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Supporting Health Reform in Bulgaria

2004–2005 || U.S. Agency for International Development

Abstract

As part of the multi-year $4.5 million USAID-funded Bulgaria Health Reform Project, Deloitte provided the Government of Bulgaria (GOB) with assistance in strengthening its health system through capacity-building and policy reform initiatives. Through expanding coverage of the National Health Insurance Fund (NHIF) to inpatient care services, implementing case based provider payment in 39 pilot hospitals, hospital restructuring in four pilot regions, promoting private health insurance, and estimating Bulgaria’s national health accounts, Deloitte played an integral role in improving the ability of the nation’s health sector to better serve its population.

The Challenge

After its transition from more than four decades as a socialist economy, Bulgaria undertook several health reforms mainly by establishing the NHIF to cover outpatient care services only. Hospital payments continued to provide contradicting incentives for provider efficiency, and the state continued to shoulder most of the burden for the provision of inpatient care services. The country needed assistance developing a defined path of where its health system should go and support with getting there.

How We Helped

The Deloitte team supported health reform in Bulgaria through the following four primary project components:

Hospital Restructuring
Deloitte assisted the Ministry of Health (MOH) with restructuring hospital services in four pilot regions in order to improve their quality and efficiency. By matching health care needs of the population with the supply of health care services, the Deloitte team was able to propose the necessary number of hospitals, types of services, and number of beds. The results informed a detailed restructuring plan for inpatient care services aimed at consolidating and converting existing structures and retraining hospital staff. Emphasis has been placed on greater efficiency and improved quality through provision of services at the most appropriate level of service by recognizing and addressing gaps in the continuum of care.

Health Insurance Reform
Deloitte provided technical assistance to the Insurance Supervisory Agency (ISA), the Parliamentary Health Commission and the MOH in developing a broad legal-regulatory framework for public and private health insurance. A multi-institutional working group developed an issues paper that was presented to government leaders as a basis for discussion about the direction of needed reforms. The public forum and the debate that followed led to preliminary agreement on a model for the private insurance industry that complemented the social insurance system covering basic health needs for Bulgarians. A second working group then developed draft language for amendments to the Health Insurance Act and the General Insurance Act to change the regulatory authority and to delineate respective roles and responsibilities of the ISA and the MOH.

Health Financing Reform
Deloitte also assisted the NHIF in reconfiguring the method for financing hospitals by implementing a case-mix payment system based on Diagnostic Related Groups (DRGs) in 39 pilot hospitals. This aspect of the project included implementing a hospital coding system for procedures and diagnosis, providing training in case-mix for NHIF staff and hospital directors, providing training for hospital financial managers in the new payment system, supporting cost reporting by case, and creating Bulgarian relative weights based on the cost of services.

Public Access to Information
Deloitte also assisted the MOH and the parliament with improving transparency and public access to information related to the health care system. Specifically, the team supported the drafting of laws that required reporting of public and private health expenditure data. In addition, the team helped improve transparency in health service delivery by launching a health information center to provide the public with up-to-date information on reform initiatives and patient rights.

Solution

By systematically tackling issues in its hospital, insurance, and health financing systems, Deloitte played an integral role working with the GOB in its mission to provide Bulgarians with a stronger health system. The pilot implementations served as the basis for a national roll-out of both the DRG payment system and hospital restructuring activities. In addition, by promoting the role of the private health insurance companies, their number increased by ten-fold in less than two years. Deloitte’s technical assistance helped not only resolve the immediate issues faced by GOB, but also positioned the country to better plan for and address future challenges.

As used in this document, “Deloitte” means Deloitte Consulting LLP, which provides strategy, operations, technology, and human capital consulting services, Deloitte Financial Advisory Services LLP, which provides financial advisory services, and Deloitte & Touche LLP which provides governance and risk oversight and reporting advisory services. These entities are separate subsidiaries of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

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