VZP insurance company facing growing deficit | Prague Monitor

?TK |

11 October 2012

Prague, Oct 10 (CTK) - The deficit of the General Health Insurance Company (VZP) may rise up to nine billion crowns by the end of next year if Health Minister Leos Heger (TOP 09) increases the payment for health care by a payment regulation, VZP director Pavel Horak told the Impuls radio station Wednesday.

In its health insurance plan for 2013, VZP reckons with a 4-percent fall in payments, whereby it is to achieve a balanced budget in the given year, Horak said.

The report on the over five-billion gap in the system's financing at the end of 2011, dealt with by the government Wednesday, is no surprise, Horak said.

The system lacks six billion crowns a year and the balance is being worsened by the state transferring further unplanned expenses to health insurance companies such as one billion for vaccination and two billion for doctors' salaries, he added.

VZP improved its financial situation this year by gaining three billion crowns from last year's redistribution, Horak said.

Employees' health insurance companies had to give a part of their surplus money to them. If it had not been for the redistribution, VZP would face a six-billion fall this year already, Horak said.

However, as most employees' health insurance companies have exhausted their reserves with the transaction, they posted a deficit for the first time since 2008, he added.

The government assigned Heger Wednesday to inform it by the end of the month on the situation in the collection of health insurance in the first six months of the year.

The government resolutely dismissed the idea of increasing the payment for state policy holders in order to stem the threatening deficit.

It said the measures should be sought that would make the system more efficient.

Horak said VZP had already started cutting its costs. This and last year, it sacked 800 employees, whereby it saves some 250 million crowns annually.

Its 13 branches were reduced to six as from July 1, the number of senior managers fell by one-third, he added.

Next year, VZP plans a "zero growth" of the value of the point for medical treatments and it wants to unite the rates of diagnosis related groups (DRG) for hospitals, Horak said.

VZP may then lower the payments as they are now the highest of all insurance companies for a number of reasons, he added.

"If the ministry passes a regulation that the payments should grow, then there will be no escape from the fall," Horak said.

If the government wanted to resolve the situation of VZP by forced administration and departure of its current management, this would be no solution, Horak said.

The deficit would remain and the state would have to pay it, he added.

Horak said there was bad experience with forced administration, adding that he doubted that anyone else would be found "who will make the miracle and bring the money."

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Source: http://praguemonitor.com/2012/10/11/vzp-insurance-company-facing-growing-deficit

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