WPIX Development of Scenarios for Health Expenditure in the Accession Economies,

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WPIX Development of Scenarios for Health
Expenditure in the Accession Economies,

• Stanislawa Golinowska, Ewa Kocot, Agnieszka Sowa
• based on country reports of
• Vladimir Kvetan, Viliam Páleník, Martin Mlýnek,
  Marek Radvanský
• Andras Gabos, Robert Gal,
• Rositsa Rangelova, Grigor Sariiski
• Stanislawa Golinowska, Ewa Kocot, Agnieszka Sowa

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Presentation plan

• Objective of the work package IX
• Model specific
• Health insurance system development in analysed
  countries
• Variables, type of data and sources
• Assumptions of variables development
• Modelling results
• Conclusion and policy recommendations

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Objective of the workpackage IX

• To prepare expenditures and revenues projections
  of the public health budget in Bulgaria, Estonia,
  Hungary, Poland and Slovakia according to the
  methodology of ILO social budget model

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Specific features of the applied model

• Taken into account external factors of the health
  system demographic, labour market development,
  economic development
• Comprehensive health budget model contains
  revenues and expenditures side
• Concentrate on insurance system balance and
  financial sustainability of the health care
  sector
• Based on national demographic, labour market and
  macroeconomic projections
• Based on national pattern of health service
  utilisation
• Results are policy oriented

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Health insurance funding system
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• Structure of health care funding

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Modules and variables of the model

• 1. Demography population size and structure,
  TFR and LE
• 2. Labour market supply module labour market
  participation rates, employment and
  unemployment,
• 3. Macroeconomic module real GDP growth, labour
  productivity growth, wages development
• 4. Health sector aggregate expenditures and its
  structure, health services utilization

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Data sources

• National statistics populations development and
  prognosis, employment statistics, macroeconomic
  results development
• Surveys of statistical offices LFS, health
  utilisation, NHA
• Data from social and health insurance offices
  health revenues and expenditures, health service
  utilisation
• Other sources National Banks

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Assumptions

• Demography - based on national prognosis
  increase TFR and LE, nevertheless population
  shrinking, strong changes in population age
  composition
• Labour market development increase of employment
  rate with the line of Lisbon Strategy
• Macroeconomic growth and labour productivity
  follow national employment strategy and
  convergence programmes
• Health services utilization J-form curve

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General assumptions

• No policy changes in the health sector
• Epidemiological development with the line of LE
  assumptions
• Income elasticity 1,0 (in the 90. lower than
  1,0)

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Population shrinking
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Age structure - no more demographic pyramid 2005
Christmas tree
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Age structure - no more pyramid form 2050
mushroom form
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Result of demographic development doubeling of
the old age dependency ratio
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Macreconomic assumption (1) GDP
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Labour market development assumption employment
strategy

• Low level of ER indicator at the start point 50
  -55
• Improvement in the first period of prognosis
  (2015 Bulgaria 2020 Hungary 2025 Slovakia)
• Lisbon target 70 of ER will be achieved 2030
  Poland and Slovakia

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Utilisation pattern by age Hungary
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Utilisation pattern expenditures according age
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Utilisation pattern - general

• In NMS growing spending tendency in younger age
  than in the EU 15 (r.40 and 50)
• Line of J-curve more flat

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Modeling results

• Revenues of the health budget
• Expenditures on health care services
• Deficit in the health sector budget

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Revenues as of GDP

• Different tendencies of relative revenue growth
  over the time
• Increase revenues during the whole projected
  period in Estonia and with moderate dynamic in
  Poland
• Increase revenues in limited time Bulgaria up to
  2030 and Slovakia up to 2010
• Drop of revenues in Hungary except the period of
  2015-2025

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Public health expenditures growth relate to the
year 2005 (2005 100)
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Public health expenditures as of GDP

• Higher start point weaker dynamic
• In the end of the projected period 7 of GDP will
  be achieved, (France and Scandinavia countries
  achieve such indicator at present)

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Death related costs moderate expenditure side
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Results public health care budget deficit as
share of GDP
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Results public health care budget deficit as
share of expenditures
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Projected deficit in Hungary and Poland with
death related costs modification as of GDP
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Comments

• Dynamic growth in Slovakia and Hungary (very
  high) already from the end of this decade
• Different tendency in Bulgaria decrease up to
  2020 and later the same tendency increase
• Poland moderate and stabile increases t
• death related costs decreasing to 0,5 of GDP

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Sensitivity analysis moderate effect

• Revenues side
• Growth of wages ()
• Higher employment rate ()

• Expenditures side
• Death- related costs (-)
• Higher longevity ()

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General tendencies

• Systematic growth of HB deficit (Slovakia until
  60 of expenditure and Hungary about 50)
• The growth of deficit is caused by trends
  influencing both expenditure and revenue side.
  Very limited increase of the revenues, high
  dynamic of expenditures growth and as a
  consequence systematic growth of deficit
• Sustainability of the health care system
  financing strong depends from the economy
  development growth, labour market participation
  and wages
• Expenditure side as strong depended from the
  health care services utilization and their costs
  is conditional on effectiveness of the health
  care sector functioning.

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Needed contribution to cover deficit
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Policy recommendations
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Common policy recommendations

• Base for revenue increase dynamic economic
  growth with employment strategy and wages
  improvement (with line of productivity growth),
  priority setting for health in income
  distribution policy contribution compliance
• Expenditure side more effectiveness in the
  health care sector, clever health care reforms
  capacity building, administrative efficiency
• Comprehensive health policy all social insurance
  sectors, revenues and expenditure side, macro
  governance and micro efficiency, public health
  (healthy aging) and curative health care

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Future - needed researches

• Health status of elderly hypothesis extensive
  longevity accompanies poorer health status gt
  health care costs increase
• Migration impact on health expenditures
  hypothesis temporary labour emigration with come
  back in later age gt health and LTC costs increase