Welfare in the Mediterranean Countries Slovenia

Transcription

1 Welfare in the Mediterranean Countries Slovenia Claudia Avolio 1

2 C.A.I.MED. Centre for Administrative Innovation in the Euro-Mediterranean Region c/o Formez - Centro Formazione Studi Viale Campi Flegrei, Arco Felice (NA) Italy Tel Fax gpennella@formez.it nvolpe@formez.it The views expressed do not imply the expression of any opinion whatsoever on the part of the United Nations and of Italian Department for Public Administration, Formez and the Campania Ragion Administration 2

3 The Slovenian Social Security System in the reform process Introduction The objective of this work is not to focus on the Welfare State system as a whole in Slovenia, but to analyse the principal aspects of recent social policy reform and its consequences on poverty and social inclusion. The paper will give more attention in particular to the two main reforms of Social Security System, concerning pensions and unemployment, and to the main features, including innovations, of the Health Care System. The welfare system now in place was set up in 1992 soon after Slovenia s independence (1991) but, in recent years and in the light of agreements for European inclusion, Slovenia has had to bring its its social legislation in line with Europe. The Lisbon Summit (2000) highlighted social policy as a core element in European strategies for becoming the most competitive and dynamic knowledge-based economy in the world. Living conditions and quality of life for citizens play a key role to ensure a cohesive and strong new European union and in determining the successful out come of enlargement. It is well know that achieving quality of life for citizens is strictly tied to national social policies and to Welfare-State concepts. A clear definition of social policy is given by T.H. Marshall: "Social policy is the use of political power to supersede, supplant, supplement, or modify operations of the economic system in order to achieve results which the economic system would not achieve on its own". It seems to reflect and anticipate the concept of policy mix on the base of the modern model of welfare state aimed to promote a more coordinated combination between economic and social strategies. Since 1990s changes in social services and in the health care system have been introducing to answer multidimensional needs: (1) to make work pay and to provide secure income; (2) to make pensions safe and pension systems sustainable; (3) to promote social inclusion; (4) to ensure high quality and sustainable health care; and (5) to increase development and competitiveness. 3

4 1. Slovenia Social Security System The concept of social security is one of the fundamental principles at the basis of Slovenia State (Slovenia become a Republic in 1991). The Constitution (1992- Art. 2) affirms that Slovenia is a state governed by the rule of law and is a social state and defines the main beliefs of the social security scheme for the right to social security, to health care and rights of disabled together (second part of the constitution). On those institutional bases some other laws, acts and programmes were adopted by Slovenia Government with the aim of straightening and implementing social policy. The most important social security sources are formal statues (laws, acts) regulating five social security schemes: (RS, 9/92, 13/93, 9/96, 29/98) Health Protection and Health Insurance Act; (RS 12/92, 5/94, 7/96,54/98, 106/99) Pension and Disability Insurance Act; (RS 5/91, 17/91, 12/92, 71/93, 2/94, 38/94, 69/98, 67/02) Employment and Unemployment Insurance Act (RS 65/93, 71/94, 73/95) Family Benefits Act; RS 54/92 Social Security Act. Also important are (RS, 5/96, 34/96, 3/98) Act on Contributions for Social Security and (19/94) Labour -courts and Social- courts Act. The social security system in Slovenia, actually, consists of five fields/branches: health care, old age and invalidity and unemployment contingencies, covered by social insurance schemes; family protection that is a mix of concepts of social insurance, social provision and social assistance; social assistance is covered by a means-tested subsidiary scheme. Below is summary outline of the main features and differences of social security programmes in terms of regulatory framework, coverage, source of funds and administrations involved. 4

5 Social security programmes Old Age, Disability, and Survivors Regulatory Framework First law: 1922 Current laws: 1999, 2000, and 2001 (amendments). Type of program: Social insurance system. Coverage Employed persons in industry, commerce, and agriculture; public employees; members of handicraft and fishery cooperatives; and self-employed workers including craftsmen, liberal professions, artists, and farmers Source of Funds Insured person: The contribution rate varies. The average contribution rate is 15.50% of earnings. Employer: The contribution rate varies. The average contribution rate is 8.85% of payroll. Government: Covers the cost for veterans and certain groups of insured (policemen, ex-active army officers) and makes up the deficit in the event of an unforeseen decline in contributions Administrative Organization Institute for Pension and Disability Insurance provides general supervision. Sickness and Maternity Regulatory Framework First laws: 1922 (sickness) and 1949 (maternity). Current law: 1992, amended in 2001 (sickness) and 2001 (maternity). Type of program: Social insurance system. Coverage Sickness: Employed persons, self-employed persons, and farmers (if insured). Maternity: Persons insured for parental leave and eligible for maternity benefit (mothers, fathers, and third persons caring for the child during leave from work). Source of Funds Insured person Sickness: Employees contribute 6.36% of their gross salary. Maternity: Employees contribute 0.10% of their gross salary; self-employed persons and farmers (if insured) contribute 0.20% of the insurance base for Old Age, Disability, and Survivors (see above). Employer Sickness: Employers contribute 6.36% of gross payroll. Maternity: Employers contribute 0.10% of gross payroll. Government Sickness and maternity; benefits in kind: Contributions are credited on behalf of certain groups of insured. Government pays for the health care of military personnel, refugees, and prisoners. Government also pays for the collection of blood, organs, and tissues for transplantation. Sickness and maternity; cash benefits: Contributions are credited on behalf of certain groups of insured. Government finances 92% of the cost of maternity benefits from general taxation. Administrative Organization Sickness benefit: National Institute of Medical Insurance including 10 district units. Maternity benefit: Ministry of Labour, Family and Social Affairs. Benefits are paid by social work centres. Work Injury Regulatory Framework First law: Current law: 1992, 1993, 1996, 1998, 1999, 2001 amendments for health insurance; 1999, 2000, and 2001 for pension and invalidity. 5

6 Type of program: Social insurance system. Coverage Employees, self-employed persons, farmers, and other persons insured under the pension and invalidity scheme, including students in secondary and tertiary education undertaking a work placement; physically and mentally disabled individuals in professional training, in work placements, or attending practical training; unemployed persons performing public work; volunteers; and prisoners. Source of Funds Insured person: The contributions for temporary and long-term incapacity benefits are taken from the insured's combined contribution for Old Age, Disability, and Survivors and Sickness. Self-employed persons and farmers pay 0.53% of the insurance base for Old Age, Disability, for temporary incapacity; and the contribution for long-term incapacity is taken from the insured's combined contribution for Old Age, Disability, and Survivors and Sickness. Employer: The contribution for temporary incapacity is 0.53% of payroll. The contribution for long-term incapacity is taken from the combined contribution for Old Age, Disability, and Survivors and Sickness. Government: The government makes up any deficit caused by a decline in contribution rates for permanent disability benefits Administrative Organization Institute for Pension and Disability Insurance and Institute of Health Insurance Unemployment Regulatory Framework First law: Current laws: 1991, 1992, 1993, 1994, 1998, and Type of program: Social insurance system. Coverage Employed persons in industry, commerce, and agriculture; public employees; and members of handicraft and fishery cooperatives. Source of Funds Insured person: 0.14% of gross wage. Employer: 0.06% of payroll. Government: The government provides subsidies. Administrative Organization Employment Service of Slovenia. Family Allowances Regulatory Framework First law: Current law: Type of program: Universal system. Coverage Families with children residing permanently in Slovenia. Source of Funds Insured person: None. Employer: None. Government: Total cost. Administrative Organization Ministry of Labour, Family and Social Affairs. Benefits paid by social work centres. 6

7 1.1 Institutional framework The legal power in the field of social security belongs to the Central State institutions, while Local authorities have certain responsibilities concerning social assistance. The Ministry of Labour, Family and Social Affairs and the Ministry of Health are responsible for developing social policy and supervising the implementation of the social security system. The insurance schemes are administrated by selfadministrative agencies: the Health Insurance Agency, the Pension and Invalidity Insurance Agency and the Employment Agency. The social partners are involved in the management of the agencies, while the regional units of the social security institutions and the local employment offices represent the decentralised aspect of the system. Family benefits and social assistance benefits are distributed by Social Work centres. These are public institutions, which carry out most of the work in the field of social assistance for practically all groups of population and all sorts of social problems within the area. There are 62 social work centres in Slovenia for the population of about two millions. Also the non-profit voluntary sector had a significant impact in political, cultural, environmental and charity fields. Its legal status and role are defined both in the constitution and in the successively acts. Early 1990's saw a great rise in number of sport and cultural associations and associations providing social care and welfare and health care. Their activities and programmes mostly mean the supplement of national measures and public services. 1.2 Financial sources and levels of expenditure Social policy deals with the provision of vital sources to satisfy basic living needs. The State, with social financial benefits (through compulsory social insurance and redistribution of income), regulates the equality as regards the accessibility of various sources. The amount and kinds of social financial benefits guaranteed by the State are defined by legislation, while the resources for them are collected through taxes and contributions to the national budget or in public funds. The way social security programmes are financed depends on the characteristics of different social security schemes 1. Insurance schemes : health insurance, pension and invalidity insurance, unemployment insurance and maternity benefits are financed mainly by employers and employees. Expenses for other family burdens and for majority of social assistance services and social assistance benefits are covered by the state budget. 1 Levels of calculated benefits are adjusted to economic movements. 7

8 Only personal help, help to the family at home and minimum housing rents are financed by the community budget. A foremost comparison between Slovenia and European social security system demonstrates some similarities. In terms of the costs of social protection expenditure relative to GDP, Slovenia is very close to the EU average (tab n.1). Comparison of the relative importance of various individual social protection programs shows that the composition of social protection expenditure in Slovenia is also more or less similar to that in the EU-15. Tab n.1 Expenditure on Social benefits by function in Slovenia and EU, 2000 Function Slovenia (% of GDP) EU-15 (% of GDP) Slovenia (% of total benefit) EU-15 (% of total benefit) Sickness, health care 7,6 7,2 30,7 27,3 Disability 2,2 2,1 9 8,1 Old age 10,7 10,9 43,3 41,7 Survivors 0,5 1,3 2 4,9 Family and children 2,3 2,1 9,2 8,1 Unemployment 1,1 1,6 4,3 6,3 Social exclusion not 0,4 1 1,5 3,6 elsewhere classified total 24,8 26, Source: Statistical office of Republic of Slovenia; Eurostat 1.3 Recent reforms: implication on poverty and social exclusion. One of the reasons for recent changes in social security laws is the adhesion to EU and the process of harmonization of national rules influenced by European recommendations. Considering, however, that EU legislation does not contain many hard social security laws, there are few legal reasons for adapting existent social security norms. So, the causes of Indirect harmonization have been also significant. Certainly at first, reform of the various parts of the social protection system in Slovenia pursued multiple goals, but financial sustainability was in the forefront: some social security transfers - especially for pension insurance - were too high to enable Slovenia s adaptation to EU economic criteria. The period was marked by gradual and incremental changes in the pension system 2. 2 The system of pension and disability insurance provides, the insured or their family, social protection in case of old age, less or reduction of working ability or death. 8

9 Two pension reforms, the Pension and Disability Insurance Act (PDIA) of 1992 and the PDIA of 1999, were adopted to introduce substantial changes in the first pillar. As a complement to statutory insurance, in which benefits have been decreased, complementary insurance may be organized through the workplace (second pillar) and pension insurance may also be taken out on an individual basis with private operators. So a voluntary second pillar was introduced, mainly in the form of collective pension schemes. An important concession wrested from the Ministry of Finance was a very favourable tax treatment of premiums for these pension schemes. Following the passage of the 1999 PDIA, the actual retirement age has started to increase 3 while pension expenditure, as a percentage of GDP, has started to decrease. Tab n.2 Pension expenditure, replacement rates and actual retirement ages. Year Pension expenditure Average replacement Actual retirement age (years, months) (%of GDP) rate* (%) Men Women ,41 77,8 56,2 52, ,13 74,3 58,3 54, ,85 72,8 59,11 55,6 *. Ratio of the average old-age pension to the average net wage Source: Institute for Pension and Disability Insurance (2003) The basic right of unemployed persons is the right to be included in the programmes of active employment policy 4. Other rights of the insured unemployed persons are unemployment benefit and unemployment allowance, health insurance, invalidity and disability insurance. Reimbursement of transport and relocation costs can be granted to all job seekers, not only to the insured ones. The unemployment insurance system is probably the weakest within the overall social protection system of Slovenia 5. In accordance with the workfare doctrine, greater emphasis in recent years has been placed on various active labour policy measures. 6 Changes introduced in 1998 further tightened eligibility conditions for the receipt of unemployment compensation, which is an income-related 3 Normal age limit for retirement is 63 for men and 58 for women but it can be lowered in the case of full pension qualification period. 4 Slovenia expenditure on active labour market policies reaches 0,36% of GDP against EU average of 0,92% and EU minimum of 0,25% (Greece and Portugal). Ref European Training Foundation 5 As it shows in table about unemployment insurance (tab n.4), unemployment are the vulnerable group with by far the largest incidence of poverty 6 The National Employment Action Programme is based on Lisbon Goals and European Employment Strategy. 9

10 unemployment benefit 7. Admittedly, the duration of entitlement has remained unchanged (it depends on the insurance period) but the required insurance record is more demanding. The eligibility for unemployment benefit depends on previous employment of at least 12 months during the last 18 months. Another condition is that the termination of employment wasn t due to the unemployed person s will or fault. These harsher conditions caused a large drop in the number of beneficiaries and the increase of unemployment assistance beneficiaries 8. Tab n. 3 Unemployment benefits (UB) and unemployment assistance (UA). Number of recipients and average duration of receipt. Year No. of UB recipients No. of UA recipients Average duration of receipt of UB (months) Average duration of receipt of UA (months) Average monthly no. of UB and UA recipients Proportion of UB and UA recipients in monthly unemployment ,3 3, , ,8 3, , ,3 6, , ,6 8, , ,6 8, ,6 Source: Employment Service of Slovenia Both reforms were triggered by the need for cost containment and the desire to ensure the system s financial viability at least in the medium term. Certainly, as several researchers have noted, some positive economic effects are already evident while some doubts on social long term consequences still remain. Social transfers have, in fact, a quite varied effect on the income of recipient groups. In other words, in spite of social transfers, the risk of poverty can be quite high for certain groups. During the transition period, from 1993 to , the risk of poverty increased slightly for all persons, although not for all subgroups. Poverty risk decreased for pensioners and for persons aged 60 and over (these two groups, of course, strongly overlap) but it has been increasing for unemployment (tab n.4). The large increase in poverty risk for the unemployed was caused by a decrease in the share of unemployed who receive unemployment benefits (for further detailed information see Stropnik and Stanovnik Combating poverty and social exclusion 2002). 7 The basis for the calculation of unemployment benefit is the average salary of the insured person in the last 12 months before the termination of employment, and it can t go under the guaranteed salary/ minimum gross earning as defined by the law, and may not be higher than three times this sum. 8 Unemployment assistance is means-tested and it can be paid no longer than 15 months. 10

11 Tab n.4 Incidence of poverty, 1993 and a Poverty line as a percent of median equivalent household income All persons Pensioners Unemployment Persons aged 60 and over Source: Stropnik and Stanovnik Combating poverty and social exclusion 2002 The concepts of poverty and of social exclusion refer to the degree to which people are integrated into a web of social relations, capable of participating in the social and political life of the society around them. It has a dynamic connotation, implying a chain of events which, if uninterrupted, leads from one form of deprivation, such as income poverty, to multiple forms of deprivation, and finally to social exclusion in the sense of detachment from social bonds. Below is a summary framework of socio-economic data relating to quality of life and risks of poverty and social exclusion. Because of the lack of data and the complexity of the phenomenon the scheme can not consider exhaustive. Tab n.5 Social indicators populatio n in millions. (2004) Life expectancy at birth. (2002) unemployment rate in% (2004) infant mortality per 1000 live births. (2001) total social protection expend. % of GDP (2000) % satisfied people for life conditions (a) men women total female average * perceived social exclusion % of popul. (a) Slovenia 2 72,7 80,5 6,4 7,0 4,2 25, EU ,8 81,9 8,0 8,9 4,6 27, EU ,8 81,3 9,0 9,9 n.a. n.a (a) Source: European Commission "Perception of living conditions in an enlarged Europe" * It is an average of nine domains(home, family life, neighbourhood, health, social life, personal safety, employment, income, health care) Source: EUROSTA New Release Several analyses of social policy in Slovenia have highlighted the expulsion from labour market, especially the long term unemployment of worker with lower level of education and professional skills, as the main factors that 11

12 influence poverty levels and social inclusion. These particular aspects have required a strong government commitment in active labour policies. Slovenia s welfare to work measures to fight unemployment 9 are founded on several educational and training programmes for both adult and young unemployed, promoted also with the help of the Employment Service of Slovenia 10 (ESS), and on the enhancement of economic facilities for investments addressed to jobs creation Health care system in Slovenia In the early 1992, following the process of economic transformation based on the principles of developed Western economies, health care legislation introduced a compulsory and a voluntary health insurance system. At the same time, private practice was reintroduced. After 1992, many elements of the health care reform have been indirectly influenced by Slovenia s desire to join EU: adequate administrative capacity in health care is a precondition for coordinating and implementing the present and future EU common standards. Under the auspices of the EU PHARE/Consensus Programme, in fact, Slovenia set up a special project aimed at strengthening administrative capacity in health care and to facilitate coordination and cooperation at the EU level. The present organizational structure, derived from the legislation on health care introduced in 1992, is based on the coordinated actions of both central and local institutions and entities. Roles, tasks and responsibilities concerning planning, regulation and care delivery are divided among the different levels. 9 They have been launched within the national strategic goals of the labour market and employment development 10 ESS operates on three levels: the main office, regional offices and local offices 11 Fiscal incentives financial facilities for self-employment and employer. 12

13 2.1 Institutional framework KEY ACTORS The parliamentary Committee on Social Affairs, Work, Family Matters and Health prepares legislative proposals and other sorts of material useful for parliamentary discussions. National Board of health is an advisory body whose task is to promote health policy by monitoring the effects of the social and physician environment on health and assessing development plans and legislative drafts. Its role is currently under review. Ministry of Health develops national health policy ensuring regulation and supervision of the implementation of legislation. Its activities cover all health care delivery system levels: primary, secondary and tertiary. The Ministry s responsibilities are to monitor public health, prepare and implement health promotion programmes, ensure the conditions for people s health education, supervise production, trade and supply of medicines and medicinal products. Also it defines, in reference to national health policy and in accordance whit other central bodies, financial funds, insurance benefits and quality of public health care facilities. Health Council is the highest coordinating expert body for health care, advising the ministry of health on health policy matters. The Health Insurance Institute of Slovenia was created as a public, not-for-profit institute with the aim of providing compulsory health insurance. Its tasks include: providing compulsory insurance; concluding contracts with health care, providers and suppliers of technical appliances; supervisory and administrative activities. It is composed of 56 branch offices, 10 to the regional level and 46 to the local level. None have decision-making rights concerning health insurance. Institute of Public Health was founded in December 1992 with the aim of covering the fields of social medicine, hygiene, environmental health, epidemiology. The most important activities of the national IPH together with its nine regional public health institutes are to implement the national programme of prevention, to collect and analyse data on the health of the population and health care services. Self-governing communities. In spite of health care reform legislation of 1992, local government of self-governing communities continue to have a marginal role in decision-making. They have responsibility for granting concessions to private health care providers who want to work within the public primary health care system and the responsibility for capital investment in public primary health care facilities and pharmacies. Nongovernmental organizations. After the Law on organizations (1995) their role is beginning to emerge. Their participation consists of proposing changes and drawing attention to anomalies. 2.2 The health care delivery system and territorial levels of services The public network consists of public health institutions (health care centres and hospitals) and private health care institutions that have a contract with HIIS. Both provide health care facilities and covered the three levels primary, secondary and tertiary in which is structured health care facilities.

14 Tab n.6 Public health Care Institutions in Slovenia, 2001 Activity By number Total number of employees Employees Max number of employees in one institute Min number of employees in one institute Health Centres Hospitals Clinical Centres, Oncology Inst., Inst. for rehabilitation Other Public institute Health Total Source: Human Development Report Both public and private providers of care deliver primary health care. Public providers include health care centres and health stations. The locations of health care centres correspond to the seats of former self-governing communities (from before 1995), and the locations of health stations correspond to important local centres, which are small towns, hamlets or villages. Today, by law and in practice, a health care centre is an institution that provides, as a minimum, preventive and curative primary health care 12 for different target groups of inhabitants, notably many of those who are at higher risk from a public health viewpoint. Health stations provide as a minimum 13 : emergency health assistance, basic diagnostic services, general practice or family medicine and health care for children and youth and is linked to the nearest health care centre for other activities described by law. A primary health care facility (health care centre or health care station) is available within 20 kilometres from almost all locations in Slovenia. The average number of patients per general practitioner is about 1800 (Ref Health care system in transition ). Today, health care centres are operated by one or more self-governing communities, which also provide funds to maintain the premises. Thus, health care centres are publicly owned. 12The types of care include: emergency medical aid; general practice or family medicine; health care for women, children and youth; home nursing; laboratory and other diagnostic facilities; preventive and curative dental care for children and adults; health aids and appliances; pharmacy services; physical therapy; and ambulance services. 13 The personnel delivering primary health care include: general practitioners or family physicians, dentists, nurses, pharmacists, physical therapists, speech therapists, occupational therapists, psychologists or psychiatrists, midwives and other health professionals necessary to carry out the work of the health centre 14

15 Private providers includes individual health professionals acting as providers or group practices with various combinations of services and specialties. The selfgoverning community grants concessions for private primary health care providers (based on the consent of the Ministry of Health). Such a concession is a public contract, which ensures inclusion into the network of publicly financed health care providers. A concession is the prerequisite for reimbursement of practitioner services by compulsory and/or voluntary health insurance. The contract with the HIIS gives the private provider of health care the same rights as any public provider with the only difference that a private provider cannot apply for public funds for capital investment. The rules of compulsory health care insurance entitle patients to select their own physician in primary health care: in the health care centre or in private practice having a contract with the HIIS. The personal physician is in principle a general practitioner. Personal physicians represent the entrance point to the health system (gatekeeper). With a referral from the personal physician, the patient may choose from a range of existing public or private providers of secondary and tertiary care. Specialist secondary care is performed in hospitals, polyclinics and spas. University, hospitals and university institutes provide more complex tertiary health care services. Secondary outpatient medical services are provided at the polyclinics spa affiliated with hospitals or in community health centres contracted through a hospital specialist or consultant. As from 2000, most hospital polyclinics have worked within the public network of health care services (Ref. Health care system in transition ). There are also a few purely private health care providers of secondary specialist care and diagnostic services, but most work on contract with the HIIS. Slovenia has no combined public-private polyclinics yet, but the medical and dental professions aspire to move in that direction. In respect to human resources issue, government policies aim, in the short term, to curb principally exiting shortage in staffing. As the table shows, the problem concern above all physicians and not nurses. Tab n.7 Health care Staff, 2001 Public Private Total All Physicians Specialist Dentist Pharmaceut Physiotherap Nursing staff Source: Human Development Report,

16 Currently there is no unemployment among physicians, and the main problem at moment seems to be the shortage of personnel in remote regions: the number of general physicians per inhabitants was in 2001 about 227 while in EU-15 and EU-25 they were respectively 363 and Physicians may practice in several ways: privately with a concession and under contract with the HIIS or privately without contract. All those employed are salaried according to the terms of the general contract for employees in the public sector and a special contract for health care 15. Physicians and dentists have, however, obtained the right to have a special contract, which means a separate negotiating position with the HIIS that introduces special supplements to their salaries. Since 1999 some new specialities have been introduced to harmonize older curricula to EU Medical Specialist guidelines while, because of new development in medicine and the use of new technologies, greater attention and importance has been given to nursing staff education. 2.3 Financial sources and levels of expenditures Virtually the entire population with permanent residence in Slovenia is covered under the sole compulsory insurance scheme either as a mandatory member or as a dependant. Opting out of the compulsory system is not permitted. Coverage is also provided to citizens of almost all EU countries through arrangements governed by bilateral conventions. Slovenia has about twenty categories of insured people with two main groups. The first comprises white-and blue collar workers whose contributions depend on own income and not risk and include without any surcharge non-earning spouses and children. The second group consist of people contributing fixed amounts: unemployed person and other people with no income whose contributions are paid by, respectively, the national institute for employment and the self-government communities; pensioners pay a fixed contribution of their gross pension (about 5,7%) while self-employed, farmers and craft workers pay contributions according to a fixed proportion of their after-tax income. The state budget covers capital investment for all secondary and tertiary health care facilities and covers also expenditures for the national public health programme which includes the traditional national prevention programmes as well as some new health promotion programmes, medical education and training, research, the national health information system, cooperation activities between sectors and so on. 14 EUROSTAT New Release 15 Physicians average earnings in 2001 were about 2.5 times the average salary in Slovenia - WHO, Regional office 16

17 The self-governing communities collect revenue at the local level to allow capital investment in primary health care facilities. They provide for all public services and decide locally how much to invest in health 16. Special funds are available from the state budget for developing self-governing communities, and some funding is available from the Ministry of Health for developing emergency units. Other financial sources derives from complementary forms of payment: - The out-of-pocket payments in the form of co-payments for services under the compulsory insurance system (these in the majority of cases are reimbursed through voluntary insurance arrangements); - the voluntary health insurance that was introduced in 1993 with the aim of diversify funding sources. It can provide supplementary insurance and covers co-payments within the compulsory system (for services depending in part on individual insurance policies) and additional (non standard) benefits International technical programmes (Eurohealth- Who- Phare) Nevertheless, as the following table show, the largest contribution still comes from public resources Tab n. 8 Health care financing sources, % of GDP Public resources compulsory health insurance Transfer of revenue from budget Private resources Voluntary health insurance Other private resources Total Sources Human Development report, Self-governing communities differ in the extent to which they use their autonomy in practice to collect taxes and to invest this in health care. 17 The two largest providers of voluntary insurance are: Vzajemna (mutual not-for-profit company) and Adriatic Company (commercial provider) 17

18 2.4 Elements of innovation for ongoing health care reform As is underlined in The National Health Care Programme of the Republic of Slovenia-health for all by 2004, the dominant strategy incorporates many important aims concerning above all the question of how to maintain health and social security in the light of a situation that will be even more marked by the problems of an ageing population and a related increase in disease, needs and requirements for services. So measures adopted are addressed to balance cost-containment and financial sustainability of delivery system with the issues of equity in resources allocation as well as in access to health care services. The most promising changes that government is attempting to meet are: 1. Output-based payments to care providers. Payments to care providers have been, and will continue to be, predominantly output-based within the framework of a budget share model. Since the early 1990s there have been three successive payment models, in this order: cost-weight items of services - impatient days of stay complete impatient episodes (cases). Today the last model is under development and some other innovative elements have been introducing to assess quality and efficiency of health care delivery. They concern: a more precise differentiation of major product categories; introduction of a variant analysis to define inpatient case types; a different handling of special cases (as inter-hospital transfers); additional incentives for same-day treatment (to reduce the most profitable overnight-stay episodes) and other complexes methods to improve the efficiency of the payment system (for further detailed information see European Observatory on health). 2. Health care sector management organization. A training programme for non-clinical managers was launched with the aim of spreading innovation culture, to encourage problem-solving techniques, the best use of resources and budget in general. At the same time efforts are undertaken to support a better basis for workforce planning and a better development of health care professionals relationships. 3. Health promotion and illness prevention. This new strategy will require more systematic support from Ministry of Health, the need to divert founds from curative services and to involve the community. One of the first measures adopted by the Ministry of Health aims to stimulate primary practitioners to engage in prevention activities discouraging unnecessary referrals to the secondary level. Primary care physician, in fact are reimbursed in full for their services only if the prevention programme has been fully implemented. 18

19 4. Quality of care. It will be targeted with high levels of training and competence of clinicians and above all through the establishment of an information system at all levels. A priority in this project is establishing a single health information system and the Centre for Exchange of Health Data and the launch of the health insurance smart card. Data Interchange with the Health Care Service Providers. Since 1996, the solutions involving electronic data interchange between the health care service providers and the HII have been in application and continuous development. Interchange with other Public Institutes and Institutions. The HII supplies, in electronic form, data concerning the registering in or out of health, pension and invalidity insurance to the Pension and Invalidity Insurance Institute, to the Employment Institute, to the Office for Statistics and other statutory receivers of these data on query. From the Ministry of Internal Affairs and from the Office for Statistics, the Institute receives data from the national registers. From the Tax Administration, the Institute receives data concerning the collection of the compulsory health insurance contributions. The insured persons are provided with a modern, information supported service which is a prerequisite for quality services. The use of a health insurance card facilitates the implementation of health care services and the verification of the validity of compulsory health insurance. It is a means of easy and direct transfer of data between the insured persons, the insurance company and the health care organisations. The insured persons have, at their disposal, about 285 self-service terminals across Slovenia, for information on their rights deriving from compulsory health insurance, and on the supply of health care services and health insurance services. Conclusion As regards adverse macroeconomic developments, in the first years of transition towards EU, Slovenia s social protection system has played an extremely important role. Its strong performance was made possible by good economic growth but especially by a well-developed administrative capacity. Even if EU membership gives Slovenia the opportunity to take advantage of the EU umbrella of protection against the negative impacts of the global environment, the future will require the improvement of its domestic institutions. That means straightening and accelerating the administrative reform and innovation processes. Giving a comprehensive overview of recent social policy reforms was not the purpose of the paper. The following SWOT analysis is therefore only a first contribute based principally on the suggestions derived from the consultation of official documents, programmes and web sites. It puts some of principal 19

20 aspects of recent reforms (above analyzed) in relation to the potential external pressures expected for the next few years. Social Protection System Strength/Opportunity - High level of social protection - Introduction of ICT in administrative organization - Electronic health insurance card - Improving management skills - Improving self-governing responsibilities - Services decentralization (regional and local units) - Educational and training programs for civil servants - Moderate level of expenditure - European Regional development aids - Increasing participation and cooperation with various European institutions Weakness/Threats - Inadequate number of personnel in remote regions - Self-governing communities do not have an active role in decision-making and planning in primary health services - Private investments for social services are still insufficient ( as hospitals) - Rising unemployment (for abolishing of domestic protections) - Rising prices (European conforming VAT) - Growing regional gap - Liquidity problems and budgetary pressures 20