Does the Implementation of Official User Charges Help to Eradicate Informal Payments - Lessons to be Learnt from the Hungarian Experience.

Abstract

User fees for health care services are a frequently applied policy tool to improve efficiency by controlling demand and contain costs. It is also applied to increase resources for health care, especially when public resources are limited or the increase of income-related contributions is not feasible or not desirable. In addition, in Central and Eastern European (CEE) countries, where informal payments are widespread, the introduction of user fees is often promoted by politicians and policy makers as a potential policy tool to eradicate or “formalize” informal payments (1). Informal payments are unofficial cash payments or gifts in kinds directly given to the health care personnel before or after using health care services. The literature on informal payments suggests that these payments violate the idea of transparency in health care financing and the accountability of providers, which results in an inefficient use of health care resources and inequalities in access to health care Furthermore, informal payments create adverse incentives for their beneficiaries, which can be in conflict with the government’s policy objectives. (2). Thus, in the last decades in the CEE countries, several policies have been implemented to eradicate these payments, including the introduction of official user fees for health care services. However, there is no evidence that supports this expectation. On the contrary, there is evidence to suggest that patients continue to pay informally after the introduction of user fees (3–5). In this case, user fees induce a double financial burden on patients, aggravating the existing problems caused by the informal payments. This makes user fees even more unpopular among the public. According to the OECD Health Statistics in Hungary, the total health expenditure accounts for 8% of the GDP in 2012, with a per capita expenditure of 1,358 USD, which is lower than the OECD average. The share of out-of-pocket payments in total health expenditure has increased considerably during the last decades, and has reached 28.3% in 2012, and accounts for about 5% of the total household expenditure. This level is one of the highest among European OECD countries. Above 80% of these payments are co-payments for pharmaceuticals (80%). There are no official co-payments for health care services, however informal payments are widespread. Hungarian health care consumers have been paying informally for medical services on a routine basis, especially in in-patient care. According to a study carried out in 2010 around one-fifth of the respondents who used physician services during the last 12 months, made informal payments, on average 60 €, and almost half of the respondents who were hospitalized during the last 12 months, paid informally on average 130 € (6). Studies suggest that the scale of these payments has not changed considerably during the last two decades. (7). In 2007 in Hungary, official user fees were introduced for the use of health care services covered by the social health insurance. The introduction of these fees was one element of the reform package to contain health care cost. According to the documented policy objectives, it was expected that official fees will contribute to the eradication of informal payments (8). Although the amount of user fees was relatively low (about 1 € per physician visit and per day spent in hospital), the implementation met with strong political opposition and unpopularity among the public. One year later, in April 2008, the payments were abolished as a result of a population referendum initiated by the opposition party in the parliament, where more than 80% of the voters supported the abolishment of the fees (8). The introduction and abolishment of users fees in Hungary can be considered a natural experiment, and enable us to study the association of formal and informal charges. The aim of this paper is to summarize findings on this issue based on studies carried out to examine the Hungarian case, and draw some policy conclusions.