Fee-for-service or donation? Hungarian perspectives on informal payment for health care

Abstract

Informal payments are known to be widespread in the post-communist health care systems of Central and Eastern Europe. However, their role and nature remains contentious with the debate characterized by much polemic. This paper aims to make sense of this debate by reviewing and summarizing the main arguments of the theoretical debate in Hungary. The review examines the possible causes of informal payment, the motivation of the actors involved and the impact of informal payment on system performance, focusing on efficiency and equity. The lines of arguments are summarized in two contrasting hypotheses, which envisage informal payment as either a donation or a fee-for-service. Evidence pertaining to the scale of informal payments and the motivation of patients are reviewed, but found to be inconclusive to verify the hypotheses.

Although focused on Hungary, accounts from other countries facing informal payments show similar threads of discussion and dilemmas. These theories should be tested further using evidence from existing studies and new empirical research, since the validity of the gratitude payment concept is a central dilemma of effective policy making in the area. To orient future research, a possible agenda is outlined, which links evidence to be obtained to the defining features of gratitude payments.

Introduction

There is a growing international interest in informal payments for health care in low and middle income countries (Delcheva et al., 1997; Ensor & Savelyeva, 1998; Killingsworth et al., 1999; McPake et al., 1999; Thompson & Witter, 2000; Ensor & Witter, 2001; Ensor, 2004; Falkingham, 2004). Such payments are widespread and enduring in the former communist countries of central and eastern Europe (Lewis, 2000), even where the transition from command to market economy has been otherwise relatively successful.

While there is no generally accepted definition of informal payment, its most common form involves patients paying physicians and other health workers out-of-pocket for services that they are entitled to receive free of charge, usually in a publicly financed system (Balázs, 1996).

The significance of informal payment is twofold. First, it is a possible way to relieve pressure on the public purse. Second, it introduces incentives and disincentives into the health care system that affect system performance and the attainment of policy objectives. What these incentives are and how they influence efficiency and equity have long been debated, not just in Hungary (Petschnig, 1983; Ádám, 1986; Csaba, 1993), but in other ex-communist countries (Delcheva et al., 1997; Lewis, 2000; Wlodarczyk & Zajac, 2002). A common theme in all these countries is differentiation between payments before and after the service, regarding the former as corruption while the latter as a gift, indicating one's gratitude. For instance, the Code of Ethics of the Hungarian Medical Chamber declares that “the expression of gratitude, which accompanies recovery from illness, saving of lives and the birth of a new life is not subject to coercion and is based on free will” and “within certain limits” gratitude payment is legal and legitimate (Hungarian Medical Chamber, 1998), while the guidelines of the Bulgarian Physicians’ Union condemn ‘ex ante’ payments as unethical, but accept ‘ex post’ payments as the right of patients (Delcheva et al., 1997).

This paper draws on the debate that has taken place in Hungary to explore this distinction, thus identifying implications for policy. Although there is considerable relevant literature from Hungary, it is not accessible in English, and there have been no attempts to summarize it in a way that can offer a theoretical framework that will inform policy making. We examine this literature in terms of three questions. What are the causes of informal payment? Why do patients give informal payments? What is the impact of informal payment on the performance of the health care system? Finally, we use this framework to generate two contrasting hypotheses with different policy implications.