VZP, the largest Czech insurer with some 6.2 million policy holders, had previously said it expected to balance its budget this year. Financial director Jan Halama told the public radio station that the insurer has large debts to health care facilities, and payments to doctors could be delayed as a result.
The insurer has been trying to cut its expenses for example by cancelling coverage for dental fillings and medications that costs K? 50 or less and was given a financial injection as part of a wider health care reform last year, but Hamala said it will not be enough to swing VZP to profitability.
"In the second half of the year, if they [politicians] fail to do something about the structure of health care providers, or if they fail to change redistribution levels, the deficit will deepen and at the end of the year could be about Kc 3 billion," he told Radiozurnal.
Among its policy holders VZP has a high proportion of elderly and chronically ill patients who cost the insurer far more than they pay in premiums.
VZP's budget for 2011 counted on spending of approximately Kc 137.3 billion. Typically, hospitals and general practitioners rely on the insurer for roughly 60 percent of their income; late payments will therefore affect a large percentage of medical professionals.
Hamala acknowledged that VZP has no financial reserves but said taking out a loan was not the solution to its long-term problems. Its economic situation wasn't helped by the necessity to purchase a 46 percent stake of shares in the scandal-hit company IZIP that is tasked with paving the way for a national database of electronic medical records.
VZP took the stake to allow it to halt the Kc 1.8 billion project, which was to provide every insured Czech with a medical card including all their health records and treatments. Ten years into the project, it appears no nearer to living up to these goals and hopes that it would streamline the health system and eventually save billions.
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CZECH REPUBLIC: VZP may end 2012 in Kc 3 bln loss
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