Health care in Hungary

As we know only too well, the cost of health care is a terrible burden on governments and individuals everywhere in the developed world. Medical science has made fantastic strides. We live longer and many illnesses that ended in certain death only a few years ago can be cured today. However, all these developments have a cost. In the United States we spend over thirteen percent of the GDP on health care, but even in other countries the cost is very high and increasing. In certain countries where there is national health insurance, like England, there is a real shortage of doctors, dentists, operating rooms, and everything else. In Canada, where there is a similar system, apparently the situation is better, but Canadians introduced the current universal, government sponsored health care system only recently. Time will tell whether something like the English situation will develop or not. In the United States, where there is no universal coverage, millions of people are without insurance and the cost of medical care is the highest in the world.

The Hungarian situation, as usual, is unique. In 1950 the communist regime made all doctors employees of the state and set their salaries very low. The population, especially those who demanded better health care for themselves and their families, could do two things. On the one hand, they could use their "connections." Within a certain class of people everybody had a relative or a friend who was a doctor or who had a doctor friend. On the other hand, they could "buy" the better service from the doctor in the form of a gratuity or, less elegantly put, a tip. This tip was of course in cash, usually placed in an envelope.

This practice was already in full swing shortly after 1956. An old classmate’s husband, a surgeon, told me the story of his first "gratuity." He was at the time a young surgeon, low down on the totem poll. In the department the higher-ups devised a "pajamas test," They figured that if a patient brought his own pajamas, the odds were that he had some money and a "tip" would come after the operation. Those who were satisfied with the ratty old hospital gown surely were poor. My friend Peter got these patients. And, indeed, the pajamas test seemed to be accurate. Until one day there was this gentleman who didn’t bring his own pajamas but who turned out to be a "maszek" tailor. "Maszek" is an abbreviation of "magánszektor," that is the private sector. A good private-sector tailor made a lot of money when ready-made clothes were practically unknown. The end of the story is predictable. Peter got his first gratuity, which was more than his monthly salary.

But those were the innocent days. Later, everybody knew what the rates were. Such and such an operation cost x forints, childbirth y forints, some other procedure z forints. In order to schedule an operation earlier cost extra money. Some of the less savory doctors started to demand money ahead of time, which was illegal. But accepting a gratuity was not and is not today against the law. All this resulted in pretty high living standards for certain specialists. The greatest beneficiaries were the surgeons and obstetricians. The poor anesthesiologist or radiologist got nothing. At the beginning, the nurses didn’t get tips, but it became obvious that if you wanted the nurse to take good care of your relative, you’d better pay. Of course, there were always exceptions to the rule, but this graft was and is widespread.

Basically what happened was that "private doctors" were using the facilities and staff of state hospitals. A wonderful business proposition: no investment, no expenses, no rent, no risk, no loans, no expensive machines, and a booming private practice. When in 1989 an income tax was introduced things got even murkier. Some of these highly paid "private doctors" were paying income tax only on their meager official salaries. The state was doubly robbed. These doctors used public facilities to their own advantage and, on top of everything else, were not paying income tax on their real income which in certain cases was very high.

But this was only half of the story. The other half was surely the fault of the Hungarian state institution, the so-called Egészségügyi Pénztár ([EP] Health Care Fund). Total chaos existed and still exists within this institution. Employers and employees who have been paying a certain percentage of the employees’ salaries for health care often don’t show up in the EP’s records. Until recently the "insured" person didn’t have to show any proof of his being insured. It was enough to show his social security card. And, as it turns out, there are about 1.5 million more social security cards in circulation than people! The socialist-liberal government a few years ago added to the problem by announcing that people who earn less than the minimum wage don’t have to pay taxes, including social security and health care taxes. Bang! Suddenly a third of the wage earners made less than the minimum wage! Meanwhile the EP every year accumulated a huge deficit that had to be covered from the central budget. It became apparent that this situation could not continue. This was, I think, pretty clear to every government of the last seventeen years, but no government dared to touch the health sector. A reorganization can be politically very costly. The second Gyurcsány government began the reforms. The government’s present unpopularity is largely the result ot these health care reforms. The dissatisfaction is fueled by some of the leading beneficiaries of the old system. But the population is dissatisfied too because there were certain privileges that will no longer be available. But more about this later.

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Every time I hear from my grandparents about the envelope system, I find it a disgrace. I think it is still going strong, in fact if I remember correctly there have been some recent legislation trying to regulate the practice – which is rather ironic as they should sort out the low wages of doctors in the first place. No wonder so many are leaving the country to work in Britain where they have a shortage and salary is good.