Elsevier

Health Policy

Volume 42, Issue 2, November 1997, Pages 89-100
Health Policy

Under-the-counter payments for health care: Evidence from Bulgaria

https://doi.org/10.1016/S0168-8510(97)00061-4Get rights and content

Abstract

Against a background of falling revenues and increasing expectations, health care systems in central and eastern Europe are facing increasing budgetary gaps. There is extensive anecdotal evidence that these gaps are being filled by informal or `under-the-table' payments. These are important because of their implications for estimates of future funding requirements, for equity, and for the possible perverse incentives they introduce for those providing and managing health services. There is, however, relatively little information on either their scale or how they are perceived in these countries. We report the results of a small survey from Bulgaria that begins to address these issues. Data were collected by means of an interviewer-administered household survey in which those who had used state-provided health services in the preceding 2 years were identified. The survey took place throughout Bulgaria in 1994. One thousand people were approached and 706 (70.6%) provided information suitable for analysis; 42.9% had paid for services that were officially free. Payments had been for a wide range of services and to differing groups, including medical, nursing and ancillary staff. Payments to individuals during consultations were between 3% and 14% of average monthly income but the average cost of an operation was 83% of mean monthly income. There were large differences in the amounts paid by individuals. Most people were in favour of both official user fees and health care reform, except among the old, the poor, and those in poor health. Despite certain limitations, this study gives some indication of the scale of informal payments in Bulgaria. Several possibilities exist to address them. Contrary to what is often argued, there seems to be a popular willingness for them to be converted into formal co-payments. Before this can be done, there is a need for more research on the impact that this would have on equity and affordability.

Introduction

Following the political changes in 1989, Bulgaria retained a state-owned health system funded from general government revenue based on the Soviet `Semashko' model. Throughout this period, it has faced constant crises, with government spending on health declining consistently in the face of national economic collapse, which has been greater than in neighbouring Central and Eastern European countries 1, 2, 3. The consequences of the reduction in health sector funding were exacerbated as they coincided with an increase in demands on it from several directions. The health status of the population declined further following the acute social and economic change, there were pressures to address the long-standing under-investment in capital equipment, economic liberalisation caused the cost of pharmaceuticals and other consumables to rise to world prices, and the transition to democracy unleashed a tide of higher expectations among both health care professionals and the public. The imbalance between these increasing demands and falling revenue could only be met by an increase in extra-budgetary financing. An important means of achieving this was an expansion in informal, or `under-the-counter' payments by patients.

Officially, the attitude towards informal co-payments in Bulgaria has been ambiguous. Although, in theory, the health care system provides comprehensive free coverage, in practice, in many state health establishments it is known that patients pay the full cost of drugs and other consumables, food, and, in some cases, an admission charge. In May 1996, the Interim Government discussed a formalisation of this situation. A proposal was prepared for the introduction of hotel fees for those admitted to hospital as well as charges for those patients choosing to go directly to a specialist rather than being referred from primary care. The decision by the government elected in April 1997 to enact or reject the proposal is likely to be of political nature.

Informal payments were widely regarded as a negative phenomenon. The communist authorities, prior to 1989, took the view that such payments were incompatible with free and equitable health care provision. While it was known that such payments were common, they were officially ignored although informally they served several purposes, not least to act as a form of control of the medical profession that provided them with additional resources as long as they did not oppose government policies but, as the payments were illegal, it offered an opportunity to attack anyone who did step out of line. What limited public debate existed stressed their unethical nature as they would lead to commercialisation of medical care.

Subsequently, more pragmatic approaches have been taken. The World Bank, while emphasising their illegal character, considers that such payments should be incorporated into a system of regulated cost sharing [3].

Another view has emerged which argues that informal payments should not always be rejected. In the economic circumstances of Bulgaria, under-the-counter payments for drugs and other consumables have, de facto, become a necessary source of extra-budgetary revenue available directly to individual health care facilities and are essential if health services are to be sustained during the period of transition. This has led to the situation whereby `donations' have acquired a semi-legal status in many institutions. The Ministry of Health has not taken a formal view on this although the prevailing attitude appears to be one of tolerance as long as the size of the `gift' does not distort the attitudes of staff or lead to abuse.

Some also argue that informal payments, if small, can simply be a sign of gratitude. This is supported by the Bulgarian Physicians' Union, whose guidelines differentiate ex ante payment for care, which they consider to be an `under-the-counter' payment and thus unethical, and ex post payment, or gift, which is a patient's right. In practice, however, as many conditions require a series of encounters with a physician, such a distinction seems artificial.

A major obstacle to developing a coherent policy on informal payments in Central and Eastern Europe is the lack of information on their scale. Inevitably, because of their semi-illicit nature, much of the information is anecdotal [4]. What little evidence exists suggests that they are an important source of health care funding. The World Bank has estimated that, prior to the introduction of social insurance in the Czech Republic, 10% of expenditure on health care was from out-of-pocket payments or gratuities [5]. Corresponding figures from other countries were 25% in Rumania and 20% in Hungary [3]. A 1992 Bulgarian survey [6]found that 34% of respondents had used a `connection' (asking “In the last year or two, have you or anyone in your household gone to someone to get things you couldn't get in the ordinary way?”) to obtain care.

As the countries in this region implement health care reform, the need for more precise measures of the frequency, size and characteristics of informal payments becomes more pressing. In the absence of such information, the scale of overall expenditure on health is underestimated, making projections of requirements inaccurate. Their important contribution, with travel costs and the cost of time away from work, to the total cost of obtaining care has important implications for equity, which cannot otherwise be adequately understood [7]. A system in which patients are required to pay the market cost of drugs and consumables will be regressive as it will not take account of income, thus reinforcing inequity. Informal payments may also create perverse incentives for clinical behaviour by salaried medical staff and may affect their attitudes to health care reform. Finally, as a manifestation of a growing informal economy, it has implications for the shrinking of the tax base and the ability of any system of health care financing to obtain sufficient resources [8].

We report the results of a study that has begun to examine this phenomenon in Bulgaria. By means of a population survey, it measures the extent of `under-the-counter' payments, defined as monetary transactions between a patient and a health care professional for services that are officially free of charge in state health facilities.

Section snippets

Objectives

This study seeks to measure the extent of `under-the-counter' payments for outpatient and inpatient care in Bulgaria; to examine how such payments vary with socio-demographic variables; to examine the willingness of different groups in the population to pay formal fees for health services; to assess popular preferences for various methods of payment for health care (direct out-of-pocket fees; voluntary health insurance; compulsory health insurance; and the existing tax-based system with no

Methods

The sampling frame consisted of 1000 individuals aged 18 or over who used state-provided health services in the 2 years preceding the survey. Interviewees were selected through a pseudo-random two-stage method, first selecting neighbourhoods and then households. The sampling frame was confined to medium and large settlements. In each household, one person who had used state health services in the preceding 2 years was selected. If no-one in the household had used health services, a second

Results

Two-hundred and fifty subjects were unwilling to be interviewed and a further 44 interviews were excluded as a significant proportion of responses were missing or inconsistent, giving an overall response rate of 70.6%. Details of non-respondents are not available; 302 (42.8%) respondents were male and 404 (57.2%) female. The age distribution was as follows: 16–24 years—19.3%, 25–34 years—17.2%, 35–54 years—34.5%, 55–64 years—15.3%, over 65 years—13.8%. The distribution of average monthly

Discussion

This study is the first of its kind to be conducted in Bulgaria and was undertaken in difficult circumstances with a very small budget. Before considering the implications for policy, it is necessary to address its limitations. First, the absence of previous data from Bulgaria limits the scope to validate the results. It is possible that responses were influenced by perceptions of the semi-illicit nature of such transactions. Second, the survey included a relatively small number of variables

Acknowledgements

The survey was funded by the Open Society Foundation. DB is supported by a European Union ACE Fellowship, Contract No. P95-3136-S. The views expressed are those of the authors alone and cannot be taken as representing those of any other organisation.

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