SOCIO-ECONOMIC CONTEXT CHAPTER 2Box1: Why are public allocations for healthcare justified?From a cost and benefit analysis, it appears obvious why the state should invest in healthcare, particularlyin prevention. There are also less tangible benefits such as the creation of positive outside effects, theprocurement of public goods, the mitigation of material inequalities, and the avoidance of subsequentextensive allocations. For example, adequate protection provided to mothers and children reduces theirmortality rate and supports future human capital - an important precondition for economic growth anddevelopment. The children of mothers suffering from malnutrition have lower birth weights and difficultphysical development. Such children are more prone to illness, more likely to do badly in school, and aremore prone to chronic diseases in their adult years. In addition, with the death or illness of the mother,society loses a member whose work and activities are crucial to the life and cohesion of the family andcommunity.Healthy individuals have more leisure time, and better developed social skills, which are both importantpreconditions for the creation of social capital. The fiscal costs of healthcare transform into long-termbenefits arising from the development of human and social capital. Public investment in healthcare alsostimulates equality in a community. People who suffer from protracted illnesses often have lower levelsof education and employability, and are generally unemployed, poorer or socially excluded. Their socialstatus is often transferred to their children. Thus, public funding in healthcare – especially for mothersand children – has the potential to correct this social injustice (World Health Organisation, 2006).Despite a relatively high allocation of funds, 25 theprovision of health services in <strong>Croatia</strong> has been concentratedin large urban centres, particularly Zagreb,while rural areas have been left with poorly equippedhealth institutions. Still, the common developmentindicators of the <strong>Croatia</strong>n healthcare system (suchas infant mortality and inoculation rates) are closerto those of developed European countries than thetransitional countries of Central and Eastern Europe.The greatest challenge in <strong>Croatia</strong>n healthcare is inits difficult and uneven access 26 which, coupledwith informal payments and usage of private healthservices, negatively impacts the less fortunate segmentsof society. There is no reliable research on thisissue for <strong>Croatia</strong> (Transparency International, 2006),but evidence of this can be derived from a generalanalysis of the <strong>Croatia</strong>n healthcare system and worldexperiences, which clearly describe the problemsconnected to a lack of available healthcare services forthe less fortunate. In <strong>Croatia</strong>, the general absence ofpersonal care for one’s own health, as well as frequentdiseases connected with unhealthy behaviour, 27 representa mounting national health concern.For a number of years, <strong>Croatia</strong> has been implementinghealthcare reforms. The last reform began in2000 with a reorganization of the healthcare systemdesigned to improve the general health of thepopulation, increase the financial sustainability ofthe system, privatise some of the services, strengthenprimary healthcare, and reduce the considerable disparitiesin the availability of services. Further reformsare planned to strengthen institutional capacitieswithin the healthcare system, implement new pilotprogrammesin healthcare services, and improve, developand integrate healthcare information systems.The reforms have been structured around the appli-25 In <strong>Croatia</strong>, the total exp<strong>end</strong>iture for health care per capita adjusted according to purchasing power amounted to USD 630 in 2002. Ofthat, the share of public exp<strong>end</strong>iture in the total exp<strong>end</strong>iture accounted for 81.4%. The share of total exp<strong>end</strong>iture for health care in GDP in2002 was 7.3% (World Health Organisation, 2006).26 Individuals with physical disabilities voice the most complaints against the (financial) unavailability of health care services. Theinterviewees express the greatest degree of dissatisfaction precisely with the system of health care, because: “The situation is at its worsein the field of health care. They have revoked so many benefits that we used to enjoy. They simply began to harass us. Paying for drugs,imposing norms on the visiting nurse...”. (<strong>UNDP</strong>, 2006b).27 Poor nutrition, smoking, alcohol, abuse of narcotic substances, excessive weight, insufficient physical activity, etc.35
CHAPTER 2SOCIO-ECONOMIC CONTEXTcation of a cost-benefit analysis and on strengtheningthe connections between hospitals and primary andsecondary health protection. Better organisation andconnection between these three levels of healthcarewill generate a greater reliance on primary servicesand reduce pressures on specialized and hospitalservices.The reform activities are classified into three groups:service provision, equipment acquisition, and developinghealthcare related information technology.Connections with the local community are also beingestablished with more homecare services, improvedhospital patient release procedures, and the involvementof general practitioners in out-patient recovery.There is also a plan to improve the general expertiseand number of nurses. Doctors and primary healthcarepractitioners have the most contact with patientsand therefore have the greatest impact on the impressionthe population has of the overall healthcaresystem. Healthcare management expertise must alsobe improved quickly so that the next generation ofpractitioners can be prepared to manage healthcareinstitutions. Methods of attracting medical staff totransitional and developing countries must be improved.Finally, public planning must include a longtermstrategy to ensure the financial sustainability ofthe healthcare system as a whole. In conclusion, it isessential to clearly and precisely define, coordinateand modernise the minimum financial standards inhealthcare. Coordination between the powers andresponsibilities of the owners of health facilities(mostly local authorities) and those providing thefinancing (<strong>Croatia</strong>n Health Insurance Institute) mustalso be improved.36