Regulatory and Strategic Framework for Hospital Performance Analysis in Bulgaria

Introduction

Hospital performance analysis in Bulgaria is shaped not only by managerial needs but also by accounting law, commercial law, healthcare regulation, medical standards, national strategies and management contracts. Evidence-based management therefore requires a framework that integrates legal compliance with performance measurement and strategic objectives.

Aim

To systematise the Bulgarian regulatory and strategic requirements governing hospital reporting and analysis and assess whether they provide a coherent basis for comprehensive hospital performance evaluation.

Three prerequisites for a comprehensive model

1. theory and international experience in stakeholders, indicators and performance dimensions;
2. national regulatory and strategic requirements;
3. actual hospital capacity, including reporting organisation, information systems and existing analytical practice.

Legal reporting requirements

The Accounting Act places responsibility on governing bodies for the timely preparation, content and publication of financial statements and annual activity reports. The annual report should address development and results, organisational condition, major risks, significant events, expected future development, research and development activity and financial risks. The review should be balanced and comprehensive and, where relevant, include non-financial indicators, including information on employees and environmental issues.

The Commercial Act adds requirements concerning annual financial reporting, planned business policy, investment, workforce development and significant transactions. Together, these provisions establish a broader analytical obligation than simple accounting compliance.

Healthcare-specific requirements

The Medical Establishments Act requires hospital managers and executive directors to prepare annual activity and economic-efficiency plans and, when requested, provide information on medical activities, resources used and analysis of organisational efficiency.

National medical standards add specialty-specific expectations and therefore provide a basis for evaluating clinical and organisational performance. In 2011, the largest numbers of inspections cited in the reviewed material concerned cardiology, dialysis treatment, surgery, obstetrics and gynaecology, and general medical practice.

Diagnostic analysis in the selection of hospital managers

Ordinance No. 9 on competitions for assigning management of healthcare establishments requires assessment of the applicability of proposed objectives and tasks, compliance with regulation, analysis of health-demographic and health-economic indicators, assessment of the organisation's objective condition and alignment of management priorities with national health policy.

Diagnostic analysis is therefore embedded not only in subsequent hospital reporting but also in the process of selecting hospital leadership and evaluating managerial competence.

National Health Strategy 2008–2013: explicit performance objectives

Strategic Objective II emphasised guaranteed health services with better quality and access, including rules for evidence-based health and clinical management and common criteria for assessing effectiveness and efficiency.

Strategic Objective IV focused on restructuring and effective management of hospital care. Specific tasks included the introduction of hospital-performance indicators and development of systems for management, monitoring and control of effectiveness.

Restructuring, information and system planning

The Better Healthcare Concept 2010–2015 identified weak managerial capacity and insufficiently developed professional health management. It promoted hospital restructuring, more transparent governance and development of e-health through registers and integrated information systems.

The hospital-restructuring concept linked reform with greater organisational stability and efficiency, while the National Health Map emphasised efficient use of public resources, accessibility, timeliness, sufficiency, quality and rationalisation of service provision.

Seven control conditions for state and university hospitals

1. overdue supplier liabilities above 0.1% of total expenditure;
2. revenue-to-cost ratio below 0.98;
3. bed occupancy below 70%;
4. inventory-turnover duration increasing by more than 5%;
5. drug and medical-consumable expenditure above 35% of total expenditure;
6. absolute liquidity ratio below 1;
7. mortality above the hospital's average for the previous 3 years.

Five bonus conditions

With a positive financial result and no overdue supplier liabilities, additional remuneration could be linked to meeting at least 3 of 5 conditions: revenue-to-cost ratio above 1.05; bed occupancy above 80%; stable or reduced average length of stay; inventory-turnover duration reduced by more than 3%; and absolute liquidity above 1.

Municipal hospitals: territorial variation

For municipal healthcare establishments, management-contract content is determined locally, producing substantial territorial variation. Sofia linked quarterly and annual reporting and remuneration to medical-care revenue, bed occupancy, staffing, changes in liabilities and financial results. Ruse used indicators such as profitability, productivity, sales volume, profit/loss, markets, utilisation of facilities, employment, liabilities and investment.

Plovdiv, Varna and Burgas applied other combinations of medical activity, fixed assets, staffing, wages, investment and performance against assigned business targets. Consequently, the definition of “good performance” differed according to ownership and municipality.

System-level problem

Requirements are numerous but fragmented in content, form and implementation. This limits comparability between planned managerial objectives and reported outcomes and creates different definitions of good performance across ownership and municipalities.

Main contributions

• systematises regulatory and strategic sources governing hospital reporting;
• extracts concrete financial, resource and clinical indicators from management contracts;
• links national health strategy to performance measurement;
• identifies differences between state and municipal governance mechanisms;
• supports the need for unified criteria and a comprehensive diagnostic-analysis framework.

Conclusions

Bulgaria's regulatory and strategic environment contains numerous individual performance requirements, but they are fragmented across legislation, strategies, standards, management contracts and local governance arrangements. The result is limited comparability between planned objectives and reported outcomes and inconsistent definitions of good hospital performance.

A comprehensive diagnostic model is therefore needed to connect legal requirements, national priorities, contractual indicators and actual hospital outcomes into one coherent evidence-based management framework.

Scientific Key Terms