Fittest will survive as decentralisation kicks off

Local Government control of hospitals may see better performing hospitals – but fewer, with up to half at risk of shut-down. Marius Savu, Bucharest’s general director of administration of hospitals and medical services, talks to Claudia Ciobanu

July 2010 - From the Print Edition

Nationwide decentralisation of hospitals could leave Romania with fewer but better performing units, argues Marius Savu, general director of the administration of hospitals and medical services, Bucharest City Hall.
Savu is at the forefront of the decentralisation of hospital management, overseeing the pilot project of Bucharest which, together with Oradea, has pioneered the change.
Nationwide, the Government is preparing to pass management of hospitals to municipalities across the country.
In January 2009, the Bucharest City Hall took over the management of 18 hospitals. Three additional Bucharest hospitals - psychiatric hospitals Gorgos and Obregia and the addiction treatment centre - will move under local management this year.
Savu argues that Bucharest has six hospitals with western standards of care - Coltea, Sf. Maria, Filantropia, Foisor, Victor Babes and Malaxa. Over 40 million Euro was invested in the city’s 18 hospitals in 2009 and the funds for 2010 will surpass last year’s figure. Around 225,000 patients, half from outside the capital, were treated in these units in 2009.
“The biggest advantage of decentralisation is that more money will come to the hospitals, because of the supplementary financing from the municipality,” says Savu. “Local moguls will also pay much more attention to healthcare than before, as their constituencies will hold them accountable for the state of the hospitals.”
Bucharest contributed between ten to 15 per cent of its hospitals’ budgets, with the money going towards running costs. The draft law leaves it up to municipalities to determine how much additional funding they will give to hospitals, providing they ensure operational costs. But even after decentralisation, the bulk of the money is likely to continue to come from state health insurance contributions through the National Health Insurance House (CNAS).

Performance critical

The huge leverage that municipalities will have over how much money they invest and how they run the units could lead to discrepancies in hospital care nationwide.
“Political involvement will be crucial - if the mayor get seriously involved, hospitals will see good results,” argues Savu. “We cannot guarantee that equal results will be obtained across the country. Most likely, the result will be a mosaic of well-performing and poorly-performing localities.”
Savu thinks that the success of the pilot project in Bucharest is partly because both the mayor and the president of the city council are medics. According to him, decentralisation is likely to yield positive results in large cities like Timisoara, Cluj-Napoca, Iasi and Constanta, which have important medical universities.
“We will potentially see a vicious cycle/virtuous cycle effect,” Savu says. “If a patient from Oltenita, for instance, goes for treatment in a hospital in Bucharest, because he knows he will receive better care, the Bucharest hospital will receive more patients. In a correct financing system - which I hope will be put in place - the Bucharest hospital will consequently receive more money and thus will be able to provide even better care.”
However there will be drawbacks. “There will be a certain degree of pain because some hospitals will have to close down and some patients will pay the price for this,” adds Savu.
He estimates that as many as 200 hospitals out of the country’s 400 might close down as a result of this “natural process”.
But Savu thinks that the effects need not be so bleak because smaller hospitals in more remote areas can survive with competent management. One option for those at risk is to specialise in a niche treatment and create associations with regional general hospitals.
Independent monitoring of the performance of hospitals could potentially alleviate some possible negative consequences. However, such monitoring is not stipulated in the draft law. During the pilot project, managers of hospitals used a set of ‘key performance indicators’ related to budget revenues and expenses to keep track of hospital performance.

Business class for patients

Savu argues that the public system cannot finance itself through its own means. To help fund hospitals, he is keen to create a “business class” for patients in state hospitals. In this structure, patients would pay for shorter waiting times for procedures and for better beds and food. He says that no differentiation would be made regarding the quality of medical treatment. However the expert thinks that the mentality in Romania - centred on free healthcare for all - will discourage the introduction of fee-based distinctions.
Another creative option is hiring private companies to administrate hospitals, in the hope of more efficient results. Savu says he has discussed with several companies, from Italy and Germany, who expressed an interest in administering Romanian hospitals. However, at present, no responsible private company would commit to handling the low revenues of Romanian hospitals, when their expertise is related to managing much bigger budgets.