HEALTHCARE: Croatian Health Insurance Fund to Leave State Treasury in 2015

varga27 October 2014, LPJ Croatia Issue 106

Health Minister, Sinisa Varga (SDP), said last week he had reached an agreement with Finance Minister, Boris Lalovac (SDP), whereby the Croatian Health Insurance Fund (HZZO) would be separated from the state treasury as of 1 January 2015. As a result, Varga hopes the healthcare system would save €143.3 million in 2015 due to the implementation of the master-plan for hospitals and the adjustment of health spending to revenues of the healthcare system.

Croatian health care is a single-payer system (i.e. a system where the government, rather than private insurers, pays for all health care costs), although private providers and insurers also operate on the market.  The system is dominated by the Public Health Insurance Fund (HZZO), whose budget is currently part of the state treasury. The central government performs a dual role:  first, as the procurer and provider of health care through its influence on the HZZO funding allocation, and, second, as the largest owner of hospitals and public health institutions.

The financing of health care is realised through contributions (e.g. for mandatory health insurance, for workplace health care) and revenues (from the state budget – mostly via payroll tax and from co-payments for the costs of health care).   In 2013, healthcare contributions amounted to €2.08 billion.

The aforementioned separation would provide HZZO with more autonomy over its finances and prima facie a better bargaining position in talks with pharmaceutical wholesalers over the procurement of medicines and medical equipment. Given that HZZO’s budget accounts for a sizeable proportion of the state budget in 2015 (estimated at €2.86 billion), Minister Lalovac has had second thoughts about the institute’s financial autonomy…

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