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Monday, June 25, 2007

Hungary To Open Health System To Private Sector

Bloomberg this morning. The implications of this need a lot of thought.

Hungary's government plans to open the country's health insurance market to a limited amount of private investment, ending the state monopoly on medical coverage that the Communists set up almost 60 years ago.

The plan, subject to parliamentary approval, will create five to seven health funds that will compete with each other for patient contracts for six to 12 months after they're established, according to the text of a speech by Prime Minister Ferenc Gyurcsany yesterday. The state will maintain a majority holding in each fund and will open the remaining stakes to companies, he said.

The proposal will offer private companies a slice of Hungary's health insurance market, with a premium revenue of as much as 900 billion forint ($4.9 billion), according to an estimate by insurance industry group MaBiSz. The Free Democrats' Alliance, the party that controls the Health Ministry, argues that Hungary's health-care providers will improve their facilities when they're forced to compete with each other for financing.

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