Health system review CZECH REPUBLIC

(Health Systems in Transition", Vol. 11 No.1 2009, European Observatory on health Systems and Policies, ISSN 1817-6127)

Executive summary

The Czech Republic is a landlocked country situated in central Europe. It covers an area of approximately 78 867 km2 and has a population of 10.33 million, the vast majority of whom are ethnic Czechs. The number of inhabitants decreased between 1994 and 2002, but has risen markedly since 2004. Economically, the country performed well after the Velvet Revolution in 1989 and has one of the most developed industrialized economies among the new European Union (EU) Member States. The Czech Republic is a parliamentary representative democracy and has been a member of the Organisation for Economic Co-operation and Development (OECD) since 1995, the North Atlantic Treaty Organization (NATO) since 1999 and the European Union (EU) since 2004. Life expectancy at birth is increasing, having reached 73.82 years for men and 80.30 years for women in 2007, which is well above the average for the new EU Member States. The rate of infant mortality in 2007 was among the lowest in the world. That same year, diseases of the circulatory system were the most frequent causes of death, followed by malignant neoplasms, external causes and respiratory disease.

Organization and regulativ

The Czech Republic has a system of social health insurance (SHI) based on compulsory membership in a health insurance fund, of which there were 10 as of early 2009. The funds are quasi-public, self-governing bodies that act as payers and purchasers of care. The Ministry of Health's chief responsibilities include setting the health care policy agenda, supervising the health systém and preparing health legislation. The Ministry also administers certain health care institutions and bodies, such as the public health network and the State Institute for Drug Control (SÚKL). The regional authorities and the health insurance funds play an important role in ensuring the accessibility of health care, the former by registering health care providers, the latter by contracting them. Eligible residents may freely choose their health insurance fund and health care providers. The health insurance funds must accept all applicants who have a legal basis for entitlement; risk selection is not permitted. SHI contributions are obligatory and based on wage or income; they are paid by employers, employees and self-employed individuals, among others. Patient empowerment has become increasingly important since 2005 and has been supported by a variety of initiatives.


Total health expenditure in the Czech Republic has remained relatively low compared to western Europe, amounting to 6.7% of gross domestic product (GDP) in 2007. The majority of expenditure is through the SHI system, which is fi nanced through compulsory, wage-based SHI contributions and through state SHI contributions on behalf of certain groups of economically inactive people. Health expenditure from public sources as a share of total health expenditure is among the highest in the World Health Organization (WHO) European Region. Population coverage is virtually universal, and the range and depth of benefi ts available to insured individuals are unusually broad. Although health expenditure from private sources is low compared to other European countries, amounting to 14.2% of total health expenditure in 2007, it is likely to rise due to a trend towards greater cost sharing. Private sources of expenditure are mainly used to cover the costs of over-the-counter pharmaceuticals, some dental procedures, co-payments on medical aids and certain prescription pharmaceuticals, and user fees for doctor visits and a number of other health services. The health insurance funds serve as the main purchasers of health care services, and their organizational relationship to the various providers is based on long-term contracts. Hospitals have been paid since 2007 using a combination of diagnosis-related groups (DRGs), individual contracts and global budgets. Since 2009, hospital outpatient care has been reimbursed using a capped feefor- service scheme. General practitioners (GPs) in private practice are paid using a combination of capitation and a system of fee-for-service payments; the latter is applied primarily for preventive care. Non-hospital ambulatory care specialists are also paid using a capped fee-for-service scheme. Importantly, SHI contributions are redistributed among the funds according to a risk-adjustment scheme based on age and gender.

Physical and human resources

During the 1990s changes made to the structure of inpatient facilities in the Czech Republic were driven primarily by an excessive number of beds in acute care and an insuffi cient number of beds in long-term care. Although this led to a decline in the number of acute beds, their proportion was still among the highest in the WHO European Region in 2006. In 2008 there were 192 acute care hospitals with 63 622 beds and 154 other inpatient facilities with 22 191 beds. In 2006, inpatient stays averaged eight days in acute care hospitals, which was well above the EU15 average. Not all Czech health care facilities have been able to keep pace with advances in medicine, and some psychiatric, long-term care and nursing facilities are outdated and in need of repair. The condition of most acute care hospitals, however, is comparable to that in other European countries. The use of information and communications technology (ICT) is generally underdeveloped in the Czech Republic, and an infrastructure for using health technology assessment (HTA) of treatments and procedures is still lacking. By European standards, the number of physicians in the Czech Republic is high, with 3.6 physicians per 1000 population in 2007. The current age structure of primary care physicians represents a potential human resources problem in the near future. The nurse-to-population ratio is above the averages for the EU15 and the new EU Member States. The number of dentists per population is slightly above the EU27 average. In 2006 the pharmacist-to-population ratio was high compared to other central and south-eastern European countries, but low compared to many countries in western Europe.

Provision of services

The Czech Republic has an extensive public health network responsible for a range of services, including epidemiological surveillance, immunization logistics, quality analyses for consumer and industrial products, and monitoring the impact of environmental factors on health status. Its main actors are the National Institute of Public Health, the Regional Public Health Authorities, and the Regional Institutes of Public Health. Regulatory authority for primary care, which includes GPs, paediatricians, gynaecologists, dentists and pharmacists, is divided among the State, the regions, and the health insurance funds. Approximately 95% of primary care services are provided by physicians working in private practice, usually as sole practitioners. Patients register with a primary care physician of their choice, but can switch to a new one every three months without restriction. Primary care physicians do not play a true gatekeeping role; patients are free to obtain care directly from a specialist and do so frequently. Secondary care services in the Czech Republic are offered mainly by private practice specialists, health centres, polyclinics, hospitals and specialized inpatient facilities. After a variety of reforms in the 1990s, hospitals that formerly belonged to the State are now owned and managed by a range of actors, including government ministries, regions, private entities and churches. Almost all pharmacies in the Czech Republic are run as priváte enterprises, and at the time of writing there is a trend towards the establishment of pharmacy chains, especially in urban areas. The SÚKL is responsible for pricing and reimbursement decisions related to registered pharmaceuticals. Pharmaceuticals are assessed based on thein effi cacy, safety, quality and cost-effectiveness. Other features of the regulátory framework are international price comparisons for setting maximum prices and a reference pricing system to establish reimbursement limits for pharmaceuticals. Furthermore, in 2006 a degressive mark-up system was introduced, petting lower mark-ups on higher ex factory prices. The systems of long-term health care and long-term social care in the Czech Republic have traditionally been separate in terms of organization and funding, which has led to frequent complications, especially in the reimbursement of services. The 2006 Act on Social Services aims to improve the coordination between the two systems by providing individuals with a fl exible care allowance, allowing cross-funding between the two systems and requiring that providers of long-term care fulfi l certain quality criteria before they may receive funding.

Principal reforms

Many of the recent reforms to the Czech health system have attempted to address the chronic fi nancial instability that has marked the system since its inception in the early 1990s. Other recent reforms have focused on the isme of hospital ownership and management structures, or on improving purchaser- provider relationships, compliance with EU law and coordination between the systems of health and social care. The key challenge to health reform in the coming decades will be to keep high-quality care accessible to all inhabitants of the Czech Republic, while taking into account economic development, demographic ageing and the capacity of the SHI system. Future reforms will focus on codifying patient rights, clarifying the purchaser-provider relationship and refi ning the SHI system. As of 2009 the system for defi ning and rationing benefi ts is fragmented, ad hoc and unwieldy. One of the most important pieces of proposed legislation would provide a more explicit definition of SHI benefi ts and redesignate them as entitlements, thus increasing transparency and strengthening the legal rights of all relevant actors to enforce them.

Assessment of the health system

The Czech health system is characterized by relatively low total health care expenditure as a share of GDP compared to western Europe; low out-ofpocket payments distributed quite evenly across household income deciles; plentiful human resources, albeit with some signifi cant regional disparities; and good results for a number of important health indicators. The population enjoys virtually universal coverage and a broad range of benefi ts, and some important health indicators are better than the EU averages (such as mortality due to respiratory disease) or even among the best in the word (in the case of infant mortality, for example). On the other hand, the standardized death rates for diseases of the circulatory system and malignant neoplasms are well above the EU27 average. The same applies to a range of health care utilization rates, such as outpatient contacts and average length of stay in acute care hospitals. In short, there is substantial potential in the Czech Republic for effi ciency gains and improved health outcomes. This has been recognized by the Czech Government, which has attempted to reduce inappropriate demand by increasing cost sparing and to improve the quality of specialized care by identifying high-performing health care facilities and allowing for special contractual arrangements between them and the health insurance funds.

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