Health Insurance Companies: Economic Results

Brief analytical comments

In Q1 2007 the number of active units operating in the area of health insurance was the same as in the corresponding quarter of 2006, there were a total of nine health insurance companies in the CR. In Q1 2007 there were in total 6 974 employees (FTE), which was 1.5% less than in Q1 2006 (7 082 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 19 871 in Q1 2006 to CZK 21 499 in Q1 2007 (+8.2% year-on-year)

Premiums written (excl. those paid by the state) make up a substantial part of total revenues of health insurance companies. In Q1 2007 they amounted to CZK 35.8 billion, rising by 13.3% on Q1 2006. This increase was also contributed to by a rise in the minimum wage from CZK 7 570 to CZK 8 000 (Government Regulation No. 567/2006 Coll.) 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—stood at CZK 48.9 billion in Q1 2007 and were 5.7% up on Q1 2006 (CZK 46.3 billion) (source: the Ministry of Health of the CR; from the results of the first to third redistribution of general health insurance premiums in 2007 and 2006).
It should be stressed that the revenues of the health insurance companies in this period cannot be compared because Q1 2006 saw a change in the frequency of payments of 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.) amounting to CZK 3.0 billion. In Q1 2007 the “advanced payment” was not made and will not be made throughout the calendar year. Excl. “advanced payment” in Q1 2006 revenues from premiums incl. state payments for state insurants would increase by 13.0% year-on-year.

Of the total costs of health insurance companies in Q1 2007 (costs and expenses established by expenditure approach from respective funds of health insurance companies), 96.2% 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 increased by 4.8% year-on-year (see Table 3). Institutional care costs make up a key proportion in health care costs (50.4%), these had the increase compared to same period of 2006 (+7.4%).

In Q1 2007, the health insurance companies acquired intangible and tangible fixed assets (incl. land) worth CZK 19 million and CZK 35 million, respectively. The balance sum of the health insurance companies (the sum of assets or liabilities) reached CZK 66.4 billion at the close of Q1 2007, increasing by CZK 1.5 billion on the end of 2006. The acquisition value of intangible and tangible fixed assets (depreciated) – net in assets of the health insurance companies was CZK 48 million down on the end of 2006.