Hungary

Background

Reform of the health system had already begun under socialism in 1988 when a national insurance fund with a budget of its own was created. This National Health Insurance Fund (HIF), as it is called today, is financed from employee and employer contributions of 3% and 15% of gross wages respectively. Contributions of those not in employment are financed from an earmarked ‘health tax’. The fund distributes its budget among its county branches, which then use them to contract local providers.

The Democratic Forum (MDF) party, who won the first free election in 1990, carried out the first set of major reforms and laid down the foundation for Hungary’s healthcare model. Firstly, ownership of hospitals, polyclinics and primary care facilities was passed to counties and municipalities. Moreover, private provision of health services  was officially permitted. Although most medical institutions remained state property and the HIF mainly contracted with public suppliers, it gradually began to open more contracts with private suppliers.

In 1993, the HIF was given complete autonomy. It was governed by a board comprised of trade union and employer federation representatives. However, self-government of the HIF was soon seen as an obstacle to cost-containment by the Socialist party, who came to power in 1994, and as a result the HIF’s autonomy was eroded and eventually abolished. The HIF is now aligned with the health ministry again.

Recent years

Since 2000, privatisation of GP surgeries is encouraged. GPs can buy the surgery they work in from the local government, with a subsidised purchase credit.

Costs quickly soared but without health outcomes improving at the same speed. Several governments enacted cost containment plans, which included a shakeout of hospital beds, a trimming of the reimbursement catalogue, and price controls for drugs. But the tendency of rising costs could not be halted. The Hungarian system is still plagued with poor health outcomes at high prices.

Current situation

After initial opposition, in December 2007 members of the governing coalition reached a compromise on a multiple insurance system. The arrangement, which persists today, called for the compulsory health insurance to be managed by 22 health insurance funds (expected to merge into seven within several years), with joint public-private ownership (51% public, 49% private). The government hopes that greater competition among insurance funds will lead to competition among service providers, and improve quality and efficiency. The outcome of this reform remains to be seen while future long-term strategies to improve the population’s health status such as establishing a sustainable financing model for an ageing population, insuring adequate human resources, reducing under-the-table payments and increasing public health sector wages are desperately needed and remain in the works.

In one positive step, albeit only a small part of what is needed, the health ministry has recently focused on raising awareness of diseases, like cardiovascular disease, by running a free screening programme between March and June of 2009.

Hungary statistics

Total Population in 2006: 10,058,000

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