MEDICINE, LAW & SOCIETY 
Vol. 17, No. 2, pp. 251–268, October 2024  
 
https://doi.org/10.18690/mls.17.2.251-268.2024 
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TRANSFER OF FOUNDING RIGHTS OVER 
GENERAL HOSPITALS TO THE REPUBLIC  
OF CROATIA: AN ECONOMIC AND  
LEGAL ANALYSIS 
  
Accepted  
22. 5. 2024 
 
Revised 
22. 6. 2024 
 
Published 
18. 4. 2024 
DEJAN BODUL,1 MARKO TOMLJANOVIĆ,2  
PAVLE JAKOVAC2 
1 University of Rijeka, Faculty of Law, Rijeka, Croatia 
dejan.bodul@uniri.hr 
2 University of Rijeka, Faculty of Economics and Business, Rijeka, Croatia 
marko.tomljanovic@efri.uniri.hr, pavle.jakovac@efri.uniri.hr 
 
CORRESPONDING AUTHOR 
dejan.bodul@uniri.hr 
 
Keywords 
Healthcare Act,  
transfer of founding 
rights, doubts,  
healthcare system, 
Croatia 
Abstract The present analysis of the activity of healthcare 
institutions in recent years shows the fundamental problem of 
the Croatian healthcare system, which currently faces a deficit 
of almost two billion euros. The question, therefore, arises as 
to how the availability, continuity, completeness and solidarity 
of the healthcare system can be ensured (as the basic principles 
of the Healthcare Act), taking into account the obligations 
under the Act on the Execution of the State Budget and the 
Fiscal Responsibility Act. The aim of this paper is to find an 
answer to the question of whether the transfer of founding 
rights over general hospitals to the Republic of Croatia, which 
is regulated by the Healthcare Act, is constitutionally, legally, 
and economically justified. The analysis is based on the fact 
that the issue of healthcare and the organisation of the 
healthcare system is regulated independently by each country 
and that this autonomy of the Member States is limited by EU 
regulations. 
 
 
252 MEDICINE, LAW & SOCIETY Vol. 17, No. 2, October 2024   
 
1 A Framework for Discussion: Overview of Current Regulations and 
Contribution of This Paper 
 
The organisation of healthcare in the Republic of Croatia involves numerous actors, 
the most important of which is the Ministry of Health. Healthcare in the Republic 
of Croatia is divided into three levels: Primary, secondary and tertiary care. The 
Republic of Croatia has a large number of healthcare facilities, most of which are 
state-owned (clinical hospital centres, clinical hospitals and clinics) or regionally and 
locally owned (general and special hospitals at the county level, health centres and 
polyclinics), while a smaller part is privately owned. 
 
In order to address the weaknesses of the healthcare financing model and to make 
the healthcare system more efficient and financially sustainable, both academia and 
practice have analysed a whole range of measures that have ultimately contributed 
to and led to a number of changes in the relevant legislation and financial savings. 
Everyone agrees that the financing of the healthcare system is of central importance 
for its functioning. There is no country in the world that can provide all its 
inhabitants with all the services that modern medicine makes possible. The doctrine 
states that the general lack of financial resources, along with the increasing 
expenditure on healthcare, is considered a difficult problem to solve (even) in 
Croatia. They point out that we are in a time of major social changes where new 
issues overtake old problems, and together, they form extremely complex challenges 
that the state should face in order to protect the rights of patients. The analysed 
authors point out that healthcare financing is a complex issue, so the statement about 
the existence of a crisis in terms of the need for changes to the existing model is still 
relevant. They point out that the Croatian healthcare system has undergone 
numerous reforms in the past period of independence of the Croatian state, the main 
goal of which was to optimise the level of healthcare service provision within the 
real financial possibilities of the Croatian economy. The goals of each reform 
measure have been partially achieved, and the solutions offered so far, i.e. the 
renovations carried out over the last three decades, were necessary but did not lead 
to an improvement in economic conditions. The problem of the lack of revenue 
from previous years remained unresolved, i.e., the problem of outstanding liabilities 
remained the highest in the last ten years (CIHI, 2023; Ostojić, 2012). From a 
research perspective, the literature is (to some extent) unanimous in reporting on the 
positive effects of the legislative reforms to date, but also on the problems and 
D. Bodul, M. Tomljanović, P. Jakovac: Transfer of Founding Rights over General Hospitals 
to the Republic of Croatia: An Economic and Legal Analysis 253   
 
 
limitations of the functioning of the existing legal framework. However, it should be 
noted that the economic and legal literature, although very extensive, is sometimes 
unable to provide answers as well as valuable explanations and appropriate 
approaches to the successful reorganisation of the healthcare system and the 
existence of an appropriate financing model, as constant changes are to be expected. 
It is a fact that the healthcare system of the Republic of Croatia can be "improved" 
at the level of organisation, management, finances and human resources. However, 
the claim remains that the adoption of this (amended) Healthcare Act (hereinafter: 
HCA)1 is an important step, but only its application in practice will be a true indicator 
of its importance. This paper represents the first economic and legal analysis of the 
issue in question. 
 
2 State of the Health System in Croatia: An Economic Analysis 
 
Within the Croatian mandatory health insurance system, the Croatian Health 
Insurance Fund (hereinafter: CHIF) is the sole insurer and main purchaser of health 
services. It also offers supplementary insurance, primarily to cover co-payments for 
services from the benefits package. More than 60 per cent of the population has 
such voluntary health insurance (hereinafter: VHI), which is taken out either by the 
CHIF (the main provider) or by private insurers. The Ministry of Health is the main 
government agency responsible for health system governance, health policy 
development, planning and evaluation, public health, regulatory standards and 
training of health professionals. 
 
Almost the entire population is covered by mandatory health insurance. 
Contributions for dependents are paid by working family members, while non-
working people (e.g., pensioners and the unemployed) and vulnerable groups (e.g., 
people with disabilities and people on low incomes) are exempt from contributions 
and are covered by state transfers. The benefits package covers a wide range of 
preventive and curative healthcare services. Most healthcare providers (especially in 
secondary and tertiary care) are still publicly owned, but the number of private 
providers, especially in primary care, is increasing. Primary care physicians (e.g., 
general practitioners, paediatricians and gynaecologists) are usually patients’ first 
point of contact with the healthcare system and act as gatekeepers to specialist and 
 
1 Healthcare Act (Official Gazette – hereinafter: OG, No. 100/18, 125/19, 147/20, 119/22, 156/22, 33/23). 
254 MEDICINE, LAW & SOCIETY Vol. 17, No. 2, October 2024   
 
hospital care. Healthcare expenditure as a percentage of GDP amounted to 8.1 per 
cent in 2021, compared to an EU average of 11.0 per cent. Overall, current 
healthcare expenditure increased by 18 per cent in 2020-21 as part of Croatia’s 
response to the COVID-19 pandemic. Nevertheless, Croatia spends less per capita 
on health than most other EU countries (Figure 1), reaching EUR 1 787 per capita 
in 2021 (adjusted for differences in purchasing power), where the EU average is 
EUR 4 028. Croatia spends a higher proportion of public funds on health than most 
countries with comparable spending levels, namely 85.5 per cent in 2021. Out-of-
pocket (hereinafter: OOP) payments account for only 9 per cent of health 
expenditure, well below the EU average of 15 per cent, while the share of the VHI 
component in health expenditure (5.1 per cent in 2021) is slightly above the EU 
average (4.4 per cent). 
 
 
 
Figure 1: Public healthcare funding in Croatia and EU countries in 2021 
Source: OECD (2023, p. 9) 
 
Approximately 37 per cent of current healthcare expenditure in Croatia is spent on 
outpatient (or ambulatory) services, which consist of primary care and outpatient 
care provided by specialists (mostly through hospital outpatient departments). 
Croatia spends a larger proportion of its healthcare expenditure (20.1 per cent in 
2021) on medicines and medical devices in the outpatient sector than many other 
EU countries (with an EU average of 17.4 per cent), although in absolute terms 
(EUR 360 per person), it is well below the EU average (Figure 2). 
 
D. Bodul, M. Tomljanović, P. Jakovac: Transfer of Founding Rights over General Hospitals 
to the Republic of Croatia: An Economic and Legal Analysis 255   
 
 
 
 
Figure 2: Per capita healthcare spending in Croatia and the EU in 2021 
Source: OECD (2023, p. 10) 
 
In contrast, due to the country’s underdeveloped formal long-term care system, only 
2.6 per cent of healthcare expenditure in Croatia is on long-term care (compared to 
an EU average of 17.3 per cent). Per capita expenditure on prevention is less than a 
third of the EU average and, at 4.4 per cent of expenditure, is below the EU average 
of 6.2 per cent. The global economic crisis led to sharp fluctuations in Croatia’s 
public healthcare expenditure in the early 2010s, with slight falls in GDP 
accompanied by sharp falls in healthcare expenditure (Figure 3). Since 2013, the 
country's public healthcare expenditure has risen steadily year-on-year, mirroring the 
increase in GDP; the share of public funds allocated to healthcare is one of the 
highest among EU member states (see section 4). The COVID-19 pandemic was a 
major shock for the Croatian healthcare system. The increase in public healthcare 
spending has accelerated in 2020 and 2021 to counter the pandemic, despite a 
massive 8.5 per cent decline in GDP in 2019/20. 
 
 
 
Figure 3: Public healthcare spending in Croatia during the COVID-19 pandemic 
Source: OECD (2023, p. 17) 
256 MEDICINE, LAW & SOCIETY Vol. 17, No. 2, October 2024   
 
At the same time, Croatia has drawn up a National Recovery and Resilience Plan for 
2021-26 as part of the EU Recovery and Resilience Mechanism to mitigate the 
economic and social consequences of the COVID-19 pandemic. The idea is to boost 
investment in the healthcare sector, including cancer treatment, hospital 
infrastructure, improving the quality of hospital care, and the digital transformation 
of the healthcare system. Croatia is also working on improving the integration of 
care and workforce planning to be better prepared for future shocks to its healthcare 
system. Of the total funds earmarked in the National Recovery Plan, 5.6 per cent is 
earmarked for investments in the healthcare system (EUR 354 million in total). 
These investments are complemented by the implementation of the EU Cohesion 
Policy 2021-27, under which Croatia will invest a total of EUR 226 million in its 
healthcare system. More than four-fifths (85 per cent) of this amount will be co-
financed by the EU. Around EUR 140 million from the European Regional 
Development Fund (ERDF) will be used for the expansion and renovation of 
healthcare infrastructure as well as for equipment, mobile healthcare devices and 
digitalisation in the healthcare sector. In addition, EUR 62 million from the 
European Social Fund Plus (ESF+) is earmarked for financing various measures to 
improve the accessibility, effectiveness and resilience of the healthcare system 
(OECD, 2023, p. 22). 
 
Croatia has implemented a number of healthcare reforms in recent years. The 
healthcare financing system in Croatia has obvious problems, which manifest 
themselves above all in the frequent restructuring of hospital debts, primarily for 
medicines. Debts to wholesalers and pharmacies are regularly rehabilitated following 
threats to stop the supply of medicines and other medical goods. Despite numerous 
reorganisations and reforms of the healthcare system, healthcare debt continues to 
grow. Almost every year, the government is forced to rehabilitate part of the 
hospitals' debt, and so far, there have been more than 20 such rehabilitations 
(Jurković, 2018) and a staggering sum of 17,7 billion kuna (i.e., around EUR 2,4 
billion; COVID-19 costs not included) for the period 1994-2018 (Laušić, 2018; Bušić 
et al., 2021). The aforementioned facts point to the problem of the (long-term) 
financial (un)sustainability of the healthcare system. Obviously, the system of 
monitoring, cost management, and planning (budgeting) for revenues and 
expenditures is failing. 
 
D. Bodul, M. Tomljanović, P. Jakovac: Transfer of Founding Rights over General Hospitals 
to the Republic of Croatia: An Economic and Legal Analysis 257   
 
 
The Croatian healthcare system generates around HRK 220 million (i.e., EUR 29,2 
million) in additional obligations per month (Government of the Republic of 
Croatia, 2020). According to the State Audit Office (2023), at the end of 2022, the 
total debt of the healthcare system amounted to 14.67 billion kuna (i.e., EUR 1,9 
billion). 
 
Despite numerous reforms and renovations, the healthcare system is in constant 
financial difficulties (Vončina et al., 2007, p. 144; Švaljek, 2014, p. 36; Broz & Švaljek, 
2014, p. 51). The reforms implemented over the last 25-30 years have focused mainly 
on containing healthcare costs rather than inefficiencies that cause financial 
problems (Šimović & Primorac, 2021, p. 3; Bubas, 2022, p. 612). With the 
amendment of the Healthcare Act in March 2023, a new focus was placed on 
strengthening primary and outpatient care and improving the coordination and 
integration of care. However, key indicators for the quality of care are still missing, 
which undermines efforts to monitor the performance of the healthcare system. Still, 
Croatia wants to establish a comprehensive national system for quality and safety in 
healthcare. Good organisation of health services, an efficient system and availability 
to all citizens under equal conditions is (or should be) the basis for the healthcare 
system's financial sustainability, and that system requires modernisation. One of the 
questions that are (to be) tackled within the amended Healthcare Act is the transfer 
of founding rights over general hospitals to the Republic of Croatia. It remains to 
see whether central administration and planning of this part of the system would 
improve (at least part of) its (financial) functionality. 
 
3 Legal Source(s) and Disputed Legal Provision 
 
Health and healthcare form a very complex and broad field. There are several legal 
regulations on this subject in the Republic of Croatia. The starting point are the 
principles guaranteed in the Constitution of the Republic of Croatia. Laws and 
regulations, such as ordinances and codes, concretise these principles. The Republic 
of Croatia is also a signatory to international legal acts that regulate the rights and 
obligations of healthcare workers and patients. However, the HCA is a basic 
regulation that governs healthcare and healthcare activities.  
  
258 MEDICINE, LAW & SOCIETY Vol. 17, No. 2, October 2024   
 
Along with a number of new amendments to the HCA (which came into force on 
April 1st, 2023), the transitional and final provisions detailed the deadlines for the 
application of certain provisions of the Act, explicitly mentioning the date of January 
1st, 2024. This date is important because the Act changes the founder2 of the general 
hospital, which is established exclusively by the Republic of Croatia.3 The units of 
local (regional) self-government and the City of Zagreb will no longer be the 
founders of general hospitals as of January 1st, 2024; the Republic of Croatia will 
become the founder.4 According to the transitional and final provision (Article 86) 
of the amended HCA, the founding rights are transferred free of charge. 
 
4 Setting up the Problem(s) 
 
Does the transfer without compensation lead to an unconstitutional restriction of 
the ability to act at the local level, and do the local and regional self-government 
units become incapable of exercising their constitutional powers? Since the transfer 
of the founding rights is undoubtedly an "interference" with the local (regional) self-
government units’ property rights, it is quite legitimate and justified from a practical 
point of view to analyse this issue in regard to the violation of the right to peaceful 
enjoyment of property. In other words, to examine whether the above-mentioned is 
in accordance with the procedures under Article 1 Protocol No. 1 of the European 
Convention for the Protection of Human Rights (European Court for Human 
Rights – hereinafter: ECHR, 2021, p. 6). The question also arises as to whether the 
consent of the local (regional) self-government units is required for the acquisition 
of the founding rights.5 We refer to the provision of Article 78(3) of the Institutions 
Act6: “The founding rights from paragraph 3 of this Article may be transferred to another legal 
 
2 Pursuant to the provisions of Article 3(1)(2) of the State Property Management Act (OG, No. 52/18), “the term 
state property used in this Act includes, in particular, the following property: founding rights to legal entities whose founder is the Republic 
of Croatia (...).” If the unit of local (regional) self-government is the owner of the founding rights, then it is their 
property. 
3 In order for the local (regional) self-government units to be able to influence decisions that are important for the 
operation of general hospitals, it is provided that the director of the general hospital is appointed and dismissed by 
the Governing Council, but with the prior opinion of the competent prefect or the Mayor of the City of Zagreb 
and with the consent of the Minister of Health. 
4 It is important to note that general hospitals become responsible for joint public procurement on the day of the 
transfer of the founding rights. 
5 In the Decision on the Acquisition of the Founding Rights over Health Centres of the Republic of Serbia, the 
Government of the Republic of Serbia (Official Gazette of the Republic of Serbia, No. 21/20) states that "The 
Republic of Serbia is acquiring the founding rights over healthcare centres established by the Republic of Serbia in accordance with the 
Healthcare Act (Official Gazette of the Republic of Serbia, No. 25/19), over which the unit of local self-government exercised the 
founding rights, on the basis of the decision of the competent body of the unit of local self-government (underlined by the authors).” 
6 Institutions Act (OG, No. 76/93, 29/97, 47/99, 25/08, 127/19, 151/22). 
D. Bodul, M. Tomljanović, P. Jakovac: Transfer of Founding Rights over General Hospitals 
to the Republic of Croatia: An Economic and Legal Analysis 259   
 
 
entity by the Government of the Republic of Croatia or a ministry authorised by it only with the 
consent of that legal entity (underlined by the authors). A special contract shall be concluded on the 
transfer of the founding rights."7 Argumentum a contrario: if the Republic of Croatia takes 
over founding rights in entities in which a local (regional) self-government unit has 
founding rights, the consent of that particular unit is required for this takeover. A 
more detailed elaboration of this position is beyond the scope of this paper (Tolo, 
2020, p. 13). 
  
5 Problem Analysis 
 
The aim is to clarify the legal institutions that have developed over many years of 
practice and to gain insight into the legal-logical decision-making mechanism of the 
Constitutional Court of the Republic of Croatia and the ECHR by examining their 
mutual relations. In addition, the aim is to gain insight into the question of whether 
the transfer of founding rights constitutes a violation of the right to local and 
regional self-government and a violation of the right to peaceful enjoyment of 
property. 
 
5.1. On the Possible Violation of the Right to Local and Regional Self-
Government 
 
Article 20 of the Act on Local (Regional) Self-Government8 provides that the county 
shall perform tasks related to healthcare within its self-government area, and a 
special law regulating certain activities (including healthcare) specifies which tasks 
the county must organise and which it may perform. The HCA is a special law within 
the meaning of the provisions of Article 129a of the Constitution of the Republic of 
Croatia9 and Article 20(2) of the Act on Local (Regional) Self-Government, as it is 
a law that constitutes the lex specialis for regulating the content and manner of 
performing the activities in the healthcare sector. The HCA explicitly prescribes the 
rights, duties and tasks of the local (regional) self-government units in the field of 
healthcare. Taking into account the analysis of the health status and needs of the 
 
7 "The Government of the Republic of Croatia may, within six months of the entry into force of this Act, adopt a 
decision on the transfer of founding rights over certain institutions or types of institutions to units of local (regional) 
self-government or another legal entity, or authorise the competent ministry to transfer the founding rights to the 
unit of local (regional) self-government." 
8 Act on Local (Regional) Self-Government (OG, No. 33/01-144/20). 
9 Constitution of the Republic of Croatia (OG, No. 56/90-5/14). 
260 MEDICINE, LAW & SOCIETY Vol. 17, No. 2, October 2024   
 
population, the available resources and personnel and other possibilities, and 
ensuring a reasonable division of labour, the transfer of the founding rights was 
carried out under the aspects set out in the Decision of the Constitutional Court of 
the Republic of Croatia of March 6, 2012,10 that states, inter alia… "Healthcare is of 
interest to the Republic of Croatia and is provided as a public service. For this reason, the legislator 
is obliged to set the organisation and normative regulation of healthcare on the fundamental 
principles on which it must be based. These are the principle of comprehensiveness (healthcare covers 
the entire population of the Republic of Croatia), the principle of continuity (healthcare must be 
continuous for the population of all age groups, and the healthcare system must be functionally 
interconnected and harmonised), the principle of availability (the list of healthcare facilities, 
companies performing healthcare activities and healthcare workers on the territory of the Republic 
of Croatia must provide the population with equal conditions for healthcare, especially at the primary 
level of healthcare), the principle of comprehensive access to primary healthcare (measures to improve 
health and disease prevention, treatment and rehabilitation must be combined) and the principle of 
specialisation in specialist-consultative and inpatient healthcare (obligation to organise and develop 
special clinical and health policy achievements and knowledge and their application in practice.” 
From Article 129a(2) of the Constitution of the Republic of Croatia, the local 
(regional) self-government units derive the right to care for the health of citizens in 
their area, as they are closest to the citizens in their area. Although the aim is to 
transfer the founding rights over general hospitals to the Republic of Croatia, and in 
order for the local (regional) self-government units to be able to influence decisions 
that are important for the operation of the general hospitals within the scope of their 
constitutional powers, it is stipulated that the director of the general hospital is 
appointed and dismissed by the Governing Council, but with the prior opinion of 
the competent prefect, or mayor of the City of Zagreb and with the consent of the 
Minister of Health (Article 86a of the HCA).11 Although the amendments led to a 
disruption of competences between the local (regional) self-government units and 
the state in the field of health and health policy, they did not lead to an 
unconstitutional restriction of the right to local (regional) self-government under 
Article 128(1) of the Constitution of the Republic of Croatia. In addition, it 
represents the revival of the constitutional definition of the Republic of Croatia as a 
democratic, social and decentralised state and, at the same time, implements the 
 
10 Decision of the Constitutional Court of the Republic of Croatia of March 6, 2012 (OG, No. 35/12). 
11 Would it not then at least be logical to ask the local (regional) self-government units to agree with taking over the 
founding rights? 
D. Bodul, M. Tomljanović, P. Jakovac: Transfer of Founding Rights over General Hospitals 
to the Republic of Croatia: An Economic and Legal Analysis 261   
 
 
principles of Article 4 and Article 9 of the European Charter of Local Self-
Government (Council of Europe, 1985, p. 2-4). 
 
5.2 On the Possible Violation of the Right to Peaceful Enjoyment of 
Property (under the Constitution of the Republic of Croatia and 
Article 1 of Protocol No. 1 of the European Convention) 
 
The Constitution of the Republic of Croatia has enshrined the inviolability of 
property as one of the highest values of the constitutional order (Article 3), 
guaranteed the right to property as one of the human rights and fundamental 
freedoms (Article 48(1)) and "ensures" its constitutional protection before the 
Constitutional Court (Article 128). In accordance with the practice of the ECHR 
(which has been established in the application of Article 1 of Protocol No. 1 of the 
European Convention), in particular in relation to the Republic of Croatia, and in 
line with the practice of the Constitutional Court, the coherence between the 
position on the protection of the constitutional guarantee of property and the case 
law of the ECHR can be observed (Omejec, 2014, p. 957). Article 1 of Protocol No. 
1 (hereinafter: P1-1) of the European Convention stipulates: "Every natural or legal 
person has the right to enjoy his property in peace. No one shall be deprived of his property except 
in the public interest and under the conditions established by law and by general principles of 
international law. These provisions shall not, therefore, in any way limit the right of the state to 
apply such laws as it deems necessary to regulate the use of property in accordance with the public 
interest or to ensure the payment of taxes or other duties or penalties." 
 
The above text gives rise to the following relevant questions to be asked when 
considering whether there is a breach of the property right secured by P1-1 in the 
provisions on the transfer of acquired/founding rights: 
 
(a) Is there a right to property in proceedings for the transfer of acquired 
rights within the meaning of Article 1?  
 
This is undoubtedly the case. As legally authorised founders of healthcare facilities, 
the local (regional) self-government units have the right to arise from their status. In 
addition to these founding rights to the healthcare facilities, of which the local 
(regional) self-government units are the founders, the funds for the operation of the 
healthcare facilities, including the income generated are also available, are to be 
262 MEDICINE, LAW & SOCIETY Vol. 17, No. 2, October 2024   
 
regarded as assets of the local (regional) self-government units to which the 
constitutional guarantee of property refers. It should be noted that these assets 
cannot be fully subsumed under the concept of property rights within the meaning 
of private law regulations. The founding rights of the City of Zagreb over healthcare 
facilities, of which it is the founder, constitute exempli gratia assets that pursue a 
special purpose and a specific public law objective as they ensure the permanent, 
smooth and proper functioning of the healthcare system as a public service. It is, 
therefore, subject to special public law regulation as long as it serves this purpose.12 
Although it has a specific public law character and is connected to a specific public 
law authority, it is, in principle, covered by the constitutional guarantee of the right 
to property. However, when examining possible violations of this right, various 
factors must be taken into account that are not present in cases of protection of the 
constitutionally guaranteed property rights of private individuals under the rules of 
private law.13 
 
 (b) Has this right to property been infringed?  
 
The legal regulation that provides for the transfer of founding rights over general 
hospitals has undoubtedly led to significant interference with the property of the 
local (regional) self-government units. 
 
In view of this, it must be examined whether the interference with property was 
justified. This can only be the case if the interference is: (a) provided by law, (b) in 
the public interest and (c) complies with the principle of proportionality. 
 
In this particular case, the phrase "provided by law" requires that the measures 
provided by law must have a basis in positive law. We consider that the relevant 
provisions of the HCA are clear and precise, in accordance with the specific nature 
of the matter they normatively regulate, thus preventing any arbitrariness in the 
interpretation and application of the law. We recall here the Decision of the 
Constitutional Court of the Republic of Croatia on the quality of legal norms in the 
light of the rule of law,14 which states that “5 (...) the requirements of legal certainty and the 
 
12 The position taken in connection with the Pharmacy Act (OG, No. 121/03-117/08) and the Decision of the 
Constitutional Court of the Republic of Croatia No.: U-I-2643/07 (OG, No. 4/10). 
13 Decision of the Constitutional Court of the Republic of Croatia of March 6, 2012 (OG, No. 35/12). 
14 Decision of the Constitutional Court of the Republic of Croatia (OG, No. 44/11). 
D. Bodul, M. Tomljanović, P. Jakovac: Transfer of Founding Rights over General Hospitals 
to the Republic of Croatia: An Economic and Legal Analysis 263   
 
 
rule of law arising from Article 3 of the Constitution require that the legal norm be accessible to the 
addressees and foreseeable for them in such a way that they can actually and concretely know their 
rights and obligations in order to be able to behave towards them. (...) 5.1 The Constitutional Court 
considers it undisputed that the addressees of a legal provision do not specifically know their rights 
and obligations and cannot foresee the consequences of their conduct if the legal provision is not 
sufficiently specific and precise. The requirement of certainty and precision of the legal norm represents 
one of the fundamental elements of the principle of the rule of law (...) and is of decisive importance 
for the creation and maintenance of the legitimacy of the legal order (...).” 
 
The analysis of the concept of "public interest"15 in the case law of the ECHR shows 
that it must be interpreted broadly since the national legislature has a wide margin 
of appreciation for this concept, which is the expression of a particular economic 
policy pursued by the state. At the same time, the Republic of Croatia is authorised 
(through economic and social policy measures) to create the conditions for the 
implementation of healthcare and the conditions for the protection, preservation 
and improvement of the health of its population. The Republic of Croatia realises 
its rights, duties, tasks and objectives in the field of healthcare by planning the 
healthcare system and defining the strategy for the development of the healthcare 
system and by creating a legal basis for the realisation of the objectives of the 
healthcare system. In other words, the Republic of Croatia has a certain margin of 
discretion in the application of measures in this area, as well as in the application of 
measures in other areas of the country's social, financial or economic policy. 
Notwithstanding this greater discretion in regulating the conditions of healthcare, it 
is only constitutionally permissible for the local (regional) self-government units to 
fulfil their obligation under Article 129a(2) of the Constitution of the Republic of 
Croatia to perform tasks in the field of healthcare that must be fully or partially 
financed. This is because healthcare is of interest to the Republic of Croatia and is 
provided as a public service. 
  
 
15 The question of the distinction between the concepts of "general interest" and "public interest" also arose before 
the ECHR, which in its judgment in the case of James and Others v. the United Kingdom (1986) stated that "even if there 
could be a difference between the concepts of "public interest" and "general interest" in Article 1 (P1-1), the Court considers that in the 
present case no fundamental difference between those two concepts can be established, which the applicants allege." Therefore, it can 
be inferred that the ECHR considers that there is no fundamental difference between these two concepts ("even if 
there could be a difference..."). 
264 MEDICINE, LAW & SOCIETY Vol. 17, No. 2, October 2024   
 
Specific measures taken by the state must also satisfy the criterion of 
"proportionality". This presupposes that the measures taken through the transfer of 
founding rights are necessary in the sense that there are no other alternative(s), more 
favourable ways to achieve a certain goal —namely, better organisation of 
healthcare, better accessibility, higher efficiency and financial sustainability, since 
general hospitals are subject to joint public procurement. The question of whether 
an appropriate balance has been achieved only becomes relevant once it has been 
established that the intervention in question was in the public interest, that it 
complied with the requirement of legality and that it was not arbitrary. In similar 
cases where the interference did not involve expropriation, the ECHR will also 
consider whether the laws provide for some form of compensation for restrictions 
that continue over a period of time. The conditions for compensation are essential 
for the assessment of just compensation and, in particular, whether the contested 
measure constitutes a disproportionate burden on the claimants. The taking of 
property without payment of a reasonable amount in relation to its value generally 
constitutes a disproportionate interference and the total absence of consideration 
can only be considered justified under P1-1 in exceptional circumstances. In 
analysing the practice, we consider that the situation in question constitutes 
exceptional circumstances. 
  
6 In Lieu of a Conclusion 
 
It is clear from the doctrinal discussions that different models of healthcare are 
applied in the world, depending on the needs, the degree of economic growth and 
the lifestyle of the inhabitants. The models differ mainly in terms of the availability 
of services and the way in which healthcare costs are financed. New problems are 
constantly arising in the healthcare system that cannot be solved because there is no 
uniform solution due to the development of countries and changes in the social 
environment. The models of the healthcare system must be partially adapted to the 
changes in the factors influencing health. The analysis of the healthcare system in 
the Republic of Croatia shows that it has undergone numerous reforms, the primary 
aim of which was to optimise the level of healthcare with the actual financial 
possibilities of the Croatian economy. The decision for or against each solution is 
by no means easy; otherwise, their coexistence would not be possible, and one would 
have long since supplanted the other. 
 
D. Bodul, M. Tomljanović, P. Jakovac: Transfer of Founding Rights over General Hospitals 
to the Republic of Croatia: An Economic and Legal Analysis 265   
 
 
As for the determination of one position or the other, a stand taken here is in favour 
of the legality of the transfer of the acquired rights. In addition, we need to take into 
account the extreme and notorious complexity of this choice and the recognised fact 
that in such complex and multifaceted matters there are (sound) arguments for both 
options. The final determination, however, depends on the factors assigned to both 
groups, while it cannot be denied that the determination of these factors is a 
subjective and obviously arbitrary act. This is not to be understood as condescending 
because the existence of value distributions, even if they are not sufficiently visible, 
has been recognised in a very authoritative way as a component that belongs to the 
foundation of the social sciences. 
 
 
Acknowledgement 
 
This research paper is part of the project: Jean Monnet Chair – EU business policies and contemporary 
challenges of European Integration - financed under ERASMUS + program – Jean Monnet Chair. 
 
 
 
 “Co-funded by the European Union. Views and opinions expressed are those of the author(s) only 
and do not necessarily reflect those of the European Union or EACEA. Neither the European Union 
nor the granting authority can be held responsible for them.” 
In addition, this work was funded through the project line ZIP UNIRI at the University of Rijeka, for 
the project ZIP-UNlRl-2023-6.” 
 
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Povzetek v slovenskem jeziku 
 
Predstavljena analiza o delovanju zdravstvenih ustanov v zadnjih letih kaže osnovni problem 
hrvaškega zdravstvenega sistema, ki danes predstavlja "luknjo" v višini skoraj dveh milijard  
evrov. Zato se postavlja vprašanje, kako je mogoče zagotoviti razpoložljivost, kontinuiteto, 
popolnost in solidarnost zdravstvenega sistema (kot temeljna načela Zakona o zdravstvenem 
varstvu) ob upoštevanju obveznosti iz Zakona o izvrševanju državnega proračuna in Zakona 
o fiskalni odgovornosti. Namen članka je poiskati odgovor na vprašanje, ali je prenos 
upravljavskih pravic nad splošnimi bolnišnicami na Republiko Hrvaško, ki ga ureja Zakon o 
zdravstvenem varstvu, ustavno, pravno in ekonomsko upravičen. Analiza temelji na dejstvu,  
da vprašanje zdravstvenega varstva in organizacije zdravstvenega sistema ureja vsaka država 
samostojno in da je ta avtonomija držav članic omejena s predpisi EU. 
 
  
268 MEDICINE, LAW & SOCIETY Vol. 17, No. 2, October 2024