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Increasing losses in compulsory health insurance

Partner Institute: 
Institute of Public Health of the Republic of Slovenia, Ljubljana
Survey no: 
(15) 2010
Tit Albreht
Health Policy Issues: 
Funding / Pooling, Benefit Basket, Remuneration / Payment, Responsiveness
Current Process Stages
Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? no no no no no yes no


Recession has had an impact on the Health Insurance Institute of Slovenia (HIIS), who evaluated losses with the compulsory health insurance and found they were increasing much more rapidly than previously estimated. The new estimate reaches 112 million Euros (double of the original estimate) and represents around 5% of the total budget of HIIS. The reasons lie in the reduced number of employees paying insurance, increased sickness absence leave costs and higher pharmaceutical expenditures.

Purpose of health policy or idea

Losses in the compulsory health insurance are an expected outcome of the developments in financial crisis and in continued recession. Specific contributing elements are:

  • decreasing contributions due to the shrinking active employed workforce
  • rapidly increasing salaries of health professionals resulting from the changed salary system in the public sector
  • increasing longer sickness absence leave costs (related to job insecurity and growing unemployment)
  • higher pharmaceutical expenditures

Currently, only the analysis of the reasons and the exploration of the current situation were prepared. No specific measures to intervene by trying to manage future losses have been introduced yet.

Main points

Main objectives

A number of factors acting in different directions - either in increasing expenditures or in decreasing inflows of health insurance contributions - have led to a growing loss with the Health Insurance Institute of Slovenia (HIIS). In 2008, when the new law on public employees was adopted, the HIIS was already warning of the potential adverse effects on the stability of the finances in the compulsory health insurance budget. However, its financing appeared stable in 2008 as economy was still reaching very good results. Some of the salary increases were effectively carried out in 2009 and since then the situation is getting worse. The last increases of salaries intended for the end of 2009 and the beginning of 2010 were delayed but they are still scheduled for 2011 and 2012. However, as much as this is an important issue, it is the only reason for the present and forecasted losses. Additional factors include the demographic situation, increasing expenditures on sickness leave and on pharmaceuticals, together with the reduced inflow of insurance contributions. The rapid growth in the number of unemployed resulted in their numbers increasing by 80 percent since September 2008 when unemployment was at the lowest point.

Compulsory health insurance's share in BDP has been in steady decline since 2002 and decreased to 5.85 percent in 2007. Consequently, private expenditures of different types increased but these have a rather limited scope. As the epidemiological situation is changing and treatment of some severe conditions, especially cancers, is getting more and more expensive, the sustainability of the current model of managing demand and supply in health care is seriously challenged.

A clear outline of the potential strategy of overcoming these losses has not yet been presented. Potential measures to be taken include:

  1.  freezing the future salary increases in health care
  2. a stricter approach to pharmaceutical reimbursement and pricing strategies
  3. managing hospital expenditures
  4. reduce expenditures on longer sickness leave absence costs

Groups affected

Health Insurance Institute of Slovenia, Health care providers, Insured

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Characteristics of this policy

Degree of Innovation traditional traditional innovative
Degree of Controversy consensual highly controversial highly controversial
Structural or Systemic Impact marginal rather fundamental fundamental
Public Visibility very low very high very high
Transferability strongly system-dependent system-dependent system-neutral

Political and economic background

There are a number of political and economic factors that led to the present losses in the compulsory health insurance scheme. Among them the most important would be:

  1. restrictive policies with respect to public expenditures on health care
  2. high increases in salaries of medical doctors and other key groups of health professionals
  3. insufficient responsiveness to the increasing demand for medical and other health services and inability to raise additional financial resources.

Losses in the compulsory health insurance had been anticipated but they were not taken too seriously. There is now a need for a comprehensive approach towards a strategic development of overall policies in national accounts and in balancing across the different sectors. It is worth noticing that some easily anticipated higher costs, such as pharmaceuticals and advances in cancer treatments had not been taken into account and the national policies on health insurance were based on the assumption that the growth of the gross domestic product would feed the increased expenditures on health care.

Complies with

Stable fiscal policies at the national level taking into account the extrabudgetary control of the Ministry of Finance - condition sine qua non

Purpose and process analysis

Current Process Stages

Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? no no no no no yes no

Origins of health policy idea

The sustainability of the compulsory health insurance financing came under question for the first time in 2000 after the increases in salaries of health professionals and the introduction of VAT. Later it was regulated by control over salaries in the public sector and through the economic growth. This changed since the end of 2008 after the gradual worsening of the economic situation in Slovenia as the result of the global economic crisis. Unemployment rises (from under 6 percent in September 2008 to around 10 percent in April 2010) and shrinkage of the GDP by 7.8 percent in 2009 contributed largely to the deficit amounting to 75 million Euros in 2009. By the beginning of 2010 the HIIS still had around 54.6 million Euros in its accumulated reserves. But as the estimated losses for 2010 now stand at 112 million Euros, the reserves will not be sufficient any more to cover for the losses.

Initiators of idea/main actors

  • Payers

Stakeholder positions

The paper and the strategy on solving the deficit in the compulsory health insurance yet need to be established and adopted. The original responsibility lies with the Health Insurance Institute of Slovenia (HIIS). They need to prepare an immediate list of interventions that will reduce the deficit already in the course of this year and in 2011. On the other hand, as the government is about to change the basic legislation in the field of health services, health care and health insurance, there is enough leverage for the government to act on behalf of the citizens and protect their interests.

Actors and positions

Description of actors and their positions
Ministry of Healthvery supportivesupportive strongly opposed
Health care providersvery supportiveopposed strongly opposed
Professional associationsvery supportiveopposed strongly opposed
Patient organisationsvery supportiveneutral strongly opposed

Influences in policy making and legislation

The present situation may be prospectively influenced by the prepared draft of the new Health Care and Health Insurance Act which, however, is still in the early stages of the public discussion.

Legislative outcome


Actors and influence

Description of actors and their influence

Ministry of Healthvery strongvery strong none
Health care providersvery strongstrong none
Professional associationsvery strongstrong none
Patient organisationsvery strongstrong none
Ministry of HealthPatient organisationsHealth care providers, Professional associations

Positions and Influences at a glance

Graphical actors vs. influence map representing the above actors vs. influences table.

Monitoring and evaluation

There will be a year-to-year monitoring and evaluation process addressing the changes proposed by the health insurance and the MoH. This evaluation is to ensure an easier follow-up and also allow for the interventions in order to fine tune the processes.

Expected outcome

Impact of this policy

Quality of Health Care Services marginal rather fundamental fundamental
Level of Equity system less equitable system less equitable system more equitable
Cost Efficiency very low neutral very high

All the interventions that are currently discussed regarding the reduction of the deficit in compulsory health insurance will lead to a reduction in access to certain health care services. The extent of these reductions yet needs to be established and also the fact whether they will affect more the active population or the elderly.


Sources of Information

1. Summary of the business report of the Health Insurance Institute of Slovenia for 2009. Accessed at the homepage of the HIIS ( on 16 April 2010.

2. Draft of the Health Care and Health Insurance Act for discussion - homepage of the Ministry of Health of Slovenia, , accessed 15 February 2010.

Author/s and/or contributors to this survey

Tit Albreht

Suggested citation for this online article

Albreht T. "Increasing losses in compulsory health insurance". Health Policy Monitor, April 2010. Available at