RAIFFEISEN INVESTMENT ROMANIA S.R.L.
Brief overview of the healthcare system in Romania
Overview of the organizational structure
The healthcare sector has always been a continuous challenge for many countries in Europe and it still is a complex and sensitive topic to be addressed in any part of the world. During the past two decades, Romania has gone through a period of rapid and major changes in every sector, including health. The local healthcare industry encountered the same difficulties as in all the Central and Eastern Europe (CEE) healthcare systems: a low level of government financing, inadequate and obsolete equipment and facilities, management deficiencies, informal payments all the aforementioned resulting in an overall increasing dissatisfaction of population.
At present, Romania’s healthcare system is still dominated by the public healthcare system, being funded by a combination of employer and employee contributions to the National Health Insurance Fund (NHIF) and of direct allocations from the state budget. Romania has a mandatory insurance-based financing model for healthcare, involving contributions from employers (5.2% of the gross wage) and employees (5.5% of the gross wage). The health insurance system is administrated and regulated by NHIF, a central quasi-autonomous body.
Since 1998, when the country adopted the mandatory social health insurance system, the roles of the main participants in the health system have changed, the relationships between different organizations have become more complex and the number of stakeholders has increased. The system is organized at two main levels: national/central and district (judet). The Ministry of Public Health responsibilities consist of developing national health policy, regulating the health sector, setting organizational and functional standards, and improving public health. The representative bodies of the Ministry of Public Health at the district level are the 42 district public health authorities (DPHAs). Also at district level, 42 District Health Insurance Funds (DHIFs) are responsible for contracting services from public and private healthcare providers according to the rules set by the central units. Two national insurance funds have been established in 2002, one belonging to the Ministry of Transport (CAST) and the other to the Defence System, Public Order, National Security and Justice (OPSNAJ Authority). Since 2002, the social insurance contributions have been collected at the national level by a special body under the Ministry of Finance (the Fiscal Administration National Agency), and DHIFs have raised contributions only from insured persons paying the whole contribution (such as the self-employed). The current legislation also assures free choice of provider for the patient.
The Ministry of Public Health has elaborated a new health law (Health Reform Law. 95/2006) in its attempt to increase access to basic medical care, enhance the quality of medical services and improve the health indicators. Among other things, the 17 titles in this law aim to continue the decentralization process, to encourage the development of the private sector and to establish clear relations between the systems of health and social care.
The private healthcare sector is in an incipient phase but growing at a high-speed. An increasing number of private clinics have been opened and have been well received by those in the middle and upper income segments. Private health insurance services are usually offered by private companies to their employees, as part of the benefits package. In theory, insurance coverage is almost comprehensive. Exclusions comprise certain dental services and high-technology treatments.
Demographic trends show continual population decline: the population declined by 5% between 1992 and 2006, up to 21.6 mn. The decrease was caused by emigration, a fall in the birth rate and a rise in mortality. Health status in Romania is quite poor compared with the other European countries. According to World Health Organization (WHO) data, the average life expectancy in Romania was 72.7 years in 2006 (69.2 years for men and 76.2 years for women), six years shorter than the European Union (EU) average (78.5 years in 2005). The most important causes of death are cardiovascular diseases (62.1% of all deaths in 2006) and cancer (17.6%), our country having one of the highest levels of cardiovascular diseases in Europe.
Physical and human resources
The number of hospitals has remained relatively constant since 1980, when 416 hospitals were registered by the Centre for Health Statistics of the Ministry of Public Health, whilst in 2005 the total number was 433. Very few new state-owned hospitals were built after 1989, the increase in numbers resulting from splitting or transforming of outpatient wards into small hospitals and vice versa. Most hospitals are state-owned, with new hospitals being opened by the private investors. Capital investment projects are decided at Ministry of Public Health level on the basis of proposals submitted by districts, being funded through taxation (and paid out of the state budget) with the additional support from external funded programs and donations. The government has also announced its support regarding public-private partnerships in the construction of new hospitals and specialized facilities such as dialysis, although no project has been completed so far.
Due to the underfunding of the system, it is generally accepted that the quality of hospital buildings and equipment is either obsolete or overused. The substantial amounts invested by the Ministry of Health during the past years in purchasing new and modern equipment are yet insufficient and unevenly distributed. Significant investments in new technologies and up-to-date medical equipment can be seen in the recently opened private clinics, which are becoming main alternatives to the formerly renowned “top clinics” in the public sector, with long traditions in health care.
In terms of hospital beds, Romania has a relatively high hospital beds to population ratio, imposing extra costs on the health system. According to the National Institute of Statistics, Romania had over 143,000 hospital beds in 2005 (including short-term acute care and long-term care beds) or 6.5 beds per 1000 people. The ratio for acute care is lower, as WHO data points out. In 2005 the ratio for acute care was around 4.5, decreasing dramatically from 6.9 in 1999.
Nonetheless, both the ratio for all bed types (6.5) and the ratio for acute care beds (4.5) were comparable to the average figures for the EU (5.9 for all bed types and 4.1 for acute care beds).
The relatively high ratio is not managed effectively as the allocation of beds is uneven and does not match the actual incidence of diseases in different therapeutic areas.
Romania has a doctor-to-patient ratio of below 2 per 1,000 inhabitants, which is lower than European average. Shortages are most acutely felt in rural areas. Lately, since Romania has joined EU, the migration of healthcare personnel to western countries has amplified, decreasing even more the ratio and the patients’ options to access better-quality medical services. Because the general funding crisis in the healthcare system, the medical professionals’ situation has deteriorated, often receiving wages with considerable delays. Although some 96% of Romanians are registered with a doctor, primary care remains poor. Additionally, there is a shortage of pharmacists, which pushes more patients to see hospital doctors.
Simona Cocos, general manager of drug producer Zentiva, part of the Sanofi group, explains how the clawback tax should be changed to limit its negative effects in the market, and shows her interest in partnerships with local companies that want to produce their medicines in Zentiva's factory in Bucharest