Health Insurance Fund to reduce payments to hospitals, cut benefits to compensate for massive deficit

Minister of Health and Labor Jevgeni Ossinovski (left) and Chairman of the Management Board at the Estonian Health Insurance Fund Tanel Ross (right) (Siim Lõvi/ERR)
9/15/2016 8:12 AM
Source: BNS
Category: News

The Health Insurance Fund’s supervisory board decided on Wednesday to support a management proposal to reduce the amount of funding paid to hospitals in the fourth quarter of 2016. The measure intends to compensate for the fund’s overspending in the first two quarters.

The size of the cuts and the formula by which they will be calculated is not yet clear. The details will be discussed by the supervisory board of the Health Insurance Fund next week, Minister of Health and Labor Jevgeni Ossinovski (SDE), the supervisory board’s chairman, said at a press conference.

Ossinovski said that next week the managers of the Health Insurance Fund would start negotiations with providers of medical services to find out how payouts in the final quarter of the year could be reduced in such a way that patients’ access to medical services would not be limited.

This would allow them to cut the fund’s overspending within three quarters compared with the current estimate, Ossinovski said. In addition, overspending could be cut by crossing certain drugs to which cheaper alternatives exist off the list of medication the fund compensates people for. This step is expected to save some €200,000.

In addition, the Health Insurance Fund is expected to receive €5m more than planned this year as a result of a bigger inflow of social tax due to higher wage growth.

All these measures would likely take the fund’s annual result closer to the budgeted deficit of €9m, Ossinovski said.

The ministry is discussing long-term changes as well, including a change of the fund’s approach to subsidizing people’s medication. Currently, how this was done was divided unequally, Ossinovski said. A future possibility is to compensate people for what they pay for drugs only starting after they have paid a certain amount of money themselves, he added.

The minister also said that while this was something that had been planned anyway, now the proposal would be brought forward.

The supervisory board also supported a proposal to impose caps on the compensation of sick days, care allowance, and maternity benefits, which according to Ossinovski could equal three average wages. Imposing a ceiling would require a political agreement and changing the law. If this could be done, the measure would allow the Health Insurance Fund to save €1.4m next year.

The supervisory board met on Wednesday to discuss the management’s proposals what to do after the fund finished the first half of the year with a much bigger deficit than planned.

Revenue of the Health Insurance Fund increased by 7% to €510.9m in the first six months of 2016, while operating costs grew by 11% to €543.8m. This meant a deficit of almost €33m, 14.5 million more than projected.

Editor: Dario Cavegn

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