Health Systems in Transition - Hungary - World Health Organization ...

Health systems in transition Hungary 79
Overspending in the pharmaceutical budget, high unemployment and
decreasing real wages certainly contributed to the persistent fiscal instability
of the HIF, at least in the early phase of economic transition, but the evasion of
health insurance contributions stemming from the size of the shadow economy
and the substantial, uncompensated decrease of the contribution rate seem to
be the core weaknesses of the revenue collection function since the mid-1990s.
3.3.3 Pooling of funds
Although the collection and pooling functions are separated from each other in
the Hungarian system of health financing, there is no complicated mechanism
to distribute resources from the collecting agency (the Tax Office) to the main
pooling agency (the NHIFA), the latter of which is also the single payer in the
health insurance system. The Tax Office must transfer the collected payments
on a daily basis to the account of the HIF, which is administered by the Treasury,
and has to report on the outcome of the collection regularly to the NHIFA
(1998/27). Given that there is a single National Risk Pool, no risk-adjusted
allocation methods are applied.
The annual process of setting the HIF budget is administered by the Ministry
of National Economy, 2 which starts planning by issuing detailed guidelines to
the other ministries and government agencies by mid-April in a given year.
These include target numbers for the sub-budget level of HIF expenditures and
other macroeconomic parameters. The planning process follows a top-down
approach, in which needs assessment plays a fairly limited role, while target
numbers for the next year are based on the current year, without taking into
account realistic calculations of the cost of services in the benefits package. The
final version of the budget approved by the government for HIF expenditure in
the 2010 financial year differed only slightly from the one originally proposed
by the Ministry of National Economy, underlining the weakness of the Ministry
of National Resources to influence budget allocation for health. The NHIFA
does not bear financial responsibility for any imbalance in the HIF budget and
the state has to cover expenditures even if they exceed revenues (1975/1, 1997/8).
The Ministry has been planning the HIF budget with a substantial deficit
since 2003. The fact that this has been possible highlights the irregularity of
state budget planning regulations. The same regulation stipulates that, when
financial data analysis and the trends in the macroeconomic context and HIF
expenditures forecast fiscal imbalance, the government is obliged to prepare
recommendations to the parliament for ensuring financial stability through
2 Before the reorganization in 2010 the Ministry of Finance.