4. Paying for services
Adequate funding for health is important to manage the excess demands on the health system. This section considers how countries are PAYING FOR COVID-19 SERVICES. Health financing describes how much is spent on health and the distribution of health spending across different service areas. The section also describes who is covered for COVID-19 testing and treatment, whether there are any notable gaps (in population coverage and service coverage), and how much people pay (if at all) for those services out-of-pocket.
4.1 Health financing
The Czech healthcare system is based on statutory health insurance (SHI) and provides a broad benefit package. All necessary healthcare costs related to COVID-19 are paid by the health insurance funds (HIFs) via their contracts with healthcare providers without any co-payments.
In late April, the Parliament approved the governmental proposal to increase the so-called state payment, a state budget contribution to the social health insurance system on behalf of defined categories of economically inactive people (children, students, unemployed, seniors, etc.) . Starting from June 1, 2020, the payment was increased by CZK 500 per person per month (from CZK 1067 to CZK 1567), with a further CZK 200 increase planned for January 1, 2021 (to CZK 1767). This measure amounts to an extra CZK 21 billion (EUR 778 million) this year and extra CZK 50 billion (EUR 1.85 billion) in 2021 and, among others, compensates for the government‘s earlier measure withdrawing the minimal monthly health insurance advance contribution payment for all self-employed individuals for 6 months (March through August). These forgiven prepayments will be treated as paid in the 2020 annual settlement , amounting to the SHI revenue loss of approximately 8.5 billion CZK (EUR 313 million) compared to the SHI original revenue. In June 2020, a similar SHI advance contribution payments withdrawal was approved for small businesses.
Healthcare providers are financed by monthly prepayments from HIFs, and all payments are settled annually based on actual healthcare utilization and the conditions set in the contracts. The HIFs continued sending these prepayments even though healthcare utilization decreased due to the postponement of elective care, treatments and prevention. Hence, most providers were receiving prepayments based on their 2018 figures and thus did not experience any temporary decrease in cash revenues, even though their activity temporarily dropped. For providers without prepayments (typically dentists), the HIFs arranged for temporary prepayments to them as well; most of these temporary measures were called off by June 30 .
While prepayments were not an issue, the debate focused on how the 2020 annual settlement would be carried out. Healthcare providers worried that the HIFs would settle payments against actual utilization according to the contracts, although the Ministry of Health (MoH) ordered providers to delay all planned care and operations to open capacity for expected COVID-19 patients. A legislative change was passed by the Czech Parliament in June, allowing the MoH to publish an amendment to the 2020 Reimbursement Directive, the so called Compensation Reimbursement Directive (CRD), which compensates healthcare providers for financial losses stemming from the COVID-19 pandemic’s decreased healthcare provisions. The MoH estimates the providers’ losses would amount to CZK 30.8 billion. The MoH proposed a rather generous compensation scheme to all providers’ segments.
The CRD was issued on July 1. The minimum level of 2020 activity for hospitals is newly set at 79%-82% of 2018 providers’ activity (depending on the number of treated COVID-19 patients) in order to settle the full contracted 2020 payments (the 2020 prospective hospital budgets are approximately 12% higher than the 2019 budgets). For LTC facilities, a bed-day reimbursement is increased on average by 5% (plus an extra 1% to compensate for PPE costs). For spas, reimbursements are increased by 17% for the second half of 2020. For outpatient care, FFS reimbursements are increased by 10% on average for the whole 2020 year .
The CRD also incentivizes providers to increase their activity over the summer and next months to make up for March-April utilization drop. Approx. CZK 3 billion is counted to reimburse for activity volumes above the 79%-82% of 2018 activity. If this level is not reached by a provider over the whole of 2020, 2021 monthly prepayments will be cut (but less than proportionally, according to the CRD) . An open question still remains as to what the baseline for 2021 revenues will be.
The CRD also explicitly compensates the inpatient and outpatient providers for treating positive COVID-19 cases (a case-specific increase in the FFS reimbursement for outpatient care and add-on per diem reimbursement per each COVID-19 positive patient, differentiated if treated on an ICU (EUR 2 237) or standard bed (EUR 88), in addition to the usual monthly payments for inpatient care) .
During the spring state of emergency, personal protective equipment (PPE) and medical equipment (e.g. ventilators) to manage the COVID-19 outbreak were purchased centrally by the Ministry of Health and Ministry of Interior (MoInt) based on government resolutions and financed from the state budget (Government Budgetary Reserve item) . The MoH distributed PPE to public health authorities, labs performing COVID-19 tests, and all healthcare facilities directly under the MoH’s authority (including all university hospitals). The MoInt distributed PPE to all other public and private entities including social care homes mainly via regional governments. After the end of state of emergency in spring ended, only the equipment for the organizational bodies of the state is provided centrally and financed from the state budget via the Administration of State Material Reserves. Healthcare providers are responsible for securing and financing PPE on their own. As of July 1, the CRD has increased the FFS reimbursements for outpatient sector, bed-day reimbursement for long-term care providers, and indexed the prospective budget reimbursement for hospitals to account for their increased costs due to PPE purchasing .
The Budgetary Reserve has been increased by 59.3 billion CZK (EUR 2.19 billion) as part of an amendment to the Act on the State Budget, which is intended to prevent the epidemic‘s spread and to respond to its consequences . This allows flexible solutions to direct financial means to the ministries when needed. For example, the MoInt was allocated 1.2 billion CZK (EUR 44.3 million) on March 23 to purchase PPE .
At the end of July, the government approved special bonuses for all employees of inpatient care facilities, including non-medical personnel. The one-off bonus for medical personnel (CZK 75 000) equals 91% of the 2019 average monthly salary for physicians and 170% of the 2019 average monthly salary for nurses (data from MoH and UZIS). For nonmedical workers, the bonus was CZK 30 000 per one full-time employee. To secure the money transfer, MoH published a call for designated subsidy to all inpatient care facilities; state-owned hospitals received the money transfer directly.
For the autumn infection surge, the CRD reimbursement remained in place, including the case-specific reimbursement for treating COVID-19 positive patients differentiated if treated on an ICU or standard bed, see above.
The government promised health care workers a new one-off bonus for the autumn (and winter) infection surge period, declaring it would be about the same amount as for the spring period, to be paid out in first months of 2021. In January, the bonuses were promised to be paid out by April 2021. Discussions are ongoing whether only healthcare workers in hospitals should be eligible (as was the case in 2020) or whether all (including outpatient workers) health care workers should get the same bonuses. Wage tariffs for hospitals’ health care workers were increased by 10% on January 1, 2021.
In March 2021, the government approved special bonuses for inpatient healthcare workers for the period from October 1, 2020, to February 28, 2021 (CZK 75 000 or EUR 2 850 for full-time healthcare workers, CZK 30 000 or EUR 1 140 for full-time non-healthcare workers), to be paid out in April or May 2021. The government has earmarked CZK 12 billion to cover full employment costs, including social contributions; the bonuses were originally planned as a subsidy program similar to the one created in 2020, however processes are ongoing to have the SHI cover the costs (an amendment to legislation is needed). The Ministry of Social Affairs is also to open a subsidy program worth CZK 6.4 billion for social care providers. Full-time social care workers are to receive a special bonus CZK 15-50 000 (EUR 570- 1900) each; bonuses for outpatient healthcare workers are still under discussion and the MoH plans to compensate them through increased SHI payments, i.e. from health insurance funds’ budget, to the tune of an extra CZK 11 billion.
 Ministry of Healthcare website, accessed April 11, 2020 https://koronavirus.mzcr.cz/parlament-schvalil-opatreni-na-podporu-platcu-pojistneho/
 Government Resolution No. 263, issued on March 19, 2020, and Government Resolution No. 286, issued on March 23, 2020. https://apps.odok.cz/attachment/-/down/IHOABMVAVX1D https://apps.odok.cz/attachment/-/down/IHOABMZANK1C
 Government Resolution No. 296, issued on March 23, 2020. https://apps.odok.cz/attachment/-/down/IHOABMZAP9TY
 Ministry of Health, Guidelines for testing Covid-19 patients, issued on March 25, 2020. https://koronavirus.mzcr.cz/wp-content/uploads/2020/03/Doporu%C4%8Den%C3%BD-postup-k-testov%C3%A1n%C3%AD-na-COVID-19.pdf