Slovak health insurance companies predict yearly losses in tens of millions [Advocacy Lab Content]

Rising healthcare costs are straining Slovak health insurance companies. The state-owned General Health Insurance Company (VšZP) took the worst hit with a predicted €169 million year-end loss.

Healthcare Surveillance Authority (ÚDZS) has warned about the potential negative outcomes and asked VšZP to present measures that can reverse the loss without impacting insured citizens or healthcare providers.

According to ÚDZS, the lack of resources does not affect all three health insurance companies equally.

State-owned company under duress

The two private health insurance companies also expect losses in 2024 – Dôvera with a €70 million loss and Union with a €17 million loss – but they have sufficient funds to cover all claims of insured persons and healthcare providers. Although they estimate that this year’s income will not fully cover their expected expenses, last year’s state funding of the sector created a sufficient cash reserve.

The real issue lies with the VšZP, where the state is the sole shareholder.

“The matter is urgent; if effective countermeasures are not taken, there may be unmet expectations from the healthcare providers. On behalf of the ÚDZS, I can say that we are ready to actively participate in solutions that will help the entire sector,” said Michal Palkovič, the chairman of ÚDZS.

Palkovič and the ÚDZS are negotiating with the VšZP’s management to determine the next steps to alleviate the situation.

Health Minister Zuzana Dolinková said that she has communicated with the heads of VšZP and ÚDZS about the current economic situation in the biggest and only state-owned health insurance company.

“In accordance with the conclusions of ÚDZS, I am waiting for the presentation of recovery measures by VšZP, which I believe will be presented within days. Once we are familiar with the proposed measures, we will inform about the next steps regarding the financial stabilisation of VšZP,” Minister Dolinková added.

The Ministry did not respond to Euractiv’s questions.

VšZP’s response

The health insurance company states its commitment to gradually reduce its losses. In cooperation with the ÚDZS, it has created a working group that will monitor the economic development of VšZP, identify the most risky areas, proposals for measures, and their subsequent execution and evaluation.

According to a statement by VšZP, the reason behind the estimated loss is mainly the rising healthcare costs: “They are predicted to increase by more than €220 million across all segments, with medicine and medical device costs forecast to increase by €78 million, inpatient healthcare costs to increase by €81 million, and outpatient healthcare costs to grow by €34 million.”

Proposed measures not enough 

The ÚDZS received the draft measures but assessed them as insufficient and asked VšZP to rework them.

“We expect that VšZP will come up with measures that are in line with the consolidation of public resources. At the same time, we still see room for the introduction of cost-saving measures so that the management of the state insurance company will be truly more efficient,” Palkovič told TASR.

A reoccurring issue

The end-of-year loss of the state-owned health insurance company has plagued the Slovak health system for years, spanning multiple administrations and health ministers.

The Health Ministry traditionally solved the issue by providing additional funds to VšZP.

ÚDZS believes that before discussing additional financing for the health insurance company beyond the approved budget, efforts should be made to find internal reserves and improve long-term efficiency.

“The reoccurring problem of resource gaps is partly due to shortcomings in budget creation and regulatory frameworks that need to be addressed in the future. ÚDZS therefore welcomes the Health Ministry’s intention to establish a committee for the health budget, to address these issues regularly and continuously assess the situation,” ÚDZS said in its statement.

Opposition MPs Jana Bittó Cigániková and Tomáš Szalay (both Freedom and Solidarity) also rejected the idea that the state should help finance the insurance company again.

According to Bittó Cigániková, providing additional funds only to VšZP alone is unfair, “What kind of system is this, where we perpetually use money meant for healthcare to only subsidise the incompetent appointees of the state insurance company?”

Euractiv asked the Health Ministry to elaborate on the possible measures it is considering and how the problem could be solved in the long run. The Ministry responded only that it “is intensively dealing with the situation concerning the VšZP, and will subsequently inform [the public] about the solutions.”

[By Filip Áč, Edited by Vasiliki Angouridi, Brian Maguire | Euractiv’s Advocacy Lab]

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