ERNST & YOUNG SRL

 | 

BOGDAN CONSTANTINESCU

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BOGDAN TENU

  |  2014-12-18

Reforms are not enough without new financing options in romanian healthcare system

Healthcare is still struggling following the Romanian Government’s failure to privatize the system in 2012 and the underfunding resulted from more than five years with one of the lowest health contribution in Europe

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ERNST & YOUNG SRL


BOGDAN CONSTANTINESCU

BOGDAN CONSTANTINESCU

at ERNST & YOUNG SRL


BOGDAN TENU

BOGDAN TENU

SENIOR MANAGER - TRANSACTION ADVISORY at ERNST & YOUNG SRL

The national healthcare system scored the penultimate in the European Consumer Health Index 2013 Report performed by Health Consumer Powerhouse. The index comprises six sections: patient rights and information, waiting time for treatment, outcomes, range and reach of services, prevention and pharmaceuticals. The result reflects the poor quality of the Romanian healthcare system, as well as one of the lowest health expenditures in Europe.

 

The healthcare expenditure accounts for only 5% of the country’s GDP, in comparison with the European average of 8% (Business Monitor International, Romania Pharmaceuticals & Healthcare Report Q4 2014) . Physicians and nurses are still leaving the country to work abroad for a much higher income, leaving Romania behind the regional average for health workforce (World Health Organization, Romania: health profile, May 2014).

 

After more than 6,000 physicians (30% of practicing doctors) left the country since 2011, the number of physicians per 10,000 inhabitants decreased considerably, reaching 23.9 in May 2014, 28% lower than the regional average.

 

Healthcare expenditure trend

As illustrated in the chart below, Romania has a predominantly publicly funded healthcare system, which is not an advantage, but rather a disadvantage due to the minimum level of 4.78% of the country’s GDP allocated to health spending in 2013.

 

Public financing

For 2014, the Government allocated 23.5 billion RON (5.08% of GDP) for healthcare, which implies a slight increase of 3.1% versus 2013. But this does not mean that there will be more funds available, RON 1.06 billion being used for paying off backdated debts. In conclusion, healthcare spending is expected to remain flat over the year.

 

 

The main financing source for healthcare in the public sector is the National Unique Social Health Insurance Fund (Romanian FNUASS, “the Fund”) which administers 85% of the total financing, but also the Ministry of Health (MoH) and local administrations contribute to the total Government spending.

 

 

The National Unique Social Health Insurance Fund was founded following the “Emergency Ordinance No.150” from 2002 which clearly defines the obligations of health insurance companies and insurants. The National Insurance Company (Romanian CNAS) together with the health insurance companies are direct responsible for the administration of the collected funds, this legislative stating that 96% of these should be used for financing the medical services, medicinal products, sanitary equipment and medical devices used by the insurants.

 

The main sources of income for the FNUASS stated in its Budget Execution statements are the insurance contribution (from companies and insurants), clawback tax, non-tax revenues, EU funds and public budget subsidies in order to cover the expenses.

 

 

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