Łanda: the system will settle like compost. The National Health Fund is dependent on politicians, and they do not wait in lines

• - The increasingly dysfunctional National Health Fund causes the Minister of Health to shift more and more healthcare costs onto citizens. Unfortunately, we are approaching a situation in which only the rich and privileged will have quick access to some benefits - says Krzysztof Łanda, former Deputy Minister of Health
• - If politicians stood in queues like all Poles, they would quickly undertake a serious reform of the system, but they and their loved ones are treated out of turn, they receive the best possible, most innovative medical technologies and right away - he adds.
• Is the introduction of additional insurance the solution to the situation?
• We talk to the former deputy head of the Ministry of Health about complementary and supplementary insurance, co-payments and moral hazard.

Luiza Jakubiak, Rynek Zdrowia: The financial crisis of the public health system may cause more medical fields to be subject to dentistry? Will they start moving to the commercial sphere, which not everyone will be able to afford?

Krzysztof Łanda: This has been happening for years. The increasingly dysfunctional National Health Fund is causing the Minister of Health to shift more and more healthcare costs onto citizens. Unfortunately, we are approaching a situation where only the rich and privileged will have quick access to some benefits. If politicians stood in queues like all Poles, they would quickly undertake a serious reform of the system, but they and their loved ones are treated out of turn, they receive the best possible, most innovative medical technologies and right away.

Is this a good time to return to the conversation about additional insurance?

It is always a good time to talk about rational possibilities of reforming the system, but now it is especially important due to the growing financial gap of the National Health Fund.

The public system will not improve itself. In the conditions of a monopsony, the National Health Fund will continue to settle like compost. The National Health Fund will not take care of the efficiency of healthcare as long as it walks on a political leash. Until payers compete for the basic contribution, nothing will change. We have supplementary insurance in Poland, but it "feeds on the deficit" in the public system. In other words, the worse the National Health Fund is and the longer the queues for doctors, the greater the demand for supplementary insurance policies. Supplementary insurance offers the same benefits that are theoretically "guaranteed" in the basket, but unfortunately the basket of benefits in Poland is "guaranteed" only in name. However, we lack a complementary insurance market in Poland.

So there is competition between insurers, and not necessarily, as today, between the private and public systems?

Yes. If the Minister of Health controls the contents of the basket and is able to conduct an appropriate pricing policy, it does not matter whether the service provider or insurance company is private or public. Competition takes place within the limits of the same contents of the basket and at the same prices. Fair competition is healthy. However, monopsony or monopoly always lead to pathology. Today, the National Health Fund boasts of very low administrative costs, but the scale of waste is gigantic, although no one talks about it openly.

It is not the case that everyone would be happy with the introduction of competition. The opponents of the changes will be officials who do not have to try today. Also hospitals financed from a political key, which are now paid for doing nothing, "because the contract has ended". Supplementary insurance will lose out when things start going well in the public system and queues disappear, although they can always be transformed into complementary insurance, which reduces their resistance to change.

Either way, without competition, the patient will never be empowered, and politicians only delude voters with "patient-centrism". Today, the patient is an unnecessary element of the system, even an obstacle. Today, Poles have no choice, because they have to pay into the National Health Fund and have no choice. If there were competition between insurers, then suddenly everything changes. If I don't like the National Health Fund, I will transfer my premium to a competing insurance company. Insurance companies will start to strive for the insured, which forces not only efficiency, i.e. better management of resources, but also the quality of care and access to doctors.

What are complementary insurances?

Complementary insurance offers the most innovative medical technologies outside the basket, and thus relieves the public system. Those who do not want to rely on collections of millions of złoty for treatment in the event of a serious illness and those who do not want to sell their homes and cars to cover the costs of very expensive treatment should be interested in purchasing a complementary insurance policy.

What about those who cannot afford such additional insurance?

Complementary insurance in the first years generates a high surplus of premium written over the loss ratio. This surplus can be taxed and within the framework of social solidarity, the poor and vulnerable social groups, such as the elderly, children or pregnant women, can be covered by free complementary insurance. This would be an example of true, even exemplary social solidarity.

Where does this surplus come from?

Healthy people, most of whom will fall ill in a few or even a dozen years, sign up for complementary insurance. However, since they pay a premium from day one, complementary insurance generates a high surplus in the first few years.

If working people aged 30-50, for example, who earn well, had to buy a complementary insurance policy on a competitive market, they would immediately gain access to the most modern methods of treatment in the event of an illness. The tax imposed on the surplus generated by complementary insurance can be used to buy the same policies for the poorest, who would obtain insurance protection and access to modern medicine for free. This is an expression of true social solidarity, and not pretended "guarantees" of health care, as is currently the case.

The rest of society, on the other hand, would have a choice. Citizens could buy complementary insurance or not. If they are preventive and do not want to conduct degrading collections or get rid of their accumulated assets in the event of illness, they will buy insurance on a voluntary basis.

After the introduction of complementary insurance, some foundations that organize collections would be very worried. This is a business with a turnover of well over a billion zlotys per year. If the purchase of medicines were financed under complementary insurance, there would no longer be a need for collections.

But we are talking about very expensive therapies.

Yes, but contrary to appearances, such therapies, even the most expensive drug in the world until recently, Zolgensma, which costs 2 million euros for a single patient, are charged a premium of less than 1 złoty per month. This is because it is a very rare disease, from which few people fall ill, and the premium is spread over a large population of insured persons. Those who fall ill gain access to innovative medicine, while the rest are burdened by this cost to a small extent. It should also be noted that the purchasing power of complementary insurance companies is much greater than that of an individual patient, and therefore the prices of purchasing health benefits by insurance companies would be much lower than those paid by individual patients today.

In the discussion about additional insurance, the example of the USA sometimes appears, where health and life are determined by the size of the wallet, and the costs of treatment can ruin the entire family. Is there no fear that additional insurance will deepen inequalities?

No one wants to introduce the American system in Poland. We all know that the US healthcare system is inefficient, very expensive, good insurance policies cost several thousand dollars a month, and a large percentage of society has no health insurance at all. Subjective and objective indicators in the United States are terrible, and the costs of the system are gigantic. In Poland, fortunately, we do not draw on American models.

On the other hand, pathology is already occurring in Poland. We wait for months or years for services that are theoretically "guaranteed". Those who do not want to stand in line pay privately out of their own pocket. If someone wants access to innovative treatment methods, state-of-the-art medicines or medical equipment, they must pay from their own savings, selling property or starting a fundraiser. Let's not pretend that this problem does not exist. It exists and will grow as long as the NHF monopsony operates.

What additional insurance costs are we talking about?

We have done actuarial calculations. Access to 150 innovative medical technologies, depending on age, costs from 40 to 90 PLN per month. Most Poles spend more on coffee and sweets.

That is why I would prefer that rational arguments be used in the discussion about insurance. In Australia, for example, people between the ages of 30 and 50 who earn above a certain threshold are required to buy supplementary insurance to gain access to an additional range of services – services that are not reimbursed by the basic insurance as part of the guaranteed basket

Complementary insurance also works very well in the Netherlands and Switzerland. Their operation brings additional benefits, not only tax revenues, but above all they allow people to access innovative treatments that are not financed by the basic contribution.

If we took patient rights seriously, then, as in the above-mentioned countries, there would be no differences in access to guaranteed services, i.e. to the most necessary medical technologies that are characterized by excellent cost-effectiveness ratios.

However, if someone can afford treatment with the most modern methods, with the highest effectiveness, but very expensive, then they should be allowed to buy complementary insurance policies or co-pay above the guaranteed standard. This would be fair, although it would not appeal to demanding voters, apart from those who would receive complementary policies for free as part of the solidarity I mentioned earlier.

Can such co-payments be extended to services such as robotic surgeries? In the case described by Rynek Zdrowia, patients were asked to make payments to a foundation operating at the hospital. Many people wrote in the comments that they would prefer to have a choice and pay extra for the service beyond the standard offered by the National Health Fund. Today, this is not possible. At the same time, we already pay over PLN 50 billion for healthcare from our own pockets.

Politicians often say that co-payment is "immoral", but Poland has and has always had co-payments at a very high level - hypocrisy combined with ignorance is an exceptionally indigestible diet.

First of all, we should understand what co-payment is for and that there are three different types of co-payment. The goals of co-payment are twofold. First, to reduce moral hazard. Second, to collect significant additional funds in the system.

Politicians in Poland do not distinguish between types of co-payments: trifles (small co-payments), deductibles (own contributions) and significant co-payments. They most often think of trifles, i.e. small co-payments for individual services or hospital bed days. For example, a PLN 5 co-payment for a doctor's visit, a PLN 10 co-payment for a hospital bed day. Such co-payments were once introduced by the Czechs and they bitterly regretted it.

Why?

This type of co-payment is the worst, because its organizational and accounting service may cost more than the funds collected, and it does not reduce moral hazard. In the Czech Republic, trifles curbed moral hazard only in the first year, after which the increase in the provision of services returned to the level before the "reform" in the second year.

The second type of co-payment is deductibles, or own contribution. The third type of co-payment is high-amount co-payment. An example is the co-payments for medicines of 30 or 50 percent used in Poland and for many medical products. Both own contribution and high-amount co-payment effectively inhibit moral hazard, or the risk of abuse, and allow for the collection of large financial resources.

Therefore, if we want to introduce co-payments, first of all, we need to answer the question of what kind of co-payments we are talking about. I advise against trifles, but I encourage deductibles and high-amount co-payments, wherever there is a high moral hazard of services on the side of both the provider and the patient. Soon, together with excellent experts from the industry, we will publish a book on this subject entitled "Vademecum of the Minister of Health".

Can you also insure yourself against co-payments?

Yes, this is the second type of complementary insurance, but I warn against eliminating co-payments for services with high moral hazard, which would be financed on the basis of fee-for-service. In this case, eliminating co-payments leads to abuses, like two plus two equals four.

On the other hand, complementary insurance for services outside the basket is nothing more than insurance against "100% co-payment". In Poland, you can also find policies covering access to robot-assisted surgery for indications other than those reimbursed by the National Health Fund. No problem. The patient pays a small amount of money per month for access to services outside the indications included in the basket in Poland.

What is moral hazard?

Moral hazard is a change in the insured's behavior depending on whether he or she has insurance or not.

Moral hazard in medicine occurs not only on the side of the insured, but also on the side of the service provider, because the concept of "client" is complex. Co-payment reduces hazard, on both sides. For example, if we have an MRI scan in our basket or in our insurance policy, some people would like to have a full-body scan every two weeks. They go to the doctor and force a referral for a scan. This is moral hazard on the side of the insured.

Moral hazard also occurs on the side of the service provider. If a certain service is in the form of a fee-for-service and is highly priced, above the costs of performance, then service providers are able to drive up supply and perform these services in excess.

But there are also benefits that have a low moral hazard. For example, brain tumor surgery. No one will perform surgery on the central nervous system for pleasure, and no doctor will perform neurosurgery if the patient does not have a brain tumor.

How long does it take to organize the basket to introduce insurance?

Competition with the National Health Fund can be introduced within half a year to a year. There is no problem. We have well-defined drug parts of the basket using medical technologies, i.e. collocation of indications and medical interventions. Of course, the patient's rights to diagnostics and treatment in the non-drug parts of the basket should be better recorded, but this can be done in 6 to 12 months.

The second issue is the introduction of broad competition in complementary insurance. This can also be done within half a year to a year.

And administrative costs?

If we introduced competition for the National Health Fund, the administrative costs of insurers would indeed be higher. They would probably reach 7-10 percent of the premium written.

But there wouldn't be such gigantic waste as there is today. The National Health Fund as a central institution boasts that it has about 3 percent of administrative costs. But at the same time, waste in the system reaches 30-40 percent!

Where did this data come from?

I talk to former presidents of the National Health Fund and former deputy ministers. The level of waste reaches 30-40 percent, because the National Health Fund does not care about the efficiency of the system. The National Health Fund cares only about one thing: political peace, so that there are no strikes and that politicians can be treated in their favorite hospitals, without queues and at the highest level.

If there was competition and citizens could choose where they want to pay their basic contribution, they would become the subject of a truly patient-centric system.

In the conditions of the NHF monopsony, the patient is an unnecessary element of the system, the fifth wheel on the cart. The last element that is taken care of. As in socialism. There, the client was not needed, no one was interested. Everyone stood in queues for everything. The NHF is the last bastion of socialism in Poland.

Dr Krzysztof Łanda, member of the Supervisory Board of MedTech Solutions SA, Undersecretary of State in the Ministry of Health in 2015-2017, former member of the Council of the National Centre for Research and Development (NCBiR).

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