Private Health Insurance And Co-Payment Proposals Polarise Parliament And Polish Society


BMI View: Reform proposals to introduce co-payments or private health insurance are splitting Polish society along income and party lines. The Polish healthcare system has been underfunded over the years due to the overcapacity in secondary care and its lag relative to employment levels. With the economic outlook for 2014 overwhelmingly positive, premiums from employed Poles are set to increase and we believe this will weaken the argument for the current government's proposals.

The Polish healthcare system is entering a period of scrutiny and debate over reform, its sustainability and the need to balance access to healthcare with affordability. Access to the public healthcare system has been established by the Polish Constitution as a universal right, so discussions to introduce private healthcare insurance have been met with resistance from centre-left parties and large sections of Polish society, who believe that it would enable privatisation-by-proxy of the Polish healthcare system.

However, the chronic underfunding of the Polish healthcare system and its gearing towards secondary care has meant that primary care has not developed as a gatekeeper to hospital care and, therefore, demand for hospital services has been overstretched. Polish hospitals have thus faced debt and management crises, and are also characterised by long queues for specialty appointments. At the same time, the Polish government has acknowledged that there is overcapacity in the hospital system. While this may appear to be contradictory, the reality is that healthcare funding is stretched thin by redundancy within hospitals that are proximal and do not optimise population coverage.

A shortage of experienced and specialty doctors to staff them appropriately also increases the waiting time for patients. Indeed, Poland faces a 'brain drain' of doctors as many emigrate to neighbouring, Western European countries which also face shortages themselves, but offer significantly higher salaries and standards of living. In order to retain these doctors, the Polish healthcare system will need to receive more funding and train up more doctors. One of the ways in which funding is being addressed is through a private health insurance pool and co-payments.

According to a survey performed by Polish newspaper Dziennik Gazeta Prawna, almost 20% of Poles would be willing to pay more for healthcare if they could gain faster access to treatment. Respondents were asked whether they would agree to a raising of healthcare insurance premiums and co-payments if it led to shorter waiting times. And according to the Polish Chamber of Insurance, almost 700,000 Poles have some form of private health insurance and 2mn subscribe to medical services. In total, this amounts to almost 8% of the Polish population. But the survey revealed that this issue was divided along income lines; those most receptive to paying more were on higher incomes and had higher education attainment, whereas those on lower incomes were against the proposals. Seventeen percent of people on incomes of less than PLN10,000 (US$3287 ) per capita responded in the affirmative to the proposals, whereas thirty-nine percent of Poles on incomes greater than PLN20,000 (US$6573) per capita agreed that they would pay more in premiums in return for faster access.

Despite the ongoing discussions, the plans to introduce additional health insurance premiums will not be implemented any time soon, with parliamentary discussion and healthcare committee debates expected after the European Parliamentary elections in May. The Democratic Left Alliance has come out and unequivocally voiced opposition to private health insurance or co-payments, stating the proposals would polarise Polish society, especially if private health insurance was linked to faster access to healthcare. The Law and Justice Party have voiced that any additional funding should come directly from the state budget, declaring that the majority of Poles cannot afford private insurance. The alignment of stances on the matter is split along party lines, with the left taking a firm defensive stance against the current government's proposals.

Whether or not these plans will come through is also dependent on Poland's economic growth and the subsequent impact on unemployment levels. With the state healthcare system funded primarily through insurance premiums raised through the Polish labour force, above-consensus economic growth in 2014 could present a boost to the healthcare budget for 2015 without resorting to the need to consider private health insurance or co-payments. Our view on Poland's economic outlook in 2014 is below consensus owing to a disappointing industrial production reading for December, but we believe that low inflation, growing real wages and a restoring of household purchasing power will catalyse an uptick in employment levels. Economic outperformance will weaken the government's argument for private health insurance and co-payments and therefore we believe that the viability of the legislation will hinge mostly on economic readouts.

Polish Healthcare Spending Set To Increase On Back Of Positive Economic Outlook
Healthcare Expenditure, US$bn

In 2014, we forecast Polish healthcare spending to reach PLN112.68bn (US$33.67bn), an increase of 1.6% in local currency terms and a decline of -3.4% in US dollar terms. Over the medium term we expect that Poland's economic recovery will provide a spur to healthcare spending; we forecast healthcare expenditure to rise to PLN145.75bn (US$47.02bn) by 2018.

This article is tagged to:
Related sectors of this article: Pharmaceuticals & Healthcare
Geography: Poland