Human-Centered Allocation of Resources Needed in Healthcare

Early this week, the Hungarian Minister of Health announced plans to make substantial progress this fall in regulating the relationship between public and private healthcare and intend to secure funding for the program.

The announcement coincided with a survey by the economic research institute GKI on the financing of the Hungarian healthcare system in European context, examining the imbalances in the expenditure structure of Hungarian public finances, with particular focus on the chronic underfunding of human and social care systems.

Regarding public expenditure allocated to specific areas, Hungary ranks across many indicators either among the laggards or at the very top within the European Union. This structure highlights the distortions in public spending: certain functions have lacked adequate funding and attention, while others have received disproportionate support by EU standards.

The clearest example is healthcare, where Hungary spent the lowest share of GDP among the 27 EU member states in both 2023 and 2024. The previous government allocated just 4.7% of GDP to this sector, whereas the EU average was more than 1.5 times higher (7.4%). The Czech Republic spent nearly double the Hungarian rate (9%), and the sector was also prioritized higher in Slovakia (6.9%) and Poland (6.1%). This domestic figure – low even in a regional comparison – is especially critical because chronic underfunding directly contributes to the deterioration of service quality and healthcare infrastructure, as well as the deepening workforce crisis in patient care. Notable symptoms include expanding and lengthening waiting lists, as well as shortages of general practitioners and nurses.

Researchers note that figures are similarly bleak in the field of social protection. This category includes social benefits and services aimed at addressing sickness, disability, old age (pensions), survivorship, unemployment, family obligations and housing difficulties. While 17.3% of GDP was allocated to social protection in 2010, this share fell to just 12.3% by 2024. Following this decline, Hungary only ranks ahead of Malta and Ireland within the EU. Data from the Hungarian Central Statistical Office (KSH) point in the same direction, showing that in relative terms compared to other segments of society, an increasing number of pensioners are falling into poverty: while the relative income poverty rate among those aged 65 and over (the share of people living on less than 60% of median income) was 4.9% in 2010, this value rose to 13.8% by 2024. All of this points toward a growing demand for social care services, which quality standards must keep pace with.

The decline in social protection spending signals a systemic retrenchment of the national social safety net. The withdrawal of funding and widening gap from the regional average exacerbate social inequalities, while leaving the most vulnerable social groups exposed. Consolidating the social protection system is therefore an urgent priority, GKI points out, as the degradation of this subsystem entails the irreversible erosion of its professional base and institutional framework. The longer intervention is delayed, the more difficult and capital-intensive restoring basic care functions will be.

Initial measures by the new administration suggest that it has recognized the severity of the issue, at least in part. Plans in the healthcare sector include providing an additional HUF 500 billion in funding annually, though the social sector is still rarely discussed. While the previous government allocated resources toward housing, no substantial progress was achieved, and housing shortages continue to worsen (with access to housing becoming increasingly difficult) – it is no coincidence that the new government plans to launch a municipal rental housing program citing this very challenge.

Overall, restructuring the functional layout of the budget will undoubtedly be one of the critical tasks in the coming period. Researchers emphasize that to achieve sustainable socio-economic development, the dominance of physical capital investments must be replaced by a human-centered allocation of resources that prioritizes adequate financing and the efficient operation of human and social care systems.