financing of healthcare sector in the olomouc region václav rýznar regional authority of olomouc...
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Financing of Healthcare Sector in the Olomouc Region
Václav RýznarRegional Authority of Olomouc Region
• Introduction
• Characteristics of the healthcare sector in the Olomouc Region
• History of healthcare financing in regions and the Czech Republic
• Financing of healthcare in the Czech Republic
• Financing of healthcare facilities
• Major issues within the system of healthcare financing in the Czech
Republic
• Suggestions for possible solutions
• Conclusion
Contents:
Area• situated in central Moravia and parts of northern Moravia• 5 267 sq kilometres• representing 6.5 % of the overall size of the Czech Republic Structure• 5 former districts - Jeseník, Olomouc, Prostějov, Přerov, and Šumperk• together with the Zlín Region - the NUTS II – Central Moravia Cohesion Region
Population • 639 894 inhabitants (the 6th most populated region) representing 6.2% of the overall number of inhabitants in the country
Introduction
Characteristics of the healthcare sector in the Olomouc Region
Primary care in the Olomouc Region:
• 1 846 physicians (outpatient treatment) registered in the region (2007)
Of this, there were:
368 dentists
299 general practitioners
141 paediatricians
76 gynaecologists
332 specialists
In addition, there were 442 physicians working at outpatient wards in hospitals.
There were on average 1 457 patients registered per 1 physician (compared with 1 588 in the Czech Republic).
General practitioners’ offices reported over 3 million attendances.
The average incapacity for work in 2007 was 6.4% citizens in the working age (4th in the country).
Acute residential treatment:
all medical specializations
available in 8 healthcare facilities
established by various authorities:
the average residential treatment time 7.1 days
the cost of treatment in hospitals offering acute residential healthcare services - from CZK 2 407 per day to CZK 7 380 per day, with the average of CZK 4 183 per day.
Number of acute beds in the Olomouc Region is higher than necessary or that the bed fund is insufficiently structured.
Characteristics of the healthcare sector in the Olomouc Region
a total of 3594 acute-treatment beds
the Ministry of Health
the Ministry of Defence
private founders
the Olomouc Region (3)
The payments for acute residential
treatment are provided under
budgetary regime.
Table 1 - Acute residential treatment
2007
NumberBed
utilization (days)
Average treatment
timeNumber of
bedsNumber of
patients
Olomouc Region 3 594 128 423 251,5 7,1
Jesenická nemocnice, spol. s r.o. 126 5 179 218,5 5,3
Šumperská nemocnice a.s. 523 23 000
Olomouc University Hospital 1 433 44 191 242 7,9
Olomouc Military Hospital 230 5 531 230,2 9,6
Nemocnice Šternberk, o.z. 250 10 343 275,3 6,7
Nemocnice Prostějov, o.z. 469 17 428 292,1 7,9
Nemocnice Přerov, o.z. 315 16 156 262,2 5,1
Nemocnice Hranice, a.s. 144 6 979 260,9 71,5
Characteristics of the healthcare sector in the Olomouc Region
Nursing, palliative hospice and long-term care hospital beds
847 nursing, palliative hospice and long-term care hospital beds
1890 after-care beds available (nursing, palliative, hospice and long-term care, as well as beds in Special treatment institutions)
Payments in these facilities are provided as fixed fees per patient, bed and day.
Characteristics of the healthcare sector in the Olomouc Region
The region lacks 306 rehabilitation beds for after-care programmes.
The number of palliative and oncology care is insufficient, owing to the increasing needs.
It is necessary to provide specialized beds in the region for oncology patients and the ageing
population of the Olomouc Region.
History of healthcare financing in regions and the Czech Republic
Introduction:
In 1951 - state‘s full responsibility for the provision of healthcare services (Soviet Union model followed). Healthcare 100% financed from public taxes.
In 1989 - reform of the Czech healthcare system (model of a general health insurance with compulsory participation)
in 2007 - 249 state-owned healthcare facilities in the Czech Republic of the total number of 27 628
Currently 193 hospitals in the Czech Republic, of which 168 are non-state.
The system was ineffective, wasteful and
extensive.
The responsibility shifted to 27 health
insurance companies (controlled by the
state to a great extent)
clear trend towards privatization of healthcare providers
Financing of healthcare in the Czech Republic
The Czech Republic spends 7.1% of its GDP on the healthcare system.
Switzerland 11.5% of GDP
Germany 11.1% of GDP
Czech Republic
7.1% of GDP
Russia 5.6% of GDP
Estonia 5.3% of GDP
Table 1 Comparison of GDP expenditure on healthcare systems
in Europe:
Table 2 The total budget of CZK 224 billion in 2007 was allocated as follows:
Residential care 50.8%
Outpatient care 21.7%
Medicines on prescription
21.5%
Medical products 2.8%
Spas, transportation, etc.
3.2%
It corresponds to CZK 224
billion.
Table 3: Development of overall expenditure on healthcare:
Development of overall expenditure on healthcare:
6,00
6,50
7,00
7,50
8,00
1995
1997
1999
2001
2003
2005
Year
%
Ratio of expenses inGDP, percentage
Financing of healthcare in the Czech Republic
The healthcare budget:
The state pays for its insured persons (representing 58.5% of the population) approximately CZK 50 billion!
The rest (CZK 150 billion) is paid by employees and employers, plus self-employed persons.
Late indexation of the state’s contribution for its insured persons = the main cause leading to cyclically repeating financial deficits in the
financing of the healthcare system.
Financing of healthcare in the Czech Republic
= 25% of the overall expenditure on healthcare = 1.4% of GDP
= 5.7% of GDP
Obvious disproportion in the
generation of the budget of the
healthcare system.
Except for the Czech Republic, only Cuba reports a similar ratio in the financing of its healthcare system.
Financing of healthcare in the Czech Republic
low financial contribution of the population in the
healthcare system
money wasting and misusing of
healthcare services
gradual increase
in the
population’s
contribution in
the healthcare =
sensitive
political issue
in 2008, fees introduced for the dispensing of medicines in pharmacies, together with regulatory fees for an appointment with a physician and for one day of hospital treatment
the ratio of the healthcare budget to GDP is stable X
88% of the expenditure on the healthcare system (2007)
12% the expenditure on the healthcare system (2007)
patient’s contributions have been increasing very slowly
In the Olomouc Region, the hospitals run by the regional authority were transformed into a single joint-stock company and the
healthcare services were leased to a company managing 18 other healthcare facilities.
Financing of healthcare in the Czech Republic
January 2001 - regions established in the Czech Republic
1 January 2003: The indebted district and regional hospitals were transformed from the state to the new regional
authorities, in the form of subsidized organizations.
hospitals are not economically tied with the national budget
but with regional budgets
the problem of debts generated by hospitals has been transferred from the state to regions and
municipalities
other possibilities of managing hospitals and transformation of hospitals into commercial corporations
X
Financing of healthcare facilities
There were 26 health insurance companies established - obliged under the valid law to sign an agreement with each existing and newly established healthcare
facility
The performance system led to a depletion of finances from the public health insurance system and was one of the causes leading to the bankruptcy of 17
health insurance companies
In 1989 experts began looking for ways to finance the healthcare
sector
new establishment was inexperienced
a chaotic system
No limits imposed on the newly established residential treatment facilities, diagnosis centres (laboratories, CT centres, ultrasound centres) and on
investment plans either. Payments were based on the actual
performance. This was a sort of a “ZERO-SUM
GAME”
Role of state (chaotic steps)
Major issues within the system of healthcare financing in the Czech Republic
1. Medicines and drug policy CZK 3-5 billion 2. Influence of pharmaceutical companies on physicians’ decisions regarding
the prescription of certain medicines, physicians’ invitations to conferences abroad – not calculated
3. False recipes – CZK 380 million4. Action by the categorization committee – competition among the suppliers
of medicines is suppressed, not calculated5. Medical products and the influence of pharmaceutical companies on the
decisions of physicians towards the use of specific materials. Estimated CZK 3-5 billion
6. Investments into instrumentation, imbalanced equipment of regions – not calculated
7. Construction investments, imbalanced construction, failure to use capacities – not calculated
8. Hospitals – redundant residential care, redundant number of acute beds and long treatment periods – CZK 7 billion
9. Physicians’ corruption, ineffective setup of the system of sickness benefits, supporting high sickness figures – CZK 2.4 billion
10. Operations, bribery with the aim of gaining preference for operations – not calculated
11. Diagnostics and ineffective use of expensive diagnostics even where cheaper methods are reasonable – CZK 1.5 billion
12. Prescription of medicines and high rate of consultations with general practitioners, often associated with the prescription of over the counter medicines – CZK 6 billion
13. Failure to consider new treatment methods, spa vouchers, obsolete indication list offering spa treatment even where new treatment procedures do not require this – CZK 450 million
14. Significant losses are also caused by the redundant capacities of beds for residential treatment and high number of consultations with physicians.
15. Political corruption and lack of competence, non-transparent selection of candidates for management positions.– not calculated – likely to reach billions of CZK
16. Doubtful legislation, laws not coherent, implementation of laws associated with high expenses – not calculated.
17. Public contracts, failure to respect valid legislation, often circumvention and violation of the public procurement laws – CZK 3.9 billion
Major issues within the system of healthcare financing in the Czech Republic
Total loss in the
system of public
health
insurance
and sickness
insurance – CZK
29.13 billion
Health insurance companies responsible
for the network of healthcare facilities
Combination of health insurance and social
security
Regular indexation of the state’s payments for state
insured persons
Higher personal involvement in one’s health condition – increasing the
contribution to at least 20%
more effective inspection
system serving health
insurance companies
The state and regional
authorities should only
play a methodical,
inspection and penalizing role
Better equipment with IT
technologies
Clear definition
of standards
Solidarity of the healthy
with the sick
Increasing the retirement agenew technologies, medicines and
medical procedures
Possibility of commercial
supplementary insurance
1. System measures:
Suggestions for possible solutions
2. Structure related measures:
Suggestions for possible solutions
Reduction in the number of
acute beds
Reduction of the treatment period
Emphasis on outpatient treatment
3. Payments:
Suggestions for possible solutions
Specialists:
• performance system
• the examination and treatment should require prior recommendation by a general practitioner (with prescription limitation according to the national average, and with unlimited availability of gynaecologists, dentists and opticians)
• general practitioners - capitation allowance (with a prescription limitation according to the national average)
• Budget system for facilities offering acute residential treatment, with regular indexation of incomes and the possibility of entering into contracts with health insurance companies for the introduction of new examination procedures.
Conclusion
mentioned problems + low salaries of hospital staffs + the worst demographic expectations in Europe
general understanding of the need to introduce a reform of the
healthcare system in the Czech Republic
probably no ideal solution as regards the financing of healthcare • primarily seeking reserves
(savings) within the system
• increasing the income in the form of indexation of the payments for
state insured persons
• increasing the retirement age
It is necessary to increase people’s
personal involvement in one’s health
condition
Thank you for your attention!
Contact details:
Václav RýznarDepartmental Manager of the Health Care
DepartmentOlomouc Region Authority
Jeremenkova 42a779 11 Olomouc
Phone: +420 585 508 858
Email: [email protected]
www.kr-olomoucky.cz