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01 February 2011

The "Doc Fix" in Czech Republic

According to the helpful and diligent translators at the Prague Daily Monitor and at Česká pozice, doctors in the Czech Republic are starting to resign en masse due to low pay and poor conditions in Czech hospitals. The problem is a complicated one, but it has important lessons for any US health care reform effort.

Health insurance is guaranteed in the Czech Republic, and is considered a basic right. (Actually, they say that health care is a basic right, but can only be obtained if you have an insurance card from an EU-based insurer. It is difficult to pay cash for any treatment at a doctor's office, though possible at hospitals.) The majority of the population, 58%, is enrolled in the state-run All-General Health Insurance Company (and the vast majority of retirees, children and the handicapped), though it is also possible to obtain non-profit insurance similar to Blue Cross-Blue Shield. There is no way to buy private health insurance.

The doctor's Komora (this can be translated as "union" or "chamber," depending on your attitudes towards government employees, general practitioners, professional organizations, etc.) is right to criticize aspects of the Czech health system. Wages are relatively low, treatments do not necessarily correspond to costs, and demand outstrips supply, yet doctors are unable to adjust their rates.

According to the doctors' campaign of "Děkujeme, odcházíme," ("Thank you, we're leaving" -- the name reminds people of a early 2000s movement in Czech politics called "Thank you, please leave" that wanted new blood in politics, rather than the same old parties and same old politicians) the system is has many problems -- the group has identified 13 here.

First off, the system is (according to them) underfinanced: 7% of GDP (paid by the state) goes to health care, compared to an EU average of 10% (to say nothing of the amount the US pays). This results in low wages, poorer negotiations with drug companies, and poorer training. They point out that among OECD countries, only Poland, Mexico, and South Korea spend less.

But doctors are also frustrated with politicians in Czech Republic; the Minister of Health is the most frequently replaced minister in this country's history, precisely because of its controversial nature. This means that there is no reassurance that any reform in policy ever will be actually implemented; moreover, politicians themselves offer promises they cannot deliver on, and the health care sector has become the battlefield for an "ideological war." Additionally, the group complains of corruption in hospital maintenance and expansion by well-connected construction companies, and uncompensated overtime.

So what can we learn from the case of Czech doctors threatening to exit the system, hoping for greener pastures in Germany? First off, they have called for increased competition in the Czech health market, and argue against the once-size-fits-all plan (similar to Medicaid) that currently lowers levels of care, eliminates opportunities for people to pay extra for better care (and at the same time help to finance the system more completely), and instead more effectively tie costs to prices. The movement points out that a "doc fix" is no fix -- the system of government-provided health care itself is rotten, and the occasional reimbursement to doctors only relieves a symptom; it does nothing to cure the disease.

Additionally, they recognize that health care has become a political football and an area where politics is always inflaming the passions. This leads to demagoguery and the constant intervention of the state in people's personal decisions, and renders the concept of limited government unthinkable. It leads to a cycle of broken promises, a skeptical and cynical population, and frustrated doctors who cannot plan in the long term for themselves or for their patients.

Political connections in the health care system, indeed, may drive up costs and increase waste. As hospitals are managed and owned often by the state (or public universities, to be fair), politically connected construction firms will have an advantage in securing contracts for building and maintaining hospitals, and the state has considerably less incentive to make a decision based on fiscal responsibility. Conversely, independent hospitals have great incentive to use their resources wisely. Developing an independent hospital sector in Czech Republic would allow competition to work its price-lowering magic, while also increasing accountability. It would be a mistake to eliminate these sorts of innovations in hospital development in the US, which is also something to worry about.

Some Czech doctors are wary about the pitfalls of the Czech system; we would be wise to look to these pitfalls and avoid them while attempting our own reforms in the US.

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