Economic Results of Health Insurance Companies
Commentary | Contents |
In Q3 2006 the number of active units operating in the area of health insurance was the same as in the corresponding quarter of 2005, there were a total of nine health insurance companies in the CR. In Q3 2006 there were in total 7 041 employees (FTE), which was 1.9% less than in Q3 2005 (7 177 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 20 591 in Q3 2005 to CZK 21 625 in Q3 2006 (+5.0% year-on-year).
Premiums written (excl. those paid by the state) make up a substantial part of total revenues of health insurance companies. In Q3 2006 they amounted to CZK 35.5 billion, rising by 8.1% (CZK 2.7 billion) on Q3 2005. This increase was also contributed to by a rise in the minimum wage from CZK 7 570 to CZK 7 955 (Government Regulation No. 513/2005 Sb.) because payments of health insurance premiums are derived in some cases from the level of minimum wage. 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 insurance companies—collections of premiums incl. those for persons paid by the state (onwards “state insurants”)—stood at CZK 135.3 billion in Q1- Q3 2006 and were 11.9% up on Q1- Q3 2005 (CZK 121.1 billion) 1), (source: the Ministry of Health of the CR; from the results of the first to ninth redistribution of general health insurance premiums in 2006 and 2005). The revenues of the health insurance companies in these periods cannot be compared because during 2006 there has been an exceptional increase of payments by the state for its insurants. As against the originally budgeted amount of CZK 513 per insurant, which was provided in January 2006, in February and March 2006 an amount of CZK 560 per insurant was paid by the state and since 1 April 2006 the payment for “state insurants” was increased to CZK 636 per one insurant as a result of the passage of Act No. 117/2006 Sb. At the same time, Q1- Q3 2005 and 2006 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 Sb. as amended), provided payments, however, differed markedly. While in 2005 general health insurance in Q1-Q2 2005 was provided with “advanced payment” in the amount of CZK 2.8 billion, in 2006 it concerns the amount of CZK 5.5 billion, in January 2006 in the amount of CZK 3.0 billion and in April 2006 the amount of CZK 2.5 billion. The first payment of the “advanced payment” was in 2005 realized in the Q3 of the given year in the amount of CZK 1.4 billion. Also in 2006, the first half of the payment of these financial means was realized in Q3 2006 in the following way –firstly, half of the second “advanced payment” was paid in August 2006 in the amount of CZK 1.3 billion and secondly, half of the first “advanced payment” was paid in September in the amount of CZK 1.5 billion, hence in total CZK 2.8 billion was paid in Q3 2006.
It follows that while in 2005 the “advanced payment” was realized in two payments, in 2006 the “advanced payment” is planed into four payments during the second half of the calendar year. Without the advanced payment in the compared periods of 2006 and 2005 the revenues from the collection of premiums also including the payment by the state for “state insurants” would have risen by 10.9% year-on-year. However, if we adjust also the influence of the exceptional increase of the payment by the state for “state insurants” as against the originally budgeted amount of CZK 513 per one insurant for 2006 and compare this data with the same period in 2005, the revenues from the collection of premiums also including the payment by the state for “state insurants” would have risen only by 6.8% in the compared periods.
Of the total costs of health insurance companies in Q3 2006 (costs and expenses established by expenditure approach from respective funds of health insurance companies), 95.8% accounted for health care costs paid from the basic health insurance fund and the prevention fund or possibly from the preventive care fund; these costs decreased only by 0.4% year-on-year (see Table 3). Institutional care costs make up a key proportion in health care costs (50.7%). The highest increase compared to same period of 2005 was in costs for out-patient care of physicians (+5.8%) and other out-patient specialists (+4.2%).
Similarly as in Q2 2006, in Q3 costs of prescribed medicines and medical devices given out on vouchers decreased by CZK 0.6 billion compared to Q3 2005. The drop of the business mark-up could have also contributed to this decrease because since January 2006 the trade margin of distributors and pharmacies was cut down from 32% to 29%.
In Q3 2006, the health insurance companies acquired intangible and tangible fixed assets (incl. land) worth CZK 38.2 million and CZK 57.6 million, respectively. The balance sum of the health insurance companies (the sum of assets or liabilities) reached CZK 60.5 billion at the close of Q3 2006, increasing by CZK 1.1 billion on the Q2 2006. The acquisition value of intangible and tangible fixed assets (depreciated) – net in assets of the health insurance companies was CZK 26,4 million down on the Q2 2006. Long-term and short-term payables and temporary accounts of liabilities reached by the end of Q3 2006 CZK 23.6 billion and compared to the beginning of the quarter of this year decreased by approximately CZK 5.6 billion.
1) The actual revenues of the insurance companies reached in Q3 2006 in total CZK 42.5 billion, which meant an increase of 9.7 % (calculations of the CZSO) compared to the same period in 2005. This increase was also contributed to by a rise in the assessment basis for those persons whose insurance is paid by the state (Act. No. 117/2006 Sb.).