District hospitals under the magnifying glass of the NIK. Couldn't be worse?

As of mid-2022, there were 313 county hospitals providing health care services financed by the National Health Fund. The number of county hospitals located in the country varies widely: the smallest are in Lubuskie Voivodeship (8), and the largest in Mazowieckie Voivodeship (44).

According to the NIK, the main problem hindering the operation of district hospitals is their deteriorating financial situation, manifested, among other things, in rising debt. According to data from the Ministry of Health, in 2019-2021, the total liabilities of district hospitals steadily increased and amounted to more than PLN 6 billion, nearly PLN 6.9 billion and less than PLN 7.3 billion, respectively. At the same time, the maturing liabilities of county hospitals over these years amounted to - respectively - about PLN 803 million, PLN 724 million and almost PLN 602 million. As of June 30, 2022, the total liabilities of county hospitals exceeded PLN 7.3 billion, including maturing liabilities of nearly PLN 777 million.

Finance on target

Due to the declaration of an epidemic state, the way hospitals are financed has changed, which has helped improve the financial performance of district hospitals. In 2019-2021, the total revenues of the hospitals audited by the NIK gradually increased and amounted to more than PLN 1.6 billion, PLN 1.9 billion, almost PLN 2.4 billion (an increase of more than 46%), respectively, and at the end of the first half of 2022 exceeded PLN 1.1, billion. While in 2019 only eight of the audited hospitals achieved a positive financial result, in 2020 there were already 13, and in 2021. - 16. The most profitable organizational units of the audited hospitals were departments established in connection with the COVID-19 epidemic state. At the same time, a negative phenomenon related to the COVID-19 epidemic was noted: in 2020, compared to 2019, the total number of inpatients and the total number of outpatients decreased (by 37.5% and 23.5%, respectively).

In contrast, already after the first half of 2022, only three audited hospitals recorded a net profit, while 19 incurred a net loss. According to the NIK, the financial problems of district hospitals will further worsen in response to mandatory salary increases for medical staff.

Order of access to benefits according to clear rules - up to 4 years in the queue

The audited hospitals determined the order of patients' access to medical services based on clear and transparent rules, in accordance with the Law on Patients' Rights. The largest number of people in stable condition waited for services in outpatient specialized care (AOS) to outpatient clinics: cardiology, ophthalmology and neurology. However, for hospitalization, the largest number of people in stable condition waited for treatment in the following departments: ophthalmology, trauma and orthopedic surgery and internal medicine.

The NIK notes that the number of patients waiting for health care services varied from one health care entity to another and depended, among other things, on the size of the entity in question, the scope of services provided and its temporary operation as a "covid hospital." As for the waiting time for hospitalization, the record-holder was the Nysa Hospital, where patients waited as long as 1,569 days, or more than four years, to receive services for stable cases.

Implementation of health services - medical apparatus without valid inspections, doctors working several days without a break

In particular, the NIK auditors showed:

• Almost ⅓ of the medical apparatus inspected were used in the process of treating patients without valid technical inspections. Technical inspections of this apparatus were carried out up to two years late, which was in violation of the Law on Medical Devices and could endanger patients;
• In three hospitals, doctors on civil law contracts provided work for several days without a break, in extreme cases for as long as 73 hours. The NIK notes that the excessive workload of medical staff could have negatively affected the quality of services provided, and in extreme cases, posed a threat to the health of patients and doctors. Significantly, the provision in the Medical Activity Act regarding rest for doctors on medical duty does not apply to doctors providing services under civil law contracts.

In addition, the audit revealed that:

• In none of the 22 health care entities audited were the management staff selected through competitions. Some hospitals did hold competitions for management positions, but due to the lack of resolution, duties were assigned to selected employees;
• The majority of hospitals (18 out of 22) did not meet the staffing standards for personnel providing health services (especially nurses), as specified in the 2013 Regulation of the Minister of Health on guaranteed services of hospital treatment. In addition, three hospitals hired medical caregivers in place of the missing nurses, despite the fact that the law does not provide for this possibility;
• In 17 hospitals, minimum staffing norms for nurses and midwives were not set or were done incorrectly. According to the Health Minister's 2012 regulation on the matter, the head of a medical entity is required to set such norms at least once every three years;
• Despite the obligation specified in the general terms and conditions of health care contracts, 12 of the 22 entities did not provide patients with all the required information (or did so partially). This included, for example, the hours of service provision, the possibility and method of signing up for a waiting list, the address and telephone number of the nearest location where night and holiday health care services are provided, emergency telephone numbers or facilities for people with disabilities. In contrast, at one hospital, the information board of the Orthopedic Department included the contact information of a private doctor's office, with three doctors of the department operating out of the hospital. The hospital director explained that the data had been made available without the knowledge of the staff responsible for posting the information on the board, and mentioned that it was immediately removed;
• 12 hospitals did not provide patients with the ability to make appointments electronically, monitor their status on the waiting list for services, and notify them of their appointments. This constituted a violation of the Law on Benefits;
• In 2020-2022 (H1), the hospitals covered by the audit outsourced health services to external entities in the areas of medical services, nursing and midwifery services, laboratory tests and diagnostic imaging, among others. In this way, health services were provided on the basis of 6802 contracts with a total value of realized orders of about PLN 9.8 million. The audit found that some of the hospitals violated applicable regulations when awarding contracts. In nine hospitals, the mandatory estimation of the value of the subject of the contract was not carried out. In 10 hospitals, the subject of the contract was described incorrectly, and in eight health care entities, contracts for health care services with a value exceeding the amount of EUR 30,000 each time were awarded without holding a tender competition. As many as 2932 contracts with external entities (about 43%) were concluded without a competition. Such practices violated the Law on Medical Activity;
• in 15 of the 22 hospitals, entries in the National Court Register and in the Registers of Entities Performing Medical Activities maintained by the provincial governors were not updated (or were done late), so the data in these registers did not reflect the facts;
• In 10 hospitals, organizational bylaws did not include all the information required by the law and were not updated on an ongoing basis. Thus, these documents were not a reliable source of information about the entity.

Irregularities in property and financial management

In particular, the NIK auditors showed that:

• In the case of 14 hospitals, the recovery of debts was tardy and not very effective. In extreme cases, debtors were summoned to pay after several years had passed (in the Olawa Hospital it was 3.5 years - there the debt for a total of PLN 17.3 thousand was time-barred). Six hospitals lacked formal procedures in this regard. Hospitals that made efforts to enforce debts charged interest on overdue debts. This interest amounted to: in 2019, a total of more than PLN 1.3 million, which accounted for about 88% of the financial income of all hospitals, in 2020 - more than PLN 1.5 million (about 90%), in 2021. - PLN 610 thousand (about 88%) and in the first half of 2022. - almost PLN 412 thousand. It happened that receivables were allowed to become overdue, and the treatment entity did not take any action to enforce them and did not charge interest in case of their late payment (Oborniki Hospital);
• As of June 30, 2022, the liabilities of the audited hospitals totaled nearly PLN 376 million, including overdue liabilities of PLN 35 million (about 9% of total liabilities). Due liabilities occurred in 18 audited hospitals. Hospitals were late in paying their liabilities, which was in violation of the Law on Public Finance and involved the payment of interest. This was a wasteful activity, constituting a violation of public finance discipline. Despite untimely payments, contractors did not withhold supplies or services necessary for the operation of the audited hospitals;
• In addition to services financed by the National Health Fund, treatment entities also provided services financed directly by patients who were not entitled to publicly financed services. On the other hand, in one entity (a hospital in Wolomin) there were cases of charging a fee for providing guaranteed services to patients who were entitled to publicly funded services. This was in violation of the Law on Benefits. In the audited sample of patients from whom fees were charged, as many as 187 out of 199 were entitled to publicly funded health services. The total amount of fees they paid amounted to PLN 38,500. In addition, in two hospitals, the rates for paid health services were not specified in the price list, but were determined individually after the service was provided. The NIK stresses that individual determination of amounts for realized medical services that were not included in the applicable price list set by the hospital director testifies to arbitrariness of conduct, lack of transparency in determining the rate for hospitalization, which may lead to corruption;
• in 2020-2022 (H1), the assets of the audited hospitals were used by other external entities on the basis of 415 lease and rental agreements. Nine hospitals inadequately managed their property, failing to properly safeguard their interests. Seven hospitals, when entering into lease/tenancy agreements, did not comply with the provisions contained in the resolutions of their constituent entities regarding the management of property. The treatment entities did not even comply with the obligation to obtain the forming entity's approval for handling property;
• 14 entities established financial plans with delays, in time to prevent their use in financial management from January 1 of a given year. This constituted a violation of the Law on Public Finance. In addition, in six hospitals the financial plans did not contain all the statutorily required elements.

Conclusions of the NIK

Taking into account the findings of the audit, the Supreme Audit Institution requested that:

Minister of Health on:

• To take legislative action to define in the provisions of the Law on Medical Activity the maximum permissible uninterrupted working time of medical personnel employed under civil law contracts;

Governors on:

• Increasing oversight of the register of healthcare providers;

District boards o:

• Increasing oversight of hospitals;

Managers of medical entities o:

• Ensuring minimum standards for the employment of medical and nursing staff, in accordance with the Decree of the Minister of Health of December 28, 2012 on how to establish minimum standards for the employment of nurses and midwives in medical entities that are not entrepreneurs;
• Provide patients with the ability to make appointments electronically, monitor their status on the waiting list for services, and be notified when services are due;
• scheduling of on-call duty of medical personnel, regardless of the form of employment in a manner that ensures adequate rest time;
• The use of provisions in outsourcing contracts that safeguard the interests of the hospital;
• Updating the financial plans of SPOZ in a manner that ensures that expenditures are made with public funds on the basis of the authorization specified in the financial plan;
• Intensify efforts to minimize financial costs resulting from the payment of interest on late payment of liabilities.

Source: NIK