Productivity and long term growth

Economic Survey of Hungary 2005: Policies to improve the health care system

 

The following OECD assessment and recommendations summarise Chapter 3 of the  Economic Survey of Hungary 2005  published on 19 July 2005.

Health care is an area where spending discipline will become increasingly important. The demand for health care services is likely to rise significantly in coming decades in a population that already places high demands on the health system. While public spending on health care is not yet worryingly high, failure to speed up modernisation of the health system could lead to significant increases in spending or unacceptable falls in the range and quality of public health services. While the health system is based on a purchaser-provider model, and reforms over the past decade have generally moved in the right direction, progress has been slow. However the government is launching a series of measures as part of the Hundred Steps programme. 

Low life expectancy is driven by high mortality in intensive care illnesses

1. 2001 for Canada, Germany, Korea, New Zealand, United Kingdom and Unites States.
2. Deaths for 100 000. 2 000 for Canada, Iceland, Ireland, Italy, Japan, Netherlands, New Zealand, Portugal, Spain, Switzerland and Unites States, 1999 for France, Denmark, Greece and United Kingdom.
Source: OECD, Health data (2004), 3rd edition.

The slow progress in modernising the health care system is reflected in key weaknesses in the efficiency of hospital care, failure to prevent uneconomic use of hospital services and excessive spending on prescription drugs. These problems need to be tackled along the following lines:

  • The allocational efficiency of resources across all providers in the purchaser-provider system needs to be improved. In particular, caps on reimbursements should be made more needs-based to take account of local differences in population characteristics. Hospitals have to be put under more pressure to co-operate or merge in order to improve cost effectiveness. 
  • Individual hospitals also have to be given more scope in managing resources and greater incentives to make efficiency improvements. Responsibility of owners and managers for deficits and debt needs to be increased and made more congruent with service obligations. This would give more control over investment expenditure and greater freedom in the management of human resources while also increasing accountability.
  • “Gatekeeping” by general practitioners for access to specialists needs to be strengthened to help reduce avoidable use of hospital services. The use of hospital services also needs to be more effectively controlled by better checking of treatment decisions, particularly those where there are alternatives to treatment requiring long stays in hospital . Some financial and contractual changes have already been made and others are planned. Nevertheless, further policy work will be needed.
  • General practitioners and specialists also need to be made more cost-conscious in drug prescription through reforms of prescription guidelines and improved monitoring of doctors’ behaviour. This should encourage greater use of low-cost drugs. The authorities also need to maintain their current contract with the pharmaceutical companies, so that pressures to remove caps on government subsidies can be resisted.

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Return to Economic Survey of Hungary 2005 homepage

A printer-friendly Policy Brief (pdf format) can also be downloaded. It contains the OECD assessment and recommendations, but not all of the charts included on the above pages.

To access the full version of the OECD Economic Survey of  Hungary:

  • Readers at subscribing institutions can go to SourceOECD, our online library.
  • Non-subscribers can purchase the PDF e-book and/or printed book at our Online Bookshop.
  • Government officials can go to  OLISnet's Publication Locator.
  • Accredited journalists can go to their password-protected website .

For further information please contact the Hungary Desk at the OECD Economics Department at webmaster@oecd.org. The OECD Secretariat's report was prepared by Philip Hemmings and Alessandro Goglio under the supervision of Andreas Wörgötter.

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