Health fund supervisory board unable to find solution to budget gap

9/22/2016 2:34 PM
Source: BNS
Category: News

The supervisory board of the Estonian Health Insurance Fund was unable to agree on a solution to the gap in the fund's budget on Thursday, which means that it is very likely that the fund will finish out this year with a deficit of several tens of millions of euros to be covered from the reserve.

The supervisory board did not back the idea put forward last week to narrow down the gap by reducing payouts to hospitals in the final quarter of the year, Aivar Kokk, a member of the supervisory board of the Health Insurance Fund, told BNS.

Kokk said that it is not possible to change valid agreements in such way that payouts are reduced. While Estonia has resorted to this kind of action once, during the economic crisis when social tax receipts dropped significantly, there is no justification for doing it now that the inflow of social tax is on the increase, he said.

While the supervisory board did decide on Thursday to reduce the amount of money paid to hospitals for work done in excess of the amount covered by valid agreements with the health fund, Kokk found that this was a cosmetic change which wouldn't allow for a substantial amount of money to be saved.

No decision was made regarding payouts in Q4, which means that no cuts will be made, he added.

The fund's supervisory board will convene again in October to discuss the same topic, but it wasn't likely that the amount of money paid to hospitals could be significantly reduced then either, according to Kokk.

What will be discussed instead is the 2017 budget, or what to do in order to balance it and avoid a repetition of this year's events.

In a bid to cut overspending by the Health Insurance Fund this year by 75 percent, the Health Insurance Fund Supervisory Board backed a proposal of the management board last Wednesday to redouce the amount of money to be paid to hospitals during Q4.

It was noted at the time that exactly by how much and using what methodology the amount of money given to healthcare prviders will be cut would be discussed by the supervisory board on Sept. 22.

Health Insurance Fund revenue increased 7 percent to 510.9 million euros in the first six months of 2016, while operating costs grew 11 percent to 543.8 million euros, making for a deficit of almost 33 million euros — 14.5 million euros bigger than projected.

Health fund supervisory may be cut from 15 to 6 members

The government has supported proposals that would reduce the gap in the Health Insurance Fund's budget by 2.6 million euros as well as reduce the size of the fund's supervisory board from 15 members to six, Prime Minister Taavi Rõivas said at a government press conference.

"Today we sought a solution that would allow us to bridge the health fund's unplanned deficit," said Rõivas.

As the health fund's supervisory board rejected the proposal made by the Minister of Health and Labor that would have had the biggest positive effect on the budget, namely to reduce payouts to hospitals in Q4, the government did not dwell on the idea any longer, said the prime minister.

"We examined the proposals that the supervisory board is prepared to support; they are worth four million [euros]," Rõivas explained. "Of these, the government supported proposals worth 2.6 million [euros]. It is clear that we have to get more proposals to this effect." As the prime minister saw it, the readiness to improve the Health Insurance Fund's financial position is there.

The topic will be revisited next week after an analysis of the impact of some of these proposals is completed by the Ministry of Social Affairs.

The government also supported the proposal to cut the number of members on the Health Insurance Fund's supervisory board from 15 to six in order to help more clearly define different responsibilities. "Having 15 members very obviously blurs the lines of responsibility," Rõivas added.

Editor: Aili Vahtla

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