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118 Economic crisis, health systems and health in Europe: country experience
1700, with 330 merging and another 40 being moved. In addition, instead of the
133 NHS hospitals having their own management boards, there will be a total of
83 councils responsible for administrating all public hospitals, and the number
of directors and deputy directors will be reduced from 175 to 145 (Ministry
of Health and Social Solidarity, 2011). It is estimated that these changes will
lead to a reduction in spending by €75 million by 2014 and €150 million by
2015. The actual impact of these measures and their expected cost savings remain
to be verified in 2015. Furthermore, as a revenue-raising measure, 500 public
hospital beds will be set aside for priority use by PHI companies for their clients.
In addition, no new doctors will be hired in state-owned institutions, but private
doctors contracted with EOPYY may work in public hospitals one day a week.
So far, progress in implementing this major restructuring of the sector has been
limited. On the one hand, the planned mergers between hospitals owned by
IKA, the main social health insurance fund prior to the introduction of EOPPY,
and those owned by the NHS have been implemented, putting them all under
state ownership. On the other hand, to date, implementation of the other
major elements outlined above has been limited to the administrative merging
of adjacent hospitals and the consolidation of similar departments within the
same hospital.
In terms of rationalizing the hospital payment system, the former
reimbursement method based on a fixed per diem charge was abandoned
since it did not reflect the real hospitalization cost, excluding among others,
the cost of personnel salaries. In 2012 a new payment system (called KEN-
DRG), based on the German version of DRGs, was rapidly developed. The
new system was implemented in January 2013 but has encountered a number
of problems. A recent KEN-DRG data analysis showed that 8–21% of overall
hospital revenue, depending on the health region considered, resulted from
outlier payments, mostly covering per diem fees (i.e. cases in which inpatient
treatment exceeded the average length of stay for the specific KEN-DRG). This
implies that the current system requires corrective amendments and indeed,
so far, four revisions have been made (Polyzos et al., 2013). Another problem
is that the MoU impelled Greece to implement a DRG system in a very short
time period (one year). As a result, the pricing of KEN-DRGs is based not
on actual costs and clinical protocols but was achieved via a combination of
activity-based costing with data from selected public hospitals, and “imported”
cost weights. Furthermore, the salary cost of those employed in hospitals is
not included. 8
Reducing input costs, including the overall cost of hospital supplies
(pharmaceuticals, medical supplies, orthopaedics and chemical reagents) has
been a major objective. Hospital supplies represent 68% of total hospital
8 Those employed in public hospitals are civil servants paid directly through the state budget.