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Healthcare reforms precede EU accession in Central & Eastern Europe
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by Harinderjit Rai 13 the future of Healthcare

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.

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