Health care 2016 – a part of broader “Country Report”
Summary
In 2016, the development of the health policy showed a steady effort of the
government to move the system towards slightly higher transparency, through
measures such as publishing contracts between health insurance agencies and
providers, and conducting audits of hospitals’ purchases made under the public
procurement scheme and funded mostly from EU structural funds. Recently, equity
and access issues have been addressed too. The Ministry announced an intention to
lower the annual ceiling on the maximum drug co-payment expenditure for the elderly
and children. This reduced limit for out-of-pocket expenditures is to significantly
diminish the financial burden for these groups.
Long-term care traditionally suffers from a lack of coordination, efficiency, and
sufficient capacities of services. No progress has been observed.
1.1.1 Healthcare
The Czech health care system is based on a compulsory public health insurance with a
multi-payer system. The space for competition among insurers is limited as the
insurance law uniquely determines the contribution rates, as well as the benefit
package. All permanent residents are mandatorily insured. Insurance contributions are
paid by employers, employees, and self-employed persons. The state covers the
premiums for, roughly, 60% of the insured. These specific groups of persons
encompass pensioners, children until they finish their education, registered
unemployed persons, women on maternity leave, disabled persons, parents caring for
small children, prisoners etc.
The contribution rate for active payers is determined by law and has remained fixed
for already 20 years (13.5%, i.e. 9.0% paid by the employer and 4.5% by the
employee, now with no ceiling). The contribution rate for state-insured persons is
determined by the government and serves, in effect, as a tool to regulate the volume
of funding in the public health insurance scheme. The revenue generated from
contributions paid for state-insured persons has ranged between 20-27% of the total
revenue in the public health insurance scheme since 1992.1
The government increased
the contribution to CZK 870/€32.2 from January 2016, and to CZK 920/€34.0 from
January 2017. Such an increase would still leave the contribution far below the level
paid by insured persons without earnings, (CZK 1485/€57 per month, representing
13.5% of the minimum wage).
The cabinet has recently proposed an amendment redesigning the way in which the
contribution rate for state-insured persons would be set until 2020. The proposed
change should ensure an increase in the total amount of contributions by CZK 3.5
billion/€134 million annually. The proposal is currently being discussed in the House of
Representatives.
The public health insurance scheme is administrated by seven health insurance
agencies. One of them – the General Health Insurance Agency of the Czech Republic
(VZP) - has a dominant position. This is due to historic reasons as it had a monopoly
position at the outset of the reform. It currently insures 57% of the population. All
health insurance agencies are open for any applicant for insurance. All of them are
non-profit and their activities are governed by the same, or very similar, rules (Holub,
et al., 2014). Health insurance agencies collect contributions from their policyholders.
The collected contributions are fully redistributed among the health insurance agencies
according to the age and gender structure of the portfolios of policyholders in order to
reflect expected costs of treatment. There is also another redistribution measure that
1
In 2013 it represented CZK 54 billion/€ 2 billion in total.
takes into account the number of policyholders who have to be covered for particularly
expensive health services. The health insurance agencies are supposed to sign
contracts with selected health care providers, according to their own health plans, in
order to ensure complex and accessible medical care for their clients. Health care
prices are largely uniformly determined by the Ministry of Health, although the
Ministry’s resolution on the price levels is formally preceded by negotiation between
health insurers and representatives of health care providers (Holub, et al., 2014)
(ibid).
The figure 2 nicely illustrates that the system has been relatively reasonable cost-wise
in recent years, compared to other developed countries - for more details see e.g.
(OECD, 2014). Total expenditure, i.e., expenditure from the public health insurance
system, the state budget, territorial budgets, and private expenditure, reached the
value of approx. CZK 300 billion/€ 11.1 billion in 2014 - an estimate from (ÚZIS/IHIS,
2016). In comparison with the 2013 level this represents an increase of 3.1%. Total
expenditure on health represented 7.0% of GDP in 2014 (the EU average was 9.56%
in 2011). The decisive part of health services funding comes through public health
insurance, and public budgets. Expenditures from public insurance reached 252
billion/€ 9.3 billion in 2015, compared to 239 billion/€ 8.8 billion in 2014.
Unfortunately, the size of private expenditures in 2015 is not available.
Figure 2 Growth of health care expenditure (year 2000 = 1) (authors, data
from (ÚZIS/IHIS, 2016))
According to the Institute for Health Information and Statistics (ÚZIS/IHIS, 2016),
there were 254 inhabitants per 1 physician in 2015 (271 in 2013). The network of
inpatient care providers consisted of 187 hospitals, 161 specialized medical facilities
(including convalescence homes and hospices), and 88 spa treatment facilities.
Hospital bed capacity was 56,960 beds.
The Country Specific Recommendations from July 2014 state (Council of the European
Union, 2014 pp. 4-5): “The inpatient sector shows excess capacity pointing to room
for possible improvements in cost-effectiveness and governance.” Partly in response,
the Ministry declared an intention to improve its managerial responsibility towards its
directly controlled facilities (mostly hospitals) in 2014 (MZd/MH, 2014). The existing
outsourcing practice was indeed reconsidered and a new purchasing mechanism was
introduced in 2015. In so doing, the Ministry achieved total savings of almost
CZK 100 million/€3.7 million for the year 2015 (MZd/MH, 2015). On the other hand,
the most radical reform planned in the cabinet’s legislative plan (Vláda/Cabinet, 2015)
was not performed. The idea of a backbone public hospital network was abandoned in
December 2016 and replaced by a bill introducing a transformation of current “faculty
hospitals” into “university hospitals”. The proposal tries to strengthen the position of
hospitals’ directors and to overcome the limitations and rigidity stemming from the
current legal status of these hospitals. The bill was passed in the first readings in the
House of Representatives. However, its chances of being adopted are often
questioned.
The 2014 Country Specific Recommendations (Council of the European Union, 2014
pp. 4-5) also noted that “no progress has been made in improving the costeffectiveness
of public spending on health care”. In its 2014 Statement, the Czech
government declared its intention to create “a predictable and stable reimbursement
system, reflecting average costs, for all types of care”, applying the principle “same
volume and comparable quality means same reimbursement” (Vláda/Cabinet, 2014b).
The Ministry’s announcement of a new project called “DRG Restart” on December 3,
2014, represents a key development in implementing the policy of optimising inpatient
care reimbursement. The project is supposed to allow fair and transparent
reimbursement of acute inpatient care. The project is in its second year now. A new
methodology for data collection was prepared, published, and reviewed. An important
amendment of the Act No. 372/2011 Coll. was proposed. It introduces a National
Health Information System - an important step for the assessment of accessibility and
quality of healthcare. The national register of the provided health services allows the
MoH to review data from Health Insurance Companies – really a fundamental step in
the short history of the Czech health system. Current development of the DRG restart
project raises cautious optimism2
. However, it has to be noted that any real outcomes
of the project can only be expected in 2 years at the earliest.
Despite all political battles between the supporters of the idea of health care as a
pure, carefully planned, and strictly non-for-profit public service, and the liberal, promarket
advocates of the healing power of competition, plurality, and choice, the Czech
health care system has managed to secure a wide access to good quality services. The
benefit package is rather generous and encompasses services in primary, secondary
and tertiary health care. There are some exclusions of coverage such as e.g. cosmetic
surgery, dental prostheses, etc.
In comparison with other EU member states, the Czech Republic emerges relatively
well from the Eurostat statistics on self-reported unmet needs for medical
examination, although there could be a bias due to cultural differences, as Eurostat
does not recommend using the indicator for cross-country comparisons. The level of
95.7% of “no unmet needs to declare” in the total population represented a higher
value than the EU average (93.1%) in 2013. The difference is even bigger when we
look at the first quintile of equalized income (94.1% to 89.6%). Unfortunately,
Eurostat considers recent data for the Czech Republic to have “low reliability”, which
makes any detailed analysis rather pointless.
In 2016, the development of the health policy showed a steady effort of the
government to move the system towards slightly higher transparency, through
measures such as publishing contracts between health insurance agencies and
providers, and conducting audits of hospitals’ purchases made under the public
procurement scheme and funded mostly from EU structural funds. Recently, equity
and access issues have been addressed too. The Ministry announced an intention to
lower the annual ceiling on the maximum drug co-payment expenditure for the elderly
and children in September 2016. This reduced limit for out-of-pocket expenditures
should significantly diminish the financial burden for these groups. The current level of
the protective cap on annual drug co-payments for the elderly (65+) and children is
CZK 2,500/€ 93. It means that the health insurance agency pays back the sum of
drug co-payments that exceeds this limit. The Ministry has prepared a proposal to
decrease that limit considerably and to enlarge the number of entitled groups. For
details see Table 3 and (Vláda/Cabinet, 2017). The proposal is currently being
discussed in the House of Representatives.
Table 3: Suggested changes of drug co-payment caps and consequent savings
Category Current cap Proposed caps Savings per
2
For details see http://www.drg-cz.cz/index.php?pg=aktuality&aid=37
CZK/€ CZK/€ person
CZK/€
Elderly 65–70 2,500/93 1,000/37 1500/56
Elderly 70+ 2,500/93 500/18.5 2000/74
Children till 18 2,500/93 1,000/37 1500/56
Source: authors
1.1.2 Long-term care
The development of long-term care (LTC) has been carried out in a fragmented
fashion, with responsibility split between the health care sector and the social care
sector in the Czech Republic. This is combined with vertical fragmentation, with
competencies split between different institutional tiers: the state, regions and
municipalities. The governance of LTC, as well as palliative, health and social care,
remains an issue, mainly in terms of integrating the health and social aspects. Despite
prior expectations, the announced draft bill addressing cross-cutting issues in social
and health services, mainly “integrated long-term care”, was not released until May
2017.3
There are still great differences in the costs of care for clients. While the clients
pay a major part of social care, the care in health care facilities is covered from public
health insurance. This discrepancy often leads to hospitalisation of people who rather
need social care.
Multi-source funding is a key concept of the current social services funding scheme.
Clients’ fees represent the main resource. Other sources consist of the MLSA’s
subsidies and grants flowing into regional governments’ budgets. Health insurance
funds are another important resource – they partly cover the costs of health services
linked with social services
The introduction of personal care allowance (cash benefits) for people in need of longterm
care, accomplished in 2006, represents a major reform step in the area of social
services. The criteria for granting a specific allowance level are specified in the law on
social services4
. The allowance is scaled into four levels, according to the recipient’s
degree of dependency on support. The highest level of dependency entitles the
recipient to a care allowance of around half the average salary and slightly aboveaverage
pension in the country. The number of recipients of the care allowance
increased from 260,000 in 2007 to almost 350,000 in 2015. In total, it reached CZK
21.1 billion/€780 million in 2015 (comparing to 20.4 billion/€750 million in 2014
(MPSV/MLSA, 2016c). Since August 1st
2016, this major resource for funding longterm
care has been raised by 10% (see Table 5).
Table 4: Personal care allowance, from August 1st 2016
Category Monthly benefit 2014–15
CZK/EUR
Age
<18 18+
Level 1 (mild dependence) 3,300/122 880/33
Level 2 (medium dependence) 6,600/244 4,400/163
Level 3 (heavy dependence) 9,900/366 8,800/326
3
According to the vice-minister Jentsche Stocklová, the draft bill has been ready and awaiting
both ministers’ (MoH and MLSA) approval prior to the public release since April 2016.
(Zdravotnický deník, 2016).
4
Act No 108/2006 Coll., see at http://www.mpsv.cz/files/clanky/7372/108_2006_Sb.pdf. The
Act also recognized a broader scope of types of social care services.
Level 4 (full dependence) 13,200/488 13,200/488
Source: (MPSV/MLSA, 2016k)
Personal care allowance should be the essential source of funding. However, almost
50% of the recipients entitled to these allowances do not use them for purchases of
services from any registered provider. As we mentioned in the ESPN Country Profile,
Stage 1 – 2014-2015, a large part of the care allowance is retained by the recipients
and not used for purchasing the services. A large part of the care allowance is retained
by the recipients and is not used for purchasing formal services. This means that it at
least partially serves to reimburse the costs of informal care provided by the relatives
and/or friends, and represents some sort of income/benefit for the carers. Right now,
it is rather difficult to foresee which changes are going to be adopted. Different
stakeholders declare different preferences and interests. For instance, the Czech
National Disability Council (NRZP) strongly opposes the idea to reduce the allowance
for those who do not use it for a service purchase and who keep it in the family (that
provides necessary care instead of professional services).
The Czech Republic belongs to the traditional model where LTC is largely considered a
“family affair” and family members and friends provide most care. Internal data of the
MLSA estimated this share at between roughly 52% and 75%, depending on the
degree of dependence of the service user, in 2010 (MPSV/MLSA, 2013a).
Social care providers have been allowed to provide nursing care covered from the
public insurance scheme since 2007. However, no specific regulation has been
available for setting the price of these services. It was an implication of the previous
strategy to rigorously divide health and social services, mainly in terms of funding.
Representatives of social services providers repeatedly requested explicit regulation
here, since an absence of a price setting mechanism may cause law suits between
them and health insurance companies (HICs). It increases their uncertainty and
transaction costs, mainly in situations when the provider and the payer cannot reach
an agreement concerning the amount of reimbursement. In this case, there is
practically “a legal vacuum”, and it is quite difficult to assess the result of a law suit –
the only way to overcome a lack of consensus. The Ministry has recently attempted to
fix this issue via inclusion of nursing services for clients of residential social services
facilities into the Decree no.373/2015 Coll. that sets up reimbursement conditions for
health services for the year 2016. However, this attempt failed due to a Decision of
the Czech Constitutional Court.
The Czech population gets older. According to the demographic prognosis by the
Czech Statistical Office (CZSO), there will be half a million inhabitants older than
85 years living in the country in 2050 (comparing to 100,000 in 2006). Three million
inhabitants, representing 31% of population, will be older than 65 years (ČSU/CZSO,
2004).
The need for LTC depends not only on the share of the older population but also on
the sustainability of good health in older age. Table 6 shows the relation between
years of good health and life expectancy of persons over 65 years in the Czech
Republic.
Table 5: Life expectancy and Healthy Life Years in the Czech Republic
2005 2010 2011 2012 2013 2014 2015
Life expectancy at 65
(males)
14.4 15.5 15.6 15.7 15.7 16.1 15.9
Life expectancy at 65
(females)
17.7 19.0 19.2 19.2 19.3 19.8 19.4
Healthy Life Years at
65 (males)
6.6 8.5 8.4 8.3 8.5 8.5 8.0
Healthy Life Years at
65 (females)
7.0 8.8 8.7 8.9 8.9 9.3 8.6
Source: Eurostat
It is clear there will be growing demand for social services, both formal and informal.
Currently, carers face many shortages of the current LTC policy. An integrated LTC
system does not exist, neither in terms of legal environment nor financing. There is an
insufficient supply of field social and health services targeting dependent persons, and
this also applies to public services for carers.
A “round table” organized by the MLSA in December 2015 addressed issues of
informal care in the CR (MPSV/MLSA, 2015d). The participants clearly indicated the
necessity to increase not only carers’ leaves and cash benefits but also in-kind
benefits, professional services and support for informal carers. The Czech Republic
belongs among countries with a less developed supply of field social services that does
not suffice the needs of either carers or dependent people. Most public services often
include just food delivery. Respite support (provision of a short break from the caring
duties), psychological support, and counselling for carers were explicitly mentioned by
representatives of dependent people organizations in this respect (ibid.). Tomášková
(Tomášková, 2015) published a survey mapping the utilization of health and social
services available for those who care for a dependent person. Her findings suggest a
large gap of unmet needs – with the exception of early care. The cost of services and
a lack of information represent two main barriers for higher utilization. (For more
detailed information about capacities of selected social services see Annex 2.
The Government approved the National Strategy of Social Services Development for
2016-2020 in March 2016. It represents a quite comprehensive document
(160 pages). The Strategy contains the goal “to improve the position of informal
carers - persons and families who provide the care” (MPSV/MLSA, 2015e). We believe
this is essential. The Czech social and health system neither values nor lightens the
role of informal care providers. Existing measures of support are not sufficient
(MPSV/MLSA, 2015e). Excessive demand for inpatient services clearly suggests that
there is an imbalance. Czech families may rather prefer less involvement with LTC. It
is not clear whether this is mainly due to a lack of support services, to the low wellbeing
of carers (mostly women), who are often forced to simultaneously deal with care
and some kind of parallel economic activity, or purely to low family income, where the
household has to make ends meet on just one income (Sirovátka, et al., 2016).
There is no proper carer’s leave scheme, direct cash benefits are limited, and the
supply of support services varies quite considerably across regions. The quality of
informal care is a serious concern, due to a lack of information about good practice,
education and training.
It may be worth paying greater attention to the issue of the employment effects of
informal care, as well as to the well-being of carers and dependent persons. There is a
need for reform to integrate social care and healthcare into one system, and to enable
a rather substantial development of professional home care. Lastly, measures that
would support part-time work for specified reasons, such as care obligations, should
be introduced – e.g. special care leave and special benefits/allowances for carers.