Vol. 8 No. 7 2006
Luka Voncina • Nadia Jemiai Sherry Merkur • Christina Golna Akiko Maeda • Shiyan Chao Aleksandar Dzakula
Editors: Sherry Merkur • Nadia Jemiai Elias Mossialos
Health Systems in Transition
Croatia Health system review
Editorial Board
Editor in chief Elias Mossialos, London School of Economics and Political Science, United Kingdom and European Observatory on Health Systems and Policies
Editors Reinhard Busse, Berlin Technical University, Germany Josep Figueras, European Observatory on Health Systems and Policies Martin McKee, London School of Hygiene and Tropical Medicine, United Kingdom and European Observatory on Health Systems and Policies Richard Saltman, Emory University, United States
Editorial team Sara Allin, European Observatory on Health Systems and Policies Olga Avdeeva, European Observatory on Health Systems and Policies Anna Maresso, European Observatory on Health Systems and Policies David McDaid, European Observatory on Health Systems and Policies Sherry Merkur, European Observatory on Health Systems and Policies Bernd Rechel, European Observatory on Health Systems and Policies Erica Richardson, European Observatory on Health Systems and Policies Sarah Thomson, European Observatory on Health Systems and Policies
International advisory board Tit Albreht, Institute of Public Health, Slovenia Carlos Alvarez-Dardet Díaz, University of Alicante, Spain Rifat Atun, Imperial College London, United Kingdom Johan Calltorp, Swedish Association of Local Authorities and Regions, Sweden Armin Fidler, The World Bank Colleen Flood, University of Toronto, Canada Péter Gaál, Semmelweis University, Hungary Unto Häkkinen, Centre for Health Economics at Stakes, Finland William Hsiao, Harvard University, United States Alan Krasnik, University of Copenhagen, Denmark Joseph Kutzin, World Health Organization Regional Office for Europe Soonman Kwon, Seoul National University, Korea John Lavis, McMaster University, Canada Vivien Lin, La Trobe University, Australia Greg Marchildon, University of Regina, Canada Alan Maynard, University of York, United Kingdom Nata Menabde, World Health Organization Regional Office for Europe Ellen Nolte, London School of Hygiene and Tropical Medicine, United Kingdom Charles Normand, University of Dublin, Ireland Robin Osborn, The Commonwealth Fund, United States Dominique Polton, National Health Insurance Fund for Salaried Staff (CNAMTS), France Sophia Schlette, Health Policy Monitor, Germany Igor Sheiman, Higher School of Economics, Russia Peter C. Smith, University of York, United Kingdom Wynand P.M.M. van de Ven, Erasmus University, The Netherlands Witold Zatonski, Marie Sklodowska-Curie Memorial Cancer Centre, Poland
The European Observatory on Health Systems and Policies is a partnership between the World Health Organization Regional Office for Europe, the Governments of Belgium, Finland, Greece, Norway, Slovenia, Spain and Sweden, the Veneto Region of Italy, the European Investment Bank, the Open Society Institute, the World Bank, the London School of Economics and Political Science, and the London School of Hygiene & Tropical Medicine.
2006
Health Systems in Transition
Written by Luka Voncina, Andrija Stampar School of Public Health
Nadia Jemiai, European Observatory on Health Systems and Policies
Sherry Merkur, European Observatory on Health Systems and Policies
Christina Golna, European Observatory on Health Systems and Policies
Akiko Maeda, World Bank
Shiyan Chao, World Bank
Aleksandar Dzakula, Andrija Stampar School of Public Health
Edited by Sherry Merkur, European Observatory on Health Systems and Policies
Nadia Jemiai, European Observatory on Health Systems and Policies
Elias Mossialos, European Observatory on Health Systems and Policies
Croatia: Health System Review
© World Health Organization 2006, on behalf of the European Observatory on Health Systems and Policies All rights reserved. The European Observatory on Health Systems and Policies welcomes requests for permission to reproduce or translate its publications, in part or in full.
Please address requests about this to:
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The views expressed by authors or editors do not necessarily represent the decisions or the stated policies of the European Observatory on Health Systems and Policies or any of its partners.
The designations employed and the presentation of the material in this publication do not imply the expression of any opinion whatsoever on the part of the European Observatory on Health Systems and Policies or any of its partners concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. Where the designation “country or area” appears in the headings of tables, it covers countries, territories, cities, or areas. Dotted lines on maps represent approximate border lines for which there may not yet be full agreement.
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Keywords: DELIVERY OF HEALTH CARE
EVALUATION STUDIES
FINANCING, HEALTH
HEALTH CARE REFORM
HEALTH SYSTEM PLANS – organization and administration
CROATIA
ISSN 1817-6127 Vol. 8 No. 7
Suggested citation: Voncina L, Jemiai N, Merkur S, Golna C, Maeda A, Chao S, Dzakula A. Croatia: Health system review. Health Systems in Transition, 2006; 8(7): 1–108.
Printed and bound in the United Kingdom by TJ International, Padstow, Cornwall.
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Contents
Preface ............................................................................................................ v Acknowledgements ...................................................................................... vii List of abbreviations...................................................................................... ix List of tables and figures ............................................................................... xi Abstract ....................................................................................................... xiii Executive summary ...................................................................................... xv 1. Introduction and historical background ..................................................... 1 1.1 Introductory overview .................................................................... 1 1.2 Historical background .................................................................. 10 2. Organizational structure and management ............................................... 17 2.1 Organizational structure of the health care system ...................... 17 2.2 Planning, regulation and management ......................................... 20 2.3 Decentralization of the health care system .................................. 22 3. Health care financing and expenditure ..................................................... 23 3.1 Main system of financing and coverage ...................................... 23 3.2 Complementary sources of financing .......................................... 35 3.3 Health care expenditure ............................................................... 40 4. Health care delivery system ..................................................................... 43 4.1 Public health services .................................................................. 43 4.2 Primary health care ...................................................................... 59 4.3 Secondary and tertiary care ......................................................... 64 4.4 Social care .................................................................................... 66 4.5 Mental health ............................................................................... 71 4.6 Human resources and training ..................................................... 73 4.7 Pharmaceuticals ........................................................................... 75 4.8 Health technology assessment ..................................................... 80
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5. Financial resource allocation ................................................................... 83 5.1 Third-party budget setting and resource allocation ..................... 83 5.2 Payment of secondary and tertiary care providers ....................... 85 5.3 Payment of primary care physicians ............................................ 87 6. Health care reforms .................................................................................. 89 6.1 Health care reform 2002 .............................................................. 89 6.2 2006 National strategy for the development of the health care system ........................................................................ 92 7. Conclusions .............................................................................................. 97 8. Appendix .................................................................................................. 99 8.1 References ................................................................................... 99 8.2 Useful web sites ......................................................................... 103 8.3 HiT methodology and production process ................................. 104
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Preface
The Health Systems in Transition (HiT) profiles are country-based reports that provide a detailed description of a health system and of reform and policy initiatives in progress or under development in a specific
country. Each profile is produced by country experts in collaboration with the Observatory’s research directors and staff. In order to facilitate comparisons between countries, the profiles are based on a template, which is revised periodically. The template provides detailed guidelines and specific questions, definitions and examples needed to compile a profile.
HiT profiles seek to provide relevant information to support policy-makers and analysts in the development of health systems in Europe. They are building blocks that can be used:
to learn in detail about different approaches to the organization, financing and delivery of health services and the role of the main actors in health systems;
to describe the institutional framework, the process, content and implementation of health care reform programmes;
to highlight challenges and areas that require more in-depth analysis;
to provide a tool for the dissemination of information on health systems and the exchange of experiences of reform strategies between policy-makers and analysts in different countries.
Compiling the profiles poses a number of methodological problems. In many countries, there is relatively little information available on the health system and the impact of reforms. Due to the lack of a uniform data source, quantitative data on health services are based on a number of different sources, including the World Health Organization (WHO) Regional Office for Europe European Health for All database, national statistical offices, Eurostat, the
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Organisation for Economic Co-operation and Development (OECD) Health Data, the International Monetary Fund (IMF), the World Bank, and any other relevant sources considered useful by the authors. Data collection methods and definitions sometimes vary, but typically are consistent within each separate series.
A standardized profile has certain disadvantages because the financing and delivery of health care differ across countries. However, it also offers advantages, because it raises similar issues and questions. The HiT profiles can be used to inform policy-makers about experiences in other countries that may be relevant to their own national situation. They can also be used to inform comparative analysis of health systems. This series is an ongoing initiative and material is updated at regular intervals.
Comments and suggestions for the further development and improvement of the HiT series are most welcome and can be sent to: info@obs.euro.who.int.
HiT profiles and HiT summaries are available on the Observatory’s web site at www.euro.who.int/observatory. A glossary of terms used in the profiles can be found at the following web page: www.euro.who.int/observatory/glossary/ toppage.
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Acknowledgements
The Health Systems in Transition Profile on Croatia was written by Luka Voncina (Andrija Stampar School of Public Health), Nadia Jemiai (European Observatory on Health Systems and Policies), Sherry Merkur
(European Observatory on Health Systems and Policies), Christina Golna (European Observatory on Health Systems and Policies), Akiko Maeda (World Bank), Shiyan Chao (World Bank) and Aleksandar Dzakula (Andrija Stampar School of Public Health). The editors of the Croatia HiT were Sherry Merkur, Nadia Jemiai and Elias Mossialos (European Observatory on Health Systems and Policies).
The European Observatory on Health Systems and Policies is grateful to Miroslav Mastilica (Andrija Stampar School of Public Health), Shiyan Chao (World Bank), and Marija Strnad (Croatian National Institute of Public Health) for reviewing the report.
The current series of HiT profiles has been prepared by the research directors and staff of the European Observatory on Health Systems and Policies. The European Observatory on Health Systems and Policies is a partnership between the WHO Regional Office for Europe, the Governments of Belgium, Finland, Greece, Norway, Slovenia, Spain and Sweden, the Veneto Region of Italy, the European Investment Bank, the Open Society Institute, the World Bank, the London School of Economics and Political Science, and the London School of Hygiene & Tropical Medicine.
The Observatory team is led by the director, Josep Figueras, co-director, Elias Mossialos, and by Martin McKee, Richard Saltman and Reinhard Busse, heads of the research hubs. Technical coordination is led by Susanne Grosse-Tebbe.
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Giovanna Ceroni managed the production and copy-editing, with help from Nicole Satterley and with the support of Shirley and Johannes Frederiksen (layout).
Special thanks are extended to the WHO European Health for All database, from which data on health services were extracted; to the OECD for the data on health services in western Europe; and to the World Bank for the data on health expenditure in central and eastern European countries. Thanks are also due to the Croatian Bureau of Statistics and the Croatian National Institute for Public Health, which have provided additional country-level data.
This report reflects data publicly available in January 2006.
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List of abbreviations
AIDS Acquired immunodeficiency syndrome
CDC United States Centers for Disease Control and Prevention
CEFTA Central European Free Trade Agreement
CERANEO Centre for Development of Non-Profit Organisations
CIA Central Intelligence Agency
CINDI Countrywide Integrated Noncommunicable Disease Intervention
CIT Croatian Institute of Toxicology
CME Continuing medical education
DRGs Diagnosis-related groups
ENHPS European Network of Health Promoting Schools
ESPAD European School Survey Project on Alcohol and other Drugs
EU European Union
EURACT European Academy of Teachers in General Practice
EUROHIS European Health Interview Survey
GDP Gross domestic product
GFATM Global Fund to Fight AIDS, Tuberculosis and Malaria
GNP Gross national product
GP General practitioner
GYTS Global Youth Tobacco Survey
HAART Highly active antiretroviral therapy
HDZ Croatian Democratic Union
HiT Health Systems in Transition
HRK Croatian kuna (currency)
HZJZ Croatian National Institute of Public Health
HZZO Croatian Health Insurance Institute
IMF International Monetary Fund
NATO North Atlantic Treaty Organisation
NGOs Nongovernmental organizations
OECD Organisation for Economic Co-operation and Development
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PfP Partnership for Peace
PPTP Procedures Paid by the Therapy Procedure [translation from Croatian]
PTCA Percutaneous transluminal coronary angioplasty
PTSD Post-traumatic stress disorder
TB Tuberculosis
UNICEF United Nations Children’s Fund
VCT Voluntary counselling and testing
WHO World Health Organization
WTO World Trade Organization
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List of tables and figures
Tables
Table 1.1 Population and gender distribution, population estimates, 1995–2004 3
Table 1.2 Percentage of the population by age group in Croatia and the EU, 2003 or latest available year (in parentheses)
3
Table 1.3 Population distribution, demographic dependency ratio, and population growth rate (thousands), 1995–2004
4
Table 1.4 Live births, deaths and natural increase (rate per 1000 population), 1995–2004
4
Table 1.5 Marriages and divorces, 1995–2003 5
Table 1.6 Population and households by census, selected years 5
Table 1.7 Macroeconomic context, 1996–2004 8
Table 1.8 Employment by sector, 2004 9
Table 1.9 Trade and balance of payments (US$ millions) 9
Table 3.1 Definitions of health insurance terminology in the EU and Croatia 24
Table 3.2 Sources of revenue reported by health care providers in 2001 25
Table 3.3 The structure of HZZO expenditure as a percentage of GDP, 1994–2002 26
Table 3.4 HZZO revenue and expenditure, 1998–2002 in US$ millions 26
Table 3.5 Annual real increase in HZZO expenditure over preceding year, 1998–2002
27
Table 3.6 Comparison of health insurance contributions in selected central European countries
30
Table 3.7 Changes in co-payment exemptions and central and local government contribution policies under the new Health Insurance Law 2002
34
Table 3.8 Mean household spending on health, in HRK (US$), 2001 36
Table 3.9 Household health expenditure by income quintile groups, in HRK (US$), 2001
37
Table 3.10 Household health expenditure by welfare status, in US$, 2001 37
Table 3.11 Distribution of relative health expenditure by social welfare status, 2001 38
Table 3.12 Estimated total spending on health, as a percentage of GDP, 1998–2002
41
Table 3.13 Per-capita spending on health (total, private and public), 1997–2002, in constant HRK (1997 prices (US$))
42
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Table 3.14 Comparison of health spending by function, Croatia and selected European countries
42
Table 4.1 Inpatient utilization and performance in acute hospitals in the WHO European Region, 2004 or latest available year
67
Table 4.2 HZZO expenditure on prescription drugs, 1997–2002 in HRK millions (US$ millions)
80
Table 5.1 Comparison of United States DRGs, Australian DRGs and Croatian PPTPs for open-heart surgery
86
Figures
Fig. 1.1 Map of Croatia 2
Fig. 1.2 Life expectancy at birth, 2004 (or latest available year) 11
Fig. 1.3 Life expectancy at age 65, 2004 (or latest available year) 12
Fig. 2.1 Organizational chart of the social protection system 18
Fig. 3.1 Beneficiary composition, 1995 and 2002 28
Fig. 3.2 Relationship between voluntary and statutory health insurance, 1993–2004
39
Fig. 4.1 Levels of immunization for measles in the WHO European Region, 2004
48
Fig. 4.2 Food-borne disease outbreaks and cases reported, 1993–2000 50
Fig. 4.3 Number of GPs per 100 000 population, 2004 or latest available year 61
Fig. 4.4 Population pyramids, 2000 and 2030 68
Fig. 4.5 Population forecast in thousands, 2000–2030 69
Fig. 4.6 Nursing staff per 100 000 population, 2004 or latest available year 74
Fig. 4.7 Dentists per 1000 population, 2004 or latest available year (in parentheses)
76
Fig. 4.8 Pharmacists per 1000 population, 2004 or latest available year (in parentheses)
77
Fig. 4.9 Number and average cost of drug prescriptions covered by the HZZO, 1994–2002
81
Fig. 5.1 Third-party budget setting 84
Boxes
Box 3.1 System of Health Accounts and definition of health expenditure 28
Box 5.1 Trends in primary care service provision between 1990 and 2003 88
Box 6.1 Problems and reform objectives identified by the Ministry of Health, 2001
90
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Abstract
The Health Systems in Transition (HiT) profiles are country-based reports that provide a detailed description of a health system and of policy initiatives in progress or under development. HiTs examine different
approaches to the organization, financing and delivery of health services and the role of the main actors in health systems; describe the institutional framework, process, content and implementation of health and health care policies; and highlight challenges and areas that require more in-depth analysis.
Croatia is a European country in transition with a population of 4.4 million. The population generally enjoys good health and an increasing life expectancy of less than three years below the European Union (EU) average. Croatia’s health system is based on the principles of inclusivity, continuity and accessibility. Croatia spends a relatively high share of its gross domestic product (GDP) on health. Public funds for health care originate from two main sources: contributions for mandatory health insurance (predominantly) and funds collected by general taxation. The network of health care providers is organized in a way that makes it accessible to all citizens. The Croatian health system has good health outcomes in relation to countries at comparable income levels. Provision and funding of services are largely public, although private providers and insurers also increasingly operate in the market. Since 1991, the Croatian health system has been subject to a range of organizational reforms. These have mostly relied on decreasing public and increasing private expenditure in the system. While reforms have, up to a point, managed to decrease public spending on health care, they have failed to adequately address issues such as growing arrears and productivity. Important actions involving strengthening policy, monitoring, regulation and more advanced supply-side-oriented tools remain to be prioritized and implemented.
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Executive summary
Croatia is a country in central Europe, covering an area of 56 542 km² and with 5835 km of coastline. Croatia has an important geographical position, being located between central Europe and the Mediterranean.
Main international land transport routes pass through the country from western Europe to the Aegean Sea and the Turkish Straits. The importance of Croatia’s geographical position is further enhanced by its proximity to the Adriatic Sea, the northernmost gulf of the Mediterranean.
In 2004, the total population was 4.4 million and the population density was 78.5 inhabitants per km². The proportion of the population aged 65 and over (16.64% in 2004) is approximately equal to the European Union (EU) average. Depopulation trends started in 1991. In 2003, the population increase was negative (–2.9), the lowest since the establishment of independence in 1990.
Croatia’s political system is a parliamentary democracy established by the Constitution of 22 December 1990. The first democratic multiparty elections took place in April 1990 when the Croatian Democratic Union defeated the Communist Party and was elected the party of the Government. Croatia’s foreign policy priorities focus on developing closer relations with international organizations, a goal towards which rapid progress has been made. Croatia is a member of the Council of Europe and the United Nations and its specialized agencies. It joined the World Bank in 1993, and the Partnership for Peace (PfP) North Atlantic Treaty Organisation (NATO) Arrangement and the World Trade Organization (WTO) in 2000. In October 2005, Croatia started negotiations towards joining the EU. Since June 1994 the national currency is the kuna (HRK).
The five years of war from 1991 to 1996, following Croatia’s declaration of independence, caused important demographic losses and left deep psychological scars. War damages, including considerable damage to the country’s housing
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and public services infrastructure, were estimated at €32.6 billion, two-thirds of which was direct material damage. Up to 20 000 people have been reported killed or missing, and more than 30 000 people have been disabled as a result of the war. Approximately 47.5% (27 000 km²) of the Croatian continental territory containing some 1.5 million inhabitants was affected by the war. The national economy suffered accordingly. Prior to the dissolution of Federal Yugoslavia, Croatia, after Slovenia, was the most prosperous and industrialized republic in the federation. The per-capita output was approximately one third above the Yugoslav average. During the war the economy went into recession. By 1993, gross national product (GNP) was at 68% of its pre-war level. The country also suffered heavy inflation.
Nonetheless, there were concentrated efforts to implement structural and economic reforms. The monetary reform in 1993, which has been described as “one of the most successful exchange rate-based stabilization programmes in the region”, led to moderate inflation rates and a stabilization of the national economy. Economic reforms have focused on fully establishing market economy structures, including deregulation and the introduction of the necessary privatization trends in the public sector, liberalization of international trade, etc.
In 2004, Croatia had an average life expectancy at birth of 75.66 years for both sexes; 71.13 years for males and 79.08 years for females. However, this figure is still lower than in western Europe and 2.8 years below the EU average of 78.49 years in 2004. Infant mortality has gradually declined from 8.1 infant deaths per 1000 live births in 1996 to 6.08 per 1000 live births in 2004 but is still higher than the EU average of 4.75. Croatia shares the disease prevalence pattern of other European countries: cardiovascular diseases, cancer, mental health problems, injuries and violence, and respiratory diseases represent the most prominent causes of morbidity and mortality.
The Croatian health system has fared relatively well among the countries in the region: the system has a well-trained health workforce, a well-established system of public health programmes and health delivery system, and good health outcomes in relation to countries at comparable income levels. However, these results have been achieved at a high cost and the Health Insurance Fund has faced growing deficits in recent years. The generous benefits and exemptions have been politically difficult to roll back, while the ageing population and rising costs of health care have contributed to a rapid increase in public spending on health.
Croatia operates a social health insurance system. However, public funds for health care originate from two main sources: contributions for mandatory health insurance and funds collected by general taxation. Both form part of the State’s
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annual budgetary contribution towards health care, which is annually determined by the Ministry of Health and Social Welfare and the Ministry of Finance, and ratified by the Parliament. Thus, as elsewhere in social health insurance countries, the funding of Croatia’s compulsory health insurance system does not depend solely on salary contributions and displays characteristics of both Bismarck and Beveridge systems. Additionally, contributions at a uniform rate of 0.5% of gross income are levied on salaries for occupational safety. Those funds are hypothecated for treatment, rehabilitation and sick leave compensations caused by injuries and diseases sustained in the workplace, according to the Health Insurance Act. As part of the general decentralization policy, a small but increasing share of public spending on health is being picked up by local government. In 2002, county governments spent just 3% of their revenues on health care. Reliable data on private spending are currently not available, government estimates place private spending somewhere around 2% of gross domestic product (GDP), or approximately one fifth of total health expenditure.
Provision and funding of services are largely public, although private providers and insurers also operate in the market. The health care system is dominated by a single public health insurance fund: the Croatian Institute for Health Insurance (HZZO). To ensure equality of access to all citizens, HZZO-contracted health care providers operate within the framework of the national health care network. The network determines allocation of public financial resources between the 20 counties according to morbidity, mortality, demographic characteristics, etc. The central government continues to play a dual role as the purchaser and provider of health care through its influence on the HZZO funding, on the one hand, and as the largest owner of hospitals and public health institutions, on the other.
Since 1991, the health system has been subject to a range of organizational reforms. Ownership of secondary and tertiary health care facilities (buildings) was distributed among the State, counties and cities. Tertiary health care facilities, comprising clinical hospitals, clinical hospital centres and national institutes of health, remained state-owned. Secondary health care facilities (general and special hospitals) and county institutes of public health became county-owned. The majority of primary health care general practitioner (GP) offices located in health centres were privatized, while the remaining were left in county ownership.
Croatia spends a relatively high share of its GDP on health. There was a period of rapid cost escalation in the late 1990s, which peaked in 2000. From 2000 to 2002, it appears that public spending was contained. According to the Croatian Ministry of Health, in 2003 total spending on health was estimated at
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8.9% of GDP, in 2004 at 9.7% of GDP and in 2005 at 8.7% of GDP. The rise of expenditure in 2004 is attributed to the settlement of HZZO and hospital arrears from 2000, 2002 and 2003, which amounted to more than HRK 3 billion (more than US$ 532 million).
Since independence, Croatia has embarked on a number of reform initiatives in the field of health care. Recent reforms appear to have succeeded in containing the increased expenditure and even bringing about a reversal in the level of public spending on health. Nevertheless, despite the reductions, the health system is still heavily burdened by arrears. According to the Croatian Ministry of Health, in December 2004 clinical hospitals owed HRK 1.3 billion (US$ 216 million), general hospitals owed HRK 890 million (US$ 148 million) and special hospitals owed HRK 180 million (US$ 30 million) to various suppliers. By the end of 2003, HZZO’s debts grew to HRK 3.686 billion (US$ 613 million), of which HRK 980 million (US$ 163 million) was for pharmaceuticals. Solutions advocated by policy-makers in Croatia heavily revolved around increasing the inflow of private funds into the system. Reforms have included enlarging the “participation scheme”, reducing the number of individuals exempt from participation, the introduction of administrative fees, and the planned exclusion of drugs expenditure from complementary insurance benefits. Developing regulation and the implementation of more supply-side-oriented tools may hold an underused window of opportunity that deserves more consideration. The pressure on public resources to spend more on health will intensify in the coming years, and will have to be met with prudent allocation of resources and continuous efforts to improve productivity wherever possible.
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1 Introduction and historical background
1.1 Introductory overview
1.1.1 Geography and sociodemography
Croatia (Hrvatska) is an Adriatic and a central European country. It stretches in an arc from the Danube in the north-east to Istria in the west and Prevlaka in the south-east. It covers an area of 56 542 km² with a
coastline length of 5835 km. Croatia is bordered by Bosnia and Herzegovina (932 km), Hungary (329 km), Serbia and Montenegro (north, 24� km), Serbia and Montenegro (south, 25 km) and Slovenia (670 km) (see Fig. �.�). Zagreb is the capital and the largest city in Croatia with approximately 800 000 inhabitants in 200� (Central Bureau of Statistics, 2004).
Croatia has an important geographical position between central Europe and the Mediterranean. Main international land transport routes pass through the country from western Europe to the Aegean Sea and the Turkish Straits. The importance of Croatia’s geographical position is further enhanced by its proximity to the Adriatic Sea, the northernmost gulf of the Mediterranean.
The country is divided into three major geographical parts: the Pannonian region, the Coastal region and the Mountain region. In the north and north- east, the Pannonian and para-Pannonian lowlands and hills are commonly used for farming. The north of the country, where Zagreb can be found, is the most industrially developed.
The hilly and mountainous area separates Pannonian Croatia from the coast. The future of this region depends on the development of transit, the wood and timber industry, the production of healthy food and tourism.
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The narrow coastal belt of the Adriatic area is predominantly karstic, with very dry summers. A few streams follow narrow gorges to break through to the sea. Croatia is among the countries with the most islands in the world. The Croatian Adriatic coast is made up of ��85 islands and islets with a total coastline of 4058 km. The total length of the mainland coast is �777 km. The biggest island is Krk; other large islands include Cres, Brac, Hvar, Pag and Korcula. The largest peninsulas are Istria and Peljesac and the largest bay is Kvarner Bay.
The climate in Croatia is continental in the north, mountainous in the centre and Mediterranean along the Adriatic coast (Government of the Republic of Croatia, 2006).
In 2004, the total population of Croatia was estimated at 4.4 million (see Table �.�) and the density of the population was 78.5 inhabitants per km² (Central Bureau of Statistics, 2005).
The proportion of young people in Croatia (0–�4 years old) is slightly lower than the European Union (EU) average (see Table �.2). The percentage has
Fig. 1.1 Map of Croatia
Source: United Nations Cartographic Section, 2006.
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declined from �9.89% in �996 to �6.�4% in 2004 (see Table �.3). Much like the rest of Europe, Croatia is facing the challenges brought about by a gradually ageing population.
Table 1.1 Population and gender distribution, population estimates, 1995–2004
Year Total population Gender distribution in 1000s Males in 1000s Females in 1000s
1995 4 776 2 313 2 463
1996 4 494 2 160 2 334
1997 4 572 2 197 2 375
1998 4 501 2 163 2 338
1999 4 553 2 188 2 365
2000 4 381 2 106 2 276
2001 4 437 2 136 2 302
2002 4 443 2 139 2 305
2003 4 427 2 129 2 298
2004 4 439 2 137 2 302
Source: Central Bureau of Statistics, 2005.
Table 1.2 Percentage of the population by age group in Croatia and the EU, 2003 or latest available year (in parentheses)
Country 0–14 years, % of total population
15–64 years, % of total population
65 and over, % of total population
Austria 16.43 68.09 15.48
Belgium (1997) 17.81 65.94 16.25
Croatia 16.42 67.19 16.39
Denmark (2001) 18.66 66.52 14.82
Finland 17.72 66.82 15.46
France (2002) 18.67 65.09 16.24
Germany 14.89 67.36 17.75
Greece 14.56 67.75 17.69
Ireland 20.95 67.92 11.13
Italy (2001) 14.22 67.1 18.68
Luxembourg 18.81 67.13 14.06
Netherlands 18.57 67.65 13.78
Portugal 15.74 67.44 16.82
Spain 14.52 68.59 16.89
Sweden (2002) 18.11 64.71 17.18
United Kingdom 18.34 65.69 15.97
EU 16.49 67.21 16.30
Source: WHO Regional Office for Europe, 2006.
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Although the proportion of the population aged 65 and over is approximately equal to the EU average, this percentage has been increasing alarmingly over the past few years, from �2.34% in �995 to �6.64% in 2004. This represents a 35% increase; just under double the rate of decline of young people over the same period. Depopulation trends in Croatia started in �99�. In 2003, the population increase was negative (–2.9), the lowest since the establishment of independence (see Table �.4).
Table 1.3 Population distribution, demographic dependency ratio, and population growth rate (thousands), 1995–2004
Year Population distribution by age (%) Demographic dependency
ratioa0–14 years 15–64 years 65+ years 1995 19.29 68.37 12.34 0.463
1996 19.89 67.79 12.32 0.475
1997 19.89 67.79 12.32 0.475
1998 19.89 67.79 12.32 0.475
1999 19.77 67.87 12.36 0.473
2000 19.81 67.68 12.51 0.476
2001 17.01 67.36 15.63 0.485
2002 16.72 67.18 16.10 0.489
2003 16.42 67.19 16.39 0.488
2004 16.14 67.22 16.64 0.488
Source: Central Bureau of Statistics, 2005.
Note: a Demographic dependency ratio is the total number of persons under 15 years old plus the elderly population aged 65 years and over, over the population of age 15–64 years.
Table 1.4 Live births, deaths and natural increase (rate per 1000 population), 1995–2004
Year Live births Deaths Natural increase 1995 11.2 11.3 -0.1
1996 12.0 11.3 0.7
1997 12.1 11.4 0.8
1998 10.5 11.6 -1.2
1999 9.9 11.4 -1.5
2000 10.0 11.5 -1.5
2001 9.2 11.2 -1.9
2002 9.0 11.4 -2.4
2003 8.9 11.8 -2.9
2004 9.1 11.2 -2.1
Source: Central Bureau of Statistics, 2005.
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CroatiaHealth systems in transition
The total number of marriages has been slowly decreasing from �995 to 2003 while, in the same period, the total number of divorces increased (see Table �.5).
Table 1.5 Marriages and divorces, 1995–2003
Year Total marriages Crude marriage
ratea Total divorces Crude divorce
rateb
1995 24 385 5.1 4 236 173.7
1996 24 596 5.5 3 612 146.9
1997 24 517 5.4 3 899 159.0
1998 24 243 5.4 3 962 163.4
1999 23 778 5.2 3 721 156.5
2000 22 017 5.0 4 419 200.7
2001 22 076 5.0 4 670 211.5
2002 22 806 5.1 4 496 197.1
2003 22 076 5.0 4 934 220.9
Source: Central Bureau of Statistics, 2005.
Notes: a Crude marriage rate: number of marriages per 1000 inhabitants; b Crude divorce rate: number of divorces per 1000 marriages.
Over a period of �0 years, the total number of people per household has decreased from 3.�0 in �99� to 2.99 in 200� (see Table �.6).
The official language is Croatian. The main national minorities are Serbs (4.5%) and others 5.9% (including Bosniak, Hungarian, Slovene, Czech and Roma). The most prevalent religion is Roman Catholicism (87.8%) (CIA, 2005).
Table 1.6 Population and households by census, selected years
Census year
Number of inhabitants Number of households Average number of
people per household 1953 3 936 022 1 031 910 3.81
1961 4 159 696 1 167 586 3.56
1971 4 426 221 1 289 325 3.43
1981 4 601 469 1 423 862 3.23
1991 4 784 265 1 544 250 3.10
2001 4 437 460 1 477 377 2.99
Source: Central Bureau of Statistics, 2003.
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Health systems in transition Croatia
1.1.2 Political and economic background
Croatia’s political system is a Parliamentary Democracy established by the Constitution of 22 December �990. The first democratic multiparty elections took place in April �990 when the Croatian Democratic Union (HDZ) defeated the Communist Party and was elected the party of the Government. Franjo Tudjman was elected as President. In the May �99� referendum the population voted in favour of independence from the Federal Republic of Yugoslavia. Croatia officially declared independence in October �99�. This prompted a declaration of independence from Croatia by the Serbian enclave of Krajina, where fighting broke out followed by an intervention of the Yugoslav People’s Army on behalf of the Serbian population. War continued with the Krajina Serbs and with the Federal Republic of Yugoslavia from �99� to �995, and in Bosnia and Herzegovina until the signing of the Dayton Peace Agreement in December �995. This agreement recognized Croatia’s traditional borders and called for the return of occupied eastern Slavonia in �997.
The Head of State is the President, who is elected by direct universal suffrage for a five-year term and may be re-elected for a further single term. In addition to being the leader of the country, the President appoints the Prime Minster and Cabinet members, with the consent of the Parliament. Following the death of President Tudjman in December �999, the powers of the presidency were curtailed and greater responsibility was vested in Parliament.
The Parliament (Sabor), contains the House of Representatives. The House of Representatives has �5� seats and members are directly elected by popular vote to serve four-year terms.
The Government of the Republic of Croatia exercises executive powers in conformity with the Constitution and national legislation. Its internal organization, operational procedures and decision-making processes are defined by the Law on Government of the Republic of Croatia and the Rules of Procedure of the Government. The Government passes decrees, introduces legislation, proposes the state budget and enforces laws and other regulations enacted by the Croatian Parliament. The Government consists of the Prime Minister, two Vice Prime Ministers and �3 ministries.
In January 2005, Stjepan Mesic won a second five-year term as President. Prime Minister Ivo Sanader, leader of the HDZ, formed a government following the parliamentary elections in November 2003.
The Constitutional Court ensures that laws passed by the Parliament conform to the Constitution. Judges are appointed for eight-year terms by the Judicial Council of the Republic of Croatia. This Council is elected by the House of Representatives.
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Regional and local government is organized on two levels: 20 counties plus the city of Zagreb, and 426 municipalities. Counties are regional territorial units, each governed by a county assembly, a county head and county administration. Municipalities are smaller, comprising a municipal council and a municipal mayor. County and municipality representatives are elected by regional elections for four-year terms.
Croatia’s foreign policy priorities focus on developing closer relations with international organizations; a goal towards which rapid progress has been made. Croatia is a member of the Council of Europe and the United Nations and its specialized agencies. It joined the World Bank in �993 and the Partnership for Peace (PfP) North Atlantic Treaty Organisation (NATO) Arrangement and the World Trade Organization (WTO) in 2000. As of June 2004, Croatia has been a candidate country for accession to the EU.
The five years of war from �99� to �996, following Croatia’s declaration of independence, caused important demographic losses and left deep psychological scars. War damages, including considerable damage to the country’s housing and public services infrastructure, were estimated at €32.6 billion, two thirds of which was direct material damage (Stevenson and Stubbs, 2003). Up to 20 000 people have been reported killed or missing, and more than 30 000 people have been disabled as a result of the war (Government of the Republic of Croatia, �999). Approximately 47.5% (27 000 km²) of the Croatian continental territory containing approximately �.5 million inhabitants was affected by the war. At the end of �99�, up to ��.5% of the population lived in partly or fully occupied areas. Displaced persons and refugees from neighbouring Bosnia and Herzegovina flooded the country. During the period between �992 and �998 the number of refugees and displaced persons was between 430 000 and 700 000 (Babic-Banaszak et al., 2002).
The national economy suffered accordingly. Prior to the dissolution of Federal Yugoslavia, Croatia, after Slovenia, was the most prosperous and industrialized republic in the federation. The per-capita output was approximately one-third above the Yugoslav average (CIA, 2005). During the war the economy went into recession. By �993, gross national product (GNP) was at 68% of its pre- war level (WHO Regional Office for Europe, 2000). The country also suffered heavy inflation. Nonetheless, there were concentrated efforts to implement structural and economic reforms. The monetary reform in �993, which has been described as “one of the most successful exchange rate-based stabilization programmes in the region”, led to moderate inflation rates and a stabilization of the national economy (World Bank, 2000). As a result, Croatia was awarded investment credit ratings (World Bank, 200�).
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Health systems in transition Croatia
Progress has also been made in implementing structural reforms – nearly two thirds of the economy has been privatized, more than three quarters of bank assets have been channelled into private institutions and the banking system has regained strength. Private consumption and a recovery in exports pulled the economy out of recession in 2000. Increased tourism revenues have also helped to reduce the current account deficit to its lowest level over the years. Although reconstruction of infrastructure, homes, schools and factories is progressing and displaced persons are returning, the economy suffered a negative current account balance of US$ 6�7 million and a total outstanding and disbursed debt of approximately US$ �3.4 million, as estimated by the World Bank in 2003 (World Bank, 2003).
Gross domestic product (GDP) has been continually rising since �996 (see Table �.7). In 2004, the service sector contributed to an impressive 6�.6% of GDP, followed by the industry sector (30.�%) and the agriculture sector (8.2%). The service sector has been the fastest growing sector of the Croatian economy with a 4.8% annual growth rate in 200� followed by the industry sector (4.3%) and the agriculture sector (0.7%) (World Bank, 2005).
Table 1.7 Macroeconomic context, 1996–2004
Indicator year 1996 1997 1998 1999 2000 2001 2002 2003 2004 Unemployment rate 10.0 9.9 11.4 13.6 16.1 14.8 14.3 14.3 13.8
Annual rate of inflation (%) 3.5 3.6 5.7 4.0 4.6 3.8 1.7 1.8 2.1
GDP per capita (€) 3 531 3 891 4 284 4 102 4 560 4 998 5 451 5 747 6 224
Source: Croatian National Bank, 2005.
Structural unemployment remains a key challenge for Croatia’s economy. In 2004, of the �.72 million inhabitants in the active population, �8% were unemployed (Central Bureau of Statistics, 2005). Most employment is concentrated in the service sector followed by the industry and agriculture sectors (see Table �.8).
Total exports in 2004 amounted to approximately US$ 8 billion with a major share (approximately US$ 3.8 billion) accounted for by manufactures. Total imports in the same year amounted to approximately US$ �6.5 billion, of which capital goods accounted for approximately US$ 5.7 billion (see Table �.9) (World Bank, 2005). Major export partners include: Germany (�6.�% of total exports), Italy (�4.5%), Slovenia (6.9%), Austria (6.3%), France (5.6%) and Russia (3.3%) (CIA, 2005).
Croatia has a universal primary education system with all children participating. Primary schools were attended by 393 744 pupils in 2004/2005.
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Regular and special secondary schools had �92 076 pupils in the same year. University courses were attended by �0� 688 students (Central Bureau of Statistics, 2005). In 2003, total adult literacy rate was 98.�%; 99.3% among men and 97.�% among women (WHO Regional Office for Europe, 2006).
1.1.3 Health status
Responsibility for the processing of health care and public health information lies with the Central Bureau of Statistics and the Croatian Institute for Public Health. For all deaths occurring in Croatia, causes are coded centrally by the Croatian National Institute of Public Health (HZJZ), thereby ensuring a high
Table 1.8 Employment by sector, 2004
Sector % of total employment Agriculture 6.3
Agriculture, hunting and forestry 6.0
Industry 31.2
Manufacturing 20.5
Services 62.3
Wholesale and retail trade; repair of motor vehicles, motorcycles and personal and household goods 16.9
Public administration and defence, compulsory social security 7.6
Transport, storage and communication 6.9
Other 0.2
Source: Central Bureau of Statistics, 2005.
Table 1.9 Trade and balance of payments (US$ millions)
2003 2004 Total exports (fob) 6 007 8 208 Raw materials, excluding fuels 329 449
Mineral fuels and lubricants 560 909
Manufactures 2 953 3 824
Total imports (cif) 13 469 16 555 Food 930 1 190
Fuel and energy 1 500 1 987
Capital goods 4 500 5 739
Balance of payments Exports of goods and services 14 324 17 828
Imports of goods and services 16 212 20 180
Resource balance -1 888 -2 353
Source: World Bank, 2005.
Notes: fob: free on board; cif: cost, insurance and freight.
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Health systems in transition Croatia
quality of classification. County-specific mortality data are published annually in the Croatian Health Services Yearbook, edited by the HZJZ.
Overall, chronic diseases are more prevalent than communicable diseases. The crude death rate per �000 people was ��.2 in 2004. In 2004, the main causes of death were due to circulatory system diseases (50%), malignant neoplasms (25%), external injury and poisoning (6%), diseases of the respiratory system (6%) and diseases of the digestive system (5%) (Central Bureau of Statistics, 2005).
In 2004, Croatia had a life expectancy at birth of 75.66 for both sexes (7�.�3 for male and 79.08 for female), while life expectancy at 65 was �3.98 for males and �7.65 for females (See Fig. �.2 and Fig. �.3).
Infant mortality has gradually declined from 8.� infant deaths per �000 live births in �996 to 6.08 per �000 in 2004 but is still higher than the EU average of 4.75 per �000. Neonatal deaths per �000 live births have decreased from 5.78 per �000 live births in �999 to 4.56 per �000 in 2004, compared to the EU average of 3.24 per �000 in 2004 (WHO Regional Office for Europe, 2006; Central Bureau of Statistics, 2005).
1.2 Historical background
The period from 1918 to 1945
Health Insurance was introduced through three separate private organizations in �922, as one of the more advanced schemes in Europe. The Brotherhood Treasury covered mine workers, the Central Office for Workers Insurance covered other employees and workers, and Merkur mainly covered government officials. These health insurance organizations also had their own health care providers.
In the �920s, public health centres for health promotion, hygiene and epidemiology were established in rural areas. The remainder of the health system was mostly privately run. In general, health services were oriented towards individuals who could pay for health care, while there was a public system for the control of communicable diseases and promotion of public hygiene.
Professor Andrija Stampar of the Zagreb School of Public Health, one of the founders of the World Health Organization (WHO) and of the Association of Public Health in Europe, helped in introducing a range of public health services in the �920s and �930s. He also pioneered primary health care centres in Croatia.
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CroatiaHealth systems in transition
60 65 70 75 80 85
Male
Female
The period from 1945 to 1990
Croatia ran its own health services with its own Ministry of Health as a separate State federated within the Socialist Federal Republic of Yugoslavia. In �945, compulsory state health insurance was introduced covering most of the
Fig. 1.2 Life expectancy at birth, 2004 (or latest available year)
Slovenia
Albania (2003)
Czech Republic
Croatia
The former Yugoslav Republic of Macedonia (2003)
Poland
Serbia and Montenegro (2002)
Slovakia (2002)
Bosnia and Herzegovina (1991)
Bulgaria
Hungary (2003)
Romania
Estonia
Lithuania
Latvia
EU average
Years
Source: WHO Regional Office for Europe, 2006.
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Health systems in transition Croatia
5 10 15 20 25
Male
Female
Source: WHO Regional Office for Europe, 2006.
Years
Fig. 1.3 Life expectancy at age 65, 2004 (or latest available year)
Slovenia
Albania (2003)
Czech Republic
Croatia
The former Yugoslav Republic of Macedonia (2003)
Poland
Serbia and Montenegro (2002)
Slovakia (2002)
Bosnia and Herzegovina (1991)
Bulgaria
Hungary (2003)
Romania
Estonia
Lithuania
Latvia
EU average
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CroatiaHealth systems in transition
population. This was financed from income-related contributions and from the state budget. Insurance was first organized at local level through local health and social insurance organizations. In the second phase, the federal Government administered pensions and health insurance funds that were brought together under the Institute for Social Insurance, which subsequently split into the Health Insurance Fund and the Pension and Disability Fund.
The third phase introduced community management. The Constitution of �974 set up local associations, which were to plan, collect and distribute financial resources, and organize health services. Legislation was enacted to consolidate large units, known as medical centres, which administered primary care, first- level secondary care hospitals and public hygiene services in their area. The result was that resources were used inefficiently, hospitals seized most of the funds, and community management was not compatible with large medical organizations. In practice, decisions were made by political or governmental bodies. Also, despite a long tradition of private health care, private medical (but not dental) practices were reduced to a very small number. The three insurance schemes continued as before for employees, farmers and artisans, and the self- employed alongside the Health Insurance Fund.
By the end of the �980s, the Croatian health care system became a unique blend of health insurance funds, neglected primary health care networks, quasi- autonomous health organizations and “self-managing” authorities. The result was a liberal, disorganized and expensive system which, according to Letica (�989), suffered from a prolonged professional and financial crisis.
Since 1990
In the decade following independence, Croatian health care went through a series of health reforms that have helped to transform the once fragmented and highly decentralized health system, inherited from former Yugoslavia and battered by five years of war, into a health care system that maintains the principles of universality and solidarity.
The Health Care Law of �993 consolidated finances under a single public entity, the Croatian Health Insurance Institute (Hrvatski zavod za zdravstveno osiguranje, HZZO). The HZZO established the foundation for a revenue base that has provided universal coverage for the population and has since been the main source of health financing in Croatia. Croatia’s social health insurance programme is based on the principles of solidarity and reciprocity in which citizens are expected to contribute according to their ability to pay, and receive basic health services according to need. The �993 Law allowed opting-out of the public insurance system and acquiring substitutive insurance with private insurers. This was abolished in 2002.
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Health systems in transition Croatia
The �993 Law introduced the principles of patient choice and patient rights. The system recognized the participation of private insurance and the role of private provision of health care services. Although the majority of health care providers remained under public ownership, private providers have grown in number, notably in primary care, dental services, specialized clinics and dispensaries. A small but growing private insurance market has also developed, which offers additional (supplementary) insurance coverage for services not covered under the statutory insurance plan.
The central Government continues to play a dual role as the purchaser and provider of health care through its influence on the HZZO funding on the one hand, and its role as the largest owner of hospitals and public health institutions, on the other. The majority of primary care units, however, have been privatized.
In July 200�, the Ministry of Health issued a comprehensive policy statement in a paper entitled “The Strategy and Plan for the Reform of the Health Care System and Health Insurance of the Republic of Croatia”. The Ministry’s paper acknowledged that despite significant achievements in improving financing and delivery of health care in the �990s, the health system continued to face a variety of financial and structural problems.
Since 2000, the Government’s round of health sector reform measures were aimed at achieving a broad set of objectives:
containing the rate of increase in expenditure from public sources and reducing the payroll contribution rate by limiting benefits and increasing revenue through increased cost sharing;
improving efficiency and productivity of services through the reorganization and rationalization of the delivery system, especially at tertiary and secondary levels;
enhancing the contractual relationship between the HZZO and health care providers to achieve better alignment of incentives for efficiency and quality with payments;
devolving greater responsibilities to the local authorities (counties and city of Zagreb) to manage the delivery system at primary and secondary levels, and to improve the continuity of services at these levels;
expanding the scope of public health programmes focused on prevention and health promotion.
The Croatian health system has fared relatively well among the countries in the region: the system has a well-trained health workforce, a well-established system of public health programmes and health delivery system, and good health outcomes in relation to countries at comparable income levels. However, these
•
•
•
•
•
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CroatiaHealth systems in transition
results have been achieved at a high cost and the Health Insurance Fund has faced growing deficits in recent years. The generous benefits and exemptions established during the early growth years have been politically difficult to roll back, while the ageing population and changing epidemiological profiles have contributed to a rapid increase in public spending on health care. The efforts to contain costs in the �990s and early 2000s were not effective, as the HZZO’s expenditure continues to outstrip revenues and arrears have built up. The attempts to cap costs administratively have led to growing waiting lists and dissatisfaction among the patients and providers. This has prompted the Government to initiate a new round of reforms aimed at containing costs, reducing the tax burden on labour, and increasing revenue through cost sharing.
Croatia’s challenge is to channel its already substantial public spending towards greater efficiency without jeopardizing its other competing objectives of universality, fairness and equity, quality, patient choice and satisfaction.
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CroatiaHealth systems in transition
2.1 Organizational structure of the health care system
Croatia’s health care system is based on the principles of social health insurance. Provision and funding of services are largely public, although private providers and insurers also operate in the market. The health
care system is dominated by a single public health insurance fund: the Croatian Institute for Health Insurance, the HZZO.
Since �99�, the health care system has been subject to a range of organizational reforms. Ownership of secondary and tertiary health care facilities (buildings) was distributed among the State, counties and cities. Tertiary health care facilities remained state-owned, comprising clinical hospitals, clinical hospital centres and national institutes of health. Secondary health care facilities (general and special hospitals) and county institutes of public health became county-owned. The majority of primary health care general practitioner (GP) offices located in health centres were privatized, and the remaining ones were left under county ownership. Since �99�, Croatia has also witnessed a rapid growth of private secondary health care facilities: mostly special hospitals and polyclinics (outpatient facilities). Fig. 2.� depicts in a simplified way the organization of the social protection system.
Ministry of Health
At central level, the Ministry of Health is responsible for: (i) health policy, planning and evaluation, including the drafting of legislation, regulation of standards for health services and training; (ii) public health programmes,
2 Organizational structure and management
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Health systems in transition Croatia
including monitoring and surveillance of health status, health promotion, food and drug safety, and environmental sanitation; and (iii) regulation of capital investments in health care providers in public ownership.
In particular, the Ministry of Health draws up legislation for consideration by the Parliament, produces the annual national health plan for the country,
Fig. 2.1 Organizational chart of the social protection system
State Government
Ministry of Health Ministry of Finance
Clinical hospitals and centres
Croatian Health Insurance Institute (HZZO)
County government
Primary care
doctors
Dental clinics
Pharmacies
Special hospitals
Polyclinics and community
health centres
County public health
institutes
General county
hospitals
State institutes of health
Institute of Public Health, Institute of Transfusion Medicine,
Occupational Health Institute, Mental Health Institute,
National Institute for Radiation Protection, Drug and Medical Product Agency,
Institute of Toxicology
a
a
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CroatiaHealth systems in transition
monitors health status and health care needs, sets and regulates standards in health facilities and supervises professional activities such as training. The Ministry of Health manages public health activities including sanitary inspections, supervises food and drug quality and engages in the health education of the population. The Ministry also nominates the chairs of the governing councils and appoints the majority of the board members in state-owned health care facilities. A National Health Council, which was set up under the Health Act and consists of nine members nominated for their expertise, advises the Minister of Health on health policy and planning issues.
Ministry of Finance and the State Treasury
The Ministry of Finance is responsible for the planning and managing of the government budget, which includes the approval of the central budget transfers to the HZZO as well as the Ministry of Health. Therefore, the Ministry of Finance plays a key role in determining the overall level of public spending on health care.
Since 200�, the State Treasury has been responsible for all state finances, including collecting and allocating social health insurance contributions. It was thought that the collection of all state revenues through a single account would alleviate the challenges with analyses and comparisons and would stimulate greater fiscal discipline in the economy (World Bank, 2000).
Croatian Health Insurance Institute (HZZO)
Established in �993, the HZZO is a public body responsible for managing the Health Insurance Fund and contracting health care services. As the main purchaser of health services, the HZZO also plays a key role in the definition of basic health services covered under statutory insurance, the establishment of performance standards and price setting for services covered by the HZZO. The HZZO is also responsible for the distribution of sick leave compensation, maternity benefits and other allowances as regulated by the Croatian Health Insurance Act.
The main office of the HZZO is located in the capital city (Zagreb) and 2� branch offices are located in county centres. The Zagreb office is responsible for devising the means of implementing compulsory health insurance, and branch offices are in charge of implementation. The HZZO is overseen by a governing council, which consists of representatives of the insured population, the Ministry of Health, the Ministry of Finance, health institutions and private practices (independent GPs).
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Health systems in transition Croatia
Counties and the city of Zagreb
Local governments own and operate most of the public primary and secondary health care facilities, including general hospitals, polyclinics, public health institutes and community health organizations (home care and emergency care units). While these facilities receive operating expenditure through their contracts with the HZZO, the local authority is responsible for the maintenance of the infrastructure, and increasingly for capital investments. Revenue is derived from decentralized state funds, local taxes and rental income. Under the Government’s decentralization policy, local governments are expected to play an increasing role in the coordination and management of health services at county and municipal levels.
Professional chambers
Croatia has statutory professional chambers for physicians, dentists, pharmacists, biochemists and nurses that were established by the relevant faculties and professional associations. All university-educated health professionals and nurses are members of a chamber. The chambers in turn are responsible for professional registration and maintenance of professional standards. The chambers also express professional opinions on a variety of issues and advise on licensing of private practice and on opening and closing of health institutions.
2.2 Planning, regulation and management
2.2.1 Planning
The Ministry of Health produces an annual national health plan that contains clearly defined objectives following suggestions from the Croatian National Institute of Public Health (HZJZ). This plan must then be approved by Government. The national health plan is implemented at all levels and supervised by the Ministry of Health. Also, based on the suggestions of the HZJZ, the Minister of Health enacts the Health Care Measure Plan and Programme, upon receiving the opinions of the competent chambers.
The HZJZ plays an important role in public health planning, monitoring and evaluation. The institute prepares epidemiological analyses and supports health promotion and illness prevention programmes. Control of quarantine; and the
2�
CroatiaHealth systems in transition
prevention and control of communicable diseases, noncommunicable diseases, the delivery of immunization programmes, environmental protection measures and the monitoring of drinking water and other health risks are undertaken through the compulsory notification system and through inspection. At county (and the city of Zagreb) level, county public health institutes collect statistics and participate in the formulation and implementation of health programmes for their areas.
The HZZO implements the plans for direct health services through its contracts with health care providers. Under the national health plan, the HZZO passes regulations on health insurance entitlements, which aim to balance the supply of resources with the demand for services.
2.2.2 Regulation
The regulation of standards in health care institutions is the responsibility of the Ministry of Health. Standards are set out in health care-related legislation. Teams of health inspectors visit health institutions if there are organizational or professional failures. Licensing of professionals is the responsibility of the professional chambers.
2.2.3 Management
Currently, managerial responsibilities in health care are divided according to ownership – between the state authorities and counties (municipalities have a minor role in managing health services). The central Government sets the framework within which a county draws up its health policy. Some planning, administrative and supervisory roles are devolved to county authorities. In practice, management has been delegated to health care-providing institutions such as health centres and hospitals that are run by governing boards.
All hospitals, health centres and other health care facilities are managed by a director and a deputy director, one of whom is required to be a medical doctor with at least five years of clinical experience. Each health care-providing institution has a governing board composed of representatives of owners and employees. Professional councils comprising department heads provide help on professional issues and technical solutions related to the providers’ operations. Professional councils participate in the planning of health care provision and supervise the implementation of clinical standards. Furthermore, all health care facilities have committees for ethical issues as advisory bodies to the principal.
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Health systems in transition Croatia
2.3 Decentralization of the health care system
During the �980s, the Croatian health care system was notable for its decentralization in terms of its range and the way in which it was introduced. It was characterized by a high level of autonomy of local authorities and by the fact that both health workers and users participated in decision-making. The model was designed to ensure workers, who were considered the central power of the socialist society, actively participated in public services. In practice, political bodies made the majority of management decisions, and there was little, if any, supervision or inspection. Health care services suffered from poor organization, lack of management and considerable inefficiency.
Political reforms related to the onset of transition in Croatia in �990 and the struggle for independence (gained in �99�) led to radical reforms of the entire system of public services, including health care. One of the measures introduced was the centralization of funding in health care, justified by a lack of cooperation and control and by severe financial difficulties. The newly founded State was eager to control not only public services in general, but also all units of individual systems such as health care. The �990 centralization of health finances marked the outline of the �993 health reform that, although introducing several elements of decentralization (e.g. health institutions owned by local authorities, privatization in primary care), kept very tight central control over health care through funding and regulation (Dzakula et al. 2005).
In 2002, a management capacity-building programme entitled “Healthy Counties” was developed by the Andrija Stampar School of Public Health and the Ministry of Health. The programme draws on a number of training resources and other concepts from the United States’ Centers for Disease Control and Prevention’s (CDC) Sustainable Management Development Programme and its Management for International Public Health Course. The main aim of the programme is to empower local professionals and authorities for managing and planning in public health, health care and health policy. Up to the end of 2004, �5 counties (out of 20) and the city of Zagreb were involved in the programme.
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CroatiaHealth systems in transition
3.1 Main system of financing and coverage
Health care in Croatia has a mixed system of financing. The Croatian public health care system is financed by funds from social health insurance contributions, co-payments, voluntary complementary health
insurance, privately provided supplementary health insurance, the state budget and local self-administration county units’ budgets. In terms of medical services provided, the majority of the Croatian health system is financed according to the social health insurance model with one insurance institution or sickness fund, the HZZO.
Health insurance terminology in Croatia varies somewhat from that used in the European Union (EU). This report uses EU terminology for ease of comparison between countries. A short legend of terms can be found in Table 3.�.
Funds for social health insurance are collected mainly from payroll taxes paid by employees, the self-employed and farmers’ contributions. Social health insurance for certain vulnerable categories of the population is partly cross- subsidized from payroll contributions and additionally funded by transfers from the central government budget and from county budgets. These categories include the unemployed, disabled, elderly, people under �8, students, war veterans and the military.
Patients are required to pay for access to certain publicly provided health services through co-payments or to buy complementary health insurance. Certain groups are exempt from paying co-payments. These include the unemployed, disabled, people under �8, students, the military, war invalids, and multiple voluntary blood donors.
3 Health care financing and expenditure
24
Health systems in transition Croatia
Table 3.1 Definitions of health insurance terminology in the EU and Croatia
European Union context Croatian context Social health insurance – mandatory Basic health insurance – mandatory Main insurance scheme Coverage is provided by the State or national health care system.
Main insurance scheme Opting out is not allowed.
Complementary insurance Coverage for services only partially covered by social health insurance or the State (e.g. co-payments imposed by the statutory health insurance) – voluntary.
“Supplemental insurance” Insurance coverage for co-payments required by the Basic Health Insurance – voluntary.
Supplementary insurance Coverage for services not covered by statutory health insurance, e.g. to provide faster access to selected services, offering greater consumer choice, and for nonmedical amenities – voluntary.
Private insurance This is covered by “private insurance” for all services not covered under the Basic Health Insurance – voluntary. Since 2004, it can also be used to cover co-payments charged by public providers.
Supplementary insurance is optional. It is provided by private insurers and covers the costs of hotel amenities or a higher standard of care in public hospitals (e.g. choice of doctor, single rooms with television, air conditioning, etc.). It can also be used for preventive check-ups and treatment in privately owned practices contracted by the respective insurance company. Additionally, since 2004 it can be used to cover co-payments charged by public providers.
Privately owned facilities can enter into contracts with the HZZO and become a part of the publicly funded system. Alternatively, they can choose to operate on their own and charge private fees or enter into contracts with private insurers and charge for services provided under supplementary insurance. Since 2002, the Croatian system does not allow for opting out of social health insurance.
Social health insurance contributions are collected through the Government and accumulated in the State Treasury. Budgetary funds for social health insurance are determined annually and allocated to the HZZO. The HZZO collects premiums for complementary insurance on its own. In 2003, state budget funds for social health insurance accounted for 96.5% of total HZZO revenue (including funds for the vulnerable categories paid from the state budget), while funds collected from complementary health insurance accounted for 3.5% (HZZO, 2004). Table 3.2 provides the sources of revenue reported by health care providers.
The State also funds extra services such as antenatal and maternity care, school health services and care for the elderly and subsidizes costs of health care in remote regions. The State pays for public health and environmental protection, and health education, and provides income substitution during maternity leave. Capital investments are also funded from the state budget. On an annual basis,
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each county receives “decentralized funds” from the state Government, which are to be used (after approval by the Ministry of Health) for investments in buildings, technical equipment, etc. County budgetary contributions also fund some public health and environmental protection activities and can additionally be used for further capital investments in county-owned hospitals. The HZZO, aside from paying for medical services, also participates (to a small extent) in funding procurement of medical equipment for publicly owned providers.
Table 3.2 Sources of revenue reported by health care providers in 2001
Primary care Hospitals Specialist clinics and polyclinics
Pharmacies
HZZO (%) 73.5 90.8 41.3 60.9
Other insurance companies (%) 13.0 3.9 55.0 29.5
Co-payments (%) 0.7 0.7 0.2 0.7
Other revenue (%) 12.8 4.6 3.6 8.8
Source: World Bank, 2004.
Financing principles: pre-2002
The major challenges that the Croatian health system had to overcome in the �990s were high expenditure and a continual fiscal crisis. As the statutory public entity responsible for managing the Health Insurance Fund, the HZZO accounted for over 90% of public spending on health and an estimated 80% of the total health expenditure in Croatia. Total HZZO expenditure (excluding cash transfers for sick leave) has grown faster than GDP, rising from 6.7% of GDP in �994, to a high of 8.0% in 2000. In 200� and 2002, the increase in HZZO expenditure has been contained below the GDP growth rate (see Table 3.3).
A rapid real increase in health expenditure was recorded by the HZZO between �998 and 2002, averaging approximately 8% per annum in real terms. This rate of increase has outstripped the revenue of HZZO, which has not increased significantly over the same period (see Table 3.4). As Table 3.5 shows, between �998 and 2000, spending increases occurred across most categories of health spending. A sharp decline in expenditure on prescription drugs in 2002 could be attributed to the higher cost sharing introduced that year. However, without the data from household expenditure and utilization surveys, it is difficult to determine the extent to which cost reductions were attained through productivity gains, or through other means, e.g. rationing of care (long waiting lists for non-emergency services) and cost shifting to patients.
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Health systems in transition Croatia
Table 3.3 The structure of HZZO expenditure as a percentage of GDP, 1994–2002
1994 1995 1996 1997 1998 1999 2000 2001 2002 Health care 6.0 6.9 6.6 6.2 7.1 7.7 8.3 7.5 6.2
Compensation and allowances 0.8 1.1 1.5 1.6 1.5 1.5 1.8 1.3 1.1
Operating costs, investments, loan repayments, other expenses 0.8 1.1 1.5 0.4 0.3 0.3 0.4 0.3 0.5
Total HZZO expenditure 7.5 9.2 9.6 8.1 8.4 9.0 9.8 8.6 7.8
HZZO expenditure excluding compensations and allowances 6.7 8.1 8.1 6.6 6.9 6.6 8.0 7.3 6.6
Source: World Bank, 2004.
Table 3.4 HZZO revenue and expenditure, 1998–2002 in US$ millionsa
Year 1998 1999 2000 2001 2002
Total revenue 1 720 1 889 1 952 2 068 2 116
Contributions 1 459 1 485 1 513 1 561 1 698
– employer 662 708 662 639 –
– employee 662 708 763 825 –
– other 136 68 87 95 –
Workers’ compensation – – – – 23
Other revenue 27 43 41 161 27
Transfers from the State Treasury 234 361 398 346 202
“Supplemental insurance” – – – – 43
Operation budget for HZZO – – – – 39
Receipts from borrowings – – – – 122
Total expenditure 1 724 1 908 2 194 2 076 2 068
Health care 1 352 1 530 1 731 1 689 1 635
Primary care 271 293 339 351 345
Polyclinics, specialist services 273 228 334 313 291
Prescription drugs 210 253 298 318 243
Hospitalization 486 642 633 612 671
Orthopaedic devices 36 39 53 50 56
Other health care-related expenditure 65 63 59 29 9
Compensation 308 311 400 318 302
HZZO operating costs 44 50 46 33 39
Other (investments, loan repayments, special expenses) 23 18 50 48 92
Stock of short-term liabilitiesb 523 542 405 410 455
Surplus/deficitc – 39 137 25 43
Source: HZZO, 2004.
Notes: a US$ millions calculated on the basis of the 2003 annual average of the US$/HRK exchange rate, as reported by the Croatian National Bank; b Stocks of short-term liabilities are accounts payable for purchases made in the current fiscal year but paid in the following fiscal year; c In this estimation, it was assumed that the stock of short-term liabilities represented the full stock of accounts payable in the following fiscal year, and that the payments were made in the following year. Receipts from borrowings are included in the 2002 calculation. On the revenue side, accounts receivable were not included in this estimation.
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Table 3.5 Annual real increase in HZZO expenditure over preceding year, 1998–2002
Expenditure categories (%)
1998 1999 2000 2001 2002 Average annual
increase, 1998–2002
Primary care 3.8 4.0 8.5 2.5 -4.2 2.9
Specialist services 30.5 15.6 10.7 5.6 -8.1 10.9
Prescription drugs 25.5 -19.7 37.5 -7.3 -22.9 2.6
Orthopaedic devices 36.7 3.6 27.1 -5.3 7.3 13.9
Hospitalization 16.4 26.9 -7.3 -4.3 7.3 7.8
Source: HZZO, 2004.
1 These are 2003 HRK values.
Throughout the �990s, the deficits incurred by the HZZO necessitated periodic transfers of funds from the central budget to maintain the provision of health services (see Table 3.4). In 2002, the Government registered short- term liabilities amounting to HRK 3 billion1 (US$ 448 million) and borrowed HRK 820 million (US$ �22 million) to pay off the old arrears accumulated by the government-owned health care providers. While these arrears have decreased from the high level of HRK 4 billion (US$ 597 million) in �999, the continuing operating deficit of the HZZO and the health care providers has been a continual source of concern.
Recognizing the need to improve fiscal discipline in the health sector and to reduce the annual deficits, the Government introduced measures to: (i) broaden the sources of revenue; (ii) improve fiscal discipline and fund management; and (iii) contain cost on the supply side through rationalizing the health delivery structure and reforming provider payment methods. In particular, the Government instituted an overall global budget cap for hospital care. However, some observers considered this applied pressure as inappropriate, since it led to longer waiting times and encouraged queues for certain high-end services, such as cardiac surgery, percutaneous transluminal angioplasty and stent (Langenbrunner, 2002).
It should be noted that the HZZO expenditure also includes substantive cash transfers for sick and maternity leave compensation, which amounted to �.�% of GDP in 2002 (see Table 3.3). For reasons described in Box 3.�, these cash transfers are excluded from the total health expenditure figures. The Government estimates that private out-of-pocket payments and private voluntary insurance payments account for around 2% of GDP, but reliable data on private financing are not yet available.
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Health systems in transition Croatia
Composition of beneficiaries
Changes in the composition of beneficiaries are expected to have a significant impact on the financial flows of the health insurance system in the coming years. Whereas the percentage of the active workforce contributing to the HZZO has remained stable at around one third of all the beneficiaries, the proportion of beneficiaries falling under the categories of “unemployed” and “pensioner” has been increasing over the last few years (see Fig. 3.�). Since health care costs for these two groups are covered by the State and pensioners are likely to be among the highest users of health services, the changes in the profile of the HZZO beneficiaries is likely to lead to higher spending and lower revenue.
Contributions and revenues
The HZZO revenue structure has been heavily dependent on the salary contributions of the �.4 million insured employees and employers, whose combined contributions accounted for 80% of the HZZO revenue in 2002.
Box 3.1 System of Health Accounts and definition of health expenditure
According to the System of Health Accounts’ (SHA) guidelines established by the Organisation for Economic Co-operation and Development (OECD), the definition of “core health care functions” excludes cash transfers, such as sick and maternity leave compensation and related allowances. Therefore, although sick and maternity leave compensation and allowances are administered by the HZZO, these categories of expenses are excluded from the total health expenditure in order to maintain international comparability. Other reports on Croatian health expenditure usually include HZZO cash transfers, and this may explain the differences in the reported figures.
Fig. 3.1 Beneficiary composition, 1995 and 2002
Source: World Bank, 2004.
34%
9%
24%
33%34%
17% 3%
46% Actively employed and active farmers
Pensioners
Unemployed
Others including dependants
1995 2002
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The payroll contributions have largely subsidized health care coverage for the remaining 2.8 million insured people, with central budget transfers covering the deficits. This financing structure has been part of the legacy of the �993 health reform, when the payroll tax contribution rate had been increased initially to �8% in order to cover the severe financial deficits facing the health system in the post-war period. In 2000, the payroll tax for health insurance was lowered to �6% as part of the Government’s fiscal policy to reduce the tax burden on the labour force. This was further reduced to �5% in 2003, along with an added contribution of 0.5% for occupational safety and workers’ compensation. As shown in Table 3.6, Croatia’s payroll contribution rate for health insurance remains among the highest in the region.
Although Croatia nominally operates a social health insurance system, the total amount of funds allocated for health care is annually determined by the state budget and collected through the State Treasury. The HZZO receives funds for social health insurance from the state budget, as was previously explained, originating from two main sources: salary contributions for compulsory health insurance and funds collected by general taxation. Therefore, the Croatian funding system displays characteristics specific to both Bismarckian and Beveridge-like models.
Citizens’ views on social health insurance: pre-2002
In a survey conducted in �999 and 2000 at the Andrija Stampar School of Public Health at the Zagreb University School of Medicine, 500 randomly selected adults from all regions of Croatia aged 40 and over were asked about their attitudes towards health insurance and its reforms in Croatia as well as towards private payments for health care services (Mastilica and Babic-Bosanac, 2002). The survey included questions on social health insurance, private payments for health care and background information.
Most of the citizens interviewed (83.2%) expressed the opinion that everybody should have access to health care services, irrespective of health insurance contributions. However, 3�.2% agreed that the utilization of services should depend on the payment of contributions. Of the respondents, 39.�% believed that the money they contributed to health insurance corresponded to the health care services they received and 60.�% agreed that the insurance rate should increase proportionately to income. When asked about reforms, more than half of those surveyed (53.4%) thought that the (pre-2002) health insurance covered fewer benefits than �0 years earlier, whereas more than a third believed that the changes offered more choice (36.9%) but less equity (37.7 %) and 46% disagreed with the introduction of a basic package of health care benefits and
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Health systems in transition Croatia
supplementary insurance. More than half of respondents thought that they had already been paying too much for health care out of their own pockets.
The survey reflects the concerns of the Croatian public with regard to the discussions that had started at the time on insurance reforms. This was prior to the change in the health insurance legislation. Participants in the survey mostly supported the principle of universal health care services provided by the Government. Respondents did not agree with the rationing of benefits and the implementation of market mechanisms in the Croatian social health insurance system.
Table 3.6 Comparison of health insurance contributions in selected central European countries
Payroll tax rate for health Country, year introduced
Salaried (employer; employee)
Self-employed Non-employed
Croatia, 1993 18% (18%; 0%) 18% of declared income
18% of gross benefits plus central budget transfer
Croatia, 2000 16% (7%; 9%) 18% of a set fixed amount which depends on formal qualificationa
Central budget transfer
Croatia, 2003 15% (15%; 0%) (0.5% occupational safety)
18% of a set fixed amount which depends on formal qualificationa
Central budget transfer
Czech Republic, 1993 13.5% (9%; 4.5%) 13.5% of declared income
Central budget transfer, equal to 13.5% of 80% of statutory minimum wage
Estonia, 1992 13% (13%; 0%) 13% of declared income
Central budget transfer
Hungary, 1990 14% (11%; 3%) plus hypothecated tax of US$ 170 per employee
14% of declared income
Central budget transfer
Slovakia, 1994 13.7% (10%; 3.7%) 13.7% of declared income
Central budget transfer, equal to 73% of statutory minimum wage
Sources: Preker et al., 2002; World Bank, 2004.
Note: a The base rate is set at HRK 2318 (US$ 346), which is multiplied by coefficients (the total of nine levels of qualifications) ranging from 1 (non-skilled workers) to 2.8 (doctoral degree holders).
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CroatiaHealth systems in transition
Health Insurance Law 2002
The Government’s new Health Insurance Law, finalized in October 200� and approved in January 2002, aimed to improve the financial sustainability of the system by reducing the extent of coverage for basic services, reorganizing the co-payment system, stimulating the purchase of a voluntary “Supplemental Health Insurance” plan2 and redefining the contributions from the central and local government budgets. Under the new Law, the complementary insurance has been introduced to allow policy-holders to purchase policies that cover the new co-payment rates, thereby re-establishing the full level of coverage. At the same time, new restrictions have been imposed on the private sector. The new Law enacted some reforms, as shown below.
A new co-payment “price schedule” for selected services in the current benefits package, with higher rates for hospital and specialist services, diagnostic tests and pharmaceuticals. Although the major categories of exemptions remain, the categories of beneficiaries exempt from co- payments have been reduced to some extent compared to previous years (see Table 3.7).
Compulsory basic insurance coverage is exclusively provided by the HZZO, thus removing the “opt-out” clause, which had permitted those with income above a certain level to purchase substitutive private insurance in place of the HZZO basic plan. Implicitly, there was an expectation that the complementary insurance would act as a new tax revenue source for the HZZO (Langenbrunner, 2002).
The option for consumers to purchase complementary insurance policies on a voluntary basis, covering co-payments and restoring the full coverage of the basic health services. From 2002 to 2004, complementary insurance was exclusively offered by the HZZO. The community-rated premium is set at HRK 50 (retired) and HRK 80 (working age) (US$ 7.50–��.90 in 2003 US$) per month, which can be paid at individual or employer level. As an added incentive, a tax refund equivalent to the amount of the cumulative premium for one year is given to any individual or employer that purchases complementary insurance.3
•
•
•
2 The Croatian use of the term “Supplemental Health Insurance” under the Health Insurance Law 2002 should not be confused with the technical definition of the different categories of voluntary health insurance used in the EU context. Under these definitions, the Croatian “Supplemental Health Insurance” plan would be categorized as “complementary voluntary health insurance” (see Table 3.�). 3 Personal Income Tax Law (Official Gazette, �27/00) allows for premiums for additional health insurance (including premiums for life and voluntary pension insurance) to be tax-deductible expenses from July �, 200�. The rebate is open-ended and can be renewed each year.
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A clarification of central and local governments’ responsibilities for providing subsidies to vulnerable categories of the population, which were until 2002 mainly subsidized from payroll contributions.
The administration of a workers’ compensation fund for occupational safety under the HZZO.
The new Law represented an important step in rationalizing health system financing, but it also raised a number of new issues. The effectiveness of the new co-payment system in mitigating excessive utilization was undermined by the broad exemptions as well as the effect of the “Supplemental Health Insurance” plan, and as a voluntary plan, “Supplemental Health Insurance” was open to adverse selection problems, i.e. the plan was more likely to be purchased by high- end users, such as pensioners, which was further exacerbated by the discount policy for the pensioners (who were given a 50% discount on “Supplemental Health Insurance” premiums to encourage their participation).
The categories of the population exempt from paying contributions prior to the 2002 Health Insurance Law were children under �8 years of age, pensioners, pregnant women and those receiving maternity benefits, farmers, unemployed people, those in households where the head of the household is over 65, and social assistance beneficiaries. These groups made up somewhere between �.7 million and 2.0 million of a total population of approximately 4.5 million (38–44%). Until the 2002 legislation, the HZZO covered insurance contributions for these groups.
In terms of real uptake of complementary insurance, in 2002 approximately 50% of the “Supplemental Health Insurance” was being purchased by pensioners, who are considered high-end users of health care services. In the first year of implementation, revenue exceeded expenditure, but as the market matures it is likely that the utilization rates and expenditure will eventually overtake revenues.
Although data for 2004 and 2005 are not publicly available, government officials have indicated that in those years the complementary insurance scheme has incurred financial deficits and is no longer financially sustainable. Several options for further reforms are being debated at the time of writing, including abolishing complementary insurance completely, as was the case in neighbouring Slovenia, and allowing private insurers to enter the market and compete for customers on the basis of risk-rated complementary insurance plans.
•
•
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Amendments to the Health Insurance Law of 2005
The amendments to the Health Insurance Law of � October 2005 have further increased the co-payments schedule from 2002 by introducing “administrative fees” into the system of finance. All patients, with the exception of people under �8 and the disabled (with invalidity over 80%), are required to pay deductibles of HRK 5 or HRK �0 (US$ 0.83 or US$ �.66)4 (charged by their respective GP) for obtaining certain products and services, such as prescriptions or referrals to specialists. If a patient bypasses the gatekeeping system by seeking care directly from a hospital emergency ward without prior consultation with his GP, then specialist consultations in emergency departments not judged to be of an emergency nature are also subject to an administrative fee of HRK �0 (US$ �.66). The maximum amount of “administrative fees” that can be charged to a patient is HRK 30 (US$ 4.96) per month. Further referrals, prescriptions, etc. are free of charge.
Other amendments to the 2002 Health Insurance Law introduced in October 2005 include cutbacks in the HZZO’s financial participation in patients’ transportation and funeral costs.
According to the Croatian Minister of Health, Dr. Neven Ljubicic, amendments to the Health Insurance Law were necessary as the public health care system faced a serious lack of funds that threatened to disable it from providing a high-quality level of services (Cafuk, 2006).
Allowances other than health care
Croatia continues to provide one of the most generous sick leave compensation packages by international standards. Since the State takes on almost the entire risk of added labour costs due to illness or maternity, there is little incentive on the part of the employers and employees to be judicious in the use of sickness benefits. As a result, there are indications that the current system is subject to abuse, often as a result of collusion between employer and employee, who may use the sick benefit for other purposes, e.g. in lieu of unemployment benefits. Under the 2002 Health Insurance Law, some modest reductions in the level of compensation were introduced (see Table 3.7), but the benefits remain essentially unchanged.
Since policy formulation and analysis of sick and maternity benefits are more appropriately considered as part of employment policies rather than of health
4 All figures in this paragraph are in 2004 US$ according to the average 2004 exchange rate as reported by the Croatian National Bank.
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