New proposals for the National Health Fund in the Sejm. Will they reduce the gap in health financing?
There is already a bill in the Parliament regarding the health care system. It provides a stick, but also a carrot, a new health tax relief in PIT. The document was prepared by PSL together with the Federation of Polish Entrepreneurs. As MP Marek Sawicki explains, the project was consulted with the Minister of Health and Minister Maciej Berek from the Chancellery of the Prime Minister. However, this is not a government project, but a parliamentary one.
Basically, it is supposed to be a remedy for the problems of the health service, i.e. the financial hole and queues to doctors. According to FPP experts, this year alone there will be a shortage of PLN 26 billion for health (in addition to the PLN 24 billion already included in the budget as a subsidy to the National Health Fund). The government must therefore find huge amounts of money to fill the gap. Next year it may be even worse, because health insurance contributions are increasingly diverging from health care expenses.
Financial problems also translate into longer and longer queues to doctors, even if the patient has an urgent referral. Within a year alone, the number of urgent patients waiting in line for outpatient specialist care increased by 14%. — up to 776 thousand people, and the average waiting time is almost two months. The queues for urgent admission to hospital wards and for the provision of other services have also lengthened.
The solution to these problems is to be a project of changes in the health care system. It provides for, among others: increasing revenues by transferring some tasks to the National Health Fund and introducing compulsory sick leave for contractors, as well as limiting the rapidly growing costs of salary indexation.
— The financial gap in the first year of implementation of the proposed solutions will decrease by PLN 16.6 billion, which corresponds to over 70 percent. the current shortage of financial resources. This is due to both the increase in the National Health Fund's revenues and the reduction in the rate of increase of its costs in the following years – comments Łukasz Kozłowski, chief economist of the Federation of Polish Entrepreneurs.
How to fill the hole in health care financing
The project assumes increasing spending on health care to 8.8 percent GDP and a more predictable salary increase mechanism. On the one hand, the project assumes increasing revenues to the system and, on the other hand, reducing costs.
In practice, there are four main changes:
— combination of health and sickness insurance,
— cost control on the part of the National Health Fund,
— introduction of a new PIT relief – “JPK Zdrowie”,
— changes in the structure of hospitals, i.e. the introduction of a leading hospital.
What are the benefits of taking over sick leave by the National Health Fund?
Currently, the National Health Fund provides benefits in kind (treatment), and ZUS provides cash (benefits). This means that institutions may pass on costs and become ineffective. According to the authors of the project, it will be better to combine both insurance policies and concentrate the funds in one institution – the National Health Fund.
This is to create strong incentives to optimize treatment, shorten periods of sickness absence and rationalize expenses. Responsibility for treatment costs and benefit costs will also lie with the National Health Fund.
The fund is also to take over some of the tasks of ZUS, including monitoring sick leave and certificates of temporary incapacity for work, and authorizing doctors and other persons to issue medical certificates (e-ZLA). The National Health Fund is also supposed to conduct proceedings and issue decisions regarding sickness benefits and rehabilitation services. Therefore, appropriate medical certification units (inspecting doctors, medical boards) would be established in the National Health Fund.
The project also provides for: changing the rules for financing sick pay. For the first 14 days, the employer would pay sick leave (in the amount of 80% of remuneration, unless company regulations provide for higher amounts), and from the 15th day, the employee would be entitled to sickness benefits. The technical payment of these benefits, based on decisions issued by the National Health Fund, will continue to be handled by ZUS.
In addition the project extends the obligation of sickness insurance, e.g. to contractors (this change alone is expected to generate approximately PLN 1.2 billion more; today, insurance for contractors is voluntary). The sickness insurance contribution will also be included in the health insurance contribution calculation base and will not reduce the PIT tax base.
What will be the financial impact of these changes? Łukasz Kozłowski explains that combining sickness and health insurance will generate direct additional revenues because the base of its collection will expand – people currently voluntarily covered by this insurance (contractors) will pay PLN 1.3 billion more per year – this only applies to those who have not paid this premium so far.
— Settlement of the sickness contribution in the same way as health insurance will also result in an increase in health insurance revenues by PLN 2.9 billion. – because the sickness contribution will no longer reduce the health insurance contribution base. Additionally PIT revenues will increase by PLN 3.8 billion due to the treatment of the sickness contribution in the same way as the health contribution is currently treated when determining the tax base – explains Łukasz Kozłowski.
Taking into account the cost of additional benefits and the distribution of financial effects between Social Insurance Fund, National Health Fund and the state budget, As a result of this change, the National Health Fund will receive PLN 6.1 billion more in the first year than before.
Greater cost control. What would that look like?
PSL and FPP also propose greater cost control. Some of them are growing too quickly, which increases the inefficiency of the National Health Fund's finances.
The indexation of remuneration of people working in medical entities based on the increase in the average remuneration in the national economy results in an increase in the costs of the National Health Fund over a 12-month period:
— by PLN 18.5 billion from July 1, 2022;
— by PLN 15.9 billion from July 1, 2023;
— by PLN 15.2 billion from July 1, 2024
Moreover, taking into account the expected change in valuations from July 1, 2025, the total annual amount of expenses generated by the amendment to the Act on the method of determining the lowest basic salary will exceed PLN 58 billion.
The designers propose a different solution: the base amounts of the lowest basic salaries for individual professional groups as of July 1, 2025 are proposed in the annex to the draft act. Every year, these salaries will be subject to indexation based on the last known indexation index of pensions and annuities. This change is intended to slow down the growth rate of personnel costswhile making them more predictable and linked to indicators used in other areas of the public sector.
New health relief in PIT? For whom
The project authors also propose the introduction of a new health tax relief in PIT. People using private healthcare they could write off 10%. expenses incurred for rehabilitation purposes, medical devices and special nutritional products purchased on prescription, health services and care services from your PIT (from tax).
Relief would be due for expenses incurred on behalf of the taxpayer, his direct relatives, siblings, family members in the household or other dependents.
The relief would cost the state budget PLN 3.2 billion.
How would the structure of hospitals change?
The project also assumes the creation of 49 leading (provincial) hospitals, cooperating with the network of district hospitals. The idea is for hospitals to cooperate and optimize costs, not compete, which leads to deepening losses.
Provincial hospitals would therefore commission services to district (cooperating) hospitals.
The project would enter into force on January 1, 2027.
Author: Łukasz Zalewski, journalist of the Law section, Business Insider Polska
