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

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Health systems in transition Hungary
municipalities and of counties, and to a lesser extent the central government
and private entities) must finance the investment in and maintenance of
infrastructure, buildings and equipment from other sources. In practice,
however, hospitals have used NHIFA revenue for investment purposes, and in
2000 the government decided to take a less rigid stance and relax regulations in
this regard (1999/12). It is not surprising that providers have been allowed to use
NHIFA revenue to cover capital expenditure, since the maintenance obligation
has placed a substantial burden on local governments, which usually have a
relatively weak revenue base and are in need of central government support.
Local governments have four other sources of revenue for investment and
capital stock maintenance: (1) transfers of national tax revenue (for example,
part of the personal income tax), (2) local taxes, (3) central government grants
in the form of earmarked and target subsidies and (4) other conditional capital
grants from national sources (mainly the Ministry of National Resources)
and international sources (mainly EU structural funds). In principle, local
governments should use the first two sources to cover the capital expenditure
on health care facilities. In practice, however, only a few local governments
can afford to pay for expensive medical equipment or for refurbishing hospital
wings or entire buildings. The central government has thus offered conditional
and matching grants under Act LXXXIX of 1992 on the System of Earmarked
and Target Subsidies for Local Governments (option 3 above), which also
determines the components of the system and the application process.
The first component is a conditional capital grant (earmarked subsidy) for
large-scale projects, usually for the renovation or extension of existing buildings
with a cost exceeding HUF 250 million (€900 000). Its upper limit and local
contribution share are not specified (2006/2). Local governments submit project
proposals to the ministry responsible for local governments (as of June 2010
the Ministry of Interior), which makes a priority list while taking into account
recommendations from the relevant ministry (for example, in the case of
health care projects, the ministry responsible for health, that is, the Ministry of
National Resources with its State Secretariat for Healthcare; see section 2.3.3).
Subsequently, the National Assembly decides on the submitted proposals.
The second component is a target subsidy (that is, a matching grant), which
allows local governments less discretion because both its purpose and conditions
are predetermined by the National Assembly (1992/9). In the health sector, local
governments can apply for target subsidies to purchase medical equipment, such
as X-ray machines or dental equipment. The local share required varies each