Economic Results of Health Insurance Companies

Commentary

In Q4 2005 the number of active units operating in the area of health insurance was the same as in the corresponding quarter of 2004-there were a total of nine health insurance companies in the CR. In total there were 7 167 employees (FTE), which was 0.7% up on Q4 2004 (7 115 employees). The average monthly wage (calculated from wages free of other personnel expenses and from the number of the employed persons above) increased from CZK 27 159 in Q4 2004 to CZK 28 580 in Q4 2005 (+5.2% year-on-year). In Q4 2005 the health insurance companies acquired intangible and tangible fixed assets (incl. land) worth CZK 144.5 million and CZK 215.4 million, respectively. Premiums written for Q4 2005 (excl. those paid by the state) reached CZK 34.5 billion and decreased approximately by CZK 0.5 billion (-1.3%) year-on-year. This drop was contributed to by the decrease of premiums written for self-employed persons, from CZK 3.1 billion in Q4 2004 to CZK 2.4 billion in Q4 2005 (-23.3%). This decrease was affected by the fall in the number of insured self-employed persons by approximately 39 thousand persons.

Premiums written for Q1-Q4 2005 (excl. those paid by the state) make up a substantial part of total revenues of health insurance companies and reached in the observed period CZK 129.8 billion, rising by approximately 6.3 billion (+5.1%) year-on-year. It should be also noted that the premiums written measured on accrual basis are not actual revenues of health insurance companies as these are lower by premiums not paid. The actual revenues of the health insurance companies-collections of premiums incl. those for persons paid by the state - reached CZK 163.6 billion in Q1-Q4 2005 which was 5.6% up on the same period in 2004 (CZK 154.9 billion) (source: the Ministry of Health of the CR; from the results of the first to twelfth redistribution of general health insurance premiums in 2005 and 2004). Since both observed calendar years saw a change in the frequency of payments by the state for its insurants (returnable financial assistance, “advanced payment”, from the state budget within the meaning of Article 12(2) of Act No. 592/1992 Coll. As amended, which was always paid back in the given calendar year) and also in both years the system started receiving revenues from outstanding premiums from the Czech Consolidation Agency (Česká konsolidační agentura), the year-on-year revenue comparability was not affected.
In 2004 revenues from outstanding premiums reached CZK 1.5 billion, in 2005 it was CZK 1.8 billion. Without the provision of these outstanding sources, revenues from the collection of premiums including the payment by the state would have risen by 5.5% year-on-year.

Of the total costs of health insurance companies in Q1-Q4 2005 (costs and expenses established by expenditure approach from respective funds of health insurance companies), 97.3% accounted for health care costs whose volume increased by 5.2% compared to the same period in 2004 (see sign No. 3). A key proportion in health care costs make up institutional care costs (47%), which had one of the highest increases (+6.5%) when compared to the same period in 2004. Another increase (+7.1%) when compared with the same period in 2004 was in expenses on out-patient services of specialists.

The balance sum of the health insurance companies (the sum of assets or liabilities) reached CZK 54.8 billion at the close of 2005 and compared to the end of 2004 it decreased by CZK 0.7 billion. The purchase price of intangible and tangible fixed assets (depreciable) – net assets of health insurance companies compared to the end of 2004 increased by CZK 436 billion.