VZCZCXYZ0000
PP RUEHWEB

DE RUEHBM #0843/01 3551121
ZNR UUUUU ZZH
P 211121Z DEC 09
FM AMEMBASSY BUCHAREST
TO RUEHC/SECSTATE WASHDC PRIORITY 0171
INFO RUEHVI/AMEMBASSY VIENNA PRIORITY 2119
RUEAUSA/DEPT OF HHS WASHINGTON DC PRIORITY

UNCLAS BUCHAREST 000843 
 
SENSITIVE 
 
STATE FOR EUR/CE ASCHEIBE 
VIENNA FOR RMO WGREEN 
 
SIPDIS 
 
E.O. 12958; N/A 
TAGS: ECON AMED EAID EFIN PGOV RO
SUBJECT: ROMANIA: HEALTH SYSTEM REMAINS ON LIFE SUPPORT 
 
REF: BUCHAREST 337 
 
SENSITIVE BUT UNCLASSIFIED. NOT FOR INTERNET DISTRIBUTION. 
 
¶1.  (SBU) Summary:  The Romanian healthcare system is in serious 
trouble, beset by a convergence of the economic crisis, political 
instability, and government budgetary woes.  A recent report by the 
Romanian Academic Society (SAR) highlighted the major problems 
plaguing the system.  With expenditure on healthcare falling to 3.2 
percent of GDP (979 million USD) even as GDP contracts by over seven 
percent this year, the resources necessary to ensure basic quality 
care to Romanian citizens are evaporating.  The country's 
unsustainably low level of health expenditures can only add to the 
long-standing corruption, brain drain, inefficiency, and poor 
quality already plaguing the system.  While the problems, and to 
some extent the solutions, are readily apparent, none of the key 
stakeholders yet appears willing to embrace substantive reforms. 
Instead, stakeholders would rather the Government simply increase 
funding for health by reallocating funds from an already shrinking 
state budget.  With the exception of the pharmaceutical companies, 
who are opposed to the measure, most other stakeholders support 
higher taxes on medications to help pay the tab.  End Summary. 
 
¶2.  (SBU) Of the 9.3 million active workers in Romania's labor 
force, whose social security contributions are meant to fund the 
health system, SAR estimates that only five million or so are 
actually contributing.  While reliable figures are hard to come 
by--self-employed laborers, farmers, and others often 
under-calculate their contributions or opt not to pay at all--SAR's 
estimation suggests that only a quarter of the Romanian population 
foots the healthcare bill for all 21.5 million citizens.  The result 
is chronic under-funding, even as costs continue to rise.  The last 
of the 2009 annual health care budget was spent by the end of 
September, leaving a three-month funding shortfall which the 
Ministry of Health (MOH) has attempted to cover through a series of 
service cuts and other stopgap measures.  With the Government forced 
to constrain spending under IMF requirements, supplemental funding 
has not been forthcoming and the MOH has had to tap into the (yet to 
be approved) 2010 budget. 
 
¶3.  (SBU) According to the SAR report, the overall decline in 
spending will be around 20 percent this year.  This will drive 
healthcare's share of GDP down to 3.2 percent, making 2009 a real 
nadir for the Romanian healthcare system.  The SAR report notes that 
Romania is well behind other EU nations both in terms of overall 
spending and quality indicators, placing 26th out of 27, ahead only 
of Bulgaria in percent of GDP spent on healthcare.  A massive 
infusion of new resources would be required to bring Romania 
anywhere close to other EU countries, which spend an average of 8.6 
percent of GDP on healthcare. 
 
¶4.  (SBU) As one means of addressing the funding gap, MOH has 
devised a much-ballyhooed decentralization project meant to transfer 
hospital financial and managerial responsibility to municipalities, 
in an attempt to decrease overall operating costs by 85 percent 
while improving the effectiveness of patient care.  The project has 
already started in Bucharest, but plans to expand it throughout the 
country in 2010 are on hold.  In a visit to nearby Cantacuzino 
Hospital, EconOff discussed the hospital's experience with 
decentralization.  The hospital administration reported positive 
results in functionality, acquisition of equipment and psychological 
well-being of both patients and staff, but also expressed 
frustration with relatively limited authority in establishing 
salaries and staffing patterns. 
 
¶5.  (SBU) Cantacuzino is generally considered one of Bucharest's 
best hospitals, but EconOff was struck by the extreme cost-saving 
measures in place at even this leading institution--such as using 
only natural lighting, with windows open for ventilation, in at 
least one operating room where a patient was undergoing surgery. 
While the hospital appeared to have a fully stocked pharmacy, 
patients routinely reported that they must purchase their own 
medications outside of the hospital, including such basics as 
painkillers and antiseptics.  The operating rooms only had a limited 
quantity of surgical supplies on hand, and according to numerous 
anecdotal reports, "disposable" surgical supplies are often reused 
without adequate sterilization, resulting in the occasional 
transmission of blood-borne illnesses such as Hepatitis C.  Local 
authorities in other cities, such as Ploiesti, have told EmbOffs 
that they have refused MOH offers to hand over administration of 
hospitals to their communities because the Government only wants to 
transfer managerial responsibility while depriving them of central 
funding or granting local revenue-raising authority. 
 
¶6.  (SBU) Another MOH solution to the funding crunch has been to 
impose a "clawback" surtax on pharmaceutical sales retroactive to 
the beginning of the year.  The surtax was passed in October as a 
Cabinet emergency ordinance, meaning it took immediate effect, but 
could still be reversed if Parliament eventually votes to overturn 
it.  MOH is expecting the tax to raise approximately 100 million RON 
(35.17 million USD) in 2009 and 570 million RON (200.49 million USD) 
in 2010.  Pharmaceutical companies protest that the GOR is unfairly 
targeting them, citing previous MOH measures (such as imposing a 
below-market currency exchange rate and a "minimum European price" 
rule for drug sales) that industry says are detrimental both to 
profits and to business relations. 
 
¶7.  (SBU) Low wages for medical staff drive the twin problems of 
corruption and brain-drain.  The average Romanian doctor makes 
approximately 500 USD a month, with nursing staff earning 
significantly less.  Low wages and inadequate staffing sometimes 
result in preventable medical mishaps, such as the recent case of a 
day-old infant being seriously burned in an (allegedly 
malfunctioning) incubator when the attending nurse, who was 
responsible for 29 other infants, left the room for an extended 
period.  In this kind of a working environment, it is not surprising 
that Romania has lost 4,000 doctors to other EU countries in the 
last two years and that up to 80 percent of medical students declare 
an intention to leave following graduation.  For those who do stay, 
"gratuity" payments (i.e., bribes) are considered de rigueur.  The 
proposed solution, a formal co-payment system where patients would 
provide fixed additional payments to hospitals and doctors, was 
announced in early 2009.  However, it failed to meet the June 
implementation deadline in the face of strong opposition.  The 
public perception is that such a system would be inadequate to 
supplant bribery and would likely only supplement it. 
 
¶8.  (SBU) Romanians frustrated with the subpar public system now 
have the option, if they can afford it, of buying services from a 
small but growing network of private clinics in major cities. 
Private health insurance policies to cover care at these clinics 
(which public insurance will not pay for) are also being marketed. 
The two-tiered private insurance system that is evolving, and for 
which policies are now available, consists of a first tier of 
required payments into the state system, with a supplemental tier 
covering extra costs for treatment at private facilities.  The 
supplemental insurance options in Romania, while still limited in 
scope and very pricey for the average citizen, should broaden when 
the MOH fully implements the decentralization process. 
 
¶9.  (SBU) Comment:  While everyone agrees that the Romanian 
healthcare system is under-financed, a public accustomed to 
state-provided, cradle-to-grave care still believes that the 
solution is more government spending.  Even were that money 
available, however, throwing it at the current system won't solve 
the system's many problems, because the underlying truth is that the 
Romanian state has proven incapable of providing adequate healthcare 
even with additional resources.  With statistics that place Romania 
far below EU averages in terms of quality of care, the state 
monopoly has resulted in corruption, crumbling infrastructure, and 
widespread frustration.  The political unwillingness to consider 
real alternatives to state control has left the system bereft of 
funds and has widened health disparities country-wide.  Unless 
Romanians can be convinced that good healthcare is something they 
will have to pay for--either through higher taxes or consumer-borne 
costs on the private market--results will remain poor and the 
quality of the system will continue to worsen.  End Comment. 
 
GITENSTEIN