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Fiscal (un)sustainability of the Croatian healthcare system: additional impact of the COVID-19 crisis*
Article | Year: 2021 | Pages: 495 - 515 | Volume: 45 | Issue: 4 Received: June 8, 2021 | Accepted: July 14, 2021 | Published online: December 6, 2021
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FULL ARTICLE
FIGURES & DATA
REFERENCES
CROSSMARK POLICY
METRICS
LICENCING
PDF
Source: OECD/European Union (2020: 44), for Croatia authors’ calculations.
Source: OECD/European Union (2020).
Source: OECD/European Union (2020).
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2015
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2016
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2017
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2018
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2019
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2020
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Health insurance contributions
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18,121.28
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18,468.68
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19,135.18
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19,904.22
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22,188.02
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21,042.81
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Budgetary income
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2,400.00
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2,588.95
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2,629.76
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3,100.00
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2,600.00
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3,769.21
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Income under special Regulations
(mostly supplemental health insurance)
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1,618.17
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2,650.80
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1,867.89
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2,004.79
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2,291.70
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2,451.01
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Property income
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14.52
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14.02
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17.36
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15.19
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12.53
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7.76
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Foreign aid - EU projects
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0.42
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1.45
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0.40
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1.34
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2.87
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0.79
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Income from CES (Croatian Employment Service),
professional training without employment
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0.62
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0.43
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0.91
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0.48
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0.00
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0.00
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Income from services provided
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0.05
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0.37
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0.86
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1.16
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1.30
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1.99
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Income from sale of non - financial assets
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0.75
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0.50
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0.65
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0.72
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1.90
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3.11
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Other income
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0.28
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0.70
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0.34
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0.36
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0.44
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0.25
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Income from financial assets and liabilities
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0.00
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26.14
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0.00
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0.00
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0.00
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1,077.58
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In total
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22,156.10
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23,752.05
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23,653.35
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25,028.27
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27,098.76
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28,354.51
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Budgetary income
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2015
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2016
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2017
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2018
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2019
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2020
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Contributions for the unemployed
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1,305.45
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1,124.94
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937.44
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778.27
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676.65
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851.10
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Contributions for persons deprived of their liberty
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10.71
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11.05
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11.37
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10.18
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12.48
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10.92
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Additional contributions for pension beneficiaries
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361.00
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363.11
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371.06
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393.59
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408.86
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420.53
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Income from special tax on tobacco
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1,339.93
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1,432.09
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1,399.69
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1,540.41
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1,636.71
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1,278.12*
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Premium for supplemental health insurance policy
at the expense of the state budget
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768.83
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683.55
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624.05
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565.62
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509.33
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464.19
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Funds to cover the costs of healthcare of insured
persons
at the expense of the state budget
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1,060.22
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818.00
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939.11*
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939.11*
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939.11*
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939.11*
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Total amount receivable from the
state budget (estimate)
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4,846.13
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4,432.74
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4,282.72
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4,227.19
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4,183.14
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3,963.97
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Budgetary income (paid)
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2,400.00
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2,588.95
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2,629.76
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3,100.00
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2,600.00
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3.769,21
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Difference
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-2,446.13
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-1,843.79
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-1,652.96
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-1,127.19
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-1,583.14
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-194.76
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Note: CHC – Clinical Hospital Center, CH – Clinical Hospital, GH – General Hospital, SH – Special Hospital. Health resorts, health care centers, and institutes are omitted from this part of the analysis. At the time of this analysis (May 2020), the CHC Sestre Milosrdnice and the Clinic for Children’s Diseases did not make public the data on due liabilities for 2020, so the data for 2019 was used in analysis.
Source: Authors’ work according to the Reports on liabilities of individual hospitals, hospital websites.
Note: CHC – Clinical Hospital Center, CH – Clinical Hospital, GH – General Hospital, SH – Special Hospital. Health resorts, health care centers, and institutes are omitted from this part of the analysis. At the time of this analysis (May 2020), the CHC Sestre Milosrdnice and the Clinic for Children’s Diseases did not make public the data on due liabilities for 2020, so the data for 2019 was used in analysis.
Source: Authors’ work according to the Reports on liabilities of individual hospitals, hospital websites.
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Year
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Financial bailouts
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Amount
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1994
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Financial bailout agreement
with health institutions
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214.84
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1994
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Agreement with wholesalers -
paid obligations for medicines
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62.13
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1998
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Settlement of due
obligations towards health care institutions - from the budget
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593.00
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1999
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Commitments of hospital
suppliers
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845.37
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1999
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Budget transfer for
suppliers
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792.02
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1999
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Short-term loan from a bank
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120.00
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1999
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Promissory note issued for
pharmacy debt (debt older than 90 days)
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244.98
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1999
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Pliva takes over CHIF debt
to pharmacies
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375.21
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2000
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CHIF issues bonds
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1,668.67
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2000
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Short-term loan
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115.00
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2001
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Collection of receivables
from CHIF
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750.37
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2001
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Short-term loan
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108.00
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2002
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Loan
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820.00
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2003
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Loan
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410.00
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2004
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Transfer to hospitals from
the Ministry of Finance (state budget) for suppliers
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533.01
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2005
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Agreement with Zagrebačka
banka on taking over overdue receivables for medicines
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808.70
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2007
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Sale of shares owned by CHIF
through the Privatization Fund - paid orthopedic devices and aids
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90.00
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2007
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Obligations to suppliers -
CHIF
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1,200.00
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2008
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Liabilities of hospitals to
suppliers of medicines and medical supplies
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500.00
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2012
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Assignment agreement
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465.03
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2013
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Assignment agreement
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3,062.06
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2014
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Assignment agreement
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3,200.00
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2017
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Budget transfer to hospitals
to settle debt to wholesalers
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200.00
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2019
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Extraordinary payment of
CHIF to wholesalers for overdue debt
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500.00
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2020
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Budget transfer to CHIF for
wholesalers debt
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500.00
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2020
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State budget amendment
(additional revenues for CHIF)
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1,300.00
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2021
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Budget transfer to CHIF (600
million for pharmacy debt and 300 million for hospitals)
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900.00
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2021
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Budget transfer to CHIF for
pharmacy debt and hospital debt (installments of 900 million in April, May
and June, plus a state budget amendment of an additional 895 million)
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3,595.00
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Total
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23,973.39
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Figure 1Central government additional COVID-19 health spending commitments per capita (between March and September 2020; EUR) DISPLAY Figure
Figure 2Health expenditure as a share of GDP, 2019 (or nearest year) DISPLAY Figure
Figure 3Health expenditure per capita in EUR, 2019 (or nearest year, in thousands) DISPLAY Figure
Table 1Overview of realized revenue of CHIF in the period from 2015 to 2020 (in million HRK) DISPLAY Table
Table 2Estimates of the amount and structure of budgetary incomes (in millions of HRK) DISPLAY Table
Figure 4Structure of due liabilities of hospitals for material expenses at the end of 2020 DISPLAY Figure
Figure 5Structure of due liabilities by type of institution (2020), in percent DISPLAY Figure
Table 3Financial recoveries of the Croatian healthcare system, 1994-2021 (million HRK) DISPLAY Table
* Some parts of the analysis presented in this article were previously published in Croatian language in Šimović and Primorac (2021). ** The authors would like to thank two anonymous referees for their useful comments and suggestions.
1 Fiscal sustainability is a narrower concept than financial sustainability. Since the Croatian health system is financed predominantly by public sources, the focus of the paper will be on fiscal sustainability and strengthening Croatian Health Insurance Fund (CHIF) revenues. However, there is a huge potential in increasing health care institutions’ own revenues from private funds (e.g. clinical studies), which goes beyond the narrower "fiscal" framework and enters the domain of financial sustainability.
2 Calculation is available later in this paper. See table 3.
3 Economic growth, specifically GDP per capita, has a positive effect on the efficiency of the health care sector, while the growing proportion of the elderly population reduces the coefficient of efficiency (Buljan, Deskar-Škrbić andović,  2019).
4 Precisely because such a conclusion is contrary to economic logic, it is called a "disease". Baumol ( 1967) came to this conclusion by analyzing why a sector of primarily public services, such as health and education, is experiencing a dichotomy of productivity and wages. He concluded that the service sector has low potential of generating innovation, as well as of improving productivity, because the substitution of labor by capital is almost impossible.
5 According to the Act on Financial Operations and Pre-Bankruptcy Settlement (OG 108/12, 144/12, 81/13, 112/13, 71/15, 78/15).
6 The methodology of calculating the maximum amount of funds is unknown, which does not improve the transparency of this system.
7 Diagnostic Related Grouping, Hospital Days.
8 For example, what is the standard hip replacement during hip surgery or the standard synthetic mesh for hernia surgery, or the standard stent for treating blockage or narrowing of cardiac arteries.
9 For general measures see Blecher et al. ( 2015). For specific measures for Croatia see Šimović and Primorac ( 2021).
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December, 2021
IV/2021
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