 2000. Comprehensive information is not available on all sources of health care revenue. For example, foreign assistance is substantial, as set out later. Private out-of-pocket pay- ments are also substantial, accounting for perhaps over 20% of health care revenue (17). The World Health Report 2000 (18) estimates these to have been 18.1% of total health care expenditure in 1997. Using this figure as a proxy for private spending, the figures in Table 4 can be recalculated as shown in Table 5.
Table 4. Main sources of financing (%)
Source of financing 1989 1994 1996 1998 1999 2000
Public – 98.0 – – – – National budget 100.0 33.0 40.0 45.0 38.5 42.0 Municipal budgets – 65.0 60.0 55.0 51.4 42.3 Statutory insurance – – – – 9.9 13.0 Private Out-of-pocket – 0.5 – – – – Private insurance – – – – 0.1 – Other chargesa – 1.5 – – – 2.7 External Foreign assistance – – – – – –
Source: Ministry of Health 1995 ; Ministry of Finance (7). Note: a Other charges refer to non-budgetary financial resources of health establishments.
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Table 5. Main sources of finance (%) using World Health Report 2000 estimates of out-of-pocket spending
Source of financing 2000
Public National budget 34.5 Municipal budgets 34.7 Statutory insurance 10.7 Private Out-of-pocket 18.0 Other charges 2.2
Source: Table 4; World Health Report 2000 (18).
It should be borne in mind that this table is also incomplete, as it does not include financing through private insurance and foreign assistance.
Out-of-pocket payments As in other central and eastern European countries, informal payments by patients for health care services were common in Bulgaria during the 1980s, although not officially sanctioned by the communist authorities. Such payments became increasingly common during the 1990s. In a survey conducted in Bulgaria in 1994 among 1000 respondents, 43% reported having paid cash for officially free services in a state medical facility in the preceding two years (17). A survey in Sofia in 1999 found that 54% had made informal payments for state services (19). Unofficial payments (under-the-table payments) are widespread in order to gain access to high quality services in hospitals and for a wide variety of outpatient services. Sometimes patients have to buy drugs themselves when they are hospitalized. Nearly two thirds of respondents were in favour of the introduction of a range of official user fees. Luxury services while in hospital (such as single rooms and TV sets) have always incurred charges. People (except children and some other categories of patients) always were charged for outpatient pharmaceuticals. Patients also pay for balneotherapy, many stomatological services, cosmetic surgery, abortions, infertility treatment and eyeglasses.
The scope of these payments and their importance to the reduced health sector budget led the government gradually to introduce health service fees in 1994, despite concerns about their regressive nature. A 1997 ordinance on medical co-payments (number 22) further established a legal basis for cost sharing. Co-payment was introduced for medical services, though only for outpatient or inpatient services without referrals and some luxury services.
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The Ministry of Health developed (in 1997 and 1999) uniform tariffs for paid services, mandatory for public health care institutions. Since 2001, medical establishments have been developing their own price lists for paid services without a physician’s referral (when the patients can make their personal choice of a doctor).
Ambulatory health care patients have always paid for their own pharma- ceuticals but these have become much more expensive with market liberalization and foreign imports of drugs.
The 1998 Health Insurance Law also defines co-payment fees for visits to physicians and dentists and for inpatient care. These apply to all patients, with the exception of certain vulnerable people (children, unemployed, disadvantaged groups, etc.) and patients suffering from certain diseases defined in the National Framework Contract. These user fees were first implemented with the introduction of health insurance financing of services, and amount to 1% of the minimum monthly wage per visit in outpatient centres and 2% of the minimum wage per day of hospitalization (not exceeding 20 days). These co- payments vary according to the minimum wage in the country, which is changed once or twice a year (In 2001 the minimum wage was set at 100 leva per month.) The co-payment is expected to be a means of restricting unnecessary demand for health care as well as additional income for the system.
Patients must also pay for luxury services such as a single room, TV, better food, etc., for plastic surgery and other services not included in the basic package of services. There are no reliable estimates, however, of the extent of out-of- pocket payments for health care, the size of their contribution to total health care revenue, or whether under the table payments are still widespread. Toward the late 1990s, the largest share of private payments was for drugs, followed by dental care, then informal payments. Patients’ direct payments for paid services constituted the smallest share (19).
Voluntary health insurance Voluntary health insurance has been limited in Bulgaria, so far taken out only by high-income groups. Under the Health Insurance Law (1998), voluntary health insurance can provide extra insurance (to be ‘bought’) on a voluntary basis by any individual. Beyond the basic package, citizens are free to buy different insurance packages on the market. Private insurance may also cover those services included in the basic package and negotiated by the National Framework Contract. Voluntary health insurance funds are also legally entitled to own hospitals and pharmacies.
The private health insurance companies offer health care services for protection, early detection, treatment and rehabilitation of insured individuals
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against a paid premium. Voluntary health insurance includes packages of medical services chosen by the insured individual and agreed upon with the company. According to the requirements of the Health Insurance Law, medical services are divided into five packages:
• improvement of health and disease prevention
• outpatient health care
• inpatient health care
• health supporting social activities
• reimbursement of costs.
Each of these provides the opportunity for a flexible choice of the preferred range of medical services. Only one company currently offers additional voluntary health insurance guaranteeing the necessary volume, quality and continuity of health care by highly qualified specialists: professors, associate professors, heads of clinics and wards at national and regional levels. A second fund was licensed in 2001 and three more in 2003.
There is extremely limited demand for supplementary insurance due to the financial situation of the bulk of the population. Those who can afford it prefer to pay cash for health services received. For the moment the private health insurance funds conclude contracts mainly with employers for the provision of health services for their employees. Personal plans are rarely used, the uptake estimated at 1–2% of population. There is no available information on uptake by firms.
Other sources of funding Until 1999, hospitals were tapping additional sources of funding by charging for extra services such as a more comfortable room. This fee was directed into an extra-budgetary account, which the hospital director was able to use for a number of purposes. The 1999 State Budget Law forbids extra-budgetary revenue so health facilities cannot now divert funds into accounts kept separate from general operating revenue.
Voluntary charitable donations by individuals, firms and foundations are also made, usually to hospitals, but these amounts contribute only a small amount of the revenue of the health system.
Foreign assistance is substantial, and includes World Bank loans and European Union programmes such as PHARE, Tempus and Interreg. Bulgaria has received €40.5 million assistance to the health care sector. The major areas of support under the PHARE programme are:
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• emergency health care – 28 regional centres established, staffed with medical and paramedical personnel and equipped with ambulances;
• training physicians in the primary health care network – over 1600 physicians trained in two-month courses in General Medicine at four regional training centres;
• improving university education in General Medicine – chairs established in the five medical universities; teachers trained and documentation centres set up;
• supporting introduction of private medical practice – proper legislation, accreditation, quality and fiscal aspects developed;
• training hospital management staff – over 350 directors and chief nurses trained in two-week re-qualification management courses. 28 people obtained two-year diploma;
• training leading administrative personnel – Ministry of Health and local authority staff trained in health economics, organization and computing. Health Economics and Policy Analysis Unit created within the Ministry of Health;
• introducing public health specialists – eight people sent to European Union countries for two-month training courses in health promotion, health legislation, medical ethics, environmental preservation, epidemiology and medical statistics. Guidelines produced for introducing public health to undergraduate training of medical students;
• training nurses in health care management – faculty created at Sofia Medical University (first students admitted in 1995). Courses following European programmes held for chief nurses, carried out by European trainers;
• national Family Planning Programme – cooperation established between government and nongovernment organizations. 30 family planning information centres set up;
• improving system of occupational health and workers’ health care – national policy for safety and health at work approved and draft law prepared;
• restructuring pharmaceutical sector and introducing a new drug policy – National Inspectorate established. Independent quarterly bulletin distributed free to 2500 clinicians. Drug Policy Department set up within Ministry of Health;
• supporting creation of health insurance system – the first part of the project devised a methodology for financing hospital resources, which is now applied to 11 pilot hospitals, in support of the introduction of health insurance system;
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• supporting medical libraries – the five medical universities’ libraries now function with automated catalogues and databases. Computer network links libraries to Academic Telecommunications Network. In 1994–1996 libraries subscribed to 747 medical journals, 1182 medical books supplied;
• developing Local Youth Health Education project in collaboration with the English Health Education Authority.
The Tempus programme has included several public health workshops and short courses in Bulgaria, masters’ degree scholarships, staff development visits, and textbook translations.
A US $47 million fund loan agreement to finance a health sector restructuring project was ratified in Bulgaria in 1996. This was funded by the World Bank (US $26 million), Council of Europe Social Fund (US $11 million), European Union Phare programme (US $2.3 million). The remaining US $7.7 million came from the Bulgarian government. The project lasted until 2001, managed and coordinated by the Ministry of Health. The project has four components, which made investments in the following activities:
• health policy and management: assistance for training administrative specialists, building analytical capacity of Ministry of Health and health care system in health care policy, economics and management;
• primary health care: medical equipment purchased for rural general practices (predominantly in remote, rather inaccessible and unattractive regions of the country), repair and upgrading of practices and training medical personnel in primary care: 750 nurses, 1071 general practitioners;
• emergency health care: ambulances and equipment purchased for emergency health care centres, repair and upgrading of regional and municipal centres for emergency health care and admissions rooms. Training provided for physicians, nurses and drivers working within the system;
• haemotransfusiology: facilities of haematology and transfusiology network upgraded construction and repair of five regional blood transfusion centres in cities of Sofia, Plovdiv, Stara Zagora, Varna and Pleven, and at the National Haemotransfusiology Centre in Sofia. Purchased high-quality medical equipment for processing and storing blood and blood products as well as vehicles for the needs of the system. Currently developing information system of haemotransfusiology.
In 2000, the World Bank approved a second loan of US $87 million to support: the introduction of health reform in Bulgaria, building an information system for the health insurance system, and financial assistance of outpatient and inpatient care. The new project is a follow-up to the first World Bank loan,
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and will be used to provide equipment for primary and outpatient care, and information systems for linking practising physicians and for inpatient care. There will also be finance for an investment programme for securing low- interest credit for hospitals investing in new equipment and devices. The National Health Insurance Fund will be assisted in constructing the technological infrastructure needed for the health insurance system, providing hardware and software systems, as well as training and technical assistance for their function and maintenance.
Nine approved international projects aimed at improving the administrative and information capacity of the health insurance system, human resources development, training of personnel, etc. were implemented. These include the United States Agency for International Development (USAID) project and the German Government-sponsored TRANSFORM programme.
The World Health Organization provides constant technical assistance through its Liaison Office. This has been focused on securing consultancy help in priority spheres, such as the development of health policy and health reform; the health of children and women; infectious diseases; non-infectious diseases; health promotion and environment and health.
The Spanish Agency for International Cooperation is assisting the Ministry of Health and NHIF in training leading medical specialists in the foundations of hospital management under the conditions of fund financing, and helping the Ministry of Health in its work with the media. A project for training per- sonnel in hospital management at a multi-profile hospital in Sofia was imple- mented with the financial support of the Agency.
Implementation of two projects financed by UNDP is under way: Promotion of the National Programme on Reproductive Health, and Development of a Strategic Plan on HIV/AIDS. A strategy was developed aimed at the implementation of a policy directed at the restriction and control of the spread of HIV/AIDS and of sexually transmitted diseases. The Strategy served as the basis for the development of a National Programme for Prevention and Control of AIDS and STDs. There are plans further to develop and implement the National Programme on Reproductive Health with a view to improving the quality and accessibility of the services for reproductive health, as well as public awareness of the population in Bulgaria, with special attention to chil- dren and women.
A large number of specializations for Bulgarian physicians was foreseen along the lines of the Japanese International Cooperation Agency and high- tech Japanese equipment was supplied to 17 Bulgarian hospitals upon Bulgarian
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request.
The Swiss government and the Swiss Red Cross financed the modernization of sterilization equipment in 13 hospitals in the country, as well as the training of personnel in these hospitals.
The EU-financed Interreg II Project for trans-border cooperation with Greece in the field of public health is being implemented.
An information system entitled Environment and Health and Infectious Diseases is being built within the framework of a joint project of WHO, the European Centre for Environment and Health and the Bulgarian Ministry of Health. Computers and basic software have been purchased, and applied software developed.
Health care expenditure
Health expenditure in Bulgaria as a percentage of GDP dropped from a high of 5.4% in 1991 to a low of 3.2% in 1996, rising to 4.2% in 1999 to drop again to 3.6% in 2000 (Table 6). These figures include only public health expenditures. The share of the health sector in total government expenditure fluctuated substantially during the 1990s, but on the whole increased relative to the low of 6.5% in 1990. This share stood at 11% and 9.3% of total government expenditure in 1998 and 1999 respectively (Table 6). If estimates of private spending are included, total health care expenditure as a share of GDP is roughly 4.4-5.1%.10 According to Fig. 3 and Fig. 4 showing GDP shares in countries of the European Region, this figure is a little below the CEE average of 5.9% but substantially below the EU average of 8.7% (2000 figures).11
The reasons for the overall drop in public health care expenditures as % of GDP reflect both the economic difficulties of the 1990s and the relatively low priority attached to spending on health care by central and municipal government. In part, cuts in municipal budget have meant less finance for health services throughout the 1990s. Health insurance, introduced in 1999, was associated with an initial increase in total health expenditures as % of GDP, but this appears to have been accompanied by correspondingly greater drops in budgetary spending in later years.
10 There are no official data on private health care expenditures, and difficulties in estimating these are compounded by the widespread underground payments which are exceedingly difficult to calculate. According to the WHO World Health Report 2000, Bulgaria’s private share in total health care expenditures stood at 18.1% in 1997. 11 It will be noted that the WHO health for all database, on which Fig. 3 and Fig. 4 are based, does not contain data for Bulgaria beyond 1994. Therefore these comparisons can only provide very rough indications of relative magnitudes.
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Table 6. Trends in health care expenditure, 1990–2000
Total on health care 1991 1995 1996 1997 1998 1999 2000
Value in current prices (million Leva)b 5 720 31 842 53 814 599 088 810 336 933 178 977 686 Value in current prices per capita – 56 37 43 56 62e 53e
Real government health budget as % 1990 budgetd 71 47 35 26 41 – – Share of GDP (%)c 5.4 3.7 3.2 3.5 3.8 4.2e 3.6e
Share of total government expenditureb 7.6 9.4 7.1 10.0â 11â 9.28 –
Source: a WHO Regional Office for Europe health for all database (4); b UNICEF TransMONEE database 3.0 (5); c Ministry of Finance (7); d Delcheva, Balabanova and McKee (17); e National Health Insurance Fund (20).
Fig. 3. Health care expenditure as a share of GDP (%) in Bulgaria and selected countries, 1990–2000
In real terms, the size of the government’s annual health budget has declined continuously since 1990, dropping to lows of just one third (1996) and one fourth (1997) of 1990 levels. These years correspond to the lows of public
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% of GDP
Georgia (2000) Belarus
Armenia (1993) Turkmenistan (1996)
Ukraine NIS average
Russian Federation (2000) Republic of Moldova
Uzbekistan Kyrgyzstan
Kazakhstan Tajikistan (1998)
Azerbaijan
Croatia (1994) Slovenia
Federal Republic of Yugoslavia (2000) Czech Republic Slovakia (2000)
Poland (1999) CEE average (2000)
Lithuania Hngary Estonia
Latvia Bulgaria (1994)
The former Yugoslav Republic of Macedonia (2000) Romania (1999)
Bosnia and Herzegovina (1991) Albania (2000)
Switzerland (2000) Germany (2000)
France (2000) Greece
Malta Iceland (2000)
Israel Belgium (2000)
EU average (2000) Denmark
Portugal (2000) Netherlands (2000)
Italy Austria (2000)
Sweden (1998) Spain (2000)
Norway (2000) United Kingdom (2000)
Ireland (2000) Finland (2000)
Luxembourg (1998) Turkey (1998)
Fig. 4. Total expenditure on health as a % of GDP in the WHO European Region, 2001 or latest available year (in parentheses)
Source: WHO Regional Office for Europe health for all database. Notes: CEE: central and eastern Europe; EU: European Union; NIS: newly independent states.
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expenditure as a share of GDP.
Fig. 5 permits a very rough comparison of health care expenditure in US $ PPP between Bulgaria and other countries.12 Quite clearly, Bulgarian per capita health care expenditure ranges at the low end of central European countries.
Structure of health care expenditures In 2000 the Ministry of Health distributed 292 million leva (about 30% of total health care expenditure) for the financing of health and health care establishments; 92% of this represented current costs. The Ministry of Health finances national centres, university hospitals, specialized establishments, as well as national health programmes. Life-saving consumables for haemo- dialysis, cardiology, radioisotope diagnosis and other activities, as well as free life-saving drugs for cancer patients and those with other severe diseases, are also secured out of the budget of the Ministry of Health.
In 2000 the National Health Insurance Fund spent 126 million leva on outpatient care. 30% was directed to primary health care, about 20% on specialized outpatient care, about 10% on dental care and about 30% on pharma- ceuticals. Extra costs were incurred for additional activities in compliance with the management of health priorities.13
As a proportion of government health care spending pharmaceutical expenditure has nearly doubled, from 12.3% in 1990 to 23.75% in 1998 (Table 7). Pharmaceutical costs rose dramatically with the rise in prices and especially with the influx of expensive foreign drugs. The pharmaceutical share of health expenditure is an underestimate since this reflects only government expenditure. Consumers also contribute a substantial amount; for example ambulatory care patients pay for their own drugs.
Constraints on the health budget have also meant a lower allocation for capital investment, which dropped to extremely low levels for most of the 1990s (Table 7). The share of capital costs was particularly low in 1995 and 1996, but rose to much higher levels in 1999 and 2000 (12.2% and 8.3% respectively). Technology renewal is a major problem since more than three quarters of medical equipment in Bulgaria is said to be over 20 years old (11). The 1999 and 2000 increases in financing provided the opportunity to purchase badly needed medical equipment, as well as general refurbishment of health care establishments, in accordance with the investment programme adopted by the government. Many additional investments are secured under the two
12 Here, too, it will be noted that the figure shown for Bulgaria is for 1994. 13 A breakdown of expenditures at the municipal level is not available.
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US $PPP
Fig. 5.
1HiT summary: Bulgaria, 2003
HiT summary Bulgaria
Fig. 1. Total health care expenditure as % of GDP, comparing Bulgaria, selected countries, CEE and EU averages
Source: WHO Regional Office for Europe health for all database.
Health Care Systems in Transition
European Observatory on Health Systems and Policies WHO Regional Office for Europe
Scherfigsvej 8 DK-2100 Copenhagen
Denmark Telephone: +45 39 17 17 17
Fax: +45 39 17 18 70 E-mail: observatory@who.dk
www.observatory.dk
Introduction
Government and recent political history Bulgaria had a Communist government until 1990. A new constitution was adopted in 1991, according to which Bulgaria became a multiparty parliamentary democracy, governed by a single chamber (the National Assembly) of 240 directly elected parliamentarians. The president is head of state.
Population The population was 8.0 million in 2001, with 68.4% living in urban areas. It declined throughout the 1990s and has been ageing, due to natural movement, a low birth rate and a high mortality rate. The ethnic composition is 85.8% Bulgarians, 9.7% ethnic Turks, 3.4% Roma, and 1.1% members of other groups. Bulgaria is now one of the poorest regions in central Europe. An estimated 35% of the population lives below the poverty line.
Average life expectancy and health indicators Life expectancy dropped from 75.1 years in 1989 to 74.6 in 2000 for women, and from 68.6 years in 1989 to 67.6 in 2000 for men. Mortality rates from chronic conditions such as ischaemic and cerebrovascular conditions have increased – strokes are six times the European Union (EU) average – as have deaths from traumas. This trend is associated with unhealthy lifestyles, unbalanced nutrition, worsening environmental conditions and increasing poverty. Infant and maternal mortality rates dropped, however, during the 1990s, so that in 2000 they were 13.3 per 1000 live births and 15.0 per 100 000 respectively.
Recent history of the health care system Bulgaria’s health care system was patterned along Semashko lines during the Communist period. With the change of regime, many elements of this model of health care were discredited, yet health care reform remained on the periphery of public sector reforms until the late 1990s. The numerous changes of government and the lack of political will for radical reforms meant little
0 2 4 6 8 10
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CEE average (2000)
The former Yugoslav Republic of Macedonia (2000)
Romania (1999)
Bulgaria (1994)
Albania (2000)
European
Observatory on Health Systems and Policies
2HiT summary: Bulgaria, 2003
change until 1997, when the imminent collapse of the health care system became obvious. Attention then turned toward measures aimed at rationalizing the system and improving the effectiveness and efficiency of health care provision.
Reform trends A step-by-step approach to reform was adopted based on the principles of equity, cost– effectiveness and quality of care. Three major reform strands can be distinguished: reform of health care financing, reorganization of primary care and rationalization of the network of inpatient and outpatient facilities.
Health care expenditure and gross domestic product (GDP) Public health care expenditure as a share of GDP dropped from a high of 5.4% in 1991 to 3.6% in 2000. If estimates of private spending are included, total health care expenditure as a share of GDP would be roughly 4.4–5.1%.
Overview
Following a cautious approach in the early years after regime change, the health care system has been undergoing rapid transformation since the latter part of the 1990s. Reforms in the early 1990s began by returning to some earlier traditions: first, laws were passed to permit private health care provision; second, medical associations were re-established; and third, responsibility for many health care services was devolved to the municipalities. Far more radical reforms were undertaken toward the end of the decade, including the introduction of a system of social health insurance, development of primary health care based on a general practice model, and rationalization of the health care delivery network. The reforms are ushering in a period during which certain efficiency gains will be made, as can already be seen through
hospital bed reductions, a process that will be accelerated through the operation of the new insurance-financed system and new volume- based payment methods. However, efficiency gains may be counterbalanced by a compro- mise in equity due to problems of access for lower income groups, for whom increasing out-of-pocket payments are making health services unaffordable.
Organizational structure and management
The Ministry of Health develops and implements national health policy, defining goals and priorities for the health system, working out national health programmes and developing health legislation. It retains responsibility for the overall supervision of the health care system, which since 1995 has been administered partly by its regional structures, including a regional health centre in each of the country’s 28 regions. The ministry owns and administers a number of national research centres and is also responsible for the country’s emergency care network and public health network. The Ministry also governs and administers several regional multiprofile and specialized acute care hospitals, as well as the Executive Agency on Pharmaceuticals, which registers drugs and controls the country’s pharmaceutical market.
The Higher Medical Council is a consultative body on health policy, the hospital network, medical education and postgraduate medical training. It is also responsible for the registration of private facilities for ambulatory and hospital care.
In 1992, municipalities were given the ownership of most health care facilities, including municipal hospitals for acute care, some specialized hospitals and outpatient clinics, diagnostic and consultative centres, and some specialized paediatric and gynaecological hospitals.
3HiT summary: Bulgaria, 2003
Source: WHO Regional Office for Europe health for all database.
A number of other ministries own, manage and finance their own health care facilities, including the Ministry of Defence, the Ministry of Internal Affairs and the Ministry of Transport.
In accordance with legislation in 1998, the National Health Insurance Fund was established as an autonomous institution for compulsory health insurance. Its main functions include management of financial resources for medical care. Through its regional bodies, the fund finances the entire health care network for outpatient care, and since July 2000, it also finances those hospitals that it has signed a contract with.
Private practice was legalized in 1991 and has expanded significantly, now including dental practices, pharmacies, physicians’ surgeries, laboratories and outpatient clinics and polyclinics. In addition, there are about 18 private inpatient establishments.
Health care finance and expenditure
Health care financing Until 2000, the health care system was financed mainly by general taxation through two main sources: the state budget and municipal budgets. Following the enactment of health insurance legislation in 1998, health insurance contributions began to be paid by employers and employees in 1999, but the amount of revenue collected was initially limited by the low tax base (due to low incomes and high unemployment) and contribution evasion. In 2000, the National Health Insurance Fund covered 13% of all public health care expenditures.
The health insurance contribution was set at 6% of income, and employer and employee initially shared the contribution in a 5:1 ratio. These shares are to change in subsequent years so that by 2007 the proportion will be 1:1.
Fig. 2. Number of beds in all hospitals per 1000 population in Bulgaria, selected countries, CEE and EU averages, 1990–2001
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4HiT summary: Bulgaria, 2003
Fig. 3. Physicians per 1000 population, Bulgaria, selected countries, CEE and EU averages, 1990–2001
Source: WHO Regional Office for Europe health for all database.
Contributions for the unemployed and poor, pensioners, students, soldiers, civil servants and members of other vulnerable categories are covered by the state and local budgets.
Social health insurance financing of outpatient care began in July 2000 and of inpatient care (though only partially) in July 2001. Health insurance revenues now cover all outpatient care and outpatient pharmaceuticals, as well as about 20% of inpatient expenditure. Full coverage of inpatient care is to be achieved gradually as the finances of the insurance fund improve.
Complementary sources of finance Out-of-pocket spending constitutes an estimated 20% of total health care expenditure. Informal payments, common in the 1980s under the previous regime, became increasingly common during the 1990s, and are made in order to obtain drugs in hospitals, to get access to high quality services and for a wide variety of outpatient services.
The scope of these payments and their importance to the reduced health sector budget led the government to introduce health services fees in 1994, despite concerns about their regressive nature. A decree on medical co- payments in 1997 further established a legal basis for cost-sharing. The Ministry of Health developed uniform tariffs in 1997 and 1999 that were mandatory for paid services at public health care institutions. Since 2001, medical establishments have been developing their own price lists for paid services without a physician’s referral.
Health care benefits and rationing The National Health Insurance Fund guarantees the financing of a basic package of services, whose scope and volume is subject to annual agreements signed with the professional medical organizations as part of the National Framework Contract. A basic package was developed for primary care and each clinical specialty in outpatient care, as well as for 40 clinical paths in
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5HiT summary: Bulgaria, 2003
inpatient care that covered over 450 diagnoses in 2002. The National Framework Contract also endorses a list of free or partially free medicines for patients with chronic diseases that is being continually updated. Services not included in the packages are paid for by users.
Health care expenditure Public health care expenditure as a percentage of GDP dropped from a high of 5.4% in 1991 to a low of 3.2% in 1996, and then rose to 4.2% in 1999 to drop again to 3.6% in 2000. The share of total government expenditure allocated to the health sector has fluctuated substantially during the 1990s, but on the whole it has increased relative to the low of 6.5% in 1990. This share stood at 11% and 9.3% of total government expenditure in 1998 and 1999 respectively.
If estimates of private spending are included, total health care expenditure as a share of GDP would rise to roughly 4.4%–5.1%. This figure is a little below the central and eastern Europe (CEE) average of 5.8% (2000), but substantially below the EU average of 8.5% (1999).
Health care delivery system
Primary health care The reform in outpatient health care beginning in 1999 was based on three pieces of legislation that regulate the organization of primary care as well as dental care and outpatient care as a whole. This reform foresees the creation of new types of outpatient institutions that embrace single and group practices, medical and dental cen- tres and independent medical diagnostic cen- tres. Practices are assigned in accordance with the National Health Map, an instrument for structural reform that specifies target numbers for institutions and health care professionals by region. The 1999 Law on Health Care Es- tablishments obliges all outpatient providers to choose one of these new organizational forms for outpatient care.
Most existing polyclinics have been transformed into diagnostic and consultation centres or medical centres and registered as trade companies in accordance with the law. The former polyclinic buildings which house the new organizations are owned by the municipalities. The single and group practices have the right to acquire ownership of the premises and medical equipment, or to rent consulting rooms from the municipalities.
The main feature of the reform is the radical change in the form and ownership of the establishments and in their legal status, which has led to equal status among all types of institutions, whether state-owned, municipal or private.
Physicians or centres contract with the National Health Insurance Fund in order to participate in statutory provision; any providers that do not sign contracts can provide private services on a fee-for-service basis.
The reform also tried to guarantee each citizen free choice of family physician. By the end of June 2000, 87% of the Bulgarian population had chosen a family physician for primary care. Due to factors such as a low acceptance of the general practice concept, excessive cost sharing, long waiting times and poor-quality services, a substantial portion of the population is still not in favour of the reform.
Public health services Public health services are organized by the Ministry of Health and are financed centrally. The system retains the basic structure that existed in the 1950s, when public health concentrated on eradicating communicable diseases. Since 1992, these services have been run by 28 district hygiene and epidemiology inspectorates. The network of these inspectorates covers the entire country. In 1999, the system was restructured, and in addition to sanitary control, its principal functions include implementing preventive and anti-epidemic measures, and protecting and promoting personal and public health.
6HiT summary: Bulgaria, 2003
The National Centre for Health Promotion was created in 1991, and together with the 28 district inspectorates it is responsible for health education.
For the most part, immunization levels for measles, tuberculosis, diphtheria, tetanus, poliomyelitis and pertussis remained above 95% in the 1990s.
Inpatient care Despite its restricted budget, Bulgaria has a much higher ratio of hospital beds to population than many countries in Europe. Bed numbers continued to increase during the first half of the 1990s, and peaked in 1996–1997 at 10.5 per 1000 population. They decreased again, amounting to 7.5 in 2000.
The extensive hospital network through- out the country means that most people have access to some kind of inpatient care. How- ever, it is also the case that there is an exces- sive and often unnecessary use of beds, often for purposes of social care. The bed reductions in the latter half of the 1990s were the result of deliberate efforts on the part of the govern- ment, which recognized that huge cost sav- ings could result from such measures.
The admission rate of 15.8 per 100 population in acute hospitals is in the mid-range for European countries. The average length of stay (10.7 days) is higher than in most countries in the WHO European Region, though it has been dropping steadily since 1980. The occupancy rate for all hospitals, including acute ones, is below two thirds, which is low by European standards.
Some hospitals suffer from a very poor state of repair, a lack of equipment and a shortage of essential supplies. To address some of these problems, a process of hospital accreditation has been initiated, and substandard hospitals are being closed.
Social care Since 1990, social care has been the responsibility of the Ministry of Social Welfare and local
social welfare departments financed by state and municipal budgets. A voluntary welfare sector is also becoming established with an increase in NGO activities.
In 1997, there were 199 social homes and facilities providing 50 596 places. The institutions included 65 homes for the elderly, 30 for the physically disabled, 49 for the mentally disabled and 35 for children with physical and mental disorders.
There are different forms of community care for those with low incomes, the elderly and the disabled, who receive some financial support and help in kind, such as assistance with household costs and provision of free food.
Legislation for the social integration of disabled people has been passed but not yet fully implemented. The government recently created a special central fund to finance the rehabilitation and social integration of the disabled.
Human resources and training Bulgaria had 3.4 doctors per 1000 population in 2000. This number is higher than the average for CEE. The trend of this figure over time almost coincides with that for the EU. There has been a slightly increasing trend in doctor numbers during the 1990s, which is likely related to increasing numbers of medical graduates.
Bulgaria is in the mid-range of CEE countries with respect to the number of nurses. A large drop occurred after 1996, most notably in 2000, when the number of nurses per 1000 population fell to 3.9. This trend is due to low prestige and low remuneration levels in the nursing profession.
Doctors are trained at five universities. Undergraduate medical education lasts six years. The curriculum was recently reorganized to include 90 hours of teaching in family medicine. After four years of residence and postgraduate qualification, doctors register their medical qualifications with the Ministry of Health and are then issued a license to practice by the Centre for Postgraduate Training at Sofia Medical University.
7HiT summary: Bulgaria, 2003
All paramedical specialists receive train- ing in 1 of 14 medical colleges. Their teach- ing activities and curricula were substantially upgraded by a EU Phare Programme project, which also introduced a bachelor degree programme for nurses and paramedical specialists.
In 2001, two faculties of public health were established, offering masters degree programmes in public health and health management. In addition, health management programmes are offered at other universities.
Pharmaceuticals The transition to a market economy involved breaking up the monopoly that was responsible for the production and distribution of pharma- ceuticals. These functions are now carried out by state-owned companies, some of which are in the process of being privatized. In 2000, there were 53 manufacturers of pharmaceutical products.
Privatization of supply and distribution has improved the supply of drugs, and consumption has increased, though some of the increase is due to inappropriate use of pharmaceuticals.
The Law on Pharmaceuticals and Pharmacies, adopted in 1995, created the basis for restruc- turing the pharmaceutical sector. Ten EU directives on good manufacturing practice (GMP) were adopted. They specify methods and means for pharmaceutical production, testing and registration, sales, import, prescribing, dispensing, advertising and storage. A new law on pharmaceuticals was adopted in 2000 to fur- ther modernize this sector.
In 1999, the Research Institute on Pharma- ceuticals was transformed into the Executive Agency on Pharmaceuticals, responsible for the quality, effectiveness and safety of pharmaceuti- cals.
Most drugs are paid for out of pocket by pa- tients at market prices. Some expensive drugs are paid for by the Ministry of Health and the
National Health Insurance Fund. Certain categories of patients (children, war veterans, etc.) receive partly subsidized drugs.
In 1999, drugs accounted for 25.4% of government expenditure on health care.
Financial resource allocation
The Ministry of Health funds university hospitals, specialized health institutions at the national and regional levels, the public health system, national health programmes, medical research and international cooperation in health care.
Municipalities, which became responsible for most health care provision following decentralization in 1992, raise their own revenues and spend on average about 33% of their budgets on health care, though this figure varies widely. Municipalities receive additional resources from the central government.
Prior to the establishment of the health insurance system, funding flows were not sufficiently transparent and accountable, and many decisions were made in response to political and personal priorities rather than the health care needs of the population. This situation led to considerable inequities in the regional distribution of health care funds, inequities that were exacerbated at the local level by variations in municipal budget revenues. Since the establishment of the insurance system in 1999, the National Health Insurance Fund, which is funded by employer and employee contributions and a state subsidy, has paid for all outpatient care and about 20% of inpatient care costs on a contractual basis. Municipalities continue to fund the non-contracted hospitals within their territory, except for the regional hospitals, which are funded by the Ministry of Health. It is expected that the health insurance share of hospital financing will increase, gradually replacing the share funded by state and municipal budgets.
8HiT summary: Bulgaria, 2003
Payment of hospitals Until reforms in the financing of health care were undertaken, hospitals, polyclinics and other provider institutions were allocated an earmarked budget determined on a historical basis.
At the present time, inpatient care is financed by two main sources: government budgets and health insurance. The National Health Insurance Fund pays only those hospitals with which it has concluded contracts. Payment is made on the basis of diagnoses; in 2001, the insurance fund financed the treatment of 159 diagnoses grouped in 30 clinical paths. In 2002, there were 40 clinical paths with over 450 diagnoses. The fund pays a fixed price for each clinical path and does not engage in active purchasing.
Hospitals which have not contracted with the National Health Insurance Fund continue to be paid by the municipalities, or by central funds in the case of regional hospitals, according to earmarked budgets. As of 1999, all hospitals must conclude contracts with their paying authorities.
Hospitals also receive additional revenues from user fees, which are mandatory for all patients, as well as from fees for services not covered by the insurance fund.
Payment of physicians Until 2000, all physicians were paid a salary fixed by national collective bargaining. Since then, some new payment mechanisms have been introduced. Family doctors are paid by capitation in accordance with the number of patients on their lists, with some regional variations to compensate for unfavourable geographical locations, and additional remuneration for interventions related to prevention and national health programmes.
Specialists in outpatient care are paid based on the number of visits received. Physicians working in the inpatient sector are salaried.
Health care reforms
Health care reforms in Bulgaria are intended to achieve system sustainability through the introduction of financing mechanisms and an appropriate public-private mix that will ensure equity, consumer satisfaction and improvements in efficiency. Radical changes were introduced in the late 1990s within a relatively short period and involved all key areas of the health care system: organization, delivery, financing and human resource training. Since the reforms were enacted during an economic crisis, it was inevitable that the successes would be hin- dered by certain difficulties. The difficulties, which stemmed from a lack of managerial ex- pertise and experience and an insufficient public awareness of the reform aims, gener- ated public opposition. At this early stage of the reform process, it is difficult to assess the results, but over the longer term it is expected that efficiency gains (which are already ap- parent) will accompany an increase in re- sources available to the health sector through social health insurance, and will ultimately contribute to the achievement of health gains.
Conclusions
There is now broad recognition among the Bulgarian people that reform of the previous system was necessary, and that an irreversible process of change has been set into motion. This process has been based on what is generally perceived to be a good idea in principle, but which has not, however, been supported by appropriate financial and technical resources. In order to increase public support for the reform process, it is now necessary for the government to fine-tune the major changes introduced in recent years and to ensure that better quality care will be delivered.
9HiT summary: Bulgaria, 2003
The HiT profile on Bulgaria was written by Stayko Koulaksazov (Ministry of Health), Svetla Todorova (Ministry of Health), Ellie Tragakes (European Observatory on Health Systems and Policies) and Stoyka Hristova (Zakrila). The HiT was edited by Ellie Tragakes. The Observatory gratefully acknowledges Antonio Duran (Tecnicas de Salud), Gena Grancharova (Higher School of Medicine, Pleven) and Dominic S. Haazen (World Bank) for reviewing the HiT. We are also grateful to the Bulgarian Ministry of Health for its support.
The full text of the HiT can be found in www.observatory.dk.
The Health Care Systems in Transition (HiT) profiles are country-based reports that provide an analytical description of each health care system and of reform initiatives in progress or under development. The HiTs are a key element that underpins the work of the European Observatory on Health Systems and Policies.
The Observatory is a unique undertaking that brings together the WHO Regional Office for Europe, the governments of Belgium, Finland, Greece, Norway, Spain and Sweden, the European Investment Bank, the Open Society Institute, the World Bank, the London School of Economics and Political Science, and the London School of Hygiene & Tropical Medicine. This partnership supports and promotes evidence-based health policy-making through comprehensive and rigorous analysis of health care systems in Europe.
HiT summary Bulgaria
Health Care Systems in Transition
Table 1. Inpatient utilization and performance in all hospitals in the WHO European Region, 2000 or latest available year, where acute hospital bed data are not available
Country Hospital beds Admissions Average per 1000 per 100 length of stay
population population in days
Albania 3.3a 8.8a 6.9a
Belarus 12.6 30.0 13.3 Bulgaria 7.2 15.3 10.7 Greece 4.9b 15.4c 8.3c
Latvia 8.2 20.7 11.3 Poland 5.6a 15.5a 8.9a
Romania 7.5 24.4 8.6 Uzbekistan 5.3 13.8 11.6 Yugoslavia 5.4a 10.6b 11.0b
CEE average 6.5 17.9 9.6 EU average 5.8a 18.4b 10.0c
NIS average 9.2 19.4 14.4
Source: WHO Regional Office for Europe health for all database. Note: a 2000, b 1999, c 1998. Acute hospital data provide a more accurate picture of utilization and performance, as well as a more reliable basis for comparison across countries, than the data corresponding to all hospitals shown in this table. The all-hospital data shown here is only for countries which do not provide acute hospital data and should be taken as indicative of general trends.
European
Observatory on Health Systems and Policies