Rath and Healthcare

The most recent “enfant terrible” of Czech politics and the current focus of the Czech press is MUDr. David Rath, the new Minister of Health. Rath, who throughout his medical career has always flirted with politics and enjoyed being in the limelight, is no stranger to controversy.

Political shenanigans

Doctors have long criticized Rath for his alleged usurpation of power, for the manner in which he got himself elected as president of the Czech Medical Chamber (ÈLK), and for non-transparent financing within the ÈLK in areas such as advertising revenue and sponsorship of its magazine. To make matters worse, Rath and the governing board of the ÈLK decided to extend their terms of leadership automatically, not once, but twice, without any due process. Most physicians in the country have long given up on the ÈLK as being their representative body, and its mandatory membership is now being challenged in court.

When Czech Prime Minister Jiøí Paroubek decided to replace Milada Emmerová, the most recent in a long line of incompetent Ministers of Health, with David Rath, he immediately ran into trouble. President Václav Klaus objected, on the legitimate grounds that Rath could not be both Minister and president of the Medical Chamber at the same time. Rath retorted that as soon as Klaus would sign the appointment (the president may not block a Minister’s appointment, but may delay approving it), that he would resign. Suddenly, the two biggest narcissistic egos of the Czech political scene were engaged in a face-off. The press instantly responded, filling its pages with the inevitable analysis and comment, unfortunately completely at the tabloid level. To make matters worse, Paroubek, who has stood up effectively to Klaus’ unjustified impertinences in the past, decided to fuel the fire, and named Rath as First Deputy of the Ministry, giving him control of the empty Ministry chair. In the end, like all children who engage in a tug-of-war, the participants simply got tired. Rath resigned his Chamber position, and was named Minister by a reluctant Klaus.

A healthcare mess

In doing so, Rath stepped from the frying pan into the fire. In the Czech Republic, the single biggest source of financial woe is the current healthcare system. Today, healthcare as a true system has ceased to exist, instead fragmenting into independent entities, each of which has become self-centered and isolated. All this began in the early 1990s, when capitalist forces were let loose into a socialized system. Suddenly, doctors and hospital directors were faced with enticing new technologies and treatments, but ones which they had to pay for in German Marks or British Pounds. Pharmaceutical firms flooded the market with new and expensive drugs that were often no better than those made here. Today, medication expenses continue to grow at an exponential rate, accounting for the largest portion of so-called “uncontrollable costs.”

At the same time, a decision was made to allow for the creation of multiple “insurance companies” that would reimburse healthcare providers and keep costs down via competition. A “point system” was created, wherein procedures and treatments were reimbursed based not on actual cost, but artificially created points. However, insurance companies remained free to ignore basic economics and to pressure healthcare providers so as to secure the biggest profit and market share. This forced the providers to adopt a survival attitude, and to cajole money from the companies any way they could. To make matters worse, the majority of the insurance contracts remained with the only pre-1989 insurer, the Universal Health Insurer (VZP), a massive bureaucratic post-communist fossil, which until several weeks ago, has remained virtually free of any external control or regulation. In keeping with its pre-1989 mentality, the VZP (and other insurers as well) still refuses to divulge its internal costs or financial data, despite the fact that it is an organization set up by and on behalf of the taxpayers.

The economic mismanagement continues to this day. Hospitals are still paid based on the number of beds and the number of in-patient days, thus encouraging patients to linger in bed and doctors to be lax about recovery times. No incentives for savings exist. Thus, the system continues to reward bad behavior. From the doctor’s union to hospitals, raises and increases are negotiated through pressure tactics, instead of being awarded based on monies saved.

Finally, there is still no definition of the “guaranteed standard of care” that the state should provide. Furthermore, no one has defined exactly where the point- of-care should be delivered on a demographic basis i.e. exactly how many state hospitals, and clinics, of what type, and where. Faced with increasing losses, many hospitals have decided to privatize. In typical short-sighted fashion, instead of creating a national plan of healthcare including a map of points of care based on demographic need, the debate has remained focused on whether hospitals can be allowed to privatize in the first place.

A bad mindset

More than any country in Europe, Czechs visit their doctor seventeen times per year, mostly to get prescriptions for medications that are readily available over-the-counter in other countries, or to get refills, (prescriptions can not be re-filled, only re-issued), or to simply doctor-shop. They can do this, because all “sick time” is generously reimbursed. Furthermore, many doctors don’t mind being paid to write prescriptions. Finally, the big drug companies and pharmacies fear losing control over a market which they have by “influencing” a limited pool of prescribers, as opposed to leaving things up to the consumer.

Just as many Europeans, most Czechs still believe that a socialist work ethic is compatible with capitalist rewards. They continue to view the state as an entity which should care for them from cradle to grave. In the absence of an anti-smoking law, Czechs continue to smoke merrily away, leading all of Europe in lung cancer deaths. Doctors with cigarette packs tucked away in the breast pockets of their surgical scrubs are commonplace in all hospitals.

At the state level, preventative care is still shockingly behind the times. Mammography and screening for cancer of the cervix are reimbursable only in certain centers and not in others.

The solutions

As regards funding healthcare, the good news is that there is already enough. This year’s budget of 180 billion Kè (about 7 billion USD, or 700 USD per citizen, which is above the European average) came up about 50 million USD short of actual expenditures. No further taxes, patient co-pays etc. should be needed. Instead, savings and further improvements can be achieved by several means.

As a first step, a definition of the minimum standard of care needs to be determined. State-sponsored points of care need to be delineated on the map.

Since healthcare wage deductions are mandatory, supporting the birth of a robust private sector will benefit state healthcare the most, as more monies will be left in the latter for fewer patients, raising the quality of state healthcare.

In a system of state-sponsored health care, multiple insurance companies are nonsense. A single administrative agency directly under the Ministry of Health should manage and control all healthcare expenditures. The remaining insurers should remain as true competitive insurance companies, offering their versions of above-standard plans (private hospital room, full prescription coverage, etc.) and negotiating with providers and clients on an individual basis. It should not be the business of the state to concern itself with so-called “above-standard” care. The point system must be abolished. Crowns should be billed and collected as crowns. A coherent drug reimbursement policy to limit spending should be in place. Only the cheapest drug in a given category should be fully reimbursed, the rest not at all.

Back to Rath

Rath is arguably the first Minister of Health since 1990, who understands the solutions to most of the problems that the healthcare system faces. As soon as he got his foot into the door of the Ministry, Rath was quick to initiate changes. After a meeting with VZP president Musílková, despite the protests of his arch rival Klaus, Rath justifiably put the insurer under forced administration. Several weeks later, Musilková resigned, a move greeted by many in the industry. In his first few weeks in office, Rath discovered tens of millions of Crowns in wasteful spending by the insurer, and cut needless programs. Rath also met with hospital directors to tell them that their expenditures will be limited to 98% of last years’, and that they will be strictly controlled. He promptly set about creating a list of expensive medications that would not be reimbursed, as well creating a strategy for enforcing generic drug prescribing.

The bad news is, that Rath embodies the classic combination of most Czech politicians: the tendency to instantly unsheathe the saber and to start jabbing, be it to prove that he is a man of action, or as his way of dealing with any criticism. In fact, Rath’s style is so abrasive, that some have begun to tape-record his media appearances as demonstrations of the epitome of callousness in Czech politics. As the former president of the ÈLK, Rath is also derided by many of his peers. Therefore, the essential problem still remains: the absence of a person who can both calmly articulate the problems of the system and their solution in a clear manner, and present a positive scenario for all sides.

In a new democracy, one with a nervous public that does not believe in its politicians or institutions, the results are dependent on the methods used. Thus far, in the span of sixteen years, eleven Ministers of Health have failed. We shall now see what the twelfth will do.

MUDr. Martin Jan Stránský, MD, FACP
Director, Policlinic at Národní, Prague
Assistant Clinical Professor, Yale School of Medicine

Dr Stránský is the publisher of this magazine. The opinions expressed in the above article are solely those of the author and do not necessarily reflect those of the magazine.


The New Presencewinter 2005

My priority is that patients recieve
and have access to the best care possible.