Romania
Located at the crossroads of Central and Eastern Europe, Romania is a country in flux. Roger St Pierre considers the challenges to insurers and assistance companies with clients in the country
First published in ITIJ 125, June 2011
Located at the crossroads of Central and Eastern Europe, Romania is a country in flux. Roger St Pierre considers the challenges to insurers and assistance companies with clients in the country
At face value, Romania – which was fifth richest country during the inter World War years – has lots going for it as it fights to regain its former status. A stunningly beautiful landscape and colourful history and culture make a shoe-in for a fast-growing tourism industry, while the country is also rebuilding its industrial base, and has substantial mineral reserves – coal, oil and, yes, gold too – and the soil of the great plain is so fertile that two crops a year are routine. But behind these positives is a long list of negatives, from pockets of grinding rural poverty, a stumbling economy and a brain drain, to rampant graft and bribery whose tentacles stretch deep into society, including the healthcare sector.
In recent years, Romania’s anti-corruption investigators have exposed more than 1,100 doctors and teachers, 170 policemen and three army generals for taking back-handers, while Berlin-based Transparency International (TI) rates it the second most corrupt of the 27 European Union (EU) member nations, after next-door neighbour Bulgaria.
Fraud in healthcare
According to TI investigators, doctors are now so used to receiving bribes that it has become necessary for patients to pay above the going rate just to get their attention. A hangover from the queue-jumping ploys of the Communist era, graft is now so endemic that it infects almost every aspect of daily life, and nowhere is it more rife than in the healthcare system. TI’s interviews with patients, doctors and others revealed that the culture of bribery has spread to every level of the system. One anonymous doctor even reported having been offered an all-expenses paid shopping trip to Dubai by one patient, an offer he said he had refused.
One anonymous doctor even reported having been offered an all-expenses paid shopping trip to Dubai by one patient, an offer he said he had refused
When honest doctors do turn bribes down, patients often mistakenly assume it is because their illness is incurable. Comments Victor Alistar, Transparency International’s director for Romania: “Public hospitals now routinely exchange what they euphemistically call ‘supplementary charges’ lists to make sure they are charging the same rates."
Current asking prices for bribes range from US$125 for an appendectomy to a whopping $6,500 for brain surgery. According to ethicist Dr Vasile Astarastoae, president of the 47,000 member Romanian College of Physicians, pitifully low wages – just $510, approximately, a month for a fully qualified doctor – are a root cause of the problem. Since 2007, some 5,000 doctors have left to seek better times abroad. A study carried out by the World Bank for the Romanian Ministry of Health back in 2005 concluded that so-called informal charges amounted to a whopping $360 million a year: “When hospitalisation is required, patents routinely pay bribes equivalent to threequarters of an average family’s monthly income,” concluded the report. Says Dr Astarastoae: “There is no status to being a doctor here. Back in Communist times it was the workers in the factories, not the professionals, who were being touted as the nation’s heroes – and that sort of view persists. The college has the power to revoke doctors’ licences but patients are loathe to give evidence in case the other doctors then put them on a black list. However, when we set up a hotline, with guarantees of anonymity, we were flooded with calls.
Considering its current woes, it is ironic that Romanian public healthcare was once among the world’s finest. The long history of socialised medicine in the country stretches all the way back to 1701, when Mihai Cantacuzino started work on Bucharest’s Coltea Public hospital, which comprises numerous buildings, each with between 12 and 30 beds. Opened in 1733, Pantelimon hospital is a monumental foundation that is also in the capital. Serving Moldavia and Wallachia, St. Spiridon Hospital, in Iasi, is the country’s second largest.
Modern private facilities include the Sanidor Medical Centre, which claims to be the only private clinic in Romania to be able to cover a full range of medical services, thanks to its highly specialised medical staff and state of the art equipment.
UNIREA has eight private clinics in prime locations within Bucharest and covers a gamut of specialities, while the MedLife Hyper Clinic claims to offer the country’s most luxurious clinical facility. Also in Bucharest, SOS Medical & Ambulance Services offers a complete administrative case-and-file management support system, a basis of the chain of survival process, from initial diagnosis through to follow-up consultations after treatment. This includes claims settling, invoicing and dealing with enquiries regarding benefits, coverage, general policy, terms and conditions and more, providing an excellent addition to the overall assistance package. SOS has recently diversified, twinning with sister company MediHelp International, which provides healthcare insurance through BUPA products as part of the portfolio.
“Although delivering primary and emergency healthcare will always be the principal business stream for private clinics, offering health insurance for both locals and expats is a logical next step. It too provides the same case-and-file management system feature as offered by SOS,” explains MediHelp’s Keith Hook. “Case management as part of the customer service is invaluable for the client, especially when you consider that Romania is not in the forefront of providing such services, especially within the medical sphere.”
Indeed, healthcare access is poor compared to other EU countries, with 450 hospitals nationwide – few of which have been built in recent times. The bed-to-patient ratios is above the EU average, but this plus factor is negated by the equipment underfunding: “Spotless linen on neat beds and newly whitewashed walls, but no equipment, is not what’s needed,” comments Keith Hook of MediHelp, adding, “And it’s not good that the doctor to patient ratio is just two per 1,000 citizens.”
“Public hospitals now routinely exchange what they euphemistically call ‘supplementary charges’ lists to make sure they are charging the same rates.”
It was once something to be envied but, given the current straits of the public healthcare system, its not surprising to find that many better-heeled members of society – including President Basescu – go abroad for their treatment, usually to Germany or Austria.
Brain drain
Today, Romania spends less on healthcare – just 5.7 per cent of GDP – than do any of its EU partners and, due to the worse recession of the postwar area, the government is continuing to make swingeing cuts in the sector while many doctors, nurses and ancillary workers are leaving to work abroad.
“Those who go can increase their pay levels tenfold. Lots of good people are leaving,” says Anca Srugiu, who organises regular medical job fairs in Bucharest. “Wages in the sector, which are already woefully low, are being slashed by 25 per cent while the hospitals, strapped for cash, cannot afford to pay for the drugs and medical supplies they so desperately need,” comments a spokeswoman for Sanitas, the nurses’ union.
It doesn’t help that patients are leaving as well as doctors. Therein lies a hidden problem for the rest of the EU: “We currently have the highest rate of tubercular infection in Europe. We are now exporting germs as well as doctors,” observes Dr Adrian Mocanu, director of the Marius Nasta Institute of Lung Diseases, in Bucharest, which has been financed by the UN Global Fund, “TB is not just our problem, it’s a problem for Europe.” It doesn’t help that the government maintains overdue debts to hospitals and pharmacies but a recently announced €3.5-billion line of credit from the International Monetary Fund should ease things.
Says health minister Attila Cseke: “The Romanian health service’s share of GDP is less than half that allocated in Germany and just a third of Germany’s budget. I would not agree that the system is collapsing, but we have reached a crossroads and must take the right turning. We’ve had 19 health ministers over the past 20 years. We now need some stability and a consistent approach to the public healthcare challenge.”
In a controversial move, Cseke has transferred control of most of the public hospitals to local authorities, hoping for greater accountability.
This year, Cseke has introduced a number of reforms, including a co-payment scheme that will see 60 per cent of patients making a financial contribution towards the cost of their treatment. Currently, Government funding, which is supported by personal and employer contributions to the National HealthCare Insurance Fund, covers 81 per cent of total health expenditure. Private health insurance was not introduced into Romania until 2003 and accounts for a mere one per cent of private healthcare spend, the rest coming from out of pocket.
the government is continuing to make swingeing cuts in the sector while many doctors, nurses and ancillary workers are leaving to work abroad
Also planned is an integrated electronic health information system that will maintain a single national database of patient history, prescription and billing information. Also on the way, and mainly financed by overseas’ funds, is a public/private partnership for the secure funding of emergency care hospitals. Some 22 million people inhabit Romania today. The vast majority are ethnic Romanians, whose Latin-based language is very similar to Italian. There are also substantial Hungarian and Gypsy ethnic minorities. The country has the EU’s 11th largest economy by total nominal GDP and the eighth largest based on purchasing power parity.
After the fall of the infamous Nicolae Ceausescu in 1989 there was massive failure in the privatisation programme, due largely to corruption, and the industrial base collapsing, leading to a GDP decrease of nearly half. But accession into the EU, on January 1, 2007, brought the rapid acceleration of a so-called tiger economy, with foreign direct investment – some $100 billion of it in the past two decades – pouring in. Growth rates soared to an impressive 8.4 per cent (three times the EU average) by 2008 and plans were being laid for Eurozone membership by 2014 – but then came the global recession, creating a 7.2 per cent GDP downturn in 2009 and the need for both harsh austerity measures and an IMF bailout. The economy continued to contract during 2010, at a rate of 1.2 per cent, but a 1.5 to 2.8 per cent recovery is being forecast for 2011.
As elsewhere in the healthcare world, private provision is burgeoning. Spotting the opportunities, Signal Iduna, the major German mutual insurer that is pioneering healthcare insurance in Eastern Europe, has launched a corporate healthcare programme in Romania. Says Rainer Schoenberg, Signal’s vice president: “We have 40 staff on board already and are building a network of hospitals so we can provide the best facilities, be they private or public, for our new insurance offering. We are hoping to open up the market by creating more demand and allowing providers to concentrate more on healthcare and less on marketing effort.”
Emergency care
Romania’s once extensive national air ambulance network was closed down in 1978 and coverage was not reintroduced until 1990 when the British-based Light into Europe charity, which works with DHL to provide service, flew a five-year old girl to Rotterdam for emergency heart surgery. Seven years later, Light into Europe was invited by the Romanian health ministry to be the country’s sole provider of air ambulance services, with the government covering fuel costs. Between 1997 and 2003, this service flew for 4,000 hours on 700 flights, saving a claimed 900 lives. Given the parlous state of the state-run ambulance service at the time of the anti-Communist revolution, in 1990, SMURD – an acronym that translates as Mobile Emergency Service for Resuscitation and Extrication – was introduced in the northern city of Taegu Murs, operating ambulances under the 112 emergency phone number used to call police, fire and ambulance services. Today, SMURD ambulances are available in many cities while the organisation operates a helicopter emergency medical system that overs Bucharest, Targu Mures and Iasi. State-owned ambulances are generally old, in poor condition, badly kitted out and, in some cases, have no treatment equipment at all. Where private air assistance services are not available, police or military helicopters step into the breach.
As elsewhere in the healthcare world, private provision is burgeoning
Tourism in Romania primarily lays it focus on the country’s natural landscapes and rich history, with the most popular destinations including Constanta and Mamaia, sometimes dubbed ‘the Romanian Riviera’. In the 1990s, the government heavily promoted the development of skiing in the Romanian Carpathian mountains and now domestic and international tourism is responsible for generating around four per cent of GDP and 800,000 jobs. In 2006, the most recent year for which figures are available, Romania registered 20 million overnight stays by international tourists, an all-time record and increase of four per cent on a year earlier. In total in 2006, over 14 million tourists holidayed in Romania, bringing with them millions of euros in revenue and an average expenditure of €679 per person.
So, while Romania may be an attractive tourist destination in the making, it is clear that there is much work to be done by assistance companies – especially when it comes to helping clients deal with what would appear to be a seriously corrupt healthcare system.