REPUBLIC OF MONTENEGRO
GOVERNMENT OF THE REPUBLIC OF MONTENEGRO
MINISTRY OF HEALTH
2005-2007 FINANCIAL PLAN
OF MONTENEGRO HEALTH SYSTEM SUSTAINABILITY
Podgorica, September 2004
By the adoption of the Law on Serbia & Montenegro Indebtedness With the
International Development Association (Montenegro Health System
Improvement Project, Official Gazette of the Republic of Montenegro, No.
31/04 and the Law on Ratification of the Development Credit Agreement,
Official Gazette of the Republic of Montenegro, No. 16/04), a credit has
been approved as a support to the Montenegro Health System Improvement
Project. Requirements in respect to the effectiveness of the credit aimed at
improvement of health system in Montenegro have obliged the Government
of the Republic of Montenegro to adopt the Financial Plan of Sustainability
of Montenegro Health System for the Period 2004-2007, with the aim to
determine expenditures and revenues of the health service system from all
kinds of sources in conformity with the Healthcare Law, Health Insurance
Law, and Budget Law, as well as their projections within the specified
period, taking into account the achieved level of healthcare and high-risk
categories of population.
2
INTRODUCTORY PART
During the last decade of the 20th century, many European countries have
started with introducing changes to the health policy and health system.
Comprehensive reforms in the domain of health systems and healthcare in
the surrounding countries have been launched setting goals for improvement
of the overall health of the population and enhancement of healthcare, by
introducing changes to the healthcare organization, functioning and funding.
Montenegro, same as all other countries under transition, is encountered
with very similar problems. Processes of transition from the old system to a
new one in a modern society, lead also to the creation of varied problems
which are mutually interrelated and which make the accomplishment of
goals of the overall development rather difficult and complex.
Health system represents a sub-system of an overall social system the
structure, organization, goals and functioning of which is prescribed by the
political and economic structure of a state, its economic potential, health
condition of its population as a whole, health problems, tradition, culture and
other numerous factors. The health system overburdened by various
inherited problems and difficulties, requires a serious process of substantive
reforms to be performed in compliance with the possibilities of overall
economic development, targeted at improvement of the health of the
population and accomplishment of financial sustainability of the system. The
fact is that the real GDP growth can be the only framework which shall
support the rights to healthcare and within which health programs and
capacities shall be developed. Restrictions to public spending make the
reform in the health service sector extremely complex, as functioning of
healthcare and health security of the population must be provided, along
with overcoming the problems of financial instability and permanent
provision of stable sources of funding for the overall health system. Thus,
selection of priorities in the system of health service seems to be the best
solution for the management and improvement of the system efficiency. The
Healthcare Law identifies priority measures in the domain of healthcare,
whereas the Financial Plan is aimed at providing funding mechanisms to
support these priorities encompassing the protection of vulnerable categories
of the population, primary healthcare and public health.
Adoption of the present Financial Plan is targeted at recognizing the
scope of financial stability of the health system, along with preservation
3
and further enhancement of the achieved level of the health of the
population, taking into account healthcare of vulnerable categories.
1. HEALTHCARE SYSTEM
The system of healthcare represents an all-inclusive system which in
addition to strictly health-related activities also comprises regulatory
framework governing the domain of rights and obligations of the state and
its competent authorities - health insurance bodies. One of the primary
functions of the state is to provide for its citizens the right to healthcare.
Thus, within that domain, one of the crucial tasks is adoption of laws and
regulations that shall represent the basis for providing the rights to
healthcare, the scope of these rights, as well as providing funds for such
rights. The role of the state in the health system is also to ensure adequate
resources for functioning and delivery of healthcare.
Within this system, all citizens of Montenegro are entitled to healthcare and
they represent insured persons who, in addition to the right to healthcare,
also have rights from the domain of health insurance which comprise the
right to a compensation of salary during temporary inability for work and the
right to compensation of traveling expenses to another locality to obtain
healthcare.
Pursuant to the adopted Health Insurance Law, the system of health
insurance, same as in the previous period, is grounded on the principles of
mandatory insurance scheme and is designed on the principles of social
health insurance according to the Bismarck model.
The Republican Health Fund is provider of health insurance. It is on the
basis of the Law that all employees, pensioners, owners or founders of
enterprises, unemployed persons, farmers and others as members of the
families covered by the Law, are insured.
Pursuant to the new laws and regulations, the scope of rights to healthcare
and standards of these rights comprise health services at the primary,
secondary and tertiary level of healthcare, as well as drugs and medical
appliances.
4
Mandatory health insurance is funded from the contributions paid by
employers for their employees, Pension Fund for pensioners, Employment
Agency, self-employed persons, farmers, natural and legal persons.
1.1 Problems of the Health System
Throughout the previous period, the system of healthcare exhibited many
deficiencies and weaknesses due to its structure and the manner of
functioning which were reflected in the health condition of the population
and which, together with economic factors culminating in a lengthy
economic crisis, adversely affected the health of the population and caused
inefficiency of the health system itself, with obvious indications of the crisis
of funding. That crisis is reflected in the illiquidity of the Health Fund and a
high level of unsettled debts, as a result of a deficit from the previous
periods.
The former healthcare system in Montenegro was grounded on the principles
of social justice, equality and availability, ensuring the largest scope of
rights to the healthcare funded from public funds, with a minimum
participation of insured persons. Equality of beneficiaries of health services
in the healthcare system, availability of such services to all, were just
declarative principles set by the law, that brought to the creation of great
expectations of the citizens from the health system, with requirements for a
high-quality healthcare and higher standards of medical care and services,
causing thus the rise of expenses much above real possibilities of the system.
The gap between the rights to, i.e. requirements for healthcare and inability
to be provided and satisfied, have exerted a considerable pressure upon both
health institutions and the Health Fund. Inability to provide health protection
within the scope envisaged by the Law, has caused inequalities in provision
of healthcare for the population, both at regional and urban-rural level, as
well as differences in availability of healthcare and services according to the
social and economic status of the population. Nonexistence of clear
objectives and health system development strategies at the Republican level
have contributed to the domination of capacities and resources in the domain
of hospital care, i.e. an unbalance in the structure of resources and funds.
Problems which appear as a consequence of the above mentioned factors and
which have been crucial to opt for the introduction of reforms, are:
5
 increasing costs of healthcare as a result of the aging population,
increase of chronic diseases, requirements for higher-quality services,
economic situation and inadequate funds for healthcare,
 inability of providing funds for delivery of health services in the scope
envisaged by the Law,
 indicators of the worsening health of the population caused primarily
by inadequate quality of life, drop of the standard of living,
impoverishment,
 undeveloped economic relations in the domain of health system and
under-funding of the health service sector the workforce of which is
not adequately remunerated and thus with an extremely low
motivation to work,
 too large spending and obligations of the Health Fund,
 insufficiently regulated private health sector, without objective
parameters as of the effects of privatization,
 undeveloped information system to support the health system
management,
 inadequate planning and management of the health system.
1.2
Organization of the Republican Health System
The existing system of the health service sector is organized at three levels:
primary level, secondary level and tertiary level, with elements of
interweaving between these three levels. The Republic of Montenegro
appears as the founder of all health institutions which perform health service
as a public activity. Health institutions, pursuant to the Law, provide
healthcare, such as:
out-patient clinics (Dom zdravljas) for each
municipality, general hospitals for several municipalities, specialized
hospitals for specific diseases and the Clinical Center, Health Institute and
Public Pharmaceutical Institution / Montepharm, as institutions established
at the Republican level.
The network of public medical institutions now comprises 31 institutions
which provide the largest scope of healthcare for the population. The health
system also encompasses over 140 private practices (policlinics, dental
clinics and pharmacies) at the primary level.
As of 31 December 2003, the workforce of the public health service system
embraced 7251 persons employed on the full-time basis (permanent jobs).
Together with part-time employees (temporary jobs), the system of public
health system has today 8267 employees. Medical staff accounts for 74.46%,
6
and non-medical staff for 25.54% of the total number of employees. The
ratio between medical and non-medical staff is rather unsatisfactory, both
from the aspect of the existing standards and in comparison to other health
systems, what makes the measures of rationalization within the existing
health system indispensable.
On the basis of the existing workforce capacities of the health service system
in Montenegro, there is one employed physician per 520 inhabitants, and in
primary health care one physician per 1023 of the population. The number of
inhabitants per one dentist is 2263, and per one pharmacist in public
institutions 6570. There are 2696 beds in medical institutions, 4 beds per
1000 of the population. Comparing the present situation in Montenegro
regarding available resources to that of other surrounding countries, we can
say that Montenegro, along with restricted funds available for financing the
healthcare, disposes presently with sufficient healthcare capacities.
2. NEW LEGISLATION AND OBJECTIVES OF THE REFORM
By introducing new laws from the domain of healthcare and health
insurance, institutional foundations have been established for a modern and
efficient health system. The reform of the health system already under way
is targeted at:
 improvement of the health of the population and healthcare based on
the principals of primary healthcare,
 establishment of national priorities in healthcare of vulnerable
categories and improvement of the health condition of the population
in the most equitable manner,
 increasing the effectiveness of public health system by rational use of
available resources,
 improvement of the quality of services,
 improvement of the financial stability of the system,
 building up such a health policy that shall help improve the citizens’
awareness. of consequences their own decisions may have on their
health, as well as their responsibility for their own health,
 health system development, harmonized with the recent development
trends of the European health system,
 implementation of modern medicinal technologies.
7
The health system in Montenegro must be designed so as to maintain and
improve the health of the population of Montenegro as a whole through the
implementation of continued activities and measures with the objective to
prevent and reduce illnesses, to deliver higher standards of treatment,
rehabilitation and care. The health system must remain accessible to all
citizens of Montenegro on an equitable basis, enabling thus a full respect of
the principle of equality and solidarity.
Functions of the public health shall be given a special prominence, in
particular putting emphasis on the prevention of chronic, noninfectious
diseases such as cardiovascular diseases, smoking and consequences of
smoking, protection and promotion of the health of mothers with young
children, youth and elderly people.
The quality of health services shall be improved through the introduction of
a continued education and training of the health system staff and their
licensing, as well as accreditation of health institutions, and maintaining
clinical protocols.
In the primary health, each citizen shall be registered with its chosen
physician who shall be in charge of surveillance of his health condition and
needs, refer him to other higher levels of health care, and who shall be
motivated to render higher quality services though an improved pay-scale
system.
The reform activities are envisaged to embrace the institutional reform,
reform of general awareness of and attitude toward the health, as well as
reform of economic relations.
Restructuring of the health system towards primary healthcare which is the
most available and the least costly form of health protection, shall be
provided though the institution of the so-called ‘chosen doctor’, and Dom
zdravlja (Out-Patient Clinics), as the most optimal model for patients and
health staff. Strengthening of the primary care shall be enabled through the
system of additional training of physicians in the primary health care, system
of payment through capitation, as well as mechanisms of modern
management supported by solutions based on new information technology.
Rationalization of resources is also envisaged, together with increasing the
effectiveness at the second and third level, in conformity with the Master
Plan of health system development which shall be passed by the
8
Government of the Republic of Montenegro pursuant to the Law. Primary
healthcare reform and projected rationalization shall, within the specified
macroeconomic categories, provide conditions for financial sustainability of
the health service system. Financial stability shall rely on the selection of
priorities and accountability of individual actors for their implementation.
3. MACROECONOMIC FRAMEWORK AND INDICATORS
Forecast of public spending for 2005, 2006 and 2007 is based on the
estimated data relating to the development of basic macroeconomic
indicators. Starting estimates indicate that the level of GDP in 2005 shall
amount to EUR 1.580 million with an annual growth rate of 7.12%. For
2006, a projected growth rate is 6.08% with GDP of EUR 1.676 million,
whereas the growth of GDP envisaged for 2007 shall be at the level of 5%
and in the amount of EUR 1.759,8 million.
It is projected that the public spending earmarked for healthcare shall
increase the absolute amount of funds for these purposes along with a
relative decrease of its share in GDP, as exhibited in the following Tables:
Table 1
Year
2003
2004
2005
2006
2007
Nominal
Nominal
Real
Real GDP1
GDP
growth
growth
1.375,00 1.417,63
1.475,00 1.475,00
7,27
4,05
1.580,00 1.533,98
7,12
4,00
1.676,00 1.592,16
6,08
3,79
1.759,80 1.642,21
5,00
3,14
The real amounts of GDP are estimated taking into account the 2004 values,
as well as the real expenses for the health system. The data on the nominal
and real expenses for the health system are indicated in Table 2 below.
Table 2
Year
2003
2004
2005
2006
2007
1
% of health Health system
Health
Health system
% of real amounts
system share growth rate in system – real
(€ million)
share in real GDP
in GDP
%
amounts
97,60
7,10
100,62
7,10
105,16
7,13
7,74
105,16
7,13
112,28
7,11
6,78
109,01
7,11
115,50
6,89
2,86
109,72
6,89
117,95
6,70
2,12
110,07
6,70
All real amounts are stated according the the value from 2004 .
9
It is envisaged that funds earmarked for the primary healthcare increase its
relative share in GDP. Thus, the primary care is planned to increase its share
from 2.89% in 2004 to 2.92% in 2007 or by 0.03 index points. As regards
the secondary healthcare, it is envisaged that its share in GDP shall be
reduced from 2.35% in 2004 to 2.07% in 2007, and in the tertiary healthcare
from 0.55% in 2004 to 0.53% in 2007. It is also projected that a share of
other rights from the domain of healthcare shall be reduced from 0.57% in
2004 to 0.54% in 2007, rights from health insurance from 0.29% in 2004 to
0.27% in 2007, whereas the share of other expenditures shall be reduced
from 0.48% in 2004 to 0.38% in 2007, as exhibited in Table 3 below.
Table 3
Year
2003
2004
2005
2006
2007
Year
2003
2004
2005
2006
2007
Year
2003
2004
2005
2006
2007
Primary
healthcare
40,86
42,62
47,05
49,41
51,31
Primary
health care
42,13
42,62
45,68
46,94
47,88
Primary
healthcare
2,97
2,89
2,98
2,95
2,92
NOMINAL AMOUNTS IN € MILLION
Other rights Rights from
TOTAL
Tertiary
Other
Secondary
from
health
EXPENDITU
healthcare
expenditures
healthcare
healthcare
insurance
RES
31,13
7,29
7,80
3,99
6,53
97,60
34,62
8,10
8,40
4,34
7,08
105,16
34,96
8,75
8,94
4,37
8,22
112,28
35,50
9,09
9,11
4,52
7,87
115,50
36,50
9,40
9,44
4,68
6,62
117,95
REAL AMOUNTS IN € MILLION
Other rights Rights from
TOTAL
Tertiary
Other
Secondary
from
health
EXPENDITU
healthcare
expenditures
healthcare
healthcare
insurance
RES
32,10
7,51
8,04
4,11
6,73
100,62
34,62
8,10
8,40
4,34
7,08
105,16
33,94
8,49
8,68
4,24
7,98
109,01
33,72
8,64
8,65
4,29
7,47
109,72
34,06
8,77
8,81
4,37
6,18
110,07
% OF SHARE IN GDP
Other rights
Rights from
Other
TOTAL
Tertiary
Secondary
from
health
expenditure EXPENDITU
healthcare
healthcare
healthcare
insurance
s
RES
2,26
0,53
0,57
0,29
0,48
7,10
2,35
0,55
0,57
0,29
0,48
7,13
2,21
0,55
0,57
0,28
0,52
7,11
2,12
0,54
0,54
0,27
0,47
6,89
2,07
0,53
0,54
0,27
0,38
6,70
The nominal and real data on the health system expenditures by the
categories of insured persons, with a relative share in GDP, are presented in
Table 4 below.
10
Table 4
NOMINAL AMOUNTS IN € MILLION
Year
2003
2004
2005
2006
2007
Year
2003
2004
2005
2006
2007
Year
2003
2004
2005
2006
2007
Employees Pensioners
45,19
48,66
52,14
53,77
55,88
30,82
32,14
32,85
33,48
34,01
Employees Pensioners
3,287
3,299
3,300
3,209
3,175
Unemployed Refugees
29,89
2,65
11,33
32,14
2,82
12,30
33,84
2,98
12,93
35,25
3,15
13,27
36,45
3,27
13,52
REAL AMOUNTS IN € MILLION
Employees Pensioners
46,59
48,66
50,62
51,08
52,14
Farmers
2,174
2,179
2,142
2,103
2,071
Farmers
Unemploye
Refugees
d
2,74
11,68
2,82
12,30
2,89
12,55
2,99
12,61
3,05
12,62
% OF SHARE IN GDP
Farmers
0,193
0,191
0,188
0,188
0,186
0,84
0,91
0,91
0,92
0,93
0,87
0,91
0,89
0,87
0,87
Unemploye
Refugees
d
0,824
0,834
0,818
0,792
0,768
0,061
0,061
0,058
0,055
0,053
Other
Displaced
expenditure
persons
s
1,16
6,53
1,25
7,08
1,26
8,22
1,27
7,87
1,28
6,62
Other
Displaced
expenditur
persons
es
1,20
6,73
1,25
7,08
1,22
7,98
1,21
7,47
1,20
6,18
Other
Displaced
expenditur
persons
es
0,084
0,475
0,085
0,480
0,080
0,521
0,076
0,469
0,073
0,376
The nominal and real expenditures for the healthcare of employed persons,
pensioners and farmers grow at a faster pace than the expenditures
earmarked for the healthcare of the unemployed, refugees and displaced
persons.
A higher level of rise of expenditures for the employed, pensioners and
farmers, appears as a consequence of the fact that in the ensuing period a
growth of employment is expected, as well as increment in the number of
farmers (stimulating measures introduced by the Government in the domain
of agriculture), and the number of pensioners. On the other side, it is
expected that the number of refugees and displaced persons shall be reduced,
as well as the unemployment rate.
The basic indicators to be used for the surveillance of realization of the basic
reform objectives in the health system are exhibited in Tables 5, 6 and 7
below.
11
Table 5
DESCRIPTION
Number of inhabitants
Expenses for medicines and med. material
per inhabitant
Expenses for medicines per inhabitant
Expenses for medicines by prescription per
inhabitant
Number of physicians
Expenses of healthcare per physician
Number of physicians in primary healthcare
Expenses for medicines by prescription per
physician
Capital expenditures per inhabitant
2003
Nominal
Real
amount
amount
620.145,00
2004
Nominal
Real
amount
amount
621.145,00
2005
Nominal
Real
amount
amount
622.445,00
2006
Nominal
Real
amount
amount
623.645,00
2007
Nominal
Real
amount
amount
624.845,00
44,02
45,39
42,69
42,69
42,59
41,35
43,52
41,35
44,93
41,93
31,17
32,14
28,86
28,86
29,18
28,33
30,04
28,53
31,01
28,94
18,72
19,30
15,47
15,47
15,98
15,51
16,50
15,67
17,04
15,90
1.139,00
1.139,00
1.139,00
1.139,00
1.139,00
76.452,50 78.822,53 82.295,45 82.295,45 87.525,42 84.976,14 90.525,17 85.996,59 93.630,11 87.373,48
402,00
402,00
402,00
402,00
402,00
28.874,85 29.769,97 23.909,91 23.909,91 24.737,91 24.017,39 25.595,43 24.315,00 26.483,53 24.713,82
5.97
6.15
6.50
6.50
8.64
8.39
8.04
7.64
5.98
5.58
Table 6
DESCRIPTION
Expenses for healthcare per inhabitant
Expenses for primary healthcare per
inhabitant
Expenses for secondary healthcare per
inhabitant
Expenses for tertiary healthcare per
inhabitant
Total expenditures for healthcare per
inhabitant
Number of inhabitants
2003
Nominal
Real
amount
amount
2004
Nominal
Real
amount
amount
2005
Nominal
Real
amount
amount
2006
Nominal
Real
amount
amount
2007
Nominal
Real
amount
amount
140,42
144,77
150,91
150,91
160,16
155,50
165,33
157,06
170,67
159,27
65,89
67,93
68,61
68,61
75,59
73,38
79,23
75,26
82,12
76,63
50,21
51,76
55,74
55,74
56,16
54,53
56,92
54,07
58,41
54,51
11,75
12,11
13,04
13,04
14,05
13,64
14,58
13,85
15,04
14,04
157,38
162,26
169,29
169,29
176,03
170,90
181,62
172,53
187,39
174,87
620.145,00
621.145,00
622.445,00
623.645,00
624.845,00
Table 7
DESCRIPTION
2003
Nominal
Real
amount
amount
2004
Nominal
Real
amount
amount
2005
Nominal
Real
amount
amount
2006
Nominal
Real
amount
amount
2007
Nominal
Real
amount
amount
Expenses per inhabitant
154,82
159,62
164,23
164,23
173,72
168,66
179,12
170,16
184,68
172,34
Employees
156,38
161,22
166,08
166,08
176,18
171,05
179,91
170,91
185,10
172,73
Pensioners
247,03
254,69
259,21
259,21
271,54
263,63
281,41
267,34
289,57
270,22
Farmers
156,05
160,89
148,28
148,28
155,19
150,67
162,27
154,15
166,98
155,82
Unemployed
87,14
89,85
94,62
94,62
100,48
97,55
104,17
98,96
107,19
100,03
Refugees
64,61
66,62
69,59
69,59
71,61
69,52
73,68
70,00
75,82
70,75
Displaced persons
63,83
65,81
68,75
68,75
70,74
68,68
72,79
69,15
74,90
69,90
It is in conformity with the objectives of the Montenegro health system
reform that the following shall be projected:
12
 real expenses of medicines and medicinal materials shall be reduced
from EUR 42.69 per inhabitant in 2004 to EUR 41.93 in 2007,
 expenses of medicines per inhabitant shall remain actually at the same
level in 2007 (EUR 28.94) in comparison to 2004 (EUR 28.86),
 no real growth of expenses per inhabitant for medicines by
prescription,
 no increase in the number of physicians, the level of 1.139 shall be
maintained, as well as the number of physicians in the primary
healthcare (402),
 real expenses of the health system per inhabitant shall be increased
from EUR 169.29 in 2004, to EUR 174.87 in 2007,
 the existing level of real expenses for medicines by prescription /
physician shall remain the same (2004 – EUR 23.909,91; 2007 –
EUR 24.713,82).
The measures implemented so far in order to reduce the expenses of
medicines and medicinal materials shall be continued in the ensuing period
by a strict implementation of these measures in the domain of surveillance
and control of the consumption of medicines. 2
2
Described in more details in the final chapter of the present document
13
4. REVENUES
It is projected that revenues earmarked for the healthcare funding in
Montenegro shall be provided from the following sources:




contributions for healthcare from the real sector,
contributions for healthcare from the public sector,
transfers from the Budget of the Republic,
other revenues.
Table 8
€ million
REVENUES
No.
I
DESCRIPTION
REVENUES FROM CONTRIBUTIONS FOR
HEALTHCARE
2003
2004
2005
2006
2007
90,12
96,65
99,88
103,70
107,63
39,97
37,99
1,89
0,09
44,29
40,62
3,42
0,25
46,28
42,45
3,57
0,26
48,37
44,36
3,73
0,27
50,54
46,35
3,90
0,29
50,15
26,15
23,90
52,36
25,26
27,00
53,60
26,40
27,10
55,33
27,58
27,65
57,09
28,83
28,16
0,10
0,10
0,10
0,10
0,10
REVENUES FROM GOVERNMENT BUDGET
Budget transfers for healthcare of unemployed
2.1 persons
Budget transfers for healthcare of refugees and
2.2 displaced persons
2.3 Budget transfers for public health
2.4 Budget transfers for capital expenditures
2.5 Financing of the Ministry of Health
3,94
4,59
8,43
8,25
8,08
2,91
3,45
3,59
3,73
3,87
0,31
0,46
0,72
0,68
2,00
0,50
1,64
0,70
2,00
0,50
1,32
0,70
2,00
0,50
1,01
0,70
OTHER REVENUES
Revenues from participation in healthcare of
3.1 insured persons
1,78
0,45
3,98
3,55
2,24
0,20
0,20
1,01
1,06
1,10
3.2 Other revenues
1,58
0,25
0,26
0,26
0,27
95,84
101,69
2,71
112,28
2,23
115,50
0,86
117,95
1.475,00 1.580,00
1.676,00
1.759,80
6,89
6,70
Contributions for healthcare of employees in real
1.1 sector
1.1.1 Contributions on salaries of employees in economy
1.1.2 Contributions from self-employed
1.1.3 Contributions for insurance of farmers
1.2 Contributions for healthcare from public sector
1.2.1 Contributions for healthcare of employees
1.2.2 Contributions for healthcare of pensioners
Contributions for healthcare of unemployed persons
1.2.3 – Republican Employment Agency
II
III
3.3 IDA loan
TOTAL
3.
GDP
1.375,00
% OF SHARE IN GDP
4.
TOTAL REVENUES
6,97
6,89
7,11
14
REVENUES FROM CONTRIBUTIONS FOR
HEALTHCARE
Contributions for healthcare of employees in real
1.1 sector
1.1.1 Contributions on salaries of employees in economy
1.1.2 Contributions from self-employed
1.1.3 Contributions for insurance of farmers
1.2 Contributions for healthcare from public sector
1.2.1 Contributions for healthcare of employees
1.2.2 Contributions for healthcare of pensioners
Contributions for healthcare of unemployed persons
1.2.3 – Republican Employment Agency
II
REVENUES FROM GOVERNMENT BUDGET
Budget transfers for healthcare of unemployed
persons
Budget transfers for healthcare of refugees
Budget transfers for public health
Budget transfers for capital expenditures
Financing of Ministry of Health
III
OTHER REVENUES
Revenues from participation in healthcare
I
Other revenues
6,55
7,03
7,26
7,54
7,83
2,91
2,76
0,14
0,01
3,65
1,90
1,74
3,22
2,95
0,25
0,02
3,81
1,84
1,96
3,37
3,09
0,26
0,02
3,90
1,92
1,97
3,52
3,23
0,27
0,02
4,02
2,01
2,01
3,68
3,37
0,28
0,02
4,15
2,10
2,05
0,01
0,29
0,01
0,33
0,01
0,61
0,01
0,60
0,01
0,59
0,21
0,00
0,02
0,00
0,05
0,13
0,01
0,25
0,00
0,03
0,00
0,05
0,03
0,01
0,26
0,15
0,04
0,12
0,05
0,29
0,07
0,27
0,15
0,04
0,10
0,05
0,26
0,08
0,28
0,15
0,04
0,07
0,05
0,16
0,08
0,11
0,02
0,02
0,02
0,02
0,20
0,16
0,06
IDA loan
4.1
Contributions for Healthcare from the Employed in the Real
Sector
The forecast of these revenues is based on the estimate of realization of
contributions from the employed people (in enterprises), self-employed
people and farmers.
Table 9
€ million
No.
DESCRIPTION
Contributions for healthcare of employees in real
1.1 sector
1.1.1 Contributions on salaries of employees in economy
1.1.2 Contributions from self-employed
1.1.3 Contributions for insurance of farmers
2003 2004 2005 2006 2007
39.97 44.29 46.28
37.99 40.62 42.45
1.89 3.42 3.57
0.09 0.25 0.26
48.37 50.54
44.36 46.35
3.73 3.90
0.27 0.29
Revenues from the contributions for the healthcare of people employed in
the real sector are envisaged to grow at an annual rate of 4.5%. The annual
15
growth rate of contributions from the real sector is lower than the GDP
growth rate due to fiscal exemptions introduced by the Government in the
mid-2004, as well as a moderate growth of the number of employed persons.
The increase of the revenues from agriculture is connected with the changes
introduced in the mode of collection of payments of such revenues. The
former system of collection of payments according to the cadastral revenue
has been replaced by the payment based on the average salary.
4.2
Contributions for Healthcare from the Public Sector
Contributions for healthcare from the public sector are planned as revenues
which shall be realized from the contributions for healthcare of employed
persons, contributions for healthcare of pensioners, and contributions for
healthcare of unemployed people which are paid by the Employment
Agency of Montenegro.
Table 10
€ million
No.
DESCRIPTION
Contributions for healthcare from public
1.2
sector
1.2.1 Contributions for healthcare of employees
1.2.2 Contributions for healthcare of pensioners
Contributions for healthcare of unemployed
1.2.3 persons – Republican Employment Agency
2003
2004
2005
2006
2007
50.15
26.15
23.90
52.36
25.26
27.00
53.60
26.40
27.10
55.33
27.58
27.65
57.09
28.83
28.16
0.10
0.10
0.10
0.10
0.10
Contributions for healthcare of the employed are projected to grow as in the
real sector at an annual rate of 4.5% on the average3. Revenues from the
contributions for healthcare of pensioners are particularly indicative in 2004
and are the result of the implementation of legislation in the domain of
pension insurance, increasing number of retired people, as well as
adjustment of pension expenditures to the cumulative growth rate of 7.4%
for the period of 18 months. The estimate of revenues for healthcare for the
years 2005, 2006 and 2007 is based on the expected growth of the number of
retired persons, statutory adjustment of pension expenditures, as well as the
fact that no correction of the rate of contributions is envisaged in the
medium-term for healthcare of pensioners.
3
According to the official records of the Health Fund, a number of the insured on the basis of employment
without family members is 155.286 persons
16
4.3 Revenues from the Budget of the Republic
Revenues from the Republican Budget are planned for healthcare of
unemployed people, healthcare of refugees and healthcare of displaced
persons, funding of the Public Health Institute and expenditures of the
Ministry of Health.
Table 11
€ million
No.
II
DESCRIPTION
REVENUES FROM GOVERNMENT
BUDGET
Budget transfers for healthcare of
2.1 unemployed persons
Budget transfers for healthcare of refugees
2.2 and displaced persons
2.3 Budget transfers for public health
2.4 Budget transfers for capital expenditures
2.5 Financing of Ministry of Health
2003
2004
2005
2006
2007
3,94
4,59
8,43
8,25
8,08
2,91
3,45
3,59
3,73
3,87
0,31
0,46
0,72
0,68
2,00
0,50
1,64
0,70
2,00
0,50
1,32
0,70
2,00
0,50
1,01
0,70
Pursuant to its statutory obligations, the Budget of the Republic financed in
2004 the expenditures of the Ministry of Health, Public Health Institute and
healthcare of unemployed people. It is from 2005 that, pursuant to new
legislation, healthcare of refugees and displaced persons shall be financed
from the Republican Budget in conformity with special regulations and
international agreements, as well as capital expenditures in the domain of
health sector. It is in this manner that liabilities of the Budget in relation to
the Health Fund shall be largely increased in 2005, reaching the value of
approximately EUR 8.43 million.
4.4 Other Revenues
Other revenues are planned as revenues from the participation in the
healthcare of the insured and other revenues from the Health Fund
institutions.
Table 12
€ million
No.
III
DESCRIPTION
OTHER REVENUES
Revenues from participation in
3.1 healthcare of insured persons
3.2 Other revenues
3.3 IDA loan
2003
2004
2005
2006
2007
1,78
0,45
3,98
3,55
2,24
0,20
1,58
0,20
0,25
1,01
0,26
1,06
0,26
1,10
0,27
2,71
2,23
0,86
17
An increase of revenues from the participation in the healthcare of insured
persons is projected due to the introduction of the participation in nonmedical services and diagnostic procedures. It is expected that the
participation of other revenues shall decrease.
Real and nominal revenues of the health system are exhibited in the Table 13
(Attachment).
5. EXPENDITURES BY THE LEVELS OF HEALTHCARE AND
CATEGORIES OF THE INSURED
The initial parameters used for the computation and planning of health
system expenditures for the period 2005-2007 are data related to the real
expenditures by levels of healthcare, types of services and categories of
insured persons for 2003 and projected expenditures for 2004.
Projected expenditures for health system in 2004 are EUR 105.16 million,
out of which expenditures of the Republican Health Fund account for EUR
104.0 million, while the remaining amount of funds is earmarked for public
health funding, or more precisely for the portion of activities of the Public
Health Institute of Montenegro and Ministry of Health.
The Health Fund has, in conformity with the policy of public spending for
2004, adopted a balance of revenues and expenditures in the amount of EUR
104.0 million. By adoption of the Health Insurance Law the provisions of
which have been in force since July 2004, rates of contributions for the
health insurance of employed people are reduced by 5% since 1 July 2004,
and further reduction by another 5% shall be effective from 1 December
2004, thereby reducing the Fund revenues. It is by a rebalance of the
Republican Budget for 2004 that the Budget has assumed the obligation to
provide the deficient funds for the Republican Health Fund, in the amount of
EUR 3.47 million, in order to be able to compensate for the decrease in
revenues caused by reducing the rate of contributions for health insurance in
2004. In line with the above mentioned changes, a rebalance of the financial
plan of the Republican Health Fund has been adopted for 2004, according to
which the structure of revenues has been modified in the part related to the
increase in transfers to the Fund. The analysis of the realized and projected
expenditures in 2003 and projected expenditures for 2004 represents a
18
starting base for drawing up a plan of the funds needed for the period of the
next three years, in conformity with the objectives of the Montenegro health
system reform.
The data by healthcare sectors for the period of 2003-2007 are exhibited in
Table 14 below.
Table 14
€ million
EXPENDITURES BY SECTORS OF HEALTHCARE
rd.br.
I
II
I
II
III
IV
V
VI
5.1
DESCRIPTION
2003
2004
2005
OUT-PATIENT CLINICS (DOM ZDRAVLJAS)
Primary healthcare
40,59
42,32
46,79
Secondary healthcare
0,39
0,42
0,44
TOTAL (I + II)
40,98
42,74
47,23
HOSPITALS
Primary healthcare
0,27
0,30
0,26
Secondary healthcare
30,74
34,20
34,52
Tertiary healthcare
7,29
8,10
8,75
TOTAL (I + II+III)
38,30
42,59
43,53
HEALTH FUND AND THE MINISTRY OF HEALTH
Other rights from healthcare
7,80
8,40
8,94
Other rights from health
3,99
4,34
4,37
insurance
Other expenditures
6,53
7,08
8,22
TOTAL (IV+V+VI)
18,32
19,82
21,53
GRAND TOTAL
97,60 105,16 112,29
2006
2007
49,19
0,45
49,64
51,08
0,47
51,55
0,22
35,05
9,09
44,36
0,23
36,03
9,40
45,66
9,11
4,52
9,44
4,68
7,87
21,50
115,50
6,63
20,75
117,96
Out-Patient Clinics (Dom zdravljas)
Primary healthcare in the territory of Montenegro is covered by a network
consisting of 18 out-patient clinics (Dom zdravljas). Dom zdravljas provide
medical services through the system of primary and secondary care. Primary
protection or care embraces healthcare from the domain of general medicine,
partially from the domain of specialized medicinal branches, laboratory and
X ray diagnostics.
Hemodialysis services in the Republic of Montenegro are mainly provided
in hospitals. However, in order to be able to make this kind of healthcare
available to all beneficiaries, as well as due to the development of tourism,
certain Dom zdravljas are also equipped for rendering these services under a
professional control of hospitals.
19
In 2003, expenditures financed through the Health Fund amounted to EUR
96.57 million, out of which expenditures of all Dom zdravljas and medicines
supplied on the basis of prescriptions accounted for EUR 40,98 million.
The policy of healthcare in Dom zdravljas represents basically a system of
primary healthcare, and pursuant to the new legislation a rise of expenditures
at a faster rate is expected for this category in the period 2005-2007 than at
other levels of healthcare, what is indicated by the projections in Table 15
below:
Table 15
No.
I
II
DESCRIPTION
2003
2004
OUT-PATIENT CLINICS (DOM ZDRAVLJAS)
Primary healthcare
40,59 42,32
Out-patient services at the level of general
medicine in Dom zdravljas
12,05 14,38
Specialized out-patient services in Dom zdravljas
3,72
4,05
Laboratory services in Dom zdravljas
4,85
5,27
X-ray services in Dom zdravljas
0,58
0,63
Dental services in Dom zdravljas
2,89
3,11
Costs of transportation by ambulances (Dom
zdravljas)
0,41
0,44
Disposable medicinal materials in Dom zdravljas
1,91
2,06
Medicines in Dom zdravljas
2,56
2,76
Medicines by prescription
11,61
9,61
Secondary healthcare
0,39
0,42
Dialysis in Dom zdravljas
0,39
0,42
TOTA L (I + II)
40,98 42,74
2005
2006
€ million
2007
46,79
49,19
51,08
18,05
4,24
5,46
0,73
2,93
19,65
4,44
5,65
0,80
2,73
20,61
4,60
5,84
0,83
2,72
0,46
2,13
2,86
9,94
0,44
0,44
47,23
0,47
2,20
2,96
10,29
0,45
0,45
49,64
0,49
2,28
3,06
10,65
0,47
0,47
51,55
Expenditures for the primary care are projected to increase from EUR 42.32
million in 2004 to EUR 51.08 million in 2007. The largest portion of
expenditures shall account for the services provided by chosen doctors in the
amount of EUR 20.61 million in 2007.
5.2 Hospitals
Republic of Montenegro disposes today of 7 general hospitals, 3 specialized
hospitals and a Clinical Center. Medical services in these institutions are
provided primarily at the level of the secondary and tertiary care, while a
part of services in the primary care is related to dental services in hospitals.
20
For the provision of healthcare at the level of general and specialized
hospitals and the Clinical Center of Montenegro, the amount of EUR 38.3
million was spent in 2003.
No larger increase in funds is projected for secondary and tertiary care in
hospitals until 2007. There is a small rise of the level of expenditures in the
nominal amount for secondary and tertiary care in 2007, in comparison to
2004, what is regarded to be the consequence of an increase of funds
earmarked for the primary care, primarily in Dom zdravljas.
Table 16
€ million
No.
DESCRIPTION
I
Primary healthcare
Dental services in hospitals
II Secondary healthcare
Dental services in hospitals
Specialized out-patient services in
hospitals
Laboratory services in hospitals
X-ray services in hospitals
Disposable medicinal materials in
hospitals
Medicines in hospitals
Dialysis in hospitals
Costs of transportation by
ambulances (Dom zdravljas)
III Tertiary healthcare
In-patient services in hospitals
Specialized out-patient services in
hospitals
Laboratory services in hospitals
X-ray services in hospitals
Disposable medicinal materials in
hospitals
Medicines in hospitals
TOTAL (I + II+III)
HOSPITALS
2003
0,27
0,27
30,74
11,94
2004
0,30
0,30
34,20
13,46
2005
0,26
0,26
34,52
13,79
2006
0,22
0,22
35,05
13,98
2007
0,23
0,23
36,03
14,24
5,46
1,62
1,15
6,18
1,74
1,34
6,55
1,80
1,42
6,68
1,86
1,47
6,92
1,93
1,52
4,85
4,13
1,48
5,22
4,44
1,68
4,87
4,21
1,74
4,81
4,30
1,80
4,97
4,44
1,87
0,12
7,29
2,98
0,13
8,10
3,36
0,13
8,75
3,65
0,14
9,09
3,62
0,14
9,40
3,74
1,36
0,40
0,29
1,47
0,44
0,41
1,52
0,55
0,53
1,58
0,67
0,64
1,63
0,69
0,67
1,21
1,03
38,30
1,31
1,11
42,59
1,35
1,15
43,53
1,39
1,19
44,36
1,44
1,23
45,66
The funds earmarked for the secondary healthcare in the real amounts in
2007 shall be below the level of funds envisaged for these purposes in 2004.
The funds earmarked for the tertiary healthcare in the real amounts indicate
a small rise in 2007 (EUR 8.77 million) in comparison to 2004 (EUR 8.1
million) (Table 18 – Attachment).
21
5.3 Health Fund and Ministry of Health
The funds earmarked for the activities of the Health Fund and Ministry of
Health for 2004 amount to EUR 19.82 million, and in 2007 such funds are
envisaged in the amount of EUR 19.88 million. These funds are intended for
the financing of other rights from the healthcare and rights from the health
insurance, as well as for the financing of the Health Fund and Ministry of
Health activities.
Table 17
€ million
DESCRIPTION
Other rights from healthcare
Out-patient treatment outside Montenegro
In-patient treatment outside Montenegro
Other for healthcare
Other rights from health insurance
Orthopedic tools and aids
Compensation for sick leave over 60
days
Compensation for traveling expenses &
daily allowances
Other expenses
Investment and development funds
Funds for professional training
Funds for the Fund' operation
Expenses of the Ministry of Health
TOTAL (IV+V+VI)
2003
7,80
0,45
6,97
0,38
3,99
1,02
2004
8,40
0,49
7,51
0,41
4,34
1,15
2005
8,94
0,51
8,01
0,42
4,37
1,14
2006
9,11
0,52
8,15
0,44
4,52
1,18
2007
9,44
0,54
8,44
0,45
4,68
1,23
0,86
0,93
0,97
1,00
1,04
2,10
6,53
1,59
0,06
3,85
1,03
18,32
2,26
7,08
1,71
0,07
4,15
1,15
19,82
2,26
8,22
0,00
0,07
4,27
3,88
21,53
2,33
7,87
0,00
0,07
4,39
3,40
21,50
2,41
6,63
0,00
0,08
4,52
2,03
20,75
5.4 Expenditures by the Categories of Insured Persons
The trend of the development of expenditures in favor of the primary
healthcare level is also projected by specific categories of the insured (Table
19).
Table 19
€ million
DESCRIPTION
EXPENDITURES
Primary healthcare
Employees
Pensioners
Farmers
Unemployed persons
2003
97,60
40,86
22,16
12,28
1,03
4,73
2004
105,16
42,62
22,87
12,93
1,02
5,10
2005
112,28
47,05
25,20
14,14
1,14
5,64
2006
115,50
49,41
26,20
15,02
1,23
6,00
2007
117,95
51,31
27,22
15,74
1,28
6,11
22
Refugees
Displaced persons
Other
0,30
0,35
0,00
0,32
0,37
0,00
0,44
0,49
0,00
0,45
0,51
0,00
0,45
0,52
0,00
31,13
13,43
11,04
1,15
4,50
0,38
0,63
0,00
34,62
15,46
11,89
1,24
4,95
0,41
0,67
0,00
34,96
15,68
12,10
1,27
5,02
0,31
0,58
0,00
35,50
15,97
12,36
1,32
4,96
0,31
0,56
0,00
36,50
16,60
12,58
1,37
5,06
0,32
0,57
0,00
Tertiary healthcare
Employees
Pensioners
Farmers
Unemployed persons
Refugees
Displaced persons
Other
7,29
3,15
2,54
0,28
1,08
0,09
0,15
0,00
8,10
3,39
2,94
0,35
1,16
0,10
0,16
0,00
8,75
3,72
3,19
0,36
1,23
0,09
0,15
0,00
9,09
3,87
3,35
0,38
1,25
0,09
0,15
0,00
9,40
4,02
3,46
0,39
1,28
0,09
0,15
0,00
Other rights from healthcare
Employees
Pensioners
Farmers
Unemployed
Refugees
Displaced persons
Other
7,80
4,12
2,94
0,10
0,55
0,06
0,02
0,00
8,40
4,43
3,17
0,11
0,60
0,06
0,02
0,00
8,94
5,01
3,18
0,12
0,56
0,06
0,02
0,00
9,11
5,11
3,23
0,12
0,57
0,06
0,03
0,00
9,44
5,31
3,35
0,13
0,58
0,06
0,03
0,00
Rights from health insurance
Employees
Pensioners
Farmers
Unemployed persons
Refugees
Displaced persons
Other
3,99
2,33
1,08
0,08
0,46
0,01
0,01
0,00
4,34
2,51
1,21
0,09
0,50
0,01
0,02
0,00
4,37
2,53
1,23
0,09
0,48
0,01
0,02
0,00
4,52
2,63
1,28
0,10
0,49
0,01
0,02
0,00
4,68
2,73
1,32
0,10
0,50
0,01
0,02
0,00
Other expenditures
Employees
Pensioners
Farmers
Unemployed persons
Refugees
Displaced persons
Other
6,53
0,00
0,00
0,00
0,00
0,00
0,00
6,53
7,08
0,00
0,00
0,00
0,00
0,00
0,00
7,08
8,22
0,00
0,00
0,00
0,00
0,00
0,00
8,22
7,87
0,00
0,00
0,00
0,00
0,00
0,00
7,87
6,62
0,00
0,00
0,00
0,00
0,00
0,00
6,62
Secondary healthcare
Employees
Pensioners
Farmers
Unemployed persons
Refugees
Displaced persons
Other
23
By analyzing the share of specific categories of insured persons in the total
healthcare expenditures at all levels, it becomes evident that the largest share
is that of the healthcare of employed people and members of families
insured by them (46.28% in 2004, i.e. 47.37% in 2007), pensioners and their
family members (30.57% in 2004, i.e. 30.9% in 2007), unemployed persons
and their family members (11.7% in 2004, i.e. 1.46% in 2007) and insured
farmers (2.68% in 2004, i.e. 2.77% in 2007), while there is a minimum
decrease in the share of funds for the provision of healthcare to refugees and
displaced persons (from 2.05% in 2004 to 1.88% in 2007) who exercise their
right to healthcare in the public health institutions of Montenegro.
Table 20
%
DESCRIPTION
Employees
Pensioners
Farmers
Unemployed persons
Refugees
Displaced persons
Other
2003
46,31
30,63
2,72
11,61
0,86
1,19
6,69
2004
46,28
30,57
2,68
11,70
0,86
1,19
6,73
2005
46,43
30,14
2,65
11,52
0,81
1,12
7,32
2006
46,56
30,52
2,72
11,49
0,80
1,10
6,81
2007
47,37
30,90
2,77
11,46
0,79
1,09
5,61
For the healthcare of employed people in the period of 2003-2007, spending
is projected to rise by 14.82%, while a growth of 13.39% is planned for the
healthcare of pensioners, 16% for farmers, 9.91% for unemployed persons,
2.5% for refugees and displaced persons.
The funds projected for the healthcare of the employed appear as the result
of an envisaged increase in the number of the employed due to the
Government measures aimed at the legalization of employment. There is
also a tendency of increasing the number of pensioners due to the policy of
providing the pensioners, as a vulnerable category of the insured, with an
adequate healthcare at the expense of the in insurance funds, whereas an
increase in the number of the insured farmers who are registered for the
conduct of agricultural activity as their primary business activity is a result
of the Government measures and investments in the domain of individual
agricultural production.
24
A gradual decrease of the share of the funds earmarked for healthcare of the
unemployed, refugees and displaced persons is expected exclusively through
the reduction of a number of healthcare beneficiaries due to the regulation
of their status. The health services projected for these beneficiaries shall
provide them with an adequate level of healthcare prescribed by law and in
line with the international standards (Table 21).
Table 21
€ million
DESCRIPTION
Total health service
Employees
Pensioners
Farmers
Unemployed
persons
Refugees
Displaced persons
Other
Number of
healthcare
beneficiaries
Employees
Pensioners
Farmers
Unemployed
persons
Refugees
Displaced persons
Expenditures per
beneficiary
Employees
Pensioners
Farmers
Unemployed
persons
Refugees
Displaced persons
2003
2004
2005
2006
2007
97.598.065,68 105.155.666,90 112.281.900,11 115.497.308,79 117.948.392,55
45.192.925,00 48.662.480,23 52.136.134,97 53.774.563,72 55.877.366,32
29.890.568,00 32.142.141,74 33.839.635,17 35.245.089,51 36.448.533,09
2.652.820,00 2.817.387,14 2.978.082,28 3.145.091,13 3.268.661,76
11.328.697,00 12.301.006,61 12.931.158,44 13.273.100,42 13.521.440,13
840.504,00
905.222,81
912.844,78
920.530,94
928.281,81
1.160.197,00 1.249.532,17 1.260.053,23 1.270.662,88 1.281.361,86
6.532.354,68 7.077.896,21 8.223.991,23 7.868.270,20 6.622.747,57
588.185
289.000
121.000
17.000
597.185
293.000
124.000
19.000
599.001
295.930
124.620
19.190
600.877
298.889
125.243
19.382
602.813
301.878
125.869
19.576
130.000
13.008
18.176
130.000
13.008
18.176
128.700
12.748
17.812
127.413
12.493
17.456
126.139
12.243
17.107
154,82
156,38
247,03
156,05
164,23
166,08
259,21
148,28
173,72
176,18
271,54
155,19
179,12
179,91
281,41
162,27
184,68
185,10
289,57
166,98
87,14
64,61
63,83
94,62
69,59
68,75
100,48
71,61
70,74
104,17
73,68
72,79
107,19
75,82
74,90
The data pertaining to the nominal and real expenditures of the Montenegro
health system by the categories of insured persons and levels of healthcare
are presented in Table 22 – Attachment.
25
5.5 Recapitulation of Expenditures by Levels of Healthcare
The total expenditures for the Montenegro health system in 2005 are
projected at a level of EUR 112.28 million, in 2006 EUR 115.50 million,
and in 2007 EUR 117.95 million, what makes the total increase of 3.9% per
annum, and represents the result of projected retail prices growth and
utilization of the World Bank loan in line with the IDA requirements.
Table 23
€ million
Year
2003
2004
2005
2006
2007
Other rights Rights from
TOTAL
Tertiary
Other
Primary
Secondary
from
health
EXPENDITU
healthcare
expenditures
healthcare healthcare
healthcare insurance
RES
40,86
31,13
7,29
7,80
3,99
6,53
97,60
42,62
34,62
8,10
8,40
4,34
7,08
105,16
47,05
34,96
8,75
8,94
4,37
8,22
112,28
49,41
35,50
9,09
9,11
4,52
7,87
115,50
51,31
36,50
9,40
9,44
4,68
6,62
117,95
Table 24
%
Year
2003
2004
2005
2006
2007
Primary
Secondary
healthcare
healthcare
41,87
31,90
40,53
32,92
41,90
31,13
42,78
30,73
43,50
30,95
Other
rights
TOTAL
Tertiary
Other
from
Rights from
EXPENDIT
healthcare
expenditures
healthcar
health
URES
e
insurance
7,47
7,99
4,08
6,69
100,00
7,70
7,99
4,13
6,73
100,00
7,79
7,96
3,89
7,32
100,00
7,87
7,89
3,91
6,81
100,00
7,97
8,00
3,97
5,61
100,00
As regards specific levels of healthcare, an increase of expenditures is
planned for the primary health care level, the share of which in the total
expenditures for the Montenegro health system in 2004 was 40.53%, while
their projected share in 2005 is 41.90%, in 2006 42.78%, and in 2007
43.50%.
The costs of primary healthcare in 2004 remain approximately at the same
level, as well as total expenditures for the secondary and tertiary healthcare.
A successive rise of these costs and a change in their structure is projected,
such that funds earmarked for the primary healthcare are larger by 11.78% in
2007 than the funds for the secondary and tertiary healthcare or EUR 5.41
million, as envisaged by the plan of reforms and new legislation.
26
Significant effects should be expected after 2007 when all Dom zdravljas
(out-patient clinics) in the Republic shall be covered by the primary
healthcare project, as the pilot project includes only Dom zdravlja of
Podgorica.
In the structure of specific types of services at the primary level, there is a
considerable decrease in expenditures for drugs supplied by prescription
which accounted for 28.60% in the total expenditures for primary care in
2003, while in 2007 their share is projected to reach the level of 20.84%. A
relative decrease in the share of these costs at the primary level of healthcare
is the result of activities undertaken with the aim to control the prescription
and consumption of medicines, as well as to introduce reference prices of
medicines, but not to restrict the insured persons’ rights (Table 25).
Table 25
%
DESCRIPTION
2003
2004
2005
OUT-PATIENT CLINICS (DOM ZDRAVLJAS)
Primary healthcare
39,62
34,09
31,91
Disposable medicinal material in Dom
zdravljas
4,70
4,86
4,55
Medicines in Dom zdravljas
6,32
6,52
6,11
Medicines by prescription
28,60
22,71
21,25
TOTAL
39,62
34,09
31,91
2006
2007
31,41
31,30
4,48
6,01
20,92
31,41
4,47
5,99
20,84
31,30
Dental healthcare for adults is projected to be reduced by restricting their
rights to dental services pursuant to the Law (about 0.5 million in the
projected period) and dental supplies at the level of out-patient clinics and
the Clinical Center of Montenegro. Projected privatization of dental care
should provide for larger savings in this domain.
A share of the secondary healthcare in the total expenditures in 2004 is
32.92%, in 2005 a projected level is 31.13%, in 2006 30.73% and in 2007
30.95%.
Expenditures for tertiary healthcare in 2004 account for 7.7% of the total
expenditures, and the plan for 2005 is 7.79%, for 2006 7.87% and for 2007
7.97%, due to the projections of further development of the first-class
27
medicine and expensive diagnostics which is expected to reduce the number
of users of medical services out of the Republic of Montenegro.
It is by introduction of reference prices and changes to the Positive
Medicines List with the object to improve the clinical efficiency and costeffectiveness, as well as by further development of information system and
surveillance of consumption of medicines and other medical supplies in the
public health institutions for in-patients treatment, that conditions shall be
created for reduction of this kind of spending in 2005. Reduction of costs for
medicines and medical disposable material in the total expenditures of the
secondary and tertiary level of healthcare is projected from 45.58% in 2004
to 43.04% in 2007.
Table 26
%
DESCRIPTION
II
III
2003
HOSPITALS
Secondary healthcare
Disposable medicinal material in
hospitals
Medicines in hospitals
Tertiary healthcare
Disposable medicinal material in
hospitals
Medicines in hospitals
TOTAL (II+III)
2004
2005
2006
2007
32,88
36,47
34,25
33,57
33,54
17,77
15,12
8,22
19,70
16,76
9,12
18,35
15,90
9,42
17,74
15,83
9,51
17,72
15,83
9,50
4,44
3,78
41,10
4,93
4,19
45,58
5,09
4,33
43,67
5,13
4,37
43,08
5,13
4,37
43,04
Other rights from the domain of healthcare are related to the treatment of the
insured persons in the medical institutions of the Republic of Serbia and
abroad and rehabilitation in the Institute of Igalo, in line with regulations,
while the rights from the domain of health insurance include expenses
related to provision of orthopedic tools and appliances, compensations for
sickness leave and traveling expenses and daily allowances when exercising
the right to healthcare out of a place of residence (Tables 27 & 28).
28
Table 27
€ million
No.
IV
DESCRIPTION
Other rights from healthcare
Out-patient treatment outside Montenegro
In-patient treatment outside Montenegro
Other for healthcare
2003
7,80
0,45
6,97
0,38
2004
8,40
0,49
7,51
0,41
2005
8,94
0,51
8,01
0,42
2006
9,11
0,52
8,15
0,44
2007
9,44
0,54
8,44
0,45
Table 28
€ million
No.
V
DESCRIPTION
Other rights from health insurance
Orthopedic tools and aids
Compensation for sick leaves over 60
days
Compensation for traveling expenses and
daily allowances
2003
3,99
1,02
2004
4,34
1,15
2005
4,37
1,14
2006
4,52
1,18
2007
4,68
1,23
0,86
0,93
0,97
1,00
1,04
2,10
2,26
2,26
2,33
2,41
Expenses related to the treatment of the insured out of the territory of the
Republic of Montenegro are projected to remain approximately at the same
level i.e. 7.98% of the total expenditures in 2004, and 8.06% in 2007. It is
envisaged to reduce the number of patients referred to the treatment out of
the Republic of Montenegro, with the exception of cases of in vitro
fertilization that is not performed in Montenegro and that represents a newly
constituted right. It is also envisaged that prices of health services which do
not depend on the price developments in Montenegro shall be increased.
Namely, health institutions from Serbia have increased prices of their
services in 2004 by approximately 20% what shall be further reflected to the
development of these costs.
A minimum increase of funds is projected for the rights from the domain of
health insurance. Standardization is envisaged in the domain of the exercise
of rights to aids, as well as measures aimed at reexamination of the rights
from the domain of health insurance with retaining a minimum cost increase
due to the expected price increase.
29
6.
HEALTH SYSTEM
CLASSIFICATION
EXPENDITURES
–
ECONOMIC
The total costs of health system in 2004 amount to EUR 105.16 million, out
of which salaries and other personal income of employees account for EUR
47.47 million or 45.11% of total expenses, current expenses account for
EUR 53.65 million or 51.02% of total expenses and capital expenses EUR
4.04 million, what makes 3.84% of overall expenditures.
Overall expenditures by levels of healthcare in 2003 and projections for the
period of 2004-2007 are shown in Table 29 below.
Table 29
€ million
No.
1.
2.
3.
4.
5.
6.
7.
DESCRIPTION
Primary healthcare
1.1 Salaries and other personal income
1.2 Current expenses
1.3 Capital expenditures
Secondary healthcare
2.1 Salaries and other personal income
2.2 Current expenses
2.3 Capital expenditures
Tertiary healthcare
3.1 Salaries and other personal income
3.2 Current expenses
3.3 Capital expenses
Other rights from healthcare
4.1 Salaries and other personal income
4.2 Current expenses
4.3 Capital expenditures
Rights from health insurance
5.1 Salaries and other personal income
5.2 Current expenses
5.3 Capital expenditures
Other expenditures
6.1 Salaries and other personal income
6.2 Current expenses
6.3 Capital expenditures
Total healthcare
7.1 Salaries and other personal income
7.2 Current expenses
7.3 Capital expenditures
2003
40,86
20,86
19,90
0,10
31,13
17,62
13,13
0,38
7,29
4,13
1,56
1,60
7,80
0,00
7,80
0,00
3,99
0,00
3,99
0,00
6,53
1,30
3,61
1,62
97,60
43,91
49,99
3,70
2004
42,62
21,76
20,76
0,10
34,62
19,59
14,60
0,42
8,10
4,59
1,73
1,78
8,40
0,00
8,40
0,00
4,34
0,00
4,34
0,00
7,08
1,53
3,82
1,73
105,16
47,47
53,65
4,04
2005
47,05
24,42
22,32
0,32
34,96
20,59
13,94
0,43
8,75
5,26
1,57
1,92
8,94
0,00
8,94
0,00
4,37
0,00
4,37
0,00
8,22
1,58
3,93
2,71
112,28
51,85
55,06
5,37
2006
49,41
25,64
23,44
0,33
35,50
20,91
14,15
0,43
9,09
5,47
1,63
2,00
9,11
0,00
9,11
0,00
4,52
0,00
4,52
0,00
7,86
1,61
4,00
2,25
115,49
53,63
56,85
5,01
2007
51,31
26,63
24,34
0,34
36,50
21,50
14,55
0,45
9,40
5,65
1,68
2,06
9,44
0,00
9,44
0,00
4,68
0,00
4,68
0,00
6,62
1,65
4,09
0,88
117,94
55,42
58,78
3,73
30
A forecast is that salaries and other personal income in 2007 shall increase
their share in the total expenditures to 46.98%, while a share of current
expenses shall be reduced to 49.92% and capital expenditures to 3.16%.
6.1 Salaries and other personal income
An overview of salaries and other personal income by levels of healthcare is
given in Tables 30 and 31.
Table 30
€ million
Description
Primary healthcare
Secondary healthcare
Tertiary healthcare
Other rights from healthcare
Rights from health insurance
Other expenditures
TOTAL
2003
20,86
17,62
4,13
0,00
0,00
1,30
43,91
2004
21,76
19,59
4,59
0,00
0,00
1,53
47,47
2005
24,42
20,59
5,26
0,00
0,00
1,58
51,85
2006
25,64
20,91
5,47
0,00
0,00
1,61
53,63
2007
26,63
21,50
5,65
0,00
0,00
1,65
55,42
Table 31
%
Description
Primary healthcare
Secondary healthcare
Tertiary healthcare
Other rights from healthcare
Rights from health insurance
Other expenditures
TOTAL
2003
47,51
40,13
9,41
0,00
0,00
2,96
100,00
2004
45,84
41,28
9,67
0,00
0,00
3,22
100,00
2005
47,09
39,72
10,14
0,00
0,00
3,05
100,00
2006
47,81
38,99
10,19
0,00
0,00
3,01
100,00
2007
48,04
38,79
10,19
0,00
0,00
2,97
100,00
Expenditures for salaries and other personal income in 2003 amount to EUR
43.91 million. Within these expenditures, the largest share is that of salaries
of primary healthcare workforce accounting for EUR 20.86 million or
47.51% of all expenditures for salaries. Salaries of employees in the
secondary healthcare account for EUR 17.62 million or 40.13%, while
salaries of persons employed in the tertiary health care account for EUR
4.13 million or 9.41%.
A number of employees in health institutions amounts to 8.267. In the
forthcoming period, as a result of reforms, it is projected that the number of
31
employees shall be reduced by 10% and largely in the part related to the
non-medical staff. Savings based on the reduction of workforce shall be used
to increase the funds earmarked for salaries of health system workforce.
Other expenditures in the amount of EUR 1.30 million related to the salaries
of employees of the Health Fund and Ministry of Health, account for 2.96%
in 2003 of overall expenditures for salaries and other personal income.
Projections of expenditures for salaries and other personal income for the
period of 2004-2007 indicate to an increase of the share of salaries and other
personal income in the total expenditures. Salaries of employees shall be
increased mainly in 2005 in the primary healthcare, with an absolute
increase of funds in the amount of EUR 2.66 million. In the course of 2006
and 2007, the rise of salaries in the primary healthcare shall be adjusted in
conformity with a general pay-policy of the Montenegro health system.
6.2 Current Expenditures
Overview of current expenditures by levels of health care.
Table 32
€ million
Description
Primary healthcare
Secondary healthcare
Tertiary healthcare
Other rights from healthcare
Rights from health insurance
Other expenditures
TOTAL
2003
19,90
13,13
1,56
7,80
3,99
3,61
49,99
2004
20,76
14,60
1,73
8,40
4,34
3,82
53,65
2005
22,32
13,94
1,57
8,94
4,37
3,93
55,06
2006
23,44
14,15
1,63
9,11
4,52
4,00
56,85
2007
24,34
14,55
1,68
9,44
4,68
4,09
58,78
Table 33
%
Description
Primary healthcare
Secondary healthcare
Tertiary healthcare
Other rights from healthcare
Rights from health insurance
Other expenditures
TOTAL
2003
39,81
26,28
3,11
15,60
7,97
7,23
100,00
2004
38,69
27,22
3,22
15,66
8,10
7,12
100,00
2005
40,53
25,31
2,85
16,23
7,93
7,14
100,00
2006
41,22
24,90
2,87
16,02
7,95
7,04
100,00
2007
41,40
24,76
2,87
16,05
7,96
6,96
100,00
32
Current expenditures in the primary, secondary and tertiary healthcare are
related to the medical disposable material, drugs and expenditures for
material costs. Current expenditures in the primary healthcare in 2003 are
EUR 19.90 million, what accounts for 39.81% of overall current
expenditures, while such expenditures in the secondary healthcare amount to
EUR 13.13 million what accounts for 26.27% of overall expenditures. The
least share is that of expenditures for tertiary healthcare, amounting to EUR
1.56 million i.e. 3.11% of overall current expenditures.
Projections of current expenses for the period 2004-2007 indicate to a
speedier trend of increase of such expenses in the primary healthcare when
compared to the secondary and tertiary healthcare. This is due to the fact that
reform in the domain of health system envisages reduction of the burden on
secondary and tertiary healthcare, while putting emphasis on primary
healthcare.
Other rights from the domain of health care are related to the costs of
treatment outside the territory of Montenegro. These costs in 2003 are EUR
7.80 million or 15.60% of overall current expenditures. The rights from the
domain of health insurance are related to the costs of compensation of
traveling expenses and daily allowances, compensations for sick leaves and
provision of orthopedic tools and helping aids. These expenditures in 2003
amount to EUR 3.99 million what accounts for 7.98% of overall current
expenses.
Projections for the period 2004-2007 indicate to the drop of a proportionate
share of these expenditures in the overall current expenditures, what is due
to the reduction of specific rights from this domain pursuant to the new
statutory prescriptions, as well as to the development of new services in the
domain of healthcare which shall be commissioned by institutions in
Montenegro.
Other expenditures are related to the business operations of the Health Fund
and Ministry of Health and in 2003 such expenses amounted to EUR 3.61
million or 7.23% of the overall current expenses, and in the period of 20042007 there is a tendency of lowering the proportionate share of these
expenses in the overall current expenditures.
33
6.3 Capital Expenditures
Capital expenditures are related to the investments and provision of
equipment required for the operation of health institutions. Overall
expenditures in 2003 amount to EUR 3.70 million, out of which the largest
share is that of tertiary healthcare, i.e. supply of equipment for the CardioSurgical Center. Projections for the period 2004-2007 indicate that the
largest share in these expenses shall also be that of tertiary level of
healthcare due to the modernization of equipment in line with the recent
world trends in the medical technology development, and development of
the information system.
Table 34
€ million
Description
Primary healthcare
Secondary healthcare
Tertiary healthcare
Other rights from healthcare
Rights from health insurance
Other expenditures
TOTAL
2003
0,10
0,38
1,60
0,00
0,00
1,62
3,70
2004
0,10
0,42
1,78
0,00
0,00
1,73
4,04
2005
0,32
0,43
1,92
0,00
0,00
2,71
5,37
2006
0,33
0,43
2,00
0,00
0,00
2,25
5,01
2007
0,34
0,45
2,06
0,00
0,00
0,88
3,73
Table 35
%
Description
Primary healthcare
Secondary healthcare
Tertiary healthcare
Other rights from healthcare
Rights from health insurance
Other expenditures4
TOTAL
2003
2,70
10,27
43,24
0,00
0,00
43,78
100,00
2004
2,58
10,47
44,04
0,00
0,00
42,91
100,00
2005
5,87
7,94
35,75
0,00
0,00
50,44
100,00
2006
6,61
8,64
39,84
0,00
0,00
44,90
100,00
2007
9,22
11,93
55,28
0,00
0,00
23,57
100,00
The data on nominal and real indicators are shown in Table 36
(Attachment).
4
Other expenditures include funds of IDA loan to be used according to the loan requirements for
improvement of the Montenegro healthcare system
34
7. CONSOLIDATED HEALTH SYSTEM BALANCE SHEET
A balanced and stable conduct of business operations of the Health
Insurance Fund of Montenegro depends on the transfers from the Republican
Budget5. Proceeding from the Agenda of Economic Reforms, Economic
Policy Guidelines and budgetary spending, implementation of reforms in the
domain of health system as well as revenues of the Budget realized for 6
months of 2004, the funds requisite for the coverage of the projected
expenditures of the health system shall be provided for the period of 20052007.
Table 38
€ million
CONSOLIDATED BALANCE SHEET OF MONTENEGRO HEALTH SYSTEM
No.
DESCRIPTION
1.
2003
2004
2005
2006
2007
95,84
101,69
112,28
115,50
117,95
90,12
96,65
99,88
103,70
107,63
39,97
44,29
46,28
48,37
50,54
50,15
52,36
53,60
55,33
57,09
II
III
REVENUES
REVENUES FROM HEALTHCARE
CONTRIBUTIONS
Contributions for healthcare of employees in
real sector
Contributions for healthcare from public
sector
REVENUES FROM THE GOVERNMENT
BUDGET
OTHER REVENUES
3,94
1,78
4,59
0,45
8,43
3,98
8,25
3,55
8,08
2,24
2.
2.1
2.2
2.3
2.4
2.5
2.6
3.
EXPENDITURES
Primary healthcare
Secondary healthcare
Tertiary healthcare
Other rights from healthcare
Rights from health insurance
Other expenditures
DEFICIT (1-2)
97,60
40,86
31,13
7,29
7,80
3,99
6,53
-1,76
105,16
42,62
34,62
8,10
8,40
4,34
7,08
-3,47
112,28
47,05
34,96
8,75
8,94
4,37
8,22
0,00
115,50
49,41
35,50
9,09
9,11
4,52
7,86
0,00
117,94
51,31
36,50
9,40
9,44
4,68
6,62
0,00
4.
FINANCING
0,00
0,00
0,00
0,00
0,00
5.
DIFFERENCE (4-3)
-1,76
-3,47
0,00
0,00
0,00
I
1.1
1.2
The Government of the Republic of Montenegro has adopted in the course
of 2004 within the package of fiscal facilities, reduction of the rate of
healthcare contributions on salaries of employees which constitute a primary
5
Pursuant to the Law, the transfers represent a statutory liability of the Republic of Montenegro Budget.
35
source of revenues of the Health Fund. The package of fiscal facilities has
envisaged the reduction of the rate of contributions by 5% to commence
from 1 July 2004 and additional 5% from 1 December 2004.
Taking into consideration the fact that during the first quarter of 2004 a
deficit of the Health Fund has been recorded in the amount of EUR 1.92
million (in spite of a balanced plan), and that an additional deficit is
projected by fiscal measures introduced by the Government in the amount of
EUR 1.55 million, the provision of funds is planned from the Budget to
cover the overall deficit of EUR 3.47% million, in line with an agreement
achieved with the International Monetary Fund and the World Bank.
According to the projections of revenues and expenditures of the
Montenegro health system for the period of 2005-2007, the consolidated
balance sheet of the health system shall be balanced.
However, as the Government has achieved the budget stability by respecting
the measures of an agreed three-year arrangement with the International
Monetary Fund, as well as that it is engaged in the implementation of
intensive measures of fiscal discipline, it can be expected that it shall be
fully capacitated to provide the projected transfers for the Health Fund in the
period of 2005-2007, which represent a statutory liability of the Government
of the Republic of Montenegro, and thus to achieve the stability of the
consolidated balance sheet of the Montenegro health system.
What has to be specifically emphasized is the fact that the Health Fund
reached such a high level of deficit in the preceding years (EUR 6.2 million
in 2001 and EUR 7.5 million in 2002), due to the unsettled contributions for
the health insurance of employees in the public sector and of pensioners.
8. MEASURES AND ACTIVITIES
It is for the purpose of accomplishment of a sustainable system of the
Montenegro health system, that the following prerequisites for the
reform shall be fulfilled:
8.1. A full fiscal discipline shall be achieved through:
36
- regular payment of contributions for the health insurance of
employees in the public and real sector,
- regular payment of transfers from the Government Budget for the
Public Health, healthcare of the unemployed, healthcare of refugees
and displaced persons and capital expenditures6,
- the Government shall not delay the payment of contributions for
health insurance in the public and real sector,
- the existing Decree on the participation of the insured persons in the
costs of healthcare shall be reexamined and the level of participation
of the insured shall be selectively increased7.
8.2. Changes to the organization of healthcare shall be introduced, such as:
- in the primary healthcare where a chosen doctor shall be in charge of
healthcare of his patients,
- fostering of preventive measures and activities with a special
emphasis on the programs of prevention to be applied to the
vulnerable categories, including actions to discourage smoking,
measures to prevent traumatism and drugs addiction,
- strengthening of the role of the Health Institute through the promotion
of health education.
8.3. The Master Plan of Health Resources Development shall define the
total capacities and the structure of public health institutions and their
network through:
- control and rationalization of the hospital beds and investments in the
secondary level, except for the standardization of equipment in all
hospital institutions,
- rationalization of the number of beds in general hospitals and
psychiatric clinic,
- restriction of employment in the hospitals,
- fostering of alternatives to hospital treatment: primary healthcare,
home care, homes for the aged,
- plans of enrollment at medical schools and faculties in conformity
with the need of the health system,
6
Liabilities specified in Article 13 of the Law on Healthcare - Official Gazette of the Republic of
Montenegro, No. 39/04
7
The Decree shall not apply to the poor categories
37
- improvement of the educational programs for the medicinal studies
with the plans of specialization,
- standardization of titles and professions in the health sector.
8.4. Measures already initiated in the domain of rationalization in the
pharmaceutical sector shall be continued, specifically in the consumption
and reduction of medicines, through:
- definition of legal instruments in the pharmaceutical domain,
- reorganization of the pharmacies service,
- definition of a positive list of medicines at the expense of the
insurance, taking into consideration the price, quality and efficacy of
medicines,
- regulation of the sales of medicines prices, with a margin level for the
retail and wholesale trade,
- determination of reference prices for medicines at the expense of the
Health Fund and medicines from the hospital list,
- encouraging the chosen doctors to prescribe medicines in the proper
and regular manner,
- development of information system to support the medicines
management and activities of the Medicines Agency concerning the
medicines registration.
8.5. Administrative costs shall be restricted, and the number of non-medical
staff shall be brought into compliance with the standards of the public health
institutions, primarily that of the hospitals.
8.6. A rise of salaries in the health system shall be brought into compliance
with the macroeconomic policy measures, along with the development of
mechanisms targeted at the stimulation of quality, specifically in the primary
healthcare by adoption of a special branch agreement in that domain.
8.7. A plan of priority investments shall be tailored to meet the objectives of
the adopted strategic documents of the Government of the Republic of
Montenegro and the Development Program.
38