Michail Bojadzhiev; Marieta Dimitrova;
Silviya Dimitrova; Monika Koptcheva
The aim of this survey is to analyze and examine the legal arrangements for the establishment of healthcare institutions in the Republic of Bulgaria, in a number of European Union countries and in the United States of America.
Paying regard to the criteria that had been taken as a basis in the survey the comparative legal analysis has been structured in the following way:
This survey has been divided in four parts.
Part 1 gives an outline of the legislative framework for the establishment, management and dissolution of healthcare institutions pursuant to the current legislation in the Republic of Bulgaria.
Part 2 presents a comparative analysis of the legislation of 12 European Union Member States, the position of international organisations in terms of the legal regulation of the establishment, the organisation and management of healthcare institutions.
Part 3 presents the legal arrangements for the healthcare institutions in the United States of America.
Part 4 makes a review of the conclusions and recommendations with regard to the provision of services to healthcare institutions by non-profit organisations.
The authors of this survey believe that the review of the positive practices of the developed countries in the provision of medical and health services will initiate a debate on the improvement of the legal framework for the operation of healthcare institutions in Bulgaria and may serve as a basis for future legislative changes in that direction.
I. Legal arrangements for the healthcare institutions in the Republic of Bulgaria Sources The health services in the Republic of Bulgaria are provided by health institutions that have been regulated by the Law for Public Health as well as by healthcare institutions that have been regulated by the Law for Healthcare Institutions.
The health institutions as per the provisions of the Law of Public Health are: sanitary and epidemiological inspectorates and national centres for public health protection. According to the provisions of the same law those include primary healthcare services, tertiary care, sanatoria, rehabilitation centres, established in compliance with the Law for Public Health until their restructuring, dissolution or liquidation as per the Law for Healthcare institutions.
The Law for Health Insurance, the Law for Professional Asociations of Doctors and Dentists and the endorsed bylaws thereof are relevant to the subject of this survey.
Organisational structure and types of healthcare institutions in terms of their medical activities The healthcare institutions as per the Law for Healthcare institutions shall be established in accordance with the provisions of the Commercial Law or the Cooperative Law. They may perform their activities only after they are granted a license or are registered as stipulated in the Law for Healthcare Institutions.The healthcare institutions provide primary, secondary and tertiary care. They are established by the state, the municipality or by other legal and natural persons.
In general the Law for Healthcare institutions foresees three large groups of healthcare institutions depending on the type of their medical activity, namely: primary healthcare institutions, tertiary care and a third, very specific group including hospices, medical and social care centres and dispensaries . Every entity that has been established as a healthcare institution has its own legal characteristics depending on the type of the medical activity, the legal arrangements for establishment and management from a commercial and administrative perspective. These characteristics affect the determination of the organisational scheme of the healthcare institution – a natural person, a cooperative or a joint venture as well as the type of the venture. A prerequisite for the establishment of a medical institution is the cumulative compliance with the set of requirements that are in force for the establishment of: a cooperative under the Cooperative Law, or a commercial entity, a joint venture as per the Commercial Law as well as the availability of a registration or license in accordance with the Law for Healthcare Institutions.
Legal and administrative arrangements for the establishment and control of the healthcare institutions The type of healthcare institution determines the administrative and legal arrangements for its establishment. The Law for Healthcare institutions stipulates the registrative and licensing conditions for the establishment of the healthcare institutions.
The primary care institutions and the hospices shall be registered. These are registered in the regional public health centres.
The activities of the tertiary care institutions, dispensaries and the social and medical care centres are subject to licensing. The licenses are issued by the Minister of Health.
Along with the registrative and licensing conditions the Law for Healthcare institutions introduces an accreditation procedure Generally the procedure is applied only for hospitals and as an exception for the diagnostic and consultative centres.The accreditation is an administrative procedure for preliminary, current and further monitoring by the state of the quality of the medical services and the educational activities in the healthcare institutions. A specialized committee within the Ministry of Public Health makes the accreditation.
Activities that may be performed by the healthcare institutions The healthcare institutions provide primary and tertiary services. The healthcare institutions hold equal rights regardless of their ownership, i.e. the public and private healthcare institutions are equal in status.
The healthcare institutions are not allowed to perform any business activities except for sustaining their medical activities and for servicing their patients.
Financing of Healthcare institutions The healthcare institutions are financed from the National Health Insurance Fund, the state and the municipal budgets, voluntary health insurance funds, donations by national and foreign legal and natural persons.
Pursuant to the provisions of the Law for Healthcare institutions the revenue of the healthcare institutions consists of payments under contracts for provided medical services, of direct payments by legal and natural persons, of payments as per the Law for Health Insurance, reimbursements of expenses by third parties, specific subsidies from the state budget in case provisions are made available, leasing of equipment, buildings and areas, of grants, legacies and aids.
In case the medical services are provided without a contract with the National Health Insurance Fund the healthcare institutions provide medical services against payment.
However the transfer of the profit tax is provided only for the healthcare institutions owned by the state or the municipality (art. 61, par. 2 of the Corporate Income Taxation Law ).
Dissolution of the healthcare institutions The healthcare institutions that have been established in accordance with art.5, par. 1 of the Law for Healthcare institutions are dissolved by an act of the Council of Ministers on the grounds of a proposal of the Minister of Health after a request by the regional municipal council. The conditions and procedures for liquidation of these healthcare institutions are defined in a regulation of the Council of Ministers.
The dissolution and liquidation of a healthcare institutions that is a joint venture or a cooperative shall be made in accordance with the provisions of the Commercial Law.
As far as the liquidation procedure is concerned, the Law for Healthcare institutions introduces a set of additional and individual requirements related to the specific activities of the healthcare institutions, for example -the period of liquidation shall not exceed 18 months, the liquidators have to be at least three persons and at least one of them should have a higher degree in medicine.
Non-profit organizations in the provision of health services The public health services and the health institutions in Bulgaria are regulated by the Law for Healthcare institutions (LHI) and the Law for Public Health (LPH). Neither of these acts contains any provisions related explicitly to the non-governmental organisations and providing the grounds for them to operate as medical or health institutions.
First of all the LHI states that the healthcare institutions can be joint ventures established as per the Commercial Law, cooperatives, established as per the Cooperative Law and budgetsustained legal entities. Unfortunately the law does not contain any provisions allowing for the activities, explicitly defined therein, namely: diagnostics, treatment and rehabilitation of patients, monitoring of pregnant women and provision of maternity ward services, monitoring of patients with chronical illnesses or patients with potential health risks, prevention and early diagnosis of illnesses, health promotion activities, to be provided with the support of a legally different formation – the non-profit organizations’s pursuing goals in the area of public health.
In art.5, par. 1. of the LHI the law has still left a possibility for the state authorities to choose the legal and organisational form of the healthcare institutions established by them and listed in the same provision. In accordance with the provisions of art. 37,para.3 of the LHI the state and the municipalities establish hospitals and dispensaries as limited companies or as shareholding companies. The systematic interpretation of the above provisions in relation with art.4, par. 2 of the Public Procurement Law provides the necessary legal basis for the establishment by the state authorities of healthcare institutions which are not hospitals or dispensaries in the form of Non-profit organizations. The latter, however does not give an answer to the question why such an opportunity has not been given to all legal persons compliant with the law. In this sense the provision of chapter 8 of LHI relating to the structure, management and control of the healthcare institutions shall be interpreted as well.
Another evidence for the inconsistency of the law with regard to the non-profit organizations’s is the existence of section 4 of chapter 8 of the LHI treating the hospital board. Art. 82 of the LHI provides for the establishment of hospital boards of hospitals apart of those stipulated in art.5, par. 1. Therefore the hospital boards cannot be founded for those healthcare institutions that have been established by the state authorities. The mechanisms for the construction of the hospital boards preclude the vital operation of these tertiary care units.
Art. 83, par. 2 of the LHI allows the hospital board to invite the hospital management body at its sessions in order to be informed of the hospital’s situation, although the transparency of the management of the healthcare institutions which is necessary for the donors cannot be guaranteed.
The difference between the joint ventures and the cooperatives and the non-profit organizations’s lies in the fact that the non-profit organizations’s are non-profit organisations, moreover the non-profit organizations’s utilize their available funds for the provision of the activities mentioned above. This may result in a decrease or elimination of the fees, which are paid by the citizens for the provided services. Without being maximalistic new jobs can be opened, the state budget, although providing insufficient financial resources, can be relieved and last but not least the benefit is for the whole society in the name of which the state and the non-profit organizations operate. Certainly the non-profit organizations should comply with the specific requirements, formulated as conditions for the establishment of healthcare institutions in the LHI ( i.e. additional registration in the local public health centre, license by the Minister of Health) or the provision of a special hypothesis in the LHI for gaining such a status by an non-profit organizations.
Furthermore the LPH explicitly states that the healthcare institutions are legal persons, thus silently including the non-profit organizations as a subgroup. Thus it is possible to conclude that the non-profit organizations may carry out the activities explicitly specified by the law however they shall be bound by the legal provisions of the Law for Non-Governmental Organisations as a general law and LHI and LPH as specific laws. It is important to note that the LPH specifies some basic public health sub-areas - protection of pregnant women, mothers and children ( the state institutions, the public and the business organisations make efforts for the increase of the birth and reproduction rate of the population), fight against alcoholism, drugs and smoking, design and construction of sport facilities, protection of recreation resources and resorts.
The Bulgarian Red Cross is the only public organisation that is entrusted with the task of public health protection. The Bulgarian Red Cross provides self-aid, mutual aid and sanitary defense training to the citizens. Supported by the management of the state institutions, the business and public organisations the Bulgarian Red Cross organises, prepares and maintains medical and sanitary units of volunteers among the population to assist the health authorities.
There is a distinctive difference between the LPH and the LHI. The former makes several references to the public organisations, these including non-profit organizations, as legal persons bound by this law, the latter does not contain such references. Still the LPH defines the public relations with regard to the public health protection therefore the stress in the regulation of these public relations is put on the public healthcare institutions.The non-profit organizations are private legal persons performing activities for the benefit of society.
This differentiating criterion is rather important from the perspective of the developing civil society in Bulgaria and the increasing civil participation in different forms in those areas where the state or designated by the state organisations used to have the exclusive competence.
II.Legal arrangements of the healthcare institutions in the European Union member states - comparative analysis Since the Community Law does not contain any specific requirements with regard to the legal and organisational form of the persons providing health services, the analysis has been focused on the national legislation of the Members States. The main concern of the Community policy in the area of the provision of health services is the quality of the health care regardless of their providers and the only regulations in this direction are related to the persons who are authorised to offer medicines on the market.
Likewise within the framework of the European Union there are few rules for the persons who are authorised to provide medical services. The quality of health services in the European Community is ensured by the establishment of control bodies in the member states and these bodies are fully independent from the persons in the health services system. The European Standardization Committee has the powers to evaluate the independence of the control bodies in the member states.
The subject of this comparative analysis are the national legislations of 12 EU countries, namely - Austria, Belgium, Denmark, France, Germany, Great Britain and Northern Ireland, Ireland, Italy, Luxembourg, Portugal, Spain and Sweden.The legislation related to the provision of health services as well as the reports of the World Health Organisation on the quality of the medical services in these countries have been analysed.
Legislative framework The general approach that had been adopted in the legal regulation of the healthcare institutions in the EU member states is their incorporation in a general law for public health.
The reason for the inclusion of the health institutions in the laws for public health lies in their integration in a common national public health system. This legal approach has been adopted in the legislation of France , Great Britain , Germany , Portugal and Sweden .
Another approach in the legislative regulation of healthcare institutions is the elaboration of a law that is separated from the general public health law. Such special laws have been enforced in the legislation of Austria , Ireland , Belgium , Italy and Luxembourg .
Organisation of the healthcare institutions
The national legislations of all countries covered by this study provide the possibility for the non-profit organizations to be providers of medical services within the framework of the structure and organisation of the health institutions. Therefore the following legislative approaches may be noted:
a) legal provisions delegating the private provision of medical services to healthcare institutions established as non-profit organizations In Great Britain, for example, these legal persons are established as independent trusts that provide primary, tertiary and public medical services as per the Health Act (1999).
The legal organisation of the healthcare institutions is similar in Austria and Ireland. The socalled fund hospitals for intensive care in Austria are structured as non-profit organizations.
Art. 3 of the Irish special law on health care corporate entities of 1961 explicitly defines the legal form of the persons who may be healthcare institutions - corporate bodies with independent status which are given the possibilities to make claims and defend themselves against claims on their behalf and at their own costs. In Belgium and Luxembourg these legal persons are mostly owned by charitable religious orders. The Irish law contains a specific provision related to the provision of medical services by third parties, registered under the Companies Law. The latter may provide health services in case there is a decision for their liquidation and the company is not longer bound by the Companies Law and gains the full legal status of the corporate bodies as per the Law of 1961.
In Spain the titulars of the health institutions are non-profit organizations and in the contract for provision of hospital services it is underlined that this is a non-profit activity. The specific feature in the Spanish legislation is that the medical services have been explicitly included in the scope of activities that may be performed by foundations .
b) legal provisions delegating the provision of medical services to non-profit organizations and to companies
The states who have adopted this dualistic approach in the regulation of medical services are relatively few. The French Code on Public Health prescribes that the public health institutions shall be established as non-profit organizations and that the private health institutions shall be established either as non-profit organizations or as companies. Belgium has adopted a similar approach in the organisation of health services provision - the healthcare institutions may be non-profit organizations or companies. However the number of private hospitals –companies - is relatively low . Similar legal arrangements have been adopted in Portugal . In Denmark only the hospitals in Copenhagen and Frederickburg have been established as public companies that are owned by the respective municipalities.
Establishment of healthcare institutions The regulation of the establishment of healthcare institutions in Europe is made in two basic ways depending on the characteristics of the establishment act and the issuing authority.
In Great Britain, France and Ireland the healthcare institutions (non-profit organizations) are established with an order or decision of the executive power body that is competent in the area of public health - either the Minister of Health (France, Ireland) or the Secretary of State (Great Britain). The order is an individual administrative act and the issuing authority exclusively determines its contents. The order explicitly specifies the scope of health services that the legal person is authorised to provide, the financing conditions and accounting arrangements, the number of the healthcare institutions employees, the conditions for their recruitment and their remuneration. In many cases the establishment procedure requires obligatory consultations with - the National Health Trusts, local health authorities ( Great Britain), with the committees for health and social organisation (France).The results of the consultation procedures are reported to the competent authority that either issues or refuses to issue an order for establishment. A similar procedure is being applied in case of amendment or revocation of the establishment act.
The other approach for the establishment of health institutions that is present in the legislation of Belgium, Spain and Italy is the so-called accreditation (licensing) procedure where the competent health authority (the Ministry of Public Health) issues a license for the provision of specific health services under strictly determined conditions. These conditions are unilaterally determined by the Minister of Public Health or are specified in the bylaws. In most cases these conditions are related to
- availability of a financial plan of the healthcare institutions,
- provision of external control of the health services quality,
- provision of financial transparency of the legal person’s activities.
Activities that can be performed by the healthcare institutions The European laws make a clear distinction between the direct providers of health services and the persons acting as commissioners. The competence of the legal person in this respect has been specified in the order, or the license for establishment. The enactments also specify the powers of the persons with regard to the performance of secondary activities. In principle the acquisition of land, the conclusion of contracts and the receipt of donations for supporting the main activities have been allowed.
Financing of the healthcare institutions
The healthcare institutions are financed mostly by the local health authorities or the state health funds. The income of health services providers is included in the system for corporate taxation of the services they provide.
Restructuring and Dissolution of the healthcare institutions
The competent authority for issuing the license for provision of medical services has the power to restructure or dissolve the medical service provider. In case of winding -up this authority settles all matters related to the execution of contracts and the continuation of pending actions.
World Health Organisation
The World Health Organisation examines the arrangements for the healthcare institutions at an international level by means of detailed reports on the health systems of the member states, declarations and statements about the main directions for the health service development. Although there are no specific requirements for the type of legal persons authorised to operate as healthcare institutions, the World Health Organisation reiterates at many occasions the participation of non-profit organizations and the non-profit organisations in particular in the public health system.
The documents endorsed by the World Health Organisation such as declarations, recommendations and statements do not prescribe any explicit requirements with regard to the legal and organisational arrangement of the healthcare institutions. The reason for the lack of such requirements is the fact that the attention has been focused on the quality and control of the medical services without considering the provider.
Statement of the World Health Organisation supporting the integration of health services in the member states The statement reiterates the necessity for the integration of health services, especially of the primary aid. A special passage is devoted to the contribution of Non-profit organizations for the improved efficiency of the health services system at a local and a regional level.
Declaration by the World Health Organisation on the primary healthcare, adopted in Alma - Ata The declaration considers the non-profit organizations as legal persons which have the right to provide medical services. Paying regard to their involvement in the provision of health services the document highlights the increase of their activities especially in the area of primary healthcare provision.
III. Legal arrangements for the healthcare institutions in the United States of America
Legal arrangements The possibility for the non-profit organizations to perform activities in the area of public health in different forms - provision of medical services, ownership and management of hospitals and other healthcare institutions, has been regulated in the legislation of the USA.
Several laws prescribe the specific rules that build the overall legal framework for these persons accounting for their non-profit nature and the specific features of the health care domain. Although the American legal system is based on the precedent, some legal solutions, which have proved to be efficient and appropriate, can be applied quite successfully in the countries of the continental legal system while taking into account the individual specific features of the respective national legislation.
First of all the issues related to the public health have been regulated in the Constitution of the United States of America. Pursuant to Amendment No 10 the powers not delegated to the United States (the federal government) by the Constitution are reserved to the States respectively. The public health domain is such an exception and it is regulated on a “state” level whereas the guidelines of the public health policy, the taxation of the health services providers and the health insurance of the citizens are arranged at a federal level.
Additionally the legislation of the United States of America includes: Public Health Act, Federal Act for the Public Health Financial Administration, Act for Health Services, Act for Protection of Health Information and Stimulation of Research Activities, Act for the Female Health, Act for the Genetically Antidiscrimination Information in Health Insurance, Act for Modernisation of the Health Service, Act for Social Insurance, Act for Mobility and Responsibility of the Health Insurance, Act for the Children’s Health, Act for Improvement of the Public Health Infrastructure, National Classification of the Exempted Organisations - Central Codes, Insurance Code, Taxation Code, Legal Practices.
Structure of the public health system. Basic powers of the health authorities The system of authorities and institutions in the field of public health consists of state bodies on a federal and a state level as well as private profit and non-profit organisations.
The Federal Department on health and human services, the National Health Fund and the Alienation Authority are the bodies on a federal level.
The National Departments for public health, the local and regional health centres, the state hospitals and healthcare institutions are the bodies on a state level.
The private organisations are the private health insurance funds and private healthcare institutions (profit or non-profit), charity institutions, professional organisations (Doctors’ Association, Pharmaceutists’ Association), associations established by the law (psychotherapists, physiotherapists etc).
The Federal Department on health and human services is the main coordinating federal body whose competencies in the public health domain and health services are:
- the implementation of the overall federal public health policy,
- public health protection,
- professional preparation of medics as well as employees in the public sanitation and health sector, health culture training and advice,
- prevention and fight against infectious diseases,
- public health care.
These powers are executed by the 13 agencies within the Department such as
1. The Office of the Secretary on Health and Human Services, who provides consultations to the President with regard to the health policy, the health programmes and plans of the Federal Government within a budget of 386 billion USD.
2. The Agency for Health Research and Quality – It makes research for the improvement of service quality and efficiency and decrease of the costs of the medical services,
3. The Agency for Toxic Substances and Registration of Illnesses - it works together with the states for the prevention of exposure to toxic and poisonous substances ,
4. Centres for Prevention and Control of Illnesses - it works together with the states for the monitoring and prevention of the dissemination of illnesses,
5. Health Care and Medical Services Centres – their activities are directed to the aging population and people with low income.
6. National Health Institute - it is a world leader in research and development and is currently developing over 35 000 projects etc.
There are some other ogranisations at a federal level that have been established as independent from the federal executive power. These are the National Health Board and the Alienation Authority. The former, pursuant to the Act for Medical Services, delineates the boundaries of the health regions on the territory of the USA and determines the establishment and control of the local and regional health services providers, the latter deals with the enforcement of court decisions for real estate property alienation and its implementation in the health care domain.
The main powers for the public health domain in the respective federal units lie within the Federal Government. The state legislation is endorsed and adopted by the National Parliaments and the executive bodies have their own public health units, health regions and the respective administration for their management.
Pursuant to the Federal Public Health Act each state shall establish the necessary legislative framework and shall ensure the required bodies for management and medical service provision within its territory.
The health services are provided by state healthcare institutions and hospitals as well as by private (non-governmental) organisations, including non -profit organisations, private companies or natural persons.
According to the National Classification of Exempted Organisations - Central Codes , established by the National Centre for Charity Statistics, there are definitions of two main types of activities that can be carried out by Non-profit organizations and group E is related to the public health domain.
This act explicitly specifies that the prerequisite for non-profit organizations to operate as a public health organisaion is its objective - to help for the good health of the population, to fight against the dissemination of illnesses and to increase the level of medical services and rehabilitation of disabled people. The Code divides this group into 99 sub-groups and explicitly itemizes the types of healthcare institutions that comply with the above definition, i.e. are considered non-governmental health organisations and the organisations, which are not covered by the definition. In general this group includes: hospitals, nurses and other persons providing primary medical aid, the reproduction as a medical activity, the artificial insemination and family planning, health- strengthening services such as the provision of blood banks, organs for transplantation, emergency medical services, etc.; the medical and health insurance services, the organisations dealing with research in medical ethics or improvement of medical ethics in science and practice.
The more important and common medical and health care activities that can be fully provided by the organisations within this group are :
- Non-profit organizations – “advocates” in the public health domain,
- management and technical assistance ( consultations, training etc.),
- professional associations (including the Register of Nurses),
- research institutes (research is their main objective),
- organisations - donors for a single organisation ( for example single profile hospitals),
- fund - raising organisations or organisations for provision of funds to a wide circle of persons operating in the public health domain,
- other support ( not a financial one) - cooperative of hospital service providers,
- hospitals and centres for primary medical aid ( except for veterinary and psychiatric hospitals, recreation centres and specialized homes for old and disabled persons),
- public health systems,
- general hospitals equipped and licensed for provision of 24 hours’ medical service and diagnostic and emergency medical services,
- specialized hospitals,
- grouped health practice - organisations for provision of pre-paid services for a specific period of time to members of organisations on a contract,
- health ambulatory centres,
-family planning centres,
- rehabilitation centres,
- health support - including pharmaceutics and emergency medical aid,
- organisations focused on the financing of the medical and health care service providers,
- public health programmes ( general programmes or programmes for health improvement),
- provision of medical services by nurses, and many others.
The second group of activities that has been specified by the National Classification includes those activities that cannot be defined as activities provided by non-governmental and nonprofit health organisations, such as the professional and paraprofessional medical and health educating programmes, psychiatric hospitals, detoxification centres, centres for treatment of drug addiction, voluntary organisations that are focused on specific diseases and disorders, medical research, nutrition programmes and services.
Such a solution is very practical, eliminating any ambiguities and inconsistencies.
Taxation of non-profit organizations in the public health domain Pursuant to art. 501 (e) of the Taxation Code the cooperatives for hospital services are exempted from payment of taxes provided they are established and operate as non-profit (charitable) organisations. By including the organisations - providers of public health services in the group of Non-profit organizations this act irrevocably highlights the wide scope of application for such legal persons.
The social value of this domain and the effective role of the Non-profit organizations have been reiterated by allowing them a relieved taxation scheme.
In order to grant this scheme the Taxation Code foresees the compliance with the following requirements:
1. The organisation shall be established as a specific service provider - data processing, insurance, clinical activity, laboratories, communications, alimentation, printing, recording centre, personnel selection and recruitment;
2. The activities should be directed and provided to two or more hospitals, each of them being a non-profit organizations exempted from payment of taxes and bound by the general provisions of art.501 (c) (3) of the Taxation Code, or to a part of such an organisation which shall be considered a non-profit organizations if separated in an independent structural unit.
Thus the non-profit organizations may operate in the public health domain at two different levels:
1. Autonomously by being registered in accordance with the specific rules for a nongovernmental organisation in the respective state, or
2. As a cooperative for hospital services which provides a specific type of hospital services or other health or medical non-governmental organisations.
The organisations from the first group , in accordance with the national legislation, have the right to elaborate and manage plans for hospital, medical and health care services. For that purpose the Non-profit organizations may conclude contracts with the state, the municipal and other district organisations and natural persons (subscribers) for provision of such services.
The public health system is financed by the national budgets as well as by considerable donations and grants from independent private donors.
IV. Conclusions and Recommendations
The main conclusion of this survey is that the current Bulgarian legislation regulating this matter does not contain any specific provisions allowing the Non-profit organizations to operate as healthcare institutions.
Meanwhile and objectively there is a natural relation between the ideal goals of non-profit organizations for the welfare of society and the subject and forms of activities that are carried out in the public health domain whose potential has not been explored by the Bulgarian legislation.
Subsequently and in spite of the practices so far the different types of healthcare institutions such as hospitals, outpatient healthcare institutions, emergency medical services’ centres, dispensaries, homes for medical and social care services and hospices represent appropriate forms of engaging Non-profit organizations.
They are inherently close to the non-profit organisations operating for the welfare of society due to the fact that they achieve such goals as explicitly defined by the law. For example art 38, par.1 of the Law for non-governmental organisations prescribes that the Non-profit organizations shall spend their property for public health development, for supporting socially disadvantaged and disabled people or people who need care. The existence of such a relation is the premise for the involvement of legal persons from the third sector in the provision of health services and makes the Non-profit organizations that work for the welfare of society an exceptionally perspective partner to the state in the public health domain.
The other arguments in support of the idea for the Non-profit organizations to operate as healthcare institutions are:
- profit gains and profit distribution are not objectives of an non-profit organizations in contrast to the joint ventures and the cooperatives,
- the accumulated income from support business activities is spent for financing of activities with ideal purposes. Thus the operation of Non-profit organizations as healthcare institutions may lead to decrease of the fees paid by the citizens for the provision of medical services as well as to the opening of new jobs and to a certain relief of the state budget.
The establishment of healthcare institutions as Non-profit organizations generally complies with the spirit of the provision of art.3, par.4 of the Law for Healthcare institutions, by stating that the healthcare institutions cannot perform business activities except for sustaining the provision of medical services to the patients. Consequentially according to the same provision the business activities of the healthcare institutions established in accordance with the Commercial Law or the Cooperative Law are principally subordinated to the main activity - the provision of medical services and health care. This is similar to the subordination of the additional business activities to the main activities of the Non-profit organizations.
The establishment of healthcare institutions as Non-profit organizations is required by the necessity of equalizing the status of the non-profit sector and the business sector in their capacities of partners to the state. The lack of a legal possibility for the Non-profit organizations to operate as healthcare institutions may be viewed as a discriminative attitude towards the non-profit sector. The regulation of this possibility is also required by the new legal framework for the establishment and operation of non-governmental organisations that has been provided by the Law for Non-governmental Organisations.
The comparative analysis of the legal arrangements for the healthcare institutions in the legislation of 12 EU member states and the United States of America backs up the above arguments very firmly.
These recommendations represent proposals for amendment to the specific texts in the current rules and regulations and their objective is to initiate a public debate about the role of the non-governmental organisations in the system of medical services and institutions, the way of financing and the participation of the state. More specifically:
1. The circle of legal persons and organisational forms, determined by the law as healthcare institutions, should be expanded and along with the joint ventures and cooperatives a legal possibility should be provided for the establishment of healthcare institutions as non governmental organisations by legal and natural persons; therefore articles 3,14,36 and 37 of the Law for Healthcare institutions shall be amended accordingly. Articles 40 and 46 from the Law for Healthcare institutions shall specifically reflect the registration and the possibility for the healthcare institutions to operate as non-governmental organisations and a direct reference should be made to the Law for Non-Governmental Organisations in terms of the two basic forms – foundations and associations – either in the public or private interest.
The latter imposes the need for the corresponding amendment to the bylaws stemming from the Appendix to the Law for Healthcare institutions in order to explicitly specify the scope of application of those requirements related to the licensing for provision of medical services by non-governmental organisations as well as by joint ventures and cooperatives.
2. The Law for Public Health should regulate the possibility for performance of activities by public organisations through the harmonization of their status of non-governmental organisations for the welfare of society, for example: establishment of medical services’ centres and hospitals as associations or foundations, including the creation of specialized homes for medical care for socially disadvantaged persons or persons with specific illnesses, homes for orphans with specific illnesses etc. In this context the medical and social care homes shall be taken out of the provisions of art. 5, par.1 of the Law for Healthcare institutions by removing the possibility for establishment of such homes exclusively by the state.
3. It is necessary to regulate the possibilities for establishment by the state authorities of healthcare institutions as non-governmental organisations and for granting property and financial resources by the state under the provisions of Law for Municipal Property and the Law for the State Property. In this sense some tax concessions and state subsidies shall be provided for those healthcare institutions that have been established as non-governmental organisations working for the welfare of society and registered in the Central Register within the Ministry of Justice. Amendments shall be proposed to the Law for Corporate Income Taxation (art.61) and the Public Procurement Law (art.6, par.4 with reference to art.4, par.2), which refer to the medical activities provided by non-governmental organisations for the welfare of society, registered in the Central Register within the Ministry of Justice.
Those non-governmental organisations that perform activities for the welfare of society and are registered in the in the Central Register within the Ministry of Justice shall be given precedence when obtaining state property or financial resources directly or in the form of tax concessions.
4. A special provision shall be established that would allow the participation of volunteers or provision of voluntary labour for the activities of the healthcare institutions and in particular for the healthcare institutions that are established as non-governmental organisations.
Therefore the text in art. 14, par.3 of the Law for Healthcare institutions should be amended so as to provide for other forms of attracting people for the provision of the medical service besides the possibility for the hiring of personnel.
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