ECONOMIC BRIEFS

Cabinet to deal with health sector financing at a special session

The Slovak Cabinet was to deal with financing of the troubled health care sector at a special session convened for May 20. If the government does not accelerate the flow of additional funds into the sector, said Miroslav Lednár, the chairman of the Association of Pharmaceutical Companies, medical care in Slovakia could collapse in a short period of time.

Lednár said he does not agree that the health care sector is "a bottomless pit," explaining that the government plans to allocate 44.5 billion Slovak crowns, or 6.2% of GDP, for health care this year. This figure comes to 8,250 crowns ($200) per capita, which is 48% less than in the neighboring Czech Republic. The annual consumption of drugs in western European countries per capita is $220, while in Slovakia it is only $57.

Lednár maintains that there is no more room for savings within the sector without seriously diminishing the quality of provided medical services.

The Pharmaceutical Association focuses on research and development of drugs, and says it supports the idea of patients' helping to cover the costs of drugs through the introduction of a standard handling fee. The Association's analysis indicates this measure would lower the consumption of drugs by 30%. If the fee were not applied to children and retired persons, who account for approximately one half of all medicine consumed in Slovakia, the savings would be 19%.

Lednár added that reform of the medical sector requires political courage to adopt unpopular and radical steps. He said that the state should begin by paying full health insurance premiums for economically non-active citizens (children, the retired, soldiers, women on maternity leave, etc.). Since the state currently is not fulfilling its obligations towards insurers, he said, insurers are also not paying pharmacies and pharmaceuticals companies what they owe. The Association's members report 1.5 billion crowns in total arrears.

Due to the chaotic financial situation, several foreign drug producers and distribution companies are considering leaving the Slovak market, which could result in a shortage of some vital drugs. Lednár said that the environment in the health care sector lacks transparency and stability, which he said was a further negative signal for potential foreign pharmaceutical investors.

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