Espicom V iew: If the government is successful in implementing changes to the health insurance market, the impact will be negative for the private sector, with the companies involved being pushed out of the market either through the Ministry of Health (MoH) acquiring their shares, taking over the management of their client portfolios, or expropriation. However, considering the volume of legal action taken against the government in relation to previous legislation aimed at the private health insurance market, progress in this development is expected to be slow and it is possible that the government will fail to achieve its goal. A positive result for the government, on the other hand, would benefit patients with a greater level of funding entering the health system. It would also reduce the level of bureaucracy for healthcare providers and other entities that have dealings with the health insurance companies.
Since a Constitutional Court ruling forced the government to amend legislation that prevented private health insurers from paying dividends to their shareholders, the government has sought to reduce the impact of private sector activity within the health insurance market by other means. It is now in the process of establishing legislation that will enable it to create a single state-run health insurer and remove the two private companies, Dovera and Union, from the market altogether. The proposal to create a single health insurer originated in 2012, when the Prime Minister stated that if all insurance payments were collected by one company, there would be more funds available in the under-financed healthcare system. The Association of Health Insurers (ZZP), of which Dovera and Union are the only two members, does not believe that a single-insurer system would solve the problem of ineffectively-used funds. It claims that the current system, which includes competition between companies, is more beneficial for healthcare and that the profit of health insurance companies is an unsuitable reason for making such a significant change to the system. The private health insurers are not interested in leaving the Slovakian health insurance market. Union's Dutch owner, Achmea, warned that the plan infringes Slovakia's constitution, European law and the investment protection agreement between the Netherlands and Slovakia. In February 2013, Achmea initiated arbitration proceedings against Slovakia in reaction to the government's decision to expropriate its investment in Union.
New System To Be Implemented By 2015
The Health Ministry's preferred method of creating a single health insurer is to acquire the shares of the private health insurance companies. The single health insurer was originally intended to be launched in January 2014 if the government was able to reach an agreement with the private insurers about the sale of their shares, or July 2014 if the government had to resort to nationalisation of the private companies. However, these deadlines are expected to be breached due to delays in the creation of the 'transformation law', which will specify the method of calculating the amount to be paid for the transfer of shares and stipulate the nationalisation process that may be used. The government has put a considerable amount of effort into ensuring that the law will be highly resistant to the arbitration that is expected to follow. The law was due to come into effect in May 2013, but the MoH had not even submitted it for interdepartmental review as of July 2013, and until the government is certain that it is in line with constitutional and international law, the project will continue to fall behind schedule. The MoH insists that Slovakia will have a single health insurer by 2015, however.
Number Of Insurers Already In Decline
Slovakia currently has one state-run and two privately-owned health insurers. In January 2010, the government merged the two public health insurance companies, Všeobecná Zdravotná Poistovna (VšZP) and Spolocná Zdravotná Poistovna (SZP), through the termination of the SZP. The VšZP now covers over 3.5mn policy holders and remains Slovakia's largest health insurer. The largest private health insurance company, Dovera, merged with Apollo on December 31 2009 and now insures around 1.4mn people. The only other private health insurer operating in Slovakia, the Dutch-owned Union, has around 400,000 policy holders. The company Európska Zdravotná Poistovna (EZP) left the market in May 2008, due to dissatisfaction with market conditions that were created by previous legislation that prevented private health insurance companies from making profits from health insurance contributions.
Decrease In Private Health Expenditure
Based on data from the World Health Organization (WHO), BMI Espicom estimates that Slovakia will spend 9.0% of GDP on healthcare in 2013, equal to US$8.6bn, or US$1,579 per capita. Around 34% of this is estimated to be the private sector, worth US$2.9bn, or US$540 per capita. Private spending as a percentage of total health expenditure is expected to diminish over the next five years, falling to 30.4% by 2018.
|Source: BMI Espicom|
|Total health expenditure (US$bn)||8.6||8.4||8.4||8.5||8.9||9.4|
|Per capita (US$)||1,579.3||1,548.4||1,546.0||1,564.1||1,624.0||1,716.6|
|As % of GDP||9.0||9.1||9.2||9.3||9.4||9.6|
|Public health expenditure (US$bn)||5.7||5.6||5.7||5.9||6.2||6.5|
|Per capita (US$)||1,038.9||1,026.||1,043.8||1,071.8||1,130.2||1,194.2|
|As % of total health expenditure||65.8||66.3||67.5||68.5||69.6||69.6|
|Private health expenditure (US$bn)||2.9||2.8||2.7||2.7||2.7||2.9|
|Per capita (US$)||540.4||522.4||502.1||492.3||493.7||522.4|
|As % of total health expenditure||34.2||33.7||32.5||31.5||30.4||30.4|
|Greater Public Sector Involvement|
|Slovakia Projected Health Expenditure By Sector, 2013-2018 (%)|