Opening Address At International Forum Health XXI

Opening Remarks by Florian Fichtl, Country manager:
The subject of today's discussion - "Health economics: Driven by health consumer needs or by health administration" - is of critical importance especially in a situation where Bulgaria will be a full member of the European Union as of the January 1, 2006. Bulgaria will be taking its rightful place within the European Union, and should be proud about that.

However, membership is not a panacea and not all problems will be resolved automatically. Rather, with the formal accession, Bulgaria faces the considerable challenge of EU integration, i.e. adjusting systems and standards to EU level, and of creating and maintaining an economic and regulatory environment that will allow convergence of living standards in the shortest possible time. The health sector is:

1. A critical part of Bulgaria's economy and, of course,

2. Key to our quality of life and living standard as all of us know only too well the moment any of us, or any member of our families, faces a health problem.

It goes without saying that anything we can do to support the health sector in Bulgaria by working with Government, health professionals and consumers, we will do. There is nothing more important to us.
Generally, Bulgaria's health sector experienced the challenges typically associated with the transition after 1989: deteriorating health indicators accompanied the early years of the transition which culminated in a macro-economic crisis in the late '90s. Even now, the burden of disease measures for Bulgaria are below EU average; access to health services is constrained for disadvantaged and marginalized groups (and therefore exerts a long-term burden on the health system and the economy) and, in addition, Bulgaria is facing a considerable demographic challenge.

Fortunately, the trend has changed: Thanks to the efforts of all partners -- and I am not going to list all the reforms initiated and measures carried out since all of you know that much better than I do, and from first hand experience -- health indicators are recovering in recent years. This is very good news that should encourage all of us that the general direction of reforms is right and that the reforms are paying off.

Let me focus instead on the current situation, and on some of the remaining challenges:

1. The overall architecture of Bulgaria's new health care system is generally appropriate; it builds on the social insurance model of Western Europe that has been adopted by many Central and Eastern European countries over the past ten years.

2. The model allows, indeed requires, trade-offs related to the public nature of the health insurance system, to the monopoly over the basic package of services, to the way insurance premiums are collected and used.

3. A main challenge is to implement the system carefully, learning from experience as the implementation progresses. Mechanisms need to be in place to monitor progress in the most important areas.

4. In doing so, special attention needs to be paid to improving the efficiency of health service provision, increasing the universality of the access to care, and ensuring the financial sustainability of the National Health Insurance Fund.

The reform that introduced health insurance in Bulgaria was meant to achieve universal coverage in a financially sustainable manner, while promoting the efficient use of resources and improving quality.

Eight years after the passing of the health insurance law, it is becoming apparent that many aspects of the original plan require additional fine-tuning and that some of the main reforms are yet to be completed. In Bulgaria challenges remain in the following areas:

1. Current spending is biased towards more expensive inpatient care, and the current payment and monitoring systems for hospitals do not contribute to managing the growth of public spending adequately;

2. The excess capacity of hospitals and unequal allocation of resources across regions has not yet been satisfactorily addressed;

3. Spending on pharmaceuticals, at 80 Euro per capita - of which about 50% is out-off-pocket - is still low in comparison to other European countries but is increasing and has the potential to become a major burden for the NHIF budget and limit access to basic drugs for poor households; and

4. Access to health care services is not yet universal.

In conclusion - the reforms in the health sector require additional efforts, and it is important to stay the course and complete the institution building so that the reformed system can do more efficiently what it is mandated to do.

Admittedly, reforming health care is a long process, it takes time to introduce new technologies and, also, to change minds and habits. The Bulgarian experience is not fundamentally different from other countries; and the Bank will be pleased to bring in its international expertise to help national partners complete the reforms in a sustainable manner.

World Bank's role: past and future: I have a detailed list here about the WB's role in supporting health sector reforms in Bulgaria, past and ongoing activities, and there are many. However, I believe it's better to be modest and let deeds speak for themselves.

Only, with respect to the future, let me assure you that our attention is focused on increasing access and quality; ensuring sustainable financing; and making the best possibly use of the opportunity provided by the EU accession, including meaningful absorption of EU structural funds. We are committed to support the health sector and contribute to addressing the challenges that you will be discussing in greater detail.

I wish this conference success in summarizing the issues and proposing solutions to help complete this important reform project on the national agenda.

Thank you.

By World Bank