Hungary and the EU

Program 0121 May 22, 2001

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

…VA KERESZTY: People think that being in a hospital, itís a normal part of the life. And they donít want one-day surgery services. They wait to have everything covered by the government or by the social security fund. Thatís an obstacle when we are talking about the reforms and the changes.

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

J”ZSEF D÷M÷T÷R: [via a translator] Weíve already modified the law because we realized there were difficulties. But we canít get rid of the cellar book. The European Union insists on this. We have obligations there and weíre trying to reduce them. But once we actually join the EU weíll have to reimpose a stricter registration system again. The EU makes the laws and the bureaucracy. Iím afraid we have to blame Brussels.

KEITH PORTER: Common Ground is a program on world affairs and the people who shape events. Itís produced by the Stanley Foundation. Iím Keith Porter.

MCHUGH: And Iím 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 Hungaryís 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 countryís 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. Itís 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 Hungaryís second city. It also has one of its best hospitals, the Kenťzy Gyula.

[sound of medical equipment operating]

EASTERMAN: This is the diagnostics laboratory at the Kenťzy Gyula Hospital. Itís full of new Japanese and German equipment and itís linked by a modern computer to all the other departments. The hospitalís director, GyŲrgy Berecz, claims itís one of the most up-to-date in Hungary. Regrettably, he canít say the same about the rest of the hospitalís equipment.

GY÷RGY 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.

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

EASTERMAN: And how much would you need, really?

GY÷RGY BERECZ: Really? 500 million yearly.

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

GY÷RGY BERECZ: Yes. Yes, yes.

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

ENIK’ G÷NCZI: [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 donít 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?

ENIK’ G÷NCZI: [via a translator] We are only the two of us work for 38 patients. We donít have time for talking and chatting.

EASTERMAN: And itís no better for doctors. Iím with the head of the orthopedic department, Dr. Gyula SŠri. Heís been a doctor for 26 years. He earns just $600 a month.

DR. GYULA SŃRI: Naturally we are unsatisfied with this small salary and itís because of the small salaries doctors and the nurses are leaving their job.

EASTERMAN: And what are they doing instead?

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

EASTERMAN: So they go and sell drugs?

SŃRI: Yes, of course. Yes.

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

SŃRI: At least double of my salary.

EASTERMAN: Have you ever considered going?

SŃRI: [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. Itís an exaggeration, but itís certainly true that Budapestís hospitals are in a very poor state. Iím taking the subway out to the Sťbeszet Clinic at the Semelweisz University to meet one of the head surgeons there. Dr. JŠnos 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?


EASTERMAN: That works OK.

WELTNER: That works . And the windows are very nice. Itís really artistic.

EASTERMAN: And theyíre OK as well?

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

EASTERMAN: And theyíre the only bits that operate properly.


EASTERMAN: That is a pretty depressing picture then, isnít it?

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

[sound of a typewriter]

EASTERMAN: This is the outpatientís clinic at the Semelweisz. There are four doctors working in here with just three cubicles for patients. Well, theyíre not even that, theyíre just a bed with a curtain round it. Thereís no privacy. And you can get some idea of the state of the equipment from the noise made by the doctors typing up their patientsí 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 itís 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 theyíre expected to take on the most difficult cases from all over the country. But they donít 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 theyíre 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. JŠnos 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 Ď90s, beginning of the early Ď90s. 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 youíre 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: Iím afraid, yes.

EASTERMAN: The Hungarian healthcare system was planned by the Communists back in the Ď50s. It was designed to tackle head-on two major problems: infectious disease and child mortality. And it was very successful. But itís 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 hereís the difficulty: too much capital is invested in the hospitals. Too many doctors work there and donít want to move. …va Kereszty, whoís head of the policy department at the health ministry, says thereís also another big problem: patient expectations.

…VA KERESZTY: People think that being in a hospital, itís a normal part of the life. And they donít want one-day surgery services. They wait to have everything covered by the government or by the social security fund. Thatís 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 donít have a, really convinced a family doctor to send them, which is absolutely nonsense. And which is another big challenge, you know, because itís a question of the attitude of the people and the attitude of the doctors.

EASTERMAN: In the mid-í90s the last government did cut hospital beds by 20 percent. It caused a storm of public outrage, not least because the money saved wasnít spent on boosting community healthcare. Itís 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 itís more money into the social security fund, so thatís 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 itís much better organized. Much more cost effective and itís a different quality.

EASTERMAN: Thereís no shortage of people who think that these plans arenít going to work. One of them is the economist, Professor Pťter MihŠlyi. Heís an expert on healthcare systems in the former Communist states. Iím on my way to see him now, at the Central European University.

Pťter MihŠlyi: 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, hereís another problem. Hungary has a huge gray economy. Many experts say itís 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, itís 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. …va Csatů didnít. She got botched aftercare and a deep vein thrombosis as a result. But she still paid up.

…VA CSAT”: [via a translator] I had to pay the doctor. Itís 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 didnít 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?

…VA CSAT”: [via a translator] 10,000 florins. Itís $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 donít 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: Itís 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, thatís for sure. Iím curious to know what hospital administrators think of them, so Iím traveling out to the Heim PŠl Childrenís 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 donít. If you donít meet patients directly, if you arenít in charge of a case, you will get nothing. So that creates professional tensions. As for me, I canít deploy the best doctors where I need them. Thatís often where they donít get copayments and I canít take any decision which affects a doctorís ability to go and getting this extra cash, because it would destroy his standard of living. Itís a totally damaging system.

[sound of a child crying]

EASTERMAN: Itís ironic, but the man who runs the intensive care department here at Heim PŠl, gets no copayments. Parents apparently are unwilling to fork out cash for their childrenís treatment. But CsŠba Szentirmai wouldnít 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, heís in terrible pain. He has a kidney problem. Dr. Szentirmai is busy phoning a private company to hire a dialysis machine. He canít afford to buy one and he doesnít believe the health ministryís plan to privatize services will help either.

DR. CSŃBA SZENTIRMAI: No one would invest in a system like this in the present conditions. I wouldnít put my own money into this system. Because we donít get the amount we spend for a patient. So the hospital never fees their money back.

EASTERMAN: So youíre always in deficit?

SZENTIRMAI: Yeah, thatís right. Thatís 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 nursesí 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, itís 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: Hungaryís fledgling wine industry, next on Common Ground.

Printed transcripts and audio cassettes of this program are available. Listen at the end of the broadcast for details, or visit our Web site at Common Ground is a service of the Stanley Foundation, a nonprofit, nonpartisan organization that conducts a wide range of programs designed to provoke thought and encourage dialogue on world affairs.

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 DŲmsŲdi Winery in the village of DŲmsŲd, about 50 kilometers south of Budapest. And the wine thatís just been poured for me is whatís known as a regional wine. Itís midway in quality between the quality wines from the better-known vineyards and wine areas and the ordinary table wine. This one-letís just have a taste-umm-well, itís bone dry, very light, made from the Sylvaner grape. And this two-liter bottle itís come from costs around 300 florins. Thatís 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, IstvŠn Kossai, is not at all pleased with the amount of work that he now has to do.

ISTVŃN 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 donít 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: Iíve just been looking at the cellar book. Itís 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 whatís 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 didnít ask the professionals about how it would work. A grape is a living thing. You canít 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, Iím right in the middle of the DŲmsŲdie Vineyards now. Theyíre huge and stretch for about, well a good half mile to a mile in every direction from where I am now. Iím with Zsolt KudŠr, whoís 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 KUDŃR: [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. Itís a question of first staying alive or not.

EASTERMAN: The people who come most often to peer into the DŲmsŲdi Cellar book are Hungaryís excise officers, who charge the winery about five cents a liter duty on the final product. So Iíve come to their headquarters in the capital, Budapest, to ask KŠroly Fehťr, head of excise, why this involves so much bureaucracy.

KŃROLY FEH…R: [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 isnít because of us; itís to do with quality, and that is to due with the Ministry of Horticulture. They enforce the quality regulations.

EASTERMAN: So youíre just the innocent agent of another government ministry.

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

EASTERMAN: So then, itís not the fault of the customs, itís all down to the Ministry of Agriculture, so thatís where Iím going. To the ministry, which is Louis Kossuth Square, immediately opposite Hungaryís 19th-century Parliament building. And Iím going to meet Jůzsef DŲmŲtŲr, the man whoís in charge of monitoring the new wine law.

J”ZSEF D÷M÷T÷R: [via a translator] Weíve already modified the law because we realized there were difficulties. But we canít get rid of the cellar book. The European Union insists on this. We have obligations there and weíre trying to reduce them. But once we actually join the EU weíll 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?

D÷M÷T÷R: [via a translator] Yes. The EU makes the laws and the bureaucracy. Iím afraid we have to blame Brussels.

EASTERMAN: Thatís not good news for producers like the Kudars at DŲmsŲd. They make wine for the lower end of the market and theyíll 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. Iím with ZoltŠn 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 DŲmsŲd. 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, itís on a steep hillside. Producing wine from high quality, noble grape varieties of grapes like Cabernet, Franc, and Merlot. ZoltŠn Heimann believes thatís the future for the Hungarian wine industry if itís to have any future at all. [breathing very heavily] Whooo!

Zoltan Heimann: We started only Ď97, blending international varieties like Merlot and a bit of Cabernet Franc, and the Hungarian varieties like Kodarko(?), Kťfrankos, and the port, too.

EASTERMAN: But why blend when youíve 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, youíre 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 theCuvťe, you can create a special taste, a special unique taste. I want to create the wine where the customers they wouldnít say, "Oh, thatís a Cabernet," or a Merlot. They would say, "Oh, thatís Heimann." And if you can do it we are successful. If we fail itís 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. Itís long been a problem in Hungary, and the new wine law is supposed to stop it. But the excise man told me theyíd 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. Thatís 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, ZoltŠn?

HAMEN: Right now, itís 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 hasnít 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.

MCHUGH:. Cassettes and transcripts of this program are available. The transcripts are free. Cassettes cost $5.00. To place an order or to share your thoughts about the program, write to us at: The Stanley Foundation, 209 Iowa Avenue, Muscatine, Iowa 52761. Please refer to Program Number 0121; thatís Program Number 0121. To order by credit card you can call us at 563-264-1500. Thatís 563-264-1500.

PORTER: Transcripts are also available on our web site, Commongroundradio is all one word. Our e-mail address is For Common Ground, Iím Keith Porter.

MCHUGH: And Iím Kristin McHugh. B.J. Liederman created our theme music. Common Ground is produced and funded by The Stanley Foundation.

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