THE HEALTH INSURANCE REFORM
IN BULGARIA –FINANCING MODELS
AND STATUS EVALUATION
Ana Borisova Ivanova1,
1

D. A. Tsenov Academy of Economics – Svishtov, Bulgaria
E-mail: 1abivanova@abv.bg

Abstract: The article presents a research on the specific characteristics
of the existing models for healthcare financing worldwide. It also presents a
brief overview of the specific characteristics of Bulgaria’s healthcare system
and a survey on the need for healthcare reform in hospital care which identifies
the bottlenecks in financing medical services for the population. The main
problems resulting from the permanent shortage of financial resources and
determined by financing methods that prioritize the quantity rather than the
quality of the provided medical services are outlined. The degree of effectiveness of clinical pathways as a tool for hospital funding is assessed.
Keywords: healthcare, reform, financing models, survey.
This article shall be cited as follows: Ivanova, А. (2022). The Health
Insurance Reform in Bulgaria –Financing Models and Status Evaluation.
Economic Archive, (4), pp. 79-98.
URL: www2.uni-svishtov.bg/NSArhiv
JEL: I11, I12, H51.
* * *

Introduction

H

ealthcare financing is a set of tools - financial, managerial, social,
political, etc. Inasmuch as the provision of healthcare services is vital
to the development of a nation, financing issues occupy an important
place in both theoretical discussions and practical development of healthcare
systems around the world. The main factor that affects the choice of a financing
model is the possibility for providing the necessary financial resources to cover
the costs of the growing demand for medical services. In this aspect, financing
models must ensure sufficient and stable revenues at all levels of the healthcare
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system and thereby guarantee fair and efficient allocation of the scarce financial
resources. Regardless of which financing model is implemented in a given
country, securing the necessary economic resources for healthcare services is a
complex problem the solution of which is usually sought within the framework
of economic regulation.
Healthcare financing is a topic that is increasingly being discussed. The
last two years proved to be a stress test for the healthcare systems not only in
our country but all over the world as well. Although our healthcare system has
been a hot topic for more than two decades, mainly in terms of its reformation,
during the COVID-19 pandemic its major flaws - and especially its being
underfunded - became very obvious. The high mortality rate compared to other
countries, the marked deficit of medical personnel and a number of other
problems caused a sharp controversy among financiers, medical specialists and
managers about the need for a comprehensive healthcare reform. The healthcare
system is essentially and structurally complex. The system needs political and
financial support to reform at least to an extent that would be sufficient to ensure
that it is functional. The system is seriously ill and needs treatment.
The aim of this study is to identify the specifics of the models for
financing healthcare services used worldwide and to assess, based on expert
opinion, the problems facing the organization and financing of the healthcare
system in Bulgaria. The object of research are the models of healthcare financing, and the subject - the organization and financing of healthcare in Bulgaria.
The main idea of this paper is the understanding of financial
management in the field of healthcare as a system for financing goods and
services, redistribution of income, realization of financial assets, attraction of
investments, stability and sustainability of healthcare institutions.
1. Existing models of healthcare financing
There are several types of healthcare financing systems in the world,
three of which are implemented in most of the world in pure or mixed form and
two others which are not preferred due to their specific features. The main
practically applicable models are: "Beveridge", which provides healthcare for
all citizens, regardless of their financial status; the "Bismarck" model, in which
healthcare is financed from healthcare insurance funds, and the "Kennedy"
model, in which healthcare is outsourced to the private sector (Иванова, 2019).
1.1. The William Beveridge model
The model was proposed in 1942 by William Beveridge, a British state
official and social reformer (Reynolds, 2018). His idea laid the foundations of
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the first fully tax-funded healthcare system – the National Health Service
(NHS) (Beveridge, 1942), which still exists. Its aim is to provide healthcare in
every corner of the country completely free at the point of use. Thus it
established and implemented a healthcare model whereby every single patient
visit to a healthcare facility is paid for by this National Health Service.
Beveridge’s model was implemented by the healthcare systems of most
economically developed countries, such as Great Britain, Spain, most of the
Scandinavian countries, and New Zealand. Hong Kong has its own healthcare
system, which is also based on the Beveridge principle, and Cuba implements
this system in its purest and ultimate form – as a fully state-funded system.
When a country adopts the tax-funded model of healthcare (UK), this means
that effectively over 50% of its revenue comes from the tax system. Health
services in such countries are available all citizens regardless of their individual
contribution, i.e. access to medical care is everyone's right regardless of their
health insurance status (Стайков & Георгиева, 2018). A healthy population
supports the production of goods and resources in the country. Moreover, free
access to healthcare ensures a higher standard of living and hence fewer
hospitalizations, and sick leave days and better capacity for work of the entire
population.
1.2. The Bismarck model
Its creator was the Prussian Chancellor Otto von Bismarck and was
based on the idea of a welfare state resulting from the unification of Germany
in the 19th century. The Bismarck model is based on health funds, relatively
numerous and operating in competition with each other. They are financed by
joint contributions of employees and employers. Despite its European origin,
this system is implemented in the USA as well. Unlike the American model,
however, Bismarck's system aims to cover all healthcare services. Currently,
this model of health care financing is used in Belgium, Germany, France, Japan,
Switzerland and in some Latin American countries. It is socially-oriented and
managed by the public finance system (Health care systems - four basic
models).
The Bismarck model “blurs” the flow of financial resources and creates
competition among the sickness funds but preserves the principle of selfmanagement. In order to have a good, working model, the state must have a
tight and adequate policy regarding the financing of the healthcare sector.
1.3. The Kennedy model (aka Out-of-Pocket Model)
This model is appropriate and could be established only in about 40 (i.e.
the most developed) industrialized countries of the world’s 200 countries
(Health care systems - four basic models). The system is based on private
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medical contributions that only the rich can afford, and the poor have no access
to health care at all. In Africa, India, China, and South America, there are remote
rural and poor regions where people never use the services of a doctor. In these
poor regions, patients do not have the means to pay a doctor and have to pay in
kind. There are also parts of the population that do not receive any health care
at all. (Health care systems - four basic models)
This is the worst model in terms of social relevance. Notwithstanding
the imperfections of previous models, it does not provide access of patients with
low or no income to health care whatsoever.
1.4. The Semashko model
The Semashko model is named after Prof. Nikolay Semashko, one of the
organizers of the health system in the Union of Soviet Socialist Republics
(USSR). It is based largely on UK’s Beveridge healthcare system, but it
absolutely excludes any possibility for private providers of healthcare goods and
services (Веков, Салчев, Велева, Джамбазов, & Стефанова, 2020). Unlike all
other healthcare systems, it is the only model which does not provide for
multiple sources of funding. Under this system, the state has an absolute
monopoly in the healthcare sector, as it is financed by general taxes, the
payment is made from the public finances, and the medical specialists are civil
servants. Medical treatment is absolutely free but also of characteristically low
quality.
1.5. Singapore’s healthcare system
Singapore's healthcare system stands out mainly for its uniqueness. This
is a very successful model that combines state regulation and free-market
competition principles. The system is financed by private healthcare
contributions, but the prices and structure are directly controlled by the state. It
is based on individual contributions and support for the socially weak citizens
(Веков, Салчев, Велева, Джамбазов, & Стефанова, 2020).
1.6. The modified National Health Insurance (NHI) model
This model of healthcare combines elements of both Beveridge and
Bismarck models. Its advantages are that payments come from the insurance
programs run by the government and healthcare is provided by the private
sector. With this form of healthcare organization there is no need for marketing
and therefore no financial motivation to deny claims, which makes the insurance
programs universal, cheaper and administratively simpler.
A typical example of this type of healthcare is Canada, where the
government negotiates prices with private providers in the lowest price range,
which makes drugs much cheaper than those sold in the US and thus many US
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patients buy them from Canadian pharmacies. Healthcare in Canada is governed
by a governmental department called Health Canada. The healthcare program
is called Medicare. The system is financed from many sources, such as rents,
interest, dividends, fees, services and tax revenues. (Драгнева, 2014). Under
this system, medical services are controlled and limited, and patients quite often
have to wait for a long time for certain medical tests.
2. Specific characteristics of Bulgaria’ healthcare system
In Bulgaria, organized healthcare was established after the liberation of
the country from the Ottoman Empire (Драгански, 2005).
The healthcare reform in our country began in 1998 with a vision and
idea of comprehensive reformation at all levels and all sectors (Vekov, 2009).
The first healthcare law in Bulgaria was adopted only after 1900. After 1948,
private hospitals were nationalized and became directly run and financed by the
state. Until 1990, Bulgaria used the Semashko healthcare model. Shortly
thereafter, government spending on healthcare was reduced and the first steps
toward a health insurance system were made. In 1999, the National Health Fund
was established, which initially worked with 88 private and 312 state-owned
and municipal medical institutions, in 28 regional health insurance funds
(RHIF). The National Health Insurance Fund (NHIF) collects contributions
mainly from the private sector concludes contracts with medical institutions to
pay for their activities. Additional sources of revenue are transfers from the state
and municipal budgets. Municipalities finance directly all their healthcare
institutions that do not have contracts with NHIF. Patients of private healthcare
institutions that have not signed contracts with NHIF have to pay for their
treatment themselves (Георгиева, 2007).
Slowly and gradually, the municipalities and the government will reduce
the amount of healthcare spending. By law, healthcare institutions are registered
as companies and since they carry out commercial activities, they cannot
dispose of public funds. The Law on Public Health regulated relationships in
healthcare until the end of 2004. The reform in the sector was imposed by the
newly adopted Health Act (10 Aug. 2004, enforced on 01 Jan. 2005) which
regulates the relationships in the health sector and establishes the legal
framework for all medical practice issues that had arisen since the beginning of
the reform. The law on medical institutions regulates their structure and activity.
However, this law also contains rules that affect the relationship between the
medical institutions themselves and the National Health Insurance Fund
(ФИНАНСИТЕ, 2005).

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Between 1990 and 2022, several minor and partial reforms and two
major ones were implemented (one regarding pre-hospital care organization,
and the other - the transformation of medical institutions into commercial
companies.) Of course, in addition to NHIF fund there are other professional
organizations - in this case the Bulgarian Medical Association (BLA) – that
mediate the relations between the insurance fund and patients. Until now the
reforms concern mainly medical treatment and its cost while nothing has been
done for those patients who cannot actually afford any treatment (patients
without health insurance coverage.). Besides the organization of the medical
services and the cost of clinical pathways, there is an urgent need for specialists
in healthcare economics who can completely reform the cash flows in the health
sector. The result of the governments' intentions and the unreformed healthcare
system are completely to the detriment of patients as well as medical staff. It is
becoming more and more difficult to manage the medical institutions, which are
accumulating liabilities and are heavily understaffed.
3. A survey conducted among hospital managers regarding the need
for a healthcare reform of hospital care
3.1. Scope and structure of the questionnaire
The questionnaire was sent to managers of all types of hospitals in order
to achieve as clear a view as possible of the current situation in our healthcare
sector.
The results of the qualitative and quantitative analyses conducted on
two stages are based on their expert opinion expressed as responses to the survey
questions. The questionnaire comprised 17 questions and answered
anonymously by 19 managers of hospitals of all types (state-owned, private and
municipal). The questions aim to determine the opinion of hospital managers on
all aspects of hospital activity (the survey was conducted online via the google
forms platform).
The first questions (questions 1 to 6) of the survey are general and aim
to gather information about the type of settlement (large, medium, small), the
type of hospital (private, municipal, state-owned), as well as the number of
medical and non-medical staff employed. These indicators give a clearer idea
of whether there are extreme discrepancies between the opinions of respondents
from different types and sizes of medical institutions.
Questions seven through fourteen concerns the type of funding and
volume of services provided on the clinical pathways contracted by each
medical institution.

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The last three questions (15, 16 and 17) aim to summarize managers’
opinion regarding the need for a radical reform in hospital care.
3.2. Expert opinions of hospital managers regarding the need for
health reform in hospital care
The distribution of respondents according to the settlement where the
medical institution is located is as follows: 58.8% are in small settlements with
a population of up to 50 000 citizens; 1.8% are in settlements with population
of up to 100 000 citizens; 11.8% – in settlements with population of up to 250
000 citizens and 17.6% – in settlements with population of more than 250 000
citizens (see Figure 1).
over 250 000
17%
up to 250 000
12%
up to 100 000
12%

up to 50 000
59%

Figure 1. Distribution of respondents in terms of settlement size
According to this indicator, most of the respondents are managers of
hospitals in small and medium-sized settlements and only about 20% manage
hospitals in the largest Bulgarian cities.
2. The second question establishes the number of beds in the hospitals
they run. This is one of the main indicators of the structure of hospital facilities.
The answers are as follows: 47.1% of all hospitals are small (up to 100 beds);
47.1% are large (over 500 beds); 5.9% are medium-sized (with 100 to 500 beds)
(see Figure 2).
The answers provide information about the size of the hospitals run by
the respondents and show that all sizes of hospitals (from the smallest with up
to 100 beds to the largest with over 500 beds) in the country are represented.
Here we must clarify that there are small municipal hospitals with 50 to 60 beds
as well as large regional hospitals with over 1500 beds.

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85

over 500 beds
47%

100 to 500 beds
6%

up to 100 beds
47%

Figure 2. Number of beds
3. The third question provides information about the type of ownership
of the hospitals. The responses show that 64.7% of the hospitals are municipal;
17.3% are private; 11.8% are owned jointly by municipals and the government,
and 5.9% are government/province-owned (see Figure 3);

municipal
65%

private
17%
joint-venture
12%
government/prov
ince-owned
6%

Figure 3. Type of ownership of the hospital
4. The fourth question provides information about the type of health
institution in terms of its registration license with the Ministry of Health (MOH).
The majority of the survey respondents are the managers of Multi-profile
Hospitals for Active Treatment (MHAT), which are healthcare institutions that
have at least three wards or clinics with different specialtzation.) MHATs are
accredited by the Ministry of Health for a certain volume of hospital care
services specified in the license. (МЗ, НАРЕДБА № 18 ОТ 20 ЮНИ 2005 Г.)
Of all responses, 5.9% are University Hospitals (Accredited hospital institutions
having a contract with a Medical University for training of students and interns.)
(МЗ, Наредба 8 от 13 ноември 2019 г) and 94.1% are MHATs.
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University
Hospital
6%

:MHAT
94%

Figure 4. Type of healthcare institution by type of registration
5. The structure of the medical institution is indicative of the volume of
medical services provided by a hospital. The number of different specialties in
individual clinics/wards and the number of clinical pathways is an indicator of
low or high revenue of the respective medical institution.
up to 3
clinics/wards
18%

over 10
clinics/wards
41%

up to 10
clinics/wards

41%

Figure 5. Structure of the medical institution
6. Employed staff is one of the most important and fundamental factors
for the functioning of the medical institutions. Medical institutions are required
to have a certain number of specialists on their payroll to sign a framework
agreement with NHIF. According to respondents, 56.3% of the hospitals have a
staff of up to 150 employees (both medical and non-medical); 37.5% have a
staff of over 500 employees and 6.3% have over 1000 employees (see Figure
6).
Such a representative sample provides a very clear picture of the
differences between these, some of which have only 50 while others have 1500
employees. The number of employees is one of the main factors for their
operation, structure, volume of activity, and number of clinical pathways.
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over 500
employees
38%

upo to 50
employees
0%
over 1000
employees
6%

uup to 150
employees
56%

Figure 6. Number of employees
7. The number of clinical pathways included in the agreement between
the hospitals and NHIF are essential for their income. The hospitals that
contracted more than 50 clinical pathways represent the largest share (58.85%
(10)), followed by those with up to 20 clinical pathways (23.5% (4)) and those
with up to 50 CPs (17.6% (3)). The total number of clinical pathways for which
a hospital can sign a Framework Agreement with the NHIF (and receive the
required license for providing the type and volume of medical services from the
Ministry of Health) is over 400 (МЗ, Приложение 9, брой Клинични пътеки).
A clinical pathway (CP) is a treatment algorithm, with categorical determination
of the steps in the treatment of the patient, successive actions, monitoring and
evaluation of the results, description of specific methods and medicinal products
for the treatment (conservative, diagnostic, operative and surgical) of a specific
type of disease. Each CP has a designated number and a predetermined cost to
be covered by the NHIF. A clinical pathway does not take into account
deviations in the treatment process, the necessary additional costs incurred for
the treatment of the patient in each individual case, as well as coexistent
diseases. Most CPs are severely underfunded, which creates difficulties for both
the treatment of patients and the financial performance of the healthcare
institution.
58.8% of the hospitals covered by the survey have signed agreements
for more than 50 clinical pathways with the NHIF. This means a higher volume
of activity, more specialized wards as well as larger volume of first-level
competence. 17.6% of the hospitals have contracted up to 50 CPs, and 23.5% up to 20 CPs. The relatively large number of medical facilities that provide
services within the least allowable number of CPs is impressive. Such hospitals
meet only the minimal license requirements for 3 wards and first level of
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competence. Since these hospitals depend entirely on NHIF reimbursements,
this minimal number of CP treatments they can provide creates significant
financial difficulties for them and they have been unable to cover their costs for
years, which keeps them permanently on the brink of bankruptcy. At the same
time, the limited number of treatments they can provide makes them less
efficient as they do not have the necessary number of specialists, equipment,
etc. and they cannot treat moderate and severe cases and sometimes even the
ones. Such hospitals survive mainly because they pay low wages to their staff
in order to cover the cost of consumables such as electricity, water, coal, and
medical supplies. At the same time, when they treat patients under the CPs they
have contracted with the NHIF, they can do so only until the patients develop
subsequent complications, in which case the patients are transferred to hospitals
with a higher level of competence following another CP, i.e. a patient admitted
for a treatment of one condition can be treated following two different CPs.
Such hospitals are usually municipal, but since they are registered as
commercial companies, the municipalities do not allocate absolutely any funds
to them and do not support them in any way. On the other hand, the hospitals of
this type are usually located in small towns where people have a very low
standard of living (and even where most people live below the social minimum)
and therefore such medical institutions are vital for them. The way they operate
and are financed must be changed radically.
less than 20
23%
more than 50
59%

up to 50
18%

Figure 7. Number of CPs contracted with the NHIF
8. Regarding the sources of hospital financing, the largest group (47.1%)
of the respondents refer to NHIF reimbursement and partial or full co-payment
by patients of amounts not included in the clinical pathways. 35.3% replied that
their hospital is funded solely by clinical pathways (see Figure 8). The
remaining 17.6% rely on reimbursements from the NHIF and the municipality.
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None of the hospitals relies entirely on private funding, i.e. there are no hospitals
run entirely on patient payments.
NHIF/RHIF
35%
entirely private
funding
0%

NHIF and partial or
full payment from
patients of amounts
not included in CPs
47%

NHIF and
municipality
transfers
18%

Figure 8. Sources of hospital financing
9. The managers' assessment of the costing of clinical pathways is as
follows: 41.2% of the respondents indicated that the income from the NHIF is
not sufficient to cover the cost of treatment (see Figure 9. The same percentage
(41.2%) expressed the opinion that the cost of clinical pathways is not estimated
realistically and is insufficient for the related treatment. 17.6% are of the
opinion that the real cost of treatment is much higher than the cost of the clinical
pathway. None of the respondents indicated as an answer that the CP costs are
realistic, properly estimated and sufficient.
NHIF reimbursements are not
sufficient to cover the
treatment costs
41%

actual costs and CP
reimbursement are
equivalent and estimated
correctly
0%

actual costs are
much higher than
the amount
reimbursed for the
CP
18%

CP reimbursement is not
realistic and does not cover
treatment costs…

Figure 9. Clinical pathway cost estimation

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10. The tenth question concerns the monthly income of hospitals from
all possible sources, including NHIF. 47.1% answered that the monthly income
of their hospital is over half a million BGN, 29.4% answered that their total
monthly income is up to BGN 150 000 and 23.5% answered that they have an
income of up to BGN 500 000 per month.
up to BGN 50 000
0%
over BGN 500
000
47%

Up to BGN 150
000
29%

up to BGN 500
000
24%

Figure 10. Monthly income
11. Managers who answered that the expenses of the medical institutions
they run amount to more than half a million BGN are 47.1% of all respondents
(see Figure 11). A large part (35.3%) report expenses of less than half a million
BGN per month, and 17.6% spend up to BGN 150 000 per month. These are
probably municipal hospitals with very limited financial resources in both the
revenue and the expenditure parts of their budgets.
up to BGN 150
000
18%

over BGN 500 000
47%

up to BGN 500
000
35%

up to BGN 50 000
0%

Figure 11. Monthly expenditures

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12. When asked whether the staff turnover for the last 5 years was due
to financial or other reasons, the respondents answered that medical staff looks
for employment in other hospitals for reasons that are not financial.
Yes
18%

No
82%

Figure 12. Staff turnover due to financial reasons
Despite all demands for better payment in healthcare by all professional
organizations as well as from healthcare workers themselves, the responses to
this survey give a clear idea that besides the low salaries there are more serious
problems in our healthcare.
13. This question aims to provide a little more clarity regarding the
obligations of healthcare organizations while question 14 determines to what
type of companies the surveyed hospitals have obligations.
To the question whether they have obligations (i.e. outstanding
payables), more than half (64.7%) of the managers answered positively and a
small part (35.3%) answered negatively (see Figure 13).
Yes
35%

No
65%

Figure 13. Obligations
To the question regarding the predominant type of companies to which
they owe money, the majority (66.7%) of the respondents pointed to
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pharmaceutical companies and/or companies for equipment and medical
consumables, which means that most hospitals accumulate obligations to
providers of the most directly related to the healing process materials. 33.3%
stated that they have obligations to municipal, private and state-owned, i.e. they
have outstanding debts accumulated from electricity, water, and heating bills,
tax payables, etc. (see Figure 14) as they have difficulties in covering any of
these costs. An interesting finding in this part of the survey is that not a single
hospital, regardless of its type, has outstanding payables for staff salaries. This
means that the managers of the medical institutions pay the salaries first and
then everything else. Given the shortage of medical personnel in our country,
such a behaviour is logical.
municipal, private
and state-owned
enterprises
33%

suppliers of drugs,
equipment and
medical
consumables
67%

Figure 14. Outstanding payables to municipal, private and state-owned
enterprises
15. The respondents answered the question about their opinion on
clinical pathway costs estimation and their reimbursement by the NHIF as
follows: almost half 47.1% answered that CP costs are neither sufficient nor
correctly estimated to cover the costs incurred for the related treatment (see
Figure 15). Approximately one-third (35.3%) answered that an absolutely new
method of payment for medical treatment without the use of any CPs
whatsoever is needed. 17.6% answered that CPs do not allow reimbursement of
additional costs and do not correspond to the actual value of the incurred costs
for each specific treatment. None (0%) of the respondents selected the first
answer choice to this question viz. that CPs reflect the treatments with a correct
algorithm and are quite sufficient to reimburse the treatment costs. The general
opinion from the four responses can be summarized as follows: CPs are
incorrectly valued, follow incorrect algorithms, do not allow the inclusion of
additional costs and are incorrect as a method for reimbursing medical treatment
costs.
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93

CPs are exclusive
of additional costs
18%

An entirely new
method is needed
35%

no answer
0%

CPs follow correct
algorythms and
correctly cover the
costs
0%

CPs are not an
adequate costing
method
47%

Figure 15. CPs
16. The answers showing respondents’ opinion regarding the financing
model of healthcare in Bulgaria are quite indicative: 94.1% think that a reform
in healthcare and a new method for reimbursement of hospital treatment is
needed, the remaining 0.6% express the opinion that the financing is satisfactory
and none answered that the it is adequate and sufficient (see Figure 16). These
responses the utter conviction of both managers and doctors that the CP model
is inadequate both as a way of reporting and as a way of reimbursing healthcare
services.

Financing is sufficient
1%

A healthcare
reform and a new
payment method
are needed
99%

Healthcare
financing is
adequate and
sufficient
0%

Figure 16. CP financing
The last question shows respondents’ opinion regarding the need for a
reform of the healthcare system. The majority are of the opinion (64.7%) that a
total reform of the whole healthcare system is needed, 35.3% think that a partial
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one is needed and none of them believe that a reform is not needed (see Figure
17).
A total reform of the
whole healthcare system
is needed
65%

A partial reform is
needed
35%

No reform is
needed
0%

Figure 17. The need for a healthcare reform
The results from the survey lead to the following conclusions:
First, the opinion that a healthcare reform (mainly in terms of financing
healthcare services) is absolutely necessary.
Second, regarding the scope of such a healthcare reform the respondents’ opinion is that a completely new system of healthcare organization
regarding hospital activity is needed.
Third, both the providers and the users of healthcare services are not
satisfied – the former from the insufficient reimbursement of their services and
the latter – from the fact that they have to cover the additional costs associated
with the treatment.
Fourth, the expert opinion of the respondents regarding the estimation
of costs and payment of treatment by the NHIF is that it is in many cases
insufficient and does not guarantee the provision of quality health services to
the population.
Fifth, the general opinion regarding the organization and financing of
healthcare in our country is negative and varies from mildly satisfied to strongly
dissatisfied.
Conclusion
Based on the conducted survey and the expert opinion expressed by the
respondents, we can summarize that the main shortcomings of the current

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healthcare system in Bulgaria are: ineffective system for financing the healthcare institutions, non-transparent allocation of financial resources and lack of
effective control by the NHIF.
The current reform, which has been implemented for almost 30 years,
concerns mainly the partial restructuring of individual small sectors, updating
the NHIF budget mainly in terms of the range of treatments or increasing the
value of a certain clinical pathway. In this sense, the healthcare system is
increasingly lagging behind in its modernization. There are structures that have
not been upgraded and renovated at all since the beginning of the reform. There
are activities where an acute financial shortage is felt.
A serious problem in terms of the efficiency of financing the healthcare
system in Bulgaria is the established monopoly of the NHIF. On the one hand,
hospitals are on the market as commercial companies and as such cannot use
public finances and on the other hand the budget of the NHIF is too large to rely
on attracting private investors and attracting competitive alternative health
funds. Moreover, the control of NHIF is predominantly on a documentary basis.
NHIF does not participate in the actual treatment of patients and the extent to
which treatment costs it reimburses are sufficient and efficiently allocated is not
among its priorities.
The primary use of clinical pathways as a means of payment and funding
of healthcare institutions is ineffective and detrimental to all healthcare
stakeholders. We need a system in which patients can track the transfers of their
health insurance contributions and how they are spent. Control over the transfer
of funds from the patient to the NHIF and back through the hospital to the
patient is difficult to establish and this is another reason for a major reform in
this sector. The practice in other countries worldwide shows that high results
are achieved when the funds collected from personal health insurance
contributions are spent transparently. The clinical pathway algorithm was
created for medical purposes and does not sufficiently cover the costs for every
unique treatment. When patients are treated in a hospital, the amount of the
additional costs incurred can sometimes increase the overall price of the
treatment several times. This cost is ultimately paid by the patient. The NHIF
as a monopolist unilaterally estimates the service cost it will cover, which
contradicts economic logic.
The main factor for improving the effectiveness of patients’ treatment is
the transparency of allocation and use of the funds they pay as health insurance
contributions.

96

Economic Archive 4/2022

References
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bg/web_content?pageId=14851&id=15450
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Ana Borisova Ivanova is a doctoral student at the Department of
Finance and Credit of D. A. Tsenov Academy of Economics in Svishtov. She is
Economic Archive 4/2022

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also a part-time lecturer in Healthcare Economics and Microeconomics of
healthcare organizations and a medical specializant in Healthcare Economics at
the Medical University in Pleven. Scientific interests: healthcare financing,
healthcare management, financial management, public finance.
ORCID ID: 0000-0002-1701-624X

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ECONOMIC ARCHIVE
YEAR LXXV, BOOK 4 – 2022
CONTENTS
Meriem Chafik, Mohammed Nabil El Mabrouki
Opportunities and Challenges of Cross-Border Banking: Focus on Pan-African
Banks /3
Kalina L. Durova
The Impact of Absorbed European Funds on the Economic Growth of Bulgaria
and New Member States /17
Desislava Koleva-Stefanova
The Dynamic Transformations on the Labour Market in Bulgaria in
Conditions of Digital Technologies and Pandemic /37
Rayna Stoyanova Petrova
The Competence-Based Approach Through the Prism
of Academic Training in Management Accounting /58
Ana Borisova Ivanova
The Health Insurance Reform in Bulgaria – Financing Models and Status
Evaluation /79

EDITORIAL BOARD:
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Hetman, Kyiv (Ukraine)
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