Salary conflict shakes Bulgarian health system [Advocacy Lab Content]

Bulgarian hospitals have warned the government that it risks mass bankruptcies in the health sector if mandatory salary increases are imposed for health staff.

The hospitals say the new demands will have a fatal impact on their ability to buy equipment and medicines.

The collective labour agreement in the Bulgarian health system sets minimum pay levels – the lowest in the EU – at €1000 for a doctor, €750 for a nurse, and €460 for an orderly.

Some hospitals continue to refuse to raise wages to minimum levels, and unions threatened protests at the end of May.

Hospitals that have not raised wages to minimum levels face fines for each violation.

“With these overwhelming financial burdens imposed for populist reasons, hospitals will inevitably be forced to lay off some of the staff, limit other expenses – for investments in new equipment, for drugs and consumables- which will lead to less income, affect the treatment of patients, and subsequently to a real risk of bankruptcy,” said the Bulgarian associations of municipal, university, and private hospitals.

Minimal funding

Bulgaria spends about 4% of its GDP (€4.1 billion per year) on its health system, which remains seriously underfunded and suffers from large structural deficits. Low salaries make it impossible to attract enough nurses, with their numbers in Bulgarian hospitals being smaller than that of doctors.

Despite the shortage of staff, Bulgaria maintains the largest number of active hospital beds in the EU, surpassing even Germany.

The huge hospital capacity and the lack of staff make Bulgarian health care highly inefficient and focused on the absorption of state funds rather than quality treatment.

Private payments equal state funding  

One of the immediate risks is that the Strategic Children’s Department of the National Cardiology Hospital in Sofia will most likely stop working due to the lack of nurses. It is the only one in Bulgaria where surgery is performed on children with congenital heart malformations.

In the last decade, the country’s Bulgarian health system has relied on huge private payments from Bulgarian patients, which are approximately the same as state funding, rising to €4 billion.

The grey economy deepens the problem of financing the healthcare system, as around 20% of Bulgarians of working age, employed in the informal sector, do not cover their mandatory health insurance.

In 2023, the government intervened directly in the health sector in an attempt to increase staff salaries to try and stop the emigration of Bulgarian medical staff to other EU countries. However, most state and municipal hospitals have refused to increase nurses’ salaries to minimum levels, citing a lack of budget.

The Bulgarian hospital organisations explained: “In the pursuit of forceful imposition of unfounded and uncoordinated populist goals, there is a real danger of bankruptcies of the municipal and state hospitals in Bulgaria, which have been operating for decades.”

They added: “Let us not forget that our population is ageing, poor and, for a large part, working and patients; it is unthinkable for them to change their place of residence or seek treatment in another city.”

Increase in wages needed

However, health unions are proposing a new 25% increase in basic wages over the agreed minimum levels and are threatening protests that could shut down some hospitals.

Data from the National Statistical Institute for the first three months of 2024 show that the Bulgarian health system’s average salary (before taxes) was €1,110.

Health Minister Galya Kondeva commented on May 27 that the government proposes to keep the minimum wages at their current levels for another year.

Bulgaria’s position during the negotiations on the EU pharma package also reveals fears of increasing healthcare system costs. Sofia insists that the new EU pharmaceutical legislation should provide mechanisms for the purchase of innovative drug therapies from countries with lower GDPs.

In April, the Bulgarian Constitutional Court issued a decision that largely changed the game in the Bulgarian health system. The court declared illegal the administrative limits imposed by the state on the hospital treatment of diseases, which is financed by the state health fund.

The government expects that this will lead to much higher costs for the state health fund, especially for the treatment of patients in private hospitals, over which the Ministry of Health has no budgetary control.

[By Krassen Nikolov, Edited by Vasiliki Angouridi, Brian Maguire | Euractiv’s Advocacy Lab]

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