NIK: Hospital network has not improved the financial situation of establishments

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The hospital network, which has been in operation since October 2017, has not had a positive impact on the financial situation of most hospitals. It has also not improved patients’ access to health services, according to the latest report of the Supreme Chamber of Control (NIK). Conclusions from the NIK audit also confirm the results of the PMR survey.

Hospital network – assumptions

Since October 2017, Poland has been operating a basic hospital security system, the so-called hospital network. According to the data of the Ministry of Health, at the time of establishing the network there were 592 hospitals, divided into six levels of protection: I, II and III degree hospitals, national hospitals, oncological or pulmonary hospitals and paediatric hospitals. The establishment of the network had two main objectives.

On the one hand, thanks to the network of hospitals, the approach to patients was to change. Hospitals were supposed to provide comprehensive health services to patients, with a coordinated treatment cycle, rather than individual procedures. On the other hand, the financial situation of hospitals was to improve thanks to the stability of funding. According to a study carried out by NIK, both these postulates were not implemented.

NIK: Hospital costs are rising faster than revenues

Flexible management of money by hospitals was to cause their gradual recovery from debt. However, according to a study conducted by NIK, the process of indebtedness of the surveyed institutions, which had already experienced financial problems, in most cases accelerated even more. The financial situation of other institutions, which had previously been in good condition, also deteriorated. All because of rising operating costs, including statutory increases in salaries of physicians and nurses. Although the revenues of hospitals controlled by NIK increased by 13% in the first three quarters of 2018, operating costs increased by 17% during the same period of time.

The accumulated net loss of hospitals surveyed by NIK increased from PLN 85m during the first three quarters of 2015 to PLN 156m in the corresponding period of 2018. At that time, accumulated net profit increased from PLN 7m to PLN 10m.

PMR survey: District hospitals are the worst performers

The results of the NIK control are consistent with the results of the survey conducted by PMR in December 2018 for the purposes of the report “Public and non-public hospital market in Poland 2019”. As many as 60% of public hospitals assessed their financial situation in 2018 as worse than in the previous year. In a similar survey conducted in March 2017, 35% of such institutions indicated a worsening of their financial situation.

Also in the group of non-public hospitals, we noted a deterioration in the assessment of the financial situation compared to the situation declared in March 2017. In the previous edition of the report, 27% of hospitals (private and operating as SP or JST companies) assessed the situation positively, whereas in 2018 it was only 18%.

The study also shows that the differences between public hospitals are widening. Establishments which are not doing well are becoming increasingly loss-making and profitable entities are increasing their positive financial results. In fact, in the public sector a lot depends on the location and type of hospital, e.g. small county hospitals are coping with changes worse and worse.

The NIK audit covered 29 units operating within the hospital network, including 12 1st degree hospitals, 12 2nd degree hospitals and 5 3rd degree hospitals.