**2. Financing of health care in post‐communist countries**

The efficiency of public organizations has become an area of practical measurement and sci‐ entific research. The evaluation of efficiency in terms of quantity should be the basic premise of making economic decisions. The more accurate it is, the more accurate and relevant are the

Assessment of health systems should be carried out in two dimensions, where the *effectiveness* of the system reflects its success in achieving its objectives, whereas the *efficiency* reflects the success of transformation of inputs into outcomes [2]. In this study, the latter approach

International comparative studies of health systems often use, among other medical resources, health‐care spending measured as the share of gross domestic product (GDP) or per capita. It should be noted, however, that a constant share of health‐care spending in GDP over time does not mean that spending is constant, but rather that changes in health‐care spending are

Controlling spending on health care and the system of its financing is a priority aspect in designing public policy. The interest in this issue has increased in recent years as a result of the economic crisis and the need for financing health care with budget funds or by increasing

An illness can cause lack of economic security both directly and indirectly. For those with‐ out or with partial health insurance, medical expenses can be devastating, leading to debt or opting out of treatment at the expense of worsening health in the future. Health insurance may cover different options, and even the insured individuals may incur high costs, paying

It should be noted, however, that the transformation of command economies proved more complicated than it was originally thought. Job insecurity, social inequality and the decline in spending on social and health insurance after the economic collapse contributed to the dete‐

The purpose of this chapter is to determine the efficiency of health‐care systems of post‐ communist countries. The study was conducted for the 28 countries of the former Eastern bloc for the years 2000 and 2013 using the method of data envelopment analysis (DEA). Averages of health indicators for the 16 economically developed countries of Western Europe were used as

The originality of this approach consists in focusing research on post‐communist countries, for which a small number of studies are carried out, as well as on conducting a broad discus‐ sion of projections, i.e. the necessary measures that must be taken to enable the countries which were in the Soviet sphere of influence after the Second World War to achieve such health results as in the case of the most developed European countries. Conducting research in multiple years allowed for verifying whether the actions taken within the framework of

information it provides.

94 Advances in Health Management

proportional to GDP changes [3].

directly for some services or medicines.

rioration of health‐care outcomes.

a benchmark.

the share of patients' private out‐of‐pocket expenditure [4].

economy transition influence also the health systems.

prevails.

The post‐communist countries of Central and Eastern Europe and Central Asia (CEECA) transformed their economies, which included the transformation of health‐care systems from the Semashko model to insurance (social health insurance, SHI) or budget (national health service, NHS) approach. Therefore, it seems necessary to measure the effectiveness of the introduced changes and assess the outcomes of health care.

The health‐care system in the centralized economy of the Soviet Union was plagued by chronic underfunding, antiquated and deteriorating facilities, inadequate supplies and out‐ moded equipment, poor morale and no incentives for health‐care workers to boost the pro‐ ductivity, as well as consumer dissatisfaction. Health statistics reveal poor life expectancy and high mortality rates, with striking disparities among the individual republics [5].

The post‐communist economies are catching up with most developed countries, but the gap in economic development remains very significant and is especially evident in the level of gross domestic product per capita and its derivatives, e.g. health‐care spending per capita. The differences are also visible in the achieved health outcomes.

Health‐care systems are usually funded from sources such as taxes, public and private health insurance contributions or patients' out‐of‐pocket payments [6].

The percentage of health‐care financing from public funds is used as an indicator enabling the assessment of the role of the state in this area. The strong role of the state, reflected by a high level of funding from the public budget, points to the elimination of inequalities in access to medical services. On the other hand, the percentage of out‐of‐pocket patient payments or pri‐ vate insurance allows for the assessment of the financial burden imposed on households in the event of necessity to use health services [7]. The high level of out‐of‐pocket expenses increases the difficulty of obtaining medical assistance for people with lower incomes and lower health status [8]. The countries with a low share of public expenditure should aim at reducing the level of out‐of‐pocket payments in favour of prepaid private insurance. This way, the public could finance health services in a more predictable manner, without facing the problematic, sudden necessity to find the funds to pay for treatment in case of an unforeseen illness. The large share of out‐of‐pocket payments in the case of the poorer social groups exacerbates the risk of the so‐called catastrophic expenditure, leading to impoverishment or abandonment of often necessary medical services. Moving away from the out‐of‐pocket patients' payments towards prepaid private insurance reduces the possibility of a financial catastrophe [9–11].

Classifying health systems in post‐communist countries according to their financial agents indicates that in the Central Europe (CE) health care is financed mainly by health insurance contributions and in Eastern Europe and Central Asia (EECA) mainly from taxes and out‐of‐ pocket payments of households. The average share of total public expenditure in the analysed countries of Central and Eastern Europe and Central Asia amounted to 58.8% in the analysed years. In 2013, the average share of public expenditure in the CE countries amounted to 66.0%, and in the EECA countries, it was equal to 43.5%. The share of funding from government social health insurance in general averaged 63.2% and increased by 5.8 percentage points (p.p.) over the period of 14 years. In the CE countries, it averaged 73.8%, and in the EECA countries, the average amounted to 29.7%. In contrast, only in the former Soviet Union, where the budget system prevails, SHI amounted to 36.3%. In most analysed countries, the share of private and out‐of‐pocket funding is high. The average share of private expenditure in total expenditure on health amounted to 41.2%—in the case of the CE countries, it amounted to 34.0%, and in the case of the EECA countries, it was equal to 56.5%. The share of out‐of‐pocket expenditure in private spending averaged 88.6%, while in the case of the CE countries, it was lower by 1.3 p.p., and in the EECA countries, it was higher by 4.2 p.p. In most post‐communist coun‐ tries, even those where public funding is very low, citizens do not show interest in additional health insurance. In 2013, private prepaid plans accounted for 6% of expenditure on average: 6.9% in the CE countries and 4% in the EECA countries. In the Central Europe, almost 50% of the Slovenian, 40% of Croatian, 7% of Hungarian and 4% Latvian population have prepaid private insurance. In the Eastern Europe and Central Asia, prepaid health insurance was used by 12% of Georgian, 6% of Armenian and Uzbek as well as 4% of Russian population.

The insurance type of health system is not the classic Bismarck model but its modification. The noticeable majority of Central Europe and Balkan peninsula adopted only the method of funding (health insurance contributions), while the organization and governance of health care are organized differently in each of the countries. The health systems in which there are several third‐party payers operate in Czech Republic, Lithuania and Slovakia. Most mecha‐ nisms of the Bismarck model were introduced in the health‐care system of the Czech Republic and Slovakia. The payers in the system are sickness funds, which conclude contracts with ser‐ vice providers. The patients are free to choose the insurance company, and the largest insurer in each of the countries has over 60% market share. In both countries, there are mechanisms of pooling and (re)allocation of contributions ex ante referred to as risk adjustment of contri‐ butions. Only in the Czech system, there is a mechanism to retrospective risk sharing [12]. In Lithuania, there are sickness funds, but their membership is territorial. There is no competition between insurers nor any mechanism of risk adjustment of contributions. On the other hand, health‐care insurance systems with a single payer prevail in Albania, Bosnia and Herzegovina, Bulgaria, Estonia, Hungary, Macedonia, Moldova, Montenegro, Poland, Romania, Serbia and Slovenia. In the post‐Soviet countries of Eastern Europe and Central Asia, centrally planned health systems with less public funding than in the countries of Central Europe prevail—the examples include Azerbaijan, Georgia and Tajikistan. The tendency of the public to purchase prepaid private insurance is not significant, which makes it difficult to access to health care due to lack of financial resources in households. In Kyrgyzstan and Russia, mandatory health insurance was introduced; however, these are supply systems financed from the budget, as in other countries not listed above.

Kyrgyzstan is the only example of a Central Asian country where the introduction of a health insurance system was successful. SHI is a system complementary in relation to budget financ‐ ing and supplements public funding. In the analysed period, the share of public funds from health insurance increased. At the same time, a successful reform the health infrastructure was implemented—some facilities were closed, but the overall access to health care for all citizens was improved [13]. Despite the introduction of SHI in the Russian Federation and the initial successes, the reform of health‐care financing eventually failed. In the 2000–2013 period, the share of public expenditure in the total expenditure on health care decreased—the fall included the funds from SHI.

It should also be noted that in all the post‐communist countries, there were high informal pay‐ ments and in‐kind gifts from patients as compensation for the health‐care workers' treatment efforts [14]. They were more prevalent in hospitals than in outpatient care. It is estimated that in some countries, they constitute up to 10–15% of private expenditure. Such payments and gifts are due to the lack of determination of a state‐funded benefit package (in Armenia and Georgia) or the fact that the benefit package is very extensive but chronically underfunded (such as in Azerbaijan, the Russian Federation, Tajikistan and Ukraine) [15]. This practice has been limited but not eliminated, since the obvious reason for its occurrence is the relatively low salaries of health‐care workers, often paid late. In some countries, the informal compen‐ sation is replaced by formal charges for health services.
