Maintaining
a balance between healthcare costs and income is the
biggest challenge faced by the markets reviewed in the IMS
Market Prognosis Central & Eastern Europe report.
In line with government efforts to curb rising healthcare
debts/costs within the region, the proportion of gross
domestic product (GDP) allocated to healthcare spending
has remained either static or has fallen in the last
one-two years.
This trend is likely to continue in most CEE countries
in the near to medium term, although Hungary is optimistic
that healthcare expenditure will rise to 7% of GDP, despite
the fact that only 25% of its population pays national
health insurance. Slovenia is the only country in the region
to currently allocate a similar share (6.9%) of GDP to
healthcare spending, although the Health Insurance Institute
of Slovenia (HIIS) has accrued its first ever debts over
the last two years.
Most
health insurance companies have accumulated debts, with
the
situation particularly poor in Turkey, where standard
payment terms to service/drug providers have stretched,
in some cases, to 210 days. Slovakia also faces a huge
debt crisis, with overdue payments by health insurance
companies estimated to be in the region of US$327 million.
Even Bulgaria’s comparatively new National Health Insurance
Fund (NHIF) has amassed debts, as spending on drug reimbursement
has exceeded income.
Most countries pinpoint pharmaceuticals as their main
healthcare expense. Bulgaria and Slovakia each spent 30%
of their healthcare budget on drugs in 2002, with Hungary
allocating 26%. The proportion is lowest in Slovenia (16-18%),
although its government is still striving to cut drug expenditure
through tightening prescribing controls. Another reform
target, hospitals, also represent a major drain on government
healthcare spending, as in Slovenia, where they accounted
for 40% of the budget in 2002.
Resolving the debt situation
Healthcare
cost-containment will remain a priority for all markets
in the next five years as governments seek to stem the
spiralling debt situation, exacerbated by an ageing population,
and prepare for EU
membership.
Focus will be mainly on the largely unreformed hospital
sector (see below) and pharmaceuticals, since each account
for a sizeable proportion of healthcare expenditure. Cost-containment
measures, most of which are closely interlinked, that feature
among the seven CEE markets, include:
- Prescribing controls
- Price controls
- Reimbursement restrictions
- Encouragement of generics
- Higher co-payments
- Increased salary deductions
- Drug procurement
A shift away from the treatment-dominated
culture apparent in most countries will occur in the
short to medium term. Preventative healthcare programmes
are already underway in Hungary, where breast cancer
screening is now available, and in Slovenia, where the
government organises preventative campaigns in the primary
and secondary sectors. Both the recently elected Turkish
and Slovakian governments have put forward proposals
to introduce preventative healthcare measures, with the
Bulgarian government acknowledging the need for a similar
shift in its healthcare culture.
Healthcare reforms
Slovakia could potentially be at the forefront of healthcare
reform, since new Health Minister Rudolf Zajac has put
forward proposals to revise all aspects of healthcare
provision, although critics doubt whether his ambitious
programme will be completed. Turkey’s new one party government
has also pledged to radically overhaul healthcare, although
so far it has made a slow start. The pace of progress in
the remaining countries varies between adequate (Slovenia),
to slow. Hungary, for example, has yet to substantiate
2002 plans for modernisation of its healthcare system,
while Poland persistently
delayed introduction of the National Health Fund.
The hospital sector will form
the major plank of government reform throughout the region
during the forecast period, since reform of the primary
care sector has so far taken precedence. In a progressive
country like Slovenia, emphasis will be on improving
hospital financing and management, whereas in most other
countries the focus will be on adapting a system inherited
from a previous era - during which market forces did
not dictate the number or size of hospitals – to meet
current needs. Rationalisation and restructuring will
be key, particularly if the debt crisis associated with
most hospitals is to be overcome.
EU accession will continue
to exert a huge influence on government policy throughout
Central & Eastern Europe in the short to medium term.
Five of the seven countries reviewed by the IMS Market
Prognosis Central & Eastern Europe report are scheduled
to become EU members in 2004.
This article was written
by Harinderjit Rai, a Project Manager for IMS Market
Prognosis. For more information on IMS' Forecasting
portfolio, please contact Cristina
Cucinotta or
call +44 207 393 5254.
For a perspective on actual
pharmaceutical sales and growth rates, IMS have launched IMS
EU Expansion Planning, which allows analysis at country,
sector, therapy class, product, molecule and form level.
This database will help companies in accession countries
plan for change and evaluate foreign influence in their
markets, as well as outline opportunities in other accessing
markets. It will also be of interest to R&D pharmaceutical
and generic companies in the rest of the world with Eastern
European business interests. Contact Laura
Darling or call +44 207 393 5356 for more information. |
