VZCZCXRO7574
RR RUEHIK RUEHYG
DE RUEHSL #0438/01 1560955
ZNR UUUUU ZZH
R 050955Z JUN 06
FM AMEMBASSY BRATISLAVA
TO RUEHC/SECSTATE WASHDC 9898
INFO RUEHZG/NATO EU COLLECTIVE

UNCLAS SECTION 01 OF 02 BRATISLAVA 000438 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV ECON SOCI PINR LO
SUBJECT: CAMPAIGN ISSUE: HEALTH CARE REFORM - EVERYONE 
HATES IT 
 
REF: A. A) BRATISLAVA 00302 
 
     ¶B. B) BRATISLAVA 00323 
 
¶1. Summary.  Health care reform is widely perceived by 
Slovaks as the Dzurinda government's biggest achilles heel. 
Privatization has not yet brought about a noticeable 
improvement in services, investment in health services 
remains low, and new private insurance schemes are 
increasingly unpopular with both doctors and patients. 
Several opposition parties have identified health care as a 
primary campaign issue, especially front-running Smer, which 
would like to abolish most of the health care reforms that 
the GOS has carried out in the past few years.  Other 
political parties have taken more moderate positions, but all 
have separated themselves from SDKU in order to gain public 
support.  SDKU, for its part, has sent out signs that it too 
might alter course in the next four years.  End Summary. 
 
What Went Wrong 
--------------- 
 
¶2. Health care reform is one of the major reasons why a 
government so widely praised by outside observers has such a 
low approval rating.  Opposition is widespread: in a May 2006 
poll, 3 percent of all Slovaks approved of GOS health care 
reforms, 22 percent viewed reforms as a good idea that needs 
further adjustment, and 72 percent viewed them negatively. 
Even when the poll is broken down by party lines, the 
majority of voters in every party disapprove of the GOS 
health care reforms.  (Tax, pension, and other reforms are 
viewed more positively).  Doctors, nurses, and health care 
workers have been especially critical, staging a series of 
brief strikes throughout the year in a labor dispute that 
resulted in the government quietly acquiescing to most of 
their 25% wage increase demand (see reftel A).  Polls suggest 
that the general public tended to support or at least 
tolerate the strikes, despite the interruption of health care 
services. 
 
¶3. The GOS authorized health care reforms in 2003 that aimed 
to replace the state-run health care system with a 
market-oriented system that would increase transparency of 
payments for services, consolidate the number of hospitals, 
and attract investment to transform the remaining hospitals 
into modern world-class facilities.  To this effect, small 
user fees for services (USD 0.70 per visit, USD 1.65 per 
prescription) were established, private insurers were allowed 
into the market, and privatization of hospitals is being 
phased in over 2005-2006.  Some of these reforms have born 
fruit.  Private and public insurance companies have forced 
doctors to be much more responsible with services and fees 
charged (especially prescription drugs), public procurement 
practices have improved, closing of inefficient hospitals has 
started, and many redundant employees have been laid off. 
 
¶4.   While hospital management is more efficient, voters do 
not see how this will improve services or lower costs -- or, 
as one analyst asked, "efficiency for whom?"  User fees are 
miniscule and largely symbolic, but have become a political 
football since services remain essentially unchanged. 
Private insurance has come to be dominated by the investment 
group Penta, which now owns essentially all private health 
insurance in Slovakia and about 25% of the overall health 
insurance market.  Private insurance has improved 
accountability of health services, but it has also introduced 
increased paperwork that frustrates both doctors and 
patients, leaving the impression of a system that is actually 
more bureaucratic than its predecessor.  Finally, 
privatization of hospitals has been a messy, drawn-out 
affair, in which facilities are converted into joint-stock or 
limited liability companies and then sold, often to finance 
companies and real estate developers such as J&T Associates 
and Penta.  Emboff conversations with the J&T developer who 
operates a Bratislava-area hospital left a clear impression 
that the company's main interest will be to repackage 
hospital assets for re-sale; only one of the four hospitals 
owned by J&T will attract significant new investment.  In 
time, further investment, modernization, and improved 
services should come, but for now the basic picture in the 
eyes of most voters is a new system where connected interests 
prevail over those of the average family. 
 
Taking Advantage 
---------------- 
 
¶5. SDKU's rivals have been quick to take notice.  Smer has 
been most visible, with Robert Fico criticizing the 
government's health care priorities as evidence of "putting a 
right-wing agenda ahead of people."  Meanwhile, Smer 'shadow 
Minister of Health' Pavol Paska and its think tank ASA have 
coordinated with doctors' associatons to establish a health 
care platform that is unusually detailed for Smer.  Paska is 
 
BRATISLAVA 00000438  002 OF 002 
 
 
a close confidante of Fico,  and his involvement on the issue 
is an indication that the Ministry of Health is one of Smer's 
top priorities if it becomes part of the next ruling 
coalition.  Smer's basic platform is as follows: eliminate 
user fees for health services, re-establish public health 
insurance for all, use EU funds to increase the percentage of 
GDP dedicated to health care from 5.1 percent to 7.0 percent, 
with funds used to rehabilitate hospitals, among other 
priorities.  (Slovakia spends the lowest percentage of GDP on 
health care in the European Union.)  This program would 
constitute a rollback but not a complete reversal of GOS 
health care reforms -- private health insurance would still 
be available and Smer officials have admitted off the record 
that around 20 percent of Slovakia's under-utilized hospitals 
would still have to be shut down. 
 
 
¶6. Other parties hold policy positions somewhere between Smer 
and SDKU, with promises of reduced fees and increased public 
investment in health care, but muted language on 
privatization of insurance and hospitals.  After all, most if 
not all parties receive money from developers such as Penta 
and J&T Associates.  KDH, a former ruling coalition member, 
has called for reducing user fees to USD 0.17, and for a 
parliamentary vote on whether to re-establish full state-run 
health insurance for all.  Parties as distinct as the 
Hungarian SMK party and the nationalist SNS party have called 
for raising health care expenditures to at least 7.0 percent 
of GDP and providing free medications for all.  Vladimir 
Meciar's HZDS has called for free medications for the young 
and the old, but supports the other basic reforms.  Zuzana 
Martinakova of Slobodne Forum recently criticized the 
government for "providing tax breaks to Kia instead of 
vitamins for our children," even though, ironically, her 
party's health care platform most closely resembles that of 
SDKU. 
 
¶7. SDKU essentially supports its health care reform, of 
course, but Prime Minister Dzurinda has defended health care 
reform less vigorously than his other reforms, and has said 
on the campaign trail that the reform needs fixing.  SDKU has 
taken this stance largely because Minister of Health Rudolf 
Zajac comes from the ANO party, a former coalition partner 
that was expelled last year.  The potential consequences of 
this distancing were seen in the recent debate over 
legislation protecting the intellectual property rights of 
pharmaceutical manufacturers vis-a-vis generic producers. 
When President Ivan Gasparovic vetoed the IPR protection 
legislation passed in parliament, Minister Zajac strongly 
opposed this action but the Prime Minister's office signaled 
that it would not use any of its political capital to 
overturn the veto (see reftel B).  The veto was overturned in 
the end with SDKU votes, but without SDKU leadership. 
 
Outlook 
------- 
¶8. Health care will continue to be an issue on which every 
political party has a free pass to criticize the government 
and propose new policy initiatives that mark a significant 
philosophical departure from current reforms.  In that sense, 
health care is very different than tax reform and almost 
every other political-economic issue in this campaign.  In 
turn, after the election, health care will be one of the few 
issues where a new ruling coalition will feel that it has a 
mandate to significantly alter the direction of public policy 
in Slovakia.  Smer clearly feels that health care is a winner 
for them, though its weak advocacy campaign on the issue begs 
the question of whether the party can capitalize on voter 
discontent. 
VALLEE