HUNGARY AND THE EU

Program 0142
October 16, 2001

This text has been professionally transcribed. However, for timely distribution, it has not been edited or proofread against the tape.


ÉVA KERESZTY: People think that being in a hospital, it’s a normal part of the life. And they don’t want one-day surgery services. They wait to have everything covered by the government or by the social security fund. That’s an obstacle when we are talking about the reforms and the changes.

KRISTIN MCHUGH: This week on Common Ground, Hungary’s struggle to transition into the European Union.

JÓZSEF DÖMÖTÖR: [via a translator] We’ve already modified the law because we realized there were difficulties. But we can’t get rid of the cellar book. The European Union insists on this. We have obligations there and we’re trying to reduce them. But once we actually join the EU we’ll have to reimpose a stricter registration system again. The EU makes the laws and the bureaucracy. I’m afraid we have to blame Brussels.

KEITH PORTER: Common Ground is a program on world affairs and the people who shape events. It’s produced by the Stanley Foundation. I’m Keith Porter.

MCHUGH: And I’m Kristin McHugh. Over the past two months Hungary has faced a series of scandals. The leader of the junior government coalition party, the Smallholders, was forced to resign over allegations of corruption. For many Hungarians such political shenanigans are neither a surprise nor of great concern.

PORTER: But the whole country has been shocked by the story of a young nurse who is under arrest and charged with illegally assisting the death of up to 40 patients on her ward during her night shifts. The “Black Angel,” as she has become known, claims that she only wanted to relieve their pain and not to kill them. But her activities have shed a startling light into some dark corners of Hungary’s hospital service. As Common Ground Correspondent Max Easterman reports, the Black Angel case is just one example of the financial crisis that is crippling the country’s entire health system. He begins his report in the eastern city of Debrecen.

[Church bells and chimes are ringing in the background]

MAX EASTERMAN: Debrecen lies just over 100 miles east of the capital of Budapest. It’s an historic city busily getting a 21st-century makeover. The carillon you can hear behind me is part of a new pedestrian precinct in the main downtown area here on Piac utca-Market Street. The bells are those of the Nagytemplom, the great church, an austere neoclassical symbol of the Calvinist faith that swept Hungary 400 years ago. Debrecen is Hungary’s second city. It also has one of its best hospitals, the Kenézy Gyula.

[sound of medical equipment operating]

EASTERMAN: This is the diagnostics laboratory at the Kenézy Gyula Hospital. It’s full of new Japanese and German equipment and it’s linked by a modern computer to all the other departments. The hospital’s director, György Berecz, claims it’s one of the most up-to-date in Hungary. Regrettably, he can’t say the same about the rest of the hospital’s equipment.

GYÖRGY BERECZ: In x-ray department, in intensive care department, our medical equipments are already old.

EASTERMAN: How much money would you need, roughly, to renew all the equipment you would like to renew.

GYÖRGY BERECZ: In one year we have 200 million Forint, to buy new equipment.

EASTERMAN: And how much would you need, really?

GYÖRGY BERECZ: Really? 500 million yearly.

EASTERMAN: Two and a half times what you actually get?

GYÖRGY BERECZ: Yes. Yes, yes.

EASTERMAN: The funding crisis over equipment is typical of many hospitals in Hungary. So also is the crisis over staffing. Kenézy Gyula treats a million outpatients a year, nearly 60,000 inpatients. But it’s short of 500 nurses. And the reason is not hard to see. It’s the pay. The basic salary is $150 a month. You can earn two or three times that on the checkout in the local supermarket. It’s a financial struggle for a nurse like Enikõ Gönczi to buy the basics that she needs. And it’s a physical struggle for her to give the basics that they need.

ENIKÕ GÖNCZI: [via a translator] Time is very short. We have so many things to do during the day and there are very few of us. So we don’t really have time to go to them and talk to them. Or be with the patients enough time during the day, because only two of us are working for a day.

EASTERMAN: For how many patients, the two of you work?

ENIKÕ GÖNCZI: [via a translator] We are only the two of us work for 38 patients. We don’t have time for talking and chatting.

EASTERMAN: And it’s no better for doctors. I’m with the head of the orthopedic department, Dr. Gyula Sári. He’s been a doctor for 26 years. He earns just $600 a month.

DR. GYULA SÁRI: Naturally we are unsatisfied with this small salary and it’s because of the small salaries doctors and the nurses are leaving their job.

EASTERMAN: And what are they doing instead?

SÁRI: Yes, there are pharmacological companies and they join into this organization as an agent.

EASTERMAN: So they go and sell drugs?

SÁRI: Yes, of course. Yes.

EASTERMAN: And for that they get paid how much, do you think?

SÁRI: At least double of my salary.

EASTERMAN: Have you ever considered going?

SÁRI: [laughs]. This is the only way. If no money, no job, no salary, we will leave and we will go to the Third World to work somewhere.

[sound of a announcement over a loud speaker]

EASTERMAN: While the cynics say you only have to work in a hospital here in the Hungarian capital to experience true Third World conditions. It’s an exaggeration, but it’s certainly true that Budapest’s hospitals are in a very poor state. I’m taking the subway out to the Sébeszet Clinic at the Semelweisz University to meet one of the head surgeons there. Dr. János Weltner.

JANUSH WELTNER: Now we are standing in the middle of the lobby of the clinic. And here I can show you three parts of the clinic, which is still functional and good enough and nice enough not to be reconstructed. And this is the stair house, which is very nice.

EASTERMAN: So the stairwell is OK?

WELTNER: Yes.

EASTERMAN: That works OK.

WELTNER: That works . And the windows are very nice. It’s really artistic.

EASTERMAN: And they’re OK as well?

WELTNER: They are OK. And here we have the theater for the students. That’s the teaching theater of the students.

EASTERMAN: And they’re the only bits that operate properly.

WELTNER: Yes.

EASTERMAN: That is a pretty depressing picture then, isn’t it?

WELTNER: Oh, it makes the things more interesting, you know.

[sound of a typewriter]

EASTERMAN: This is the outpatient’s clinic at the Semelweisz. There are four doctors working in here with just three cubicles for patients. Well, they’re not even that, they’re just a bed with a curtain round it. There’s no privacy. And you can get some idea of the state of the equipment from the noise made by the doctors typing up their patients’ details on old East German electric typewriters.

WELTNER: Here you can see some instruments of Russian make, which is about ten years old, but it does work.

EASTERMAN: But it’s not very modern.

WELTNER: Not very modern, but to run a modern equipment would be much more expensive.

EASTERMAN: How much more?

WELTNER: The running cost about ten times more. And all the spare parts are more expensive. For instance, the Russian-made rectoscopic tubes can be repaired by hand and if you have the modern rectoscopic tubes then you can hardly repair them. You must change them. And this makes the running costs higher.`

EASTERMAN: Budapest hospitals are in a more serious financial position than many others because they’re expected to take on the most difficult cases from all over the country. But they don’t get any extra cash for doing this. Often, they can do better than their provincial counterparts, but they find it convenient to off-load their most serious, and therefore most expensive cases, onto the capital. The university hospitals are even worse off because they’re also competing with other departments for precious resources. And all hospitals are being forced by lack of funds to cut their costs. Surgeons, like Dr. János Weltner, have to cope as best they can.

WELTNER: The purchase power of the money of the hospital system, which means how many aspirins I can buy from the budget, is now about half the cost in the ‘90s, beginning of the early ‘90s. And the very first years we did not really realize that the value of our budget is going down. And we tried to do our best to do the similar level of treatment for less money and for a couple of years we succeeded on that. But now we are over the limits and now we take away some treatment from the rest. And we cannot give the same quality of level of treatment.

EASTERMAN: So you’re having to prioritize? Certain procedures are now out?

WELTNER: Procedures and drugs and treatments. Not just the procedures. We take away a little bit from everything.

EASTERMAN: So are you saying that some patients are getting less than effective treatment as a result of these cuts.

WELTNER: I’m afraid, yes.

EASTERMAN: The Hungarian healthcare system was planned by the Communists back in the ‘50s. It was designed to tackle head-on two major problems: infectious disease and child mortality. And it was very successful. But it’s now too inflexible to treat modern diseases effectively, like cancer and heart disease. For those, there has to be a radical shift to more primary care, more ambulatory care. But here’s the difficulty: too much capital is invested in the hospitals. Too many doctors work there and don’t want to move. Éva Kereszty, who’s head of the policy department at the health ministry, says there’s also another big problem: patient expectations.

ÉVA KERESZTY: People think that being in a hospital, it’s a normal part of the life. And they don’t want one-day surgery services. They wait to have everything covered by the government or by the social security fund. That’s an obstacle when we are talking about the reforms and the changes. So we spend a lot of money for the use of the services. Just to give an example for this: there are hundreds of thousands of women who take part in cancer screening several times a year. Whenever they meet an obstetrician or a gynecologist they have the screening. But there is a very huge population who never took part in a screening like this. Because they don’t have a, really convinced a family doctor to send them, which is absolutely nonsense. And which is another big challenge, you know, because it’s a question of the attitude of the people and the attitude of the doctors.

EASTERMAN: In the mid-’90s the last government did cut hospital beds by 20 percent. It caused a storm of public outrage, not least because the money saved wasn’t spent on boosting community healthcare. It’s a mistake the present administration has avoided so far by doing nothing. So in spite of its improving economic performance, Hungary is spending less of its GDP on healthcare today than it was five years ago. According to Eva Karisty, there are now plans to get more investment into the system.

KARISTY: Two points: One is that now the general income of the people is raising. Which means that the social fund is in a possibility to also be raised. I mean that to the higher income you pay more tax and it’s more money into the social security fund, so that’s one way. The other is the different forms of privatization, for example. In the outpatient services very expensive machines work only 8 hours or 6 hours in their state patient services, or diagnostic centers, while in the privatized they use it during the whole day; they have a very good referral system with their practitioners. So it’s much better organized. Much more cost effective and it’s a different quality.

EASTERMAN: There’s no shortage of people who think that these plans aren’t going to work. One of them is the economist, Professor Péter Mihályi. He’s an expert on healthcare systems in the former Communist states. I’m on my way to see him now, at the Central European University.

Péter Mihályi: We need a simultaneous reform on the financing side and the supply side. We need more privatization on the supply side, whereby not part of the hospital would change hands, but entire hospitals. If an entire hospital is private, then it is clear that in this hospital the logic is making money. On the financing side what we need is a competitive insurance model where several insurance companies compete for the business, because today the biggest problem is that the state-controlled monopolist system does not compel people to pay and therefore the system remains heavily unfunded.

EASTERMAN: Now, here’s another problem. Hungary has a huge gray economy. Many experts say it’s worth nearly a third of GDP. So all those people pay no taxes and no health insurance, but they still expect the government to pay for their healthcare. And that gray economy has spread into the healthcare system itself, where it even has an official name-copayment. In reality, it’s a system of backhanders. Patients are expected to pay hospital doctors cash to get better treatment. Whether they do or not is a moot point. Éva Csató didn’t. She got botched aftercare and a deep vein thrombosis as a result. But she still paid up.

ÉVA CSATÓ: [via a translator] I had to pay the doctor. It’s necessary in Hungary and I thought if I pay him he would pay more attention to me. He would be more sympathetic to me. I didn’t expect him to treat me differently or better than other patients. But at least I thought he would come to me, talk to me, and give me personal help.

EASTERMAN: How much did you pay him?

ÉVA CSATÓ: [via a translator] 10,000 florins. It’s $35, but I was willing to pay him more at the beginning. But since he never showed up and the thrombosis happened, I reduced the payment for him. I don’t know why I did it, but this is the custom in Hungary. Everybody has to pay different amount of money, depending on how much they are able to afford. Patients give the information through their grapevine and get information from each other, how much should they pay for this or that kind of a service or operation.

EASTERMAN: It’s said that many doctors could double or triple their salaries with these so called copayments. And they must take some of the pressure off the payroll budget, that’s for sure. I’m curious to know what hospital administrators think of them, so I’m traveling out to the Heim Pál Children’s Hospital in Budapest to find out from the Director, Ervin Smrcz.

ERVIN SMRCZ: [via a translator] It may be good for the doctors who get these payments-the BMWs in the hospital car park speak for themselves. But many doctors don’t. If you don’t meet patients directly, if you aren’t in charge of a case, you will get nothing. So that creates professional tensions. As for me, I can’t deploy the best doctors where I need them. That’s often where they don’t get copayments and I can’t take any decision which affects a doctor’s ability to go and getting this extra cash, because it would destroy his standard of living. It’s a totally damaging system.

[sound of a child crying]

EASTERMAN: It’s ironic, but the man who runs the intensive care department here at Heim Pál, gets no copayments. Parents apparently are unwilling to fork out cash for their children’s treatment. But Csába Szentirmai wouldn’t dream of asking. He works 250 hours a month, and what he really wants is more money for better equipment. The boy you can hear, he’s in terrible pain. He has a kidney problem. Dr. Szentirmai is busy phoning a private company to hire a dialysis machine. He can’t afford to buy one and he doesn’t believe the health ministry’s plan to privatize services will help either.

DR. CSÁBA SZENTIRMAI: No one would invest in a system like this in the present conditions. I wouldn’t put my own money into this system. Because we don’t get the amount we spend for a patient. So the hospital never fees their money back.

EASTERMAN: So you’re always in deficit?

SZENTIRMAI: Yeah, that’s right. That’s right. Just building up huge, huge, deficit. So in the end, sooner or later, we are afraid the system is just going to collapse.

EASTERMAN: The present center-right government came to power in1998 promising to quadruple doctors and nurses’ salaries. Then it did nothing. Its critics claim the case of the Black Angel-the nurse whose illegal euthanasia activities took two years to come to light-they claim that this case shows that healthcare management is failing. That without more cash the whole system will fall apart. Meanwhile, it’s been revealed that Hungary now has the worst life expectancy in Europe. The next government is going to have to make healthcare a real priority for the first time since the Communist era. For Common Ground, this is Max Easterman in Budapest, Hungary.

MCHUGH: Hungary’s fledgling wine industry, next on Common Ground.

PORTER: A century ago, Hungary was one of the biggest producers of some of the finest wines in Europe. But 100 years of war, lost territory, and requirements to make cheap wine for the former Soviet market reduced most vineyards to just shadows of their former glory. Even the world famous sweet wines of Tokaji lost ground during the Communist period.

MCHUGH: But just as Hungarian wines are starting to make a comeback, they all face a new challenge: the strict regulations enforced by the European Union, of which Hungary will soon become a member. As Common Ground Correspondent Max Easterman reports, a new EU wine law was introduced last year, to the dismay and then anger of many producers.

[sound of wine being poured into a glass]

EASTERMAN: Well, this is the tasting room in Dömsödi Winery in the village of Dömsöd, about 50 kilometers south of Budapest. And the wine that’s just been poured for me is what’s known as a regional wine. It’s midway in quality between the quality wines from the better-known vineyards and wine areas and the ordinary table wine. This one-let’s just have a taste-umm-well, it’s bone dry, very light, made from the Sylvaner grape. And this two-liter bottle it’s come from costs around 300 florins. That’s just over a dollar. Now last year it would have cost about 20 cents less, the reason being that the government has introduced a new wine law and that wine law has put a huge burden of bureaucracy on the wine producer. The cellar master here, István Kossai, is not at all pleased with the amount of work that he now has to do.

ISTVÁN KOSSAI: [via a translator] Every day we have to look how much grape must we have and how much is lost in our cellar book. But the problem is you don’t know exactly how much you lose when you transfer the wine from one vat to another. Traditionally we had an allowance for how much we could lose without penalty. Now every drop has to be accounted for.

EASTERMAN: I’ve just been looking at the cellar book. It’s a monumental tome. Pages and pages of figures. Many of them are almost pointless, according to Mr. Kossai. They keep the customs man and the ministry of agriculture happy, but when Mr. Kossai wants to know what’s really going on he goes back to his own cellar book, which he keeps in the old way.

VAN KOSCHOI: [via a translator] The new wine law was drafted too quickly. And they didn’t ask the professionals about how it would work. A grape is a living thing. You can’t regulate it with laws. When we were harvesting I was in the office writing up data, and I had no idea what was actually going on outside where the wine was being made.

[sound of car doors opening and closing]

EASTERMAN: Well, I’m right in the middle of the Dömsödie Vineyards now. They’re huge and stretch for about, well a good half mile to a mile in every direction from where I am now. I’m with Zsolt Kudár, who’s one of the vineyard owners. Zsolt, all this bureaucracy, this must be putting something of a financial strain on the system. Is that right?

ZSOLT KUDÁR: [via a translator] Because of the extra administration now they have to employ three more people and that made the costs higher-about 10 percent. And if they want to stay alive in the markets then they have to accept that. It’s a question of first staying alive or not.

EASTERMAN: The people who come most often to peer into the Dömsödi Cellar book are Hungary’s excise officers, who charge the winery about five cents a liter duty on the final product. So I’ve come to their headquarters in the capital, Budapest, to ask Károly Fehér, head of excise, why this involves so much bureaucracy.

KÁROLY FEHÉR: [via a translator] Yes, we have introduced a little bureaucracy. But the wine growers are just going to have to accept it and the bookkeeping that goes with it. How much wine they make is very important because it affects tax revenue. But in any case, most of the bookkeeping isn’t because of us; it’s to do with quality, and that is to due with the Ministry of Horticulture. They enforce the quality regulations.

EASTERMAN: So you’re just the innocent agent of another government ministry.

FEHÉR: [via a translator]: Not innocent. We just do what we have to do.

EASTERMAN: So then, it’s not the fault of the customs, it’s all down to the Ministry of Agriculture, so that’s where I’m going. To the ministry, which is Louis Kossuth Square, immediately opposite Hungary’s 19th-century Parliament building. And I’m going to meet József Dömötör, the man who’s in charge of monitoring the new wine law.

JÓZSEF DÖMÖTÖR: [via a translator] We’ve already modified the law because we realized there were difficulties. But we can’t get rid of the cellar book. The European Union insists on this. We have obligations there and we’re trying to reduce them. But once we actually join the EU we’ll have to reimpose a stricter registration system again.

EASTERMAN: But the point is, once Hungary joins the European Union, inevitably the bureaucratic burden is going to rise again?

DÖMÖTÖR: [via a translator] Yes. The EU makes the laws and the bureaucracy. I’m afraid we have to blame Brussels.

EASTERMAN: That’s not good news for producers like the Kudars at Dömsöd. They make wine for the lower end of the market and they’ll find it difficult to recoup their costs by raising their prices. The new wine law has had less impact on the producers of more expensive quality wells, but then they have other problems. I’m with Zoltán Heimann, traveling to visit his vineyards in Szekszard, just a few miles from the Serbian border in the south of Hungary.

EASTERMAN: [speaking as he walks, in an out-of-breath style] Well, this is a very different kind of vineyard from the one at Dömsöd. Szekszard is where the great Hungarian plain ends and the hills of southern Hungary rise up. This is a very small vineyard by comparison with the huge ones on the plains. And as you can probably hear from my somewhat heavy breathing, it’s on a steep hillside. Producing wine from high quality, noble grape varieties of grapes like Cabernet, Franc, and Merlot. Zoltán Heimann believes that’s the future for the Hungarian wine industry if it’s to have any future at all. [breathing very heavily] Whooo!

Zoltan Heimann: We started only ‘97, blending international varieties like Merlot and a bit of Cabernet Franc, and the Hungarian varieties like Kodarko(?), Kéfrankos, and the port, too.

EASTERMAN: But why blend when you’ve got famous varieties like Merlot?

HEIMANN: Look, we have to have a certain identity. I think if you want to compete with the cabernets and Merlots themselves, you’re always competing. With New Zealand, with Chile, with South Africa, California. On the other side, if you think of your terain, the mild soil, the microclimate, then with the blending with theCuvée, you can create a special taste, a special unique taste. I want to create the wine where the customers they wouldn’t say, “Oh, that’s a Cabernet,” or a Merlot. They would say, “Oh, that’s Heimann.” And if you can do it we are successful. If we fail it’s a big disaster.

EASTERMAN: Now there are several reasons why potential disaster could face the Hungarian wine industry. One of the most pernicious is fake or artificial wines. These are made by adding sugar alcohol to grape must, to make the wine more quickly and cheaply. It’s long been a problem in Hungary, and the new wine law is supposed to stop it. But the excise man told me they’d filed half a million liters of sugar alcohol in the last six months. Mr. Heimann, you must be worried by this.

HEIMANN: Look at Austria with their scandal with the glycol. They can never recover with their image. Because you know, the glycol ruins their possibilities. In Hungary right now we have the problem with the fake wines. You can face also the same problem. On the other side, as soon as the European Community is opening the doors, a big mass of normal table wines coming to us at a very cheap price and a reasonable quality. So, unless we succeed with our wines, producing something special, we are, I would say, vanish into the ocean of the table wines. That’s the challenge right now for us.

[sound of someone walking]

EASTERMAN: So now we come to the best bit, which is actually tasting the wine. [now speaking to Heimann]: Which one are we going to taste, Zoltán?

HAMEN: Right now, it’s going to be Kodarko(?)

[sound of wine pouring]

EASTERMAN: Wonderful. Umm!

[sound of wine classes clinking together in a toast]

EASTERMAN: [still speaking to Heimann] Good health! Well, I have to say this drinks very well on its own. It tastes wonderful. [Back to narration] I for one hope that Zoltan Heimann achieves his ambition. He hasn’t got long. Because one thing is for sure-the ocean of wine he talked about will overwhelm the cheaper wines from the great plain and it will drive out many quality producers as well-unless they can create those unique, special wines that everyone, including Hungarians, will want to drink. For Common Ground, this is Max Easterman in Szekszard, southern Hungary.

Our theme music was created by B.J. Leiderman. Common Ground was produced and funded by the Stanley Foundation.

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