Fee-for-service or donation? Hungarian perspectives on informal payment for health care

Informal payments are known to be widespread in the post-communist health care systems of Central and Eastern Europe. However, their role and nature remains contentious with the debate characterized by much polemic. This paper aims to make sense of this debate by reviewing and summarizing the main arguments of the theoretical debate in Hungary. The review examines the possible causes of informal payment, the motivation of the actors involved and the impact of informal payment on system performance, focusing on efficiency and equity. The lines of arguments are summarized in two contrasting hypotheses, which envisage informal payment as either a donation or a fee-for-service. Evidence pertaining to the scale of informal payments and the motivation of patients are reviewed, but found to be inconclusive to verify the hypotheses. Although focused on Hungary, accounts from other countries facing informal payments show similar threads of discussion and dilemmas. These theories should be tested further using evidence from existing studies and new empirical research, since the validity of the gratitude payment concept is a central dilemma of effective policy making in the area. To orient future research, a possible agenda is outlined, which links evidence to be obtained to the defining features of gratitude payments.     

An alternative way of understanding exit,voice and loyalty: the case of informal payments for health care in Israel

This study examines Hirschman's model of exit, voice and loyalty with regard to informal payments in the Israeli healthcare system. Based on a national survey, we investigate the extent of “black” payments, its characteristics and its correlated factors. We find that informal payments do exist in Israel—although it seems that there has been a decline in the phenomenon. Contrary to the literature, we find no relationship between the option of voice or dissatisfaction with healthcare services and informal payments. However, we do find a negative correlation between trust and the use of such payments. This finding is consistent with Hirschman's insight that a lack of loyalty may lead people to strategies of exit. We suggest that given the fact that health care in Israel is a public service, the exit option may actually be a quasi‐exit behavior. Copyright © 2015 John Wiley & Sons, Ltd.     

Understanding informal payments for health care: the example of Bulgaria

INTRODUCTION: Throughout the 1990s, in response to funding deficits, out-of-pocket payment has grown as a share of total expenditure in countries in transition. A clear policy response to informal payments is, however, lacking. The current study explores informal payments in Bulgaria within a conceptual framework developed by triangulating information using a variety of methodologies. OBJECTIVE: To estimate the scale and determinants of informal payments in the health sector of Bulgaria and to identify who benefits, the characteristics and timing of payments, and the reasons for paying. DESIGN: Data were derived from a national representative survey of 1547 individuals complemented by in-depth interviews and focus groups with over 100 respondents, conducted in Bulgaria in 1997. Informal payments are defined as a monetary or in-kind transaction between a patient and a staff member for services that are officially free of charge in the state sector. RESULTS: Informal payments are relatively common in Bulgaria, especially if in the form of gifts. Informal cash payments are universal for operations and childbirth, clear-cut and life-threatening procedures, in hospitals or elite urban facilities or well-known physicians. Most gifts were given at the end of treatment and most cash payments-before or during treatment. Wealthier, better educated, younger respondents tend to pay more often, as a means of obtaining better-quality treatment in a de facto two-tier system. Since the transition, informal payments had become frequent, explicit, solicited by staff, increasingly in cash, and less affordable. Informal payments stem from the low income of staff, patients seeking better treatment; acute funding shortages; and from tradition. Attitudes to informal payments range from strongly negative (if solicited) to tolerant (if patient-initiated), depending on the circumstances. CONCLUSIONS: The study provides important new insights into the incidence and nature of informal payments in the health sector in Bulgaria. Payments were less than expected, very complex, organised in a chaotic, although adaptive, system, and relatively equitable. The timing of payment and the presence of compulsion is a key factor in distinguishing between informal payments given in gratitude or as a bribe, and the latter are seen as problematic, needing to be addressed. Paying informally appeared to be a product of socio-economic reality rather than culture and tradition. The study showed that the principle of comprehensive free coverage existing in Bulgaria until 1989 has been significantly eroded. Initiating a public debate on informal payments is important in a health care reform process that purports to increase accountability.     

Informal payment for health care: evidence from Hungary

While there is a growing body of evidence that informal payments for health care are widespread and enduring in the former communist countries of Central and Eastern Europe and Central Asia, evidence on the scale of the phenomenon is not only limited, but what is available is often conflicting. Hungary exemplifies this controversy, as the available literature provides conflicting figures, differing by an order of magnitude among various surveys, with a similarly large difference between survey findings and expert estimates. This study advances understanding of the methodological issues involved in researching informal payments by providing a systematic analysis of the methodology of available empirical research and official statistics on the scale of informal payments in Hungary. The paper explores the potential sources of differences, to assess the scope to reduce the differences between various estimates and to define the upper and lower boundaries within which the true magnitude of informal payments can be expected to lie. Our analysis suggests that in 2001 the overall magnitude of informal payments lay between 16.2 and 50.9 billion HUF (euro 64.8- euro 203.6 million, US dollars 77.1-242.4 million), which amounted to 1.5-4.6% of total health expenditures in Hungary. Looked at this way, informal payments do not seem to be an important source of health care financing. However, as informal payments are unequally distributed among health workers, with the bulk of the money going to physicians, with some not taking any informal payments, family doctors and some specialists may have earned between 60 and 236% of their net official income from this source in 2001. This suggests that it is not the overall amount of informal payment that makes it a policy concern, but the consequences of its unequal distribution among health workers. What is remarkable about informal payments in Hungary is that a relatively small amount of money can keep the system running, which gives rise to the hypothesis that, in certain cases, it is the hope of substantial informal payments in the future that motivates physicians to remain in the system. This is a difficult challenge for policy-makers as it would require a much larger amount of money to achieve equilibrium under any formal alternative.     

Informal payments in public hospitals in Greece

Informal payments are an ingrained social institution in Greece. In some cases, they are also part of corruption in the health area, which includes a variety of other forms. OBJECTIVE: The objective of this paper is to measure and analyze the size and nature of informal payments in the Greek public hospitals, concentrating on payments made to health personnel to facilitate access to services and preferred providers. METHODS: We used a randomized countrywide sample of 1616 households, amounting to 4738 individuals. The survey methodology was telephone interviews with a questionnaire supported by the software of Computer Assisted Telephone Interviewing. RESULTS: Out of the total number of those reporting treatment in public hospitals (N=336), 36% reported at least one informal payment to a doctor. Of these, 42% reported it was given because of the fear of receiving sub-standard care (if they did not pay) and another 20% claimed that the doctor demanded such a payment. None of the socio-economic characteristics of the family were related to the size of extra (informal) payments. The probability of extra payments is 72% higher for patients aiming to "jump the queue", compared to those admitted through normal procedures. Also, surgical cases had a 137% higher probability for extra payments compared to non-surgical patients. CONCLUSIONS: A very high percentage of informal payments are made in order to gain access to public hospitals and to receive a higher quality of services. Despite near universal coverage of the population by public health insurance, informal payments are widespread and a major source of inequity and inefficiency in the Greek health care system.     

Informal patient payments in maternity hospitals in Kiev,Ukraine

Maternity care in Ukraine is a government priority. However, it has not undergone substantial changes since the collapse of the Soviet Union. Similar to the entire health care sector in Ukraine, maternity care suffers from inefficient funding, which results in low quality and poor access to services. The objective of this paper is to explore the practice of informal payments for maternity care in Ukraine, specifically in cases of childbirth in Kiev maternity hospitals. The paper provides an ethnographic study on the consumers' and providers' experiences with informal payments. The results suggest that informal payments for childbirth are an established practice in Kiev maternity hospitals. The bargaining process between the pregnant woman (incl. her partner) and the obstetrician is an important part of the predelivery arrangement, including the informal payment. To deal with informal payments in Kiev maternity hospitals, there is a need for the following: (i) regulation of the “quasi‐official” patient payments at the health care facility level; and (ii) improvement of professional ethics through staff training. These strategies should be coupled with improved governance of the health care sector in general, and maternity care in particular in order to attain international quality standards and adequate access to facilities. Copyright © 2012 John Wiley & Sons, Ltd.     

Rethinking informal payments by patients in Europe: An institutional approach

The aim of this paper is to explain informal payments by patients to healthcare professionals for the first time through the lens of institutional theory as arising when there are formal institutional imperfections and asymmetry between norms, values and practices and the codified formal laws and regulations. Reporting a 2013 Eurobarometer survey of the prevalence of informal payments by patients in 28 European countries, a strong association is revealed between the degree to which formal and informal institutions are unaligned and the propensity to make informal payments. The association between informal payments and formal institutional imperfections is then explored to evaluate which structural conditions might reduce this institutional asymmetry, and thus the propensity to make informal payments. The paper concludes by exploring the implications for tackling such informal practices.     

Informal out-of-pocket payments experience and individuals’ willingness-to-pay for healthcare services in Greece

BackgroundInformal out-of-pocket payments to healthcare providers are not uncommon in the Greek health system. We explore individuals’ willingness-to-pay (WTP) to secure zero out-of-pocket full coverage for healthcare services and medications and we estimate the impact of past informal payments and individuals’ opinion about the legalization of informal payments on WTP.MethodsWe conducted a survey of 2841 participants from November 2016 to February 2017. We obtained information on WTP using the contingent valuation method. A two-part regression model was used to estimate the association between WTP, informal payments, and respondents’ opinion about legalizing such payments.ResultsAbout 80% of the respondents were willing to pay an average of €95 per month to obtain free access to full healthcare coverage and medications. About 65% of the respondents were involved in an informal payment at least once during the past four months with an average payment of €247. Higher informal payments and supportive opinions towards the legalization of informal payments increased the likelihood of WTP and were also positively associated with increased WTP amounts overall (p < 0.001).ConclusionsThis survey reveals that individuals’ WTP is critically affected by previous experiences and attitudes towards informal payments. Our results imply that the potential introduction of official fees might not suffice to limit informal payments and suggest the need for stricter regulatory policies.     

Informal payments for health care in the Former Soviet Union: some evidence from Kazakstan

An important feature of the health care system of the Former Soviet Union (FSU) and Central and Eastern Europe is the presence of informal or under-the-table payments. It is generally accepted that these represent a significant contribution to the income of medical staff. Discussions with medical practitioners suggest that for certain specialities in certain hospitals a doctor might obtain many times his official income. Yet little empirical work has been done in this area. Informal payments can be divided into those paid to health care providers and those that go directly to practitioners. They can be further divided into monetary and non-monetary. The complexity of these payments make obtaining estimates using quantitative survey techniques difficult. Estimates on contributions to the costs of medicines in Kazakstan suggest that they may add 30% to national health care expenditure. Payments to staff are likely to add substantially to this figure, although few reliable statistics exist. Research in this area is important since informal payment is likely to impact on equity in access to medical care and the efficiency of provision. The impact of attempts to reform systems using Western ideas could be reduced unless account is taken of the effect and size of the informal payment system.     

Informal payments in the health sector: a case study from Turkey

The practice of making informal payments in the health sector is common in a number of countries. It has become an important policy issue around the world. These payments can jeopardize governments' attempts to improve equity and access to care and policies targeted to the poor. It is widely believed that a considerable amount of out-of-pocket payment in the health sector in Turkey is informal. To examine this issue, we used a questionnaire adopted from a wider international study. We concluded that informal payments in Turkey are significant and have important implications for health care reform.     

INFORMAL PAYMENTS AND HEALTH WORKER EFFORT: A QUANTITATIVE STUDY FROM TANZANIA

Informal payments—payments made from patients to health personnel in excess of official fees—are widespread in low‐income countries. It is not obvious how such payments affect health worker effort. On the one hand, one could argue that because informal payments resemble formal pay for performance schemes, they will incite higher effort in the health sector. On the other hand, health personnel may strategically adjust their base effort downwards to maximise patients' willingness to pay informally for extra services. To explore the relationship between informal payments and health worker effort, we use a unique data set from Tanzania with over 2000 observations on the performance of 156 health workers. Patient data on informal payments are used to assess the likelihood that a particular health worker accepts informal payment. We find that health workers who likely accept payments do not exert higher average effort. They do however have a higher variability in the effort they exert to different patients. These health workers are also less sensitive to the medical condition of the patient. A likely explanation for these findings is that health workers engage in rent seeking and lower baseline effort to induce patients to pay. Copyright © 2012 John Wiley & Sons, Ltd.     

Paying for graduate medical education: the debate goes on

The debate over Medicare payments for graduate medical education has been conducted under the premise that such payments cover the added costs of training. Standard economic theory suggests that residents bear the costs of their training, implying that the additional costs of teaching hospitals are not attributable to training per se but to some combination of a different patient care product, unmeasured case-mix differences, and the costs of clinical research. As a result, payment for the additional patient care costs at teaching hospitals should come from the Medicare trust fund; any subsidies for training should come from general revenues.     

Informal payments for health care in transition economies

There is considerable evidence that unofficial payments are deeply embedded in the markets for health care in transition countries. Numerous surveys indicate that these payments provide a significant but possibly distorting contribution to health care financing. Unofficial payments can be characterised into three groups: cost contributions, including supplies and salaries, misuse of market position and payments for additional services. There is evidence from across the region on the presence of payment in each category although it is often difficult to distinguish between payment types. Regulatory policy must address a number of issues. Imposing penalties may help to reduce some payments but if the system is simply unable to provide services, such sanctions will drive workers into the private sector. There appears to be some support for formalising payments in order to reduce unofficial charges although the impact must be monitored and the danger is that formal fees add to the burden of payment. Regulation might also attempt to increase the amount of competition, provide information on good performing facilities and develop the legal basis of patient rights. Ultimately, unless governments address the endemic nature of payments across all sectors, policy interventions are unlikely to be fully effective.     

Beliefs about informal payments in Albania

Informal payments for health care are a growing concern in Albania and other transitional economy countries. Recent international studies have shown that informal payments can have negative effects on health care access, equity and health status by causing people to forgo or delay seeking care, or sell assets to pay for care. Many countries are putting in place reforms meant to reduce informal payments. In order to be successful, such policies need to consider people's attitudes and beliefs about the practice. This study collected data from 222 citizens in Albania regarding intentions, past behaviours, attitudes and beliefs about informal payments. Comparing people who intend to make informal payments with people who do not intend to make payments, the study found differences in attitudes as well as beliefs about the consequences of making informal payments, in perceptions about what others think and in control beliefs, but no difference in moral beliefs or demographic characteristics. People who intend to make informal payments the next time they seek care are more likely to believe they will get faster and better quality care than non-intenders, but also think they must pay to receive any care at all. People who do not intend to make informal payments are more likely to report that they have connections with medical personnel, which may be substituting for informal payments. The study has implications for educational campaigns accompanying policy reforms. Campaigns which focus on anti-corruption messages are unlikely to be effective, as moral beliefs do not appear to influence intention.     

Informal payments for healthcare services and short-term effects of the introduction of visit fee on these payments in Hungary

The objective of this paper is to study the short-term effects of the introduction of the visit fee in Hungary in 2007 on informal patient payments. We present the pattern of informal payments in primary, out-patient specialist and in in-patient care in the period before and shortly after the visit fee was introduced. We also analyse whether in the short run, the introduction of visit fee decreased the probability of paying informally. For the analysis, we use a dataset for a representative sample of 2500 respondents collected in 2007 shortly after the introduction of the visit fee, which contains data on informal payments for healthcare services. According to our results, 9% of the patients paid informally during their last visit to GP (2 Euros on average), 14% paid informally for specialist care (35 Euros on average) and 50% paid informally for hospitalisation (58 Euros on average). We find a significant reduction in the probability of paying informally only for elderly patients in case of in-patient care. Our results suggest that informal payments are widely spread in Hungary, especially in in-patient care. The short run potential of the introduction of the visit fee to reduce informal payments seems to be minor.     

Hospital payment arrangements to encourage efficiency: the case of Victoria, Australia

The casemix funding arrangements introduced in Victoria on 1 July 1993 represent a significant departure from the previous approaches to public hospital funding in Australia. They are designed to change the economic incentives on hospitals by linking payment to the number and case complexity of patients treated. The new funding arrangements include a combination of fixed and variable payments to hospitals for inpatient services. Outpatient services remain funded on a historical basis. Special payments are made for teaching and research functions. Total payments to hospitals are capped through operation of an 'Additional Throughput Pool' which allows price to fluctuate inversely with volume to ensure an expenditure limit. Because of operations of specific conditions on the Additional Throughput Pool, hospitals were given an incentive to reduce waiting lists. Despite the success in reducing waiting lists and budgets, there are a number of problems with the casemix approach including both technical issues (how are payment rates to be updated?; the failure to address problems of capital) and ethical issues. These are discussed in the paper.     

How do supply‐side factors influence informal payments for healthcare? The case of HIV patients in Cameroon

Direct out‐of‐pocket payments for healthcare continue to be a major source of health financing in low‐income and middle‐income countries. Some of these direct payments take the form of informal charges paid by patients to access the needed healthcare services. Remarkably, however, little is known about the extent to which these payments are exercised and their determinants in the context of Sub‐Saharan Africa. This study attempts therefore to shed light on the role of supply‐side factors in the occurrence of informal payments while accounting for the demand‐side factors. The study relies on data taken from a nationally representative survey conducted among people living with HIV/AIDS in Cameroon. A multilevel mixed‐effect logistic model is employed to identify the factors associated with the incidence of informal payments. Results reveal that circa 3.05% of the surveyed patients incurred informal payments for the consultations made on the day of the survey. The amount paid informally represents up to four times the official tariff. Factors related to the following: (i) human resource management of the health facilities (e.g., task shifting); (ii) health professionals' perceptions vis‐à‐vis the remunerations of HIV care provision; and (iii) reception of patients (e.g., waiting time) significantly influence the probability of incurring informal payments. Also of note, the type of healthcare facilities is found to play a role: informal payments appear to be significantly lower in private non‐profit facilities compared with those belonging to public sector. Our findings allude to some policy recommendations that can help reduce the incidence of informal payments. Copyright © 2014 John Wiley & Sons, Ltd.     

降低居民家庭灾难性卫生支出:“总额预算+按服务单元付费”组合支付方式预期效果之一

为了科学论证"总额预算+按服务单元付费"组合支付方式对于消除百姓高额医疗费用风险,减轻居民医疗费用负担的效果,研究运用居民家庭灾难性卫生支出发生率指标及其计算方法,利用大规模居民家庭入户调查数据,通过比较分析发现,按项目付费下居民家庭灾难性卫生支出(40%阈值计算)的发生率为5.55%,组合支付方式可使其降低17.88%,且效果远大于现行医疗保障的作用(5.29%)。提示组合支付方式可通过良好的费用共担机制,降低居民家庭灾难性卫生支出的发生。     

Informal payments in transitional economies: implications for health sector reform

Since the collapse of the Soviet Union increasing evidence is emerging of informal payments by patients for health care services that are officially free. There is little information, however, on the characteristics of these payments and the effect that they have on health care reform initiatives. This paper examines these issues and concludes that the endemic and complex nature of such payments suggests that a range of policy tools are necessary to address the negative features of informal payments in those countries undergoing transition.     

Medicare Payment Reform and Provider Entry and Exit in the Post‐Acute Care Market

Objective

To understand the impacts of Medicare payment reform on the entry and exit of post-acute providers.

Data Sources

Medicare Provider of Services data, Cost Reports, and Census data from 1991 through 2010.

Study Design

We examined market-level changes in entry and exit after payment reforms relative to a preexisting time trend. We also compared changes in high Medicare share markets relative to lower Medicare share markets and for freestanding relative to hospital-based facilities.

Data Extraction Methods

We calculated market-level entry, exit, and total stock of home health agencies, skilled nursing facilities, and inpatient rehabilitation facilities from Provider of Services files between 1992 and 2010. We linked these measures with demographic information from the Census and American Community Survey, information on Certificate of Need laws, and Medicare share of facilities in each market drawn from Cost Report data.

Principal Findings

Payment reforms reducing average and marginal payments reduced entries and increased exits from the market. Entry effects were larger and more persistent than exit effects. Entry and exit rates fluctuated more for home health agencies than skilled nursing facilities. Effects on number of providers were consistent with entry and exit effects.

Conclusions

Payment reform affects market entry and exit, which in turn may affect market structure, access to care, quality and cost of care, and patient outcomes. Policy makers should consider potential impacts of payment reforms on post-acute care market structure when implementing these reforms.Provisions in the Affordable Care Act represent an important restructuring of payment for health care providers. Accountable care organizations and “bundled” payments for acute and post-acute care create incentives for coordinating and reorganizing the delivery of health care by changing provider payment for an episode of care, where care during an episode can be provided across multiple settings. These reforms affect both the average payment received by providers for an episode of care and the “marginal” or additional payment received for the provision of additional services during the episode. These latest policies are a continuation of earlier reforms implementing prospective payment systems for acute care (1983) and post-acute care (1997–2003) that replaced prior cost-based systems of payment. As now, the earlier reforms were conceived to reduce unnecessary utilization, and considerable research has studied how these policies affected health care costs and patient outcomes (e.g., McKnight 2006; Sood, Buntin, and Escarce 2008; Grabowski, Afendulis, and McGuire 2011).Payment reforms impact providers'' profitability and financial risks through changes in both the overall level of payment and the marginal payment for additional services. Consequently, payment reform may impact provider entry and exit, market concentration, and providers'' organizational structure (e.g., vertical integration). Such changes may have important consequences for provider competition, access to care, and patient choice. While prior research has considered the impact of specific reforms on entry and exit, there is limited evidence of how the design of payment systems more generally affects market structure. In this article, we use a series of Medicare payment reforms for post-acute care providers to investigate how payment system design affects provider entry and exit, and the implications for market structure.