Comments on changes to the hospital modernization and efficiency improvement bill

Comments on changes to the hospital modernization and efficiency improvement bill

There is no doubt that the essence and purpose of the Hospital Modernization and Efficiency Improvement Act remained intact after the consultation and agreement stage.

Still the axis of the Act will be the division of public hospitals into 4 categories (A-D). This will be done every 3 years, with significant supervisory powers of the Agency for the Development of Hospitals (ARS) as to the units in categories C and D. In these groups, there will be recovery and development proceedings in which far-reaching powers will be exercised by the supervisor of the hospital entity nominated by the Agency. These will range from repairing the hospital’s operations to restructuring its debt as part of an arrangement with creditors. It was clarified that one supervisor will be able to act for up to three hospitals.

System changes

Despite the comments, neither the list nor the value of indicators on the basis of which the categorization of hospitals will take place, were changed.

However, there were changes of a systemic nature. One of them is the increased role and duties of ARS in coordination of recovery and development activities of hospitals and setting regional and national plans of health needs in relation to financing from NFZ.

The changes also included – as it turned out – a very sensitive matter of competence and authority to hold positions and perform functions in ARS and hospitals. The requirements necessary to become a supervisor of a hospital entity being an employee of the Agency were increased. The one-year period of work experience in management in health care was changed to 5 years or 3 years in a managerial position in a hospital entity. The requirements for becoming ARS president are also different. In this case, it is required to complete postgraduate MBA studies or have a doctoral degree in the specified fields. At the same time, the catalog of prerequisites for exemption from the examination for the position of the head of a hospital entity has been expanded. For this purpose, it is necessary to have completed postgraduate MBA studies (not only those in health care), carried out at least 400 teaching hours, or possession of a doctoral degree in specified fields.

The controversial provision for ARS to change the head of a Category D hospital entity has been slightly relaxed. If the Agency makes such a change, the possibility of filing a complaint with the court has been allowed.

Local government has also been included in the development of the development plan. The plan will be developed in consultation with the supervising entity.

Recovery and development process

As for the unit-specific recovery and development process itself, additional actors were included in the agreement and consultation stages. For example, the voivode appeared in the area of regional health needs, and trade unions in the area of employment restructuring. The Agency itself will provide hospitals and supervising entities with necessary data and analyses enabling them to draw up repair and development plans.

ARS has been included in the process related to the Instrument for Evaluation of Investment Applications in the Health Sector (IOWISZ). It was also clarified that investments provided for in the approved recovery and development plan will be exempt from the necessity to obtain an opinion on the advisability of the investment.

Some comments of entities representing creditors were taken into account. For example, the protective measure of protection against execution for hospitals will be limited in time. It will be valid for up to 12 months from the date of the announcement of categorization of the hospital into category C or D. However, fundamental creditor demands to remove provisions for entering into an arrangement with creditors and applying a repayment plan for groups that do not accept the arrangement have not been addressed. It should be recalled here that the repayment plan will specify that creditor groups that do not accept the arrangement will be satisfied in an amount equal to the enforcement value of the hospital’s assets and within 5 years to the extent that the hospital’s financial capacity allows.

In addition, the amended bill links development processes and recovery and development proceedings, in terms of the obligation to adjust the activities of the hospital entity to local, regional and national health needs, with financing from the National Health Fund. The entity that will have the final say in aligning the hospital entity’s activities with local, regional, and national health needs will be the Hospital Development Agency alone (no dispersion of decision-making).

Other changes

In the area of provisions of the bill, shaping the system of basic hospital provision of health care services, the exclusion of night and holiday health care from the hospital network has been abandoned. The year 2019 was also adopted as the basis for determining the minimum share of surgical services while qualifying service providers to the network.

However, in the area of provisions shaping the entire hospital market, the Healthcare Institutions Act allows for the possibility of establishing and operating an independent public healthcare institution by an association of local government units (a mechanism of cooperation between forming entities).

Piotr Magdziarz, medical services market expert and founder of FORMEDIS Medical Management & Consulting is a co-author of this text. 

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