Advisor to the Minister of Health Health reform strategy Debt reduction strategy World Bank workshop Warsaw, 19/05/03 Rudolf Zajac Minister of Health Peter Pažitný Advisor to the Minister of Health

Content Fiscal position of Health sector Where is the beginning of the circle? Stabilisation measures System measures Network measures Debt reduction strategy

I. Fiscal position of Health Sector

Gap is widening (Cumulative real growth of GDP, 1990=100) USA EU 15 SR

Deficit of Public Finances (% of GDP)

Fiscal position of Health sector (% of GDP) Expenditures Resources Deficit

Coverage of the Deficit (% from GDP)

… growing debts (in bln. Sk) Annual change 2002 … 2003 VAT and deregulation … 1,0 Providers: 16,2 … 22,0 Health insurance funds: 13,2 … 15,4

Where is the Beginning of the Circle?

Challenges and Reactions of the Reform Growing expectations of the citizens Increasing Costs Limited ability to pay Decreasing of expectations of the citizens Increasing of efficiency Mobilisation of Resources

Position of Political Decisions How much Resources ? Decreasing of high expectations of the citizens Efficiency How wide Treatment Act?

Where is the Beginning of the Circle? Health Care Act Treatment Act New Insurance Act CONSTITUTION Health Insurance Act New Treatment Act Health Care Surveillance Authority Act Chambers Act Health Care Occupations Act Health Care Providers Act

Schedule of reform steps Network measures New system System measures Stabilisation measures 2002 2003 2004

III. Stabilisation measures

Goals STOP Stopping of debt growth Financial stabilisation of system

Stabilisaton measures Modern definition of the Health Care Introduction of marginal co-payments for Providers New initiatives in Drug Policy

… stabilisation of debts (in bln. Sk) Annual change 2002 … 2003 VAT and deregulation … 1,0 Total savings 2,5 - 3,8 bln. Sk Providers: 16,2 … 19,6 Health insurance funds : 13,2 … 14,2

IV. System measures

Goals Decreasing of expectations of citizens Raising the efficiency of the system Mobilisation of Resources (particularly private)

System measures NEW Treatment Act NEW Insurance Act NEW Health Care Surveillance Authority Act

1. New Treatment Act A Fully reimbursed B Partially reimbursed C Not reimbursed Performance Drugs Tools and material

Beyond scope of Treatment Act 2. New Insurance Act Voluntary insurance Beyond scope of Treatment Act Compulsory insurance Covering BBP in Treatment Act

3. Health Care Surveillance Authority Strong regulatory body, which monitors: Licences Register of assured Index of risk Solvency of Health Insurance Funds Quality of Health Care Lege artis

Goal: Active role purchaser Purchasing of goods Drug policy Influencing the price Purchasing of services Provider

V. Network measures

Current conditions – there is no feedback in the system Hospitals and LZZ SKK Health Insurance Fund Patient Primary care Secondary care SKK

Goals Increasing allocative and technical efficiency Increasing Quality Enhancement of effective access Reinforcement of competition Equality of chances

Network measures NEW Chambers Act NEW Health Care Providers and Institutions Act NEW Health Care Occupations Act

Goal: Management of the patient in the future - interaction Hospitals and LZZ Patient Purchaser Primary and secondary care

VI. Debt reduction strategy

Structure of the external debt (SKK billion) Pharmacies (7,0) HIF Without Perspektiva (2,2) Without Redistrib. Fund (3,8) Contributors Unpaid insurance (11,0) Fines, Penalties (8,5) Public finances (2,2) Primary and secondary care (1,3) Drugs (4,5) Inpatient facilities Public finances (4,1) Energy (2,9) Others (4,6)

Receivables after maturity Maturity dates Annual expenditures SKK billion Receivables after maturity Maturity dates in days Public pharmacies 20,2 7,0 120 - 150 Hospital pharmacies 5,1 4,5 220 - 270 Energy suppliers 1,3 2,9 500 - 700

Bailing out the system Subject of bailing out: Pharmacies (7,0) Subject of bailing out: Stock of external debt to 31.12.2002 Public finances (2,2) Primary and secondary care (1,3) Drugs (4,5) Public finances (4,1) Energy (2,9) Others (4,6)

How much is that? (SKK billion) Annual health budget in 2002: SKK 68 billion GDP in 2002: SKK 1062 billion Pharmacies (7,0) Public finances (2,2) Primary and secondary care (1,3) 26,6 Drugs (4,5) Public finances (4,1) 40,0% 2,5% Energy (2,9) Others (4,6)

Special agency MOF, MOH, NPF receivables HIF Pharmacies (7,0) Special agency “Creditor” Purchase of receivables from creditors Public finances (2,2) Primary and secondary care (1,3) receivables Inpatient facilities Drugs (4,5) Public finances (4,1) Energy (2,9) Others (4,6) cash

Resources receivables cash Pharmacies (7,0) Special agency “Creditor” Purchase of payables from creditors National Property Fund Public finances (2,2) Primary and secondary care (1,3) Drugs (4,5) Ministry of finance Issue of bonds Public finances (4,1) Energy (2,9) Others (4,6) cash

Schedule of debt reduction 1. Phase Pharmacies (7,0) HIF Without Perspektiva (2,2) Without Redistrib. Fund (3,8) Contributors Unpaid insurance (11,0) Fines, Penalties (8,5) Public finances (2,2) Primary and secondary care (1,3) Drugs Inpatient facilities (decentralized) (6) Public finances Energy Others

Schedule of debt reduction 2. Phase Pharmacies (7,0) HIF Without Perspektiva (2,2) Without Redistrib. Fund (3,8) Contributors Unpaid insurance (11,0) Fines, Penalties (8,5) Public finances (2,2) Primary and secondary care (1,3) Drugs (4,5) Inpatient facilities (decentralized) Public finances (4,1) Energy (2,9) Others (4,6)

Schedule of debt reduction 3. Phase Pharmacies (7,0) HIF Without Perspektiva (2,2) Without Redistrib. Fund (3,8) Contributors Unpaid insurance (11,0) Fines, Penalties (8,5) Public finances (2,2) Primary and secondary care (1,3) Drugs Inpatient facilities (state owned) (10) Public finances Energy Others

... ??? ... We are lucky, the hole is not on our side

Thank You for Your Attention We are looking forward to Your comments and for further information attend www.reformazdravotnictva.sk