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Financing of Long Term Care in
Slovakia: Comparison with other
OECD Countries
PETER
GONDA
Conservative Institute of M.R. Štefánik; Socia Fdn.
SLOVAKIA
„Development in Community-Based Care and Public Policy“
(IAHSA Conference „Creative Solutions for an Aging Society: Sharing
the Wisdom, Norway, 27.-29. June 2005)
1. Starting points

Long term care in Slovakia = virtual „system“
! System of LTC financing LTC for relevant clients (frail
elderly and severe disabled people) does not exist, since:
• financing a care for any such client has absolutely
different arrangements in social and health care system,
• even same or similar services in social and health
sectors are financed differently = financing according to
sectors and type of institutions, not clients and type of
expenditure)
 Slovakia (similarly as other new EU members) needs to
built a system of LTC, including system of LTC financing.
Financing of Long-term Care in Slovakia: Comparison with other OECD Countries
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1. Starting points

Economic situation – still limiting factor of financing
social and health systems, because:

growing, but still insufficient performance of economic
entities (Chart 1)

limited public sources for LTC financing, accompanied
with public finance deficit and excessive and distorted
public expenditure (high demands for other
expenditures) – „crowding out in public expenditure“ – Chart 2
• growing, but still low income of many individuals and
households (distinctively LTC clients: old age and
disability retired)
Financing of Long-term Care in Slovakia: Comparison with other OECD Countries
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1. Economic and political framework
Level of GDP per capita Slovakia to EU-15
and real change of GDP Slovakia
100
8
GDP Slovakia / EU-15 (%)
GDP Slov akia / EU-15 (%)
Real change of GDP Slov . (%)
75
6
50
4
25
2
0
0
1995
1996
1997
1998
1999
2000
2001
2002
Real economic growth (%)
Chart 1
2003
Source: Eurostat, Statistical Office of the SR
Financing of Long-term Care in Slovakia: Comparison with other OECD Countries
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1. Starting points
Chart 2 Government expenditure by functions in
Slovakia (2003)
Economy
11,1%
Other
5,9%
General Public
Service
11,9%
Defense
4,3%
Security
4,8%
Social Security
31,6%
Health
20,0%
Education
10,4%
Source: Author, Ministry of Finance of the SR
Financing of Long-term Care in Slovakia: Comparison with other OECD Countries
5
1. Starting points

•
•
•
•
Political situation: health and social reforms inter alia have
lead to:
improvement in conditions for multi-source financing
more transparent financial flows
higher and more clear responsibility of stakeholders, but also
stronger pressure on people from LTC target groups
 Commitment of the Slovak Government to create new
(integrated) LTC system, but its implementation was
postponed to 2006 = risk of non-acceptance by new
government
Financing of Long-term Care in Slovakia: Comparison with other OECD Countries
6
2. Current LTC Financing

Ratio of LTC expenditure to GDP (according to first
estimations for SR) = circa 0.9% (2002)*
Chart 3
LTC expenditure to GDP
0,97
AUS
1,40
AUT
1,29
CAN
NED
2,20
NOR
1,60
UK
0,90
SK
0,15
HU
0,0
* Preliminary data
2,88
1,0
% HDP
2,0
3,0
Source: Author, OECD (2003), Gibson (2003), Howe (2003)
Financing of Long-term Care in Slovakia: Comparison with other OECD Countries
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2. Current LTC Financing

Structure of LTC expenditure (2002)*:
1. Low expenditure on institutional care as % of total LTC
spending (circa 38%) does not mean adequate
domination home and community care
2. Expenditure on benefits (55% of total expenditure)
exceeds the costs on services (45%)
3. Expenditure in social care (circa 90%) considerable
dominate to the health care expenditure (10%)
4. Public expenditure (92%) significantly exceeds the
private (8%).
Financing of Long-term Care in Slovakia: Comparison with other OECD Countries
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2. Current LTC Financing
 Community – institutional mix
REASON of this paradox (1): structure of „non-institutional“
care
- home and community care = 7% of total expenditure
- benefits intended to home care 21% of total expend.
- benefits no intended to care 34% of total expenditure
 Home and community care, incl. cash benefits to home
care, in SR > home and community share in many OECD
countries, but but it is contrary in case „without all cash
benefits“ (Chart 4)
Financing of Long-term Care in Slovakia: Comparison with other OECD Countries
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2. Current LTC Financing

Community – institutional mix
Chart 4 Institutional vs. home and community care
Institution.
100%
16
Home / Community
15
21
38
50%
84
85
79
62
31
69
16
42
84
58
0%
G
AUS
CAN
NED
SCOT
SK (1)
SK (2)
Notes: (1) Expenditure on home/community care (and total expenditure) include also benefits
directly related to care, but no compensation benefits.
(2) Expenditure on home/community care (and total expend.) do not include cash benefits.
Source: Author, OECD (2003)
Financing of Long-term Care in Slovakia: Comparison with other OECD Countries
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2. Current LTC Financing

Public-private mix
Chart 5 Comparing public and private expenditure (2002)
Public
Private
SK
SCOT/UK
NOR
NED
ONT/CAN
VIC/AUS
AUT
ESP
0%
50%
100%
Source: Autor, OECD (2003), Howe (2003)
Financing of Long-term Care in Slovakia: Comparison with other OECD Countries
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2. Current LTC Financing
 Public-private mix of financing
Predomination of public source (about 92% in 2002) is
result of:
! significant difference between financing relevant clients
in health care and social system, since:
- health care – almost „free of charge“ access to
services (with marginal user fees for dental care,
related services, issuing prescription, drugs...
- social system – means tested payments for services in
facilities (partially for lodging, boarding, maintenance
and attendance care)...
Financing of Long-term Care in Slovakia: Comparison with other OECD Countries
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2. Current LTC Financing
 Public-private mix: financing
Predomination of public source is also result of:
! difference between type of public source
-
-
health care – from mandatory and public social/health
insurance (financed by public and private Health
Insurance Companies)
social system – from taxes (financed by central and local
governments)
 Since social system is dominant, thus taxes are main
sources of (public) LTC are taxes (general taxation)
– similar as in Norway and UK, but in contrary to „contributions
system“ in Netherlands (Chart 5)
Financing of Long-term Care in Slovakia: Comparison with other OECD Countries
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2. Current LTC Financing
Chart 6 Comparison of public sources in selected countries
Victoria
(AUS)
Austria
Ontario
(CAN)
x
x
x
Netherl Norway Scotland SLOVA
(UK)
ands
KIA
x
Taxation
x
x
Public
(in social
sector)
Mandat.
soc./health
insurance
x
x
(negligible
)
x
(in
health
sector)
Source: Author, OECD (2003), Howe (2003)
Financing of Long-term Care in Slovakia: Comparison with other OECD Countries
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2. Current LTC Financing
 Public-private mix in a social and health systems
Chart 7 Example of structure of financing social and health facilities
Geriatric departments
Retirem ent Hom e
S
O
C
I
A
L
Local
Budget
s
8%
Out of
pocket
23%
State
Budget
69%
Other
22,5%
Out of
pocke
t
0,1%
Social
Health
Insura
nce
77,4%
H
E
A
L
T
H
Source: MoH SR, MLSaF SR, author
Financing of Long-term Care in Slovakia: Comparison with other OECD Countries
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2. Current LTC Financing
Chart 7
Approaches to the Application of Eligibility
ELGIBILITY
Victoria (AUS)
Institutional care
UNIVERSAL
Austria
Ontario
(CAN)
UNIVERSAL UNIVERSAL
Netherlands
Scotland
(UK)
Norway
SLOVAKIA
MEANS
TESTED
UNIVERSAL
UNIVERSAL
(by property)
UNIVERSAL
- social services
Home and community
social care
UNIVERSAL
Home and community - UNIVERSAL
health care
UNIVERSAL
MEANS
TESTED BY UNIVERSAL
PROVINCE
UNIVERSAL UNIVERSAL
UNIVERSAL
MEANS
UNIVERSAL TESTED
UNIVERSAL
(not in Scotland)
UNIVERSAL UNIVERSAL
UNIVERSAL
Source: Author, OECD (2003), Howe (2003)
Financing of Long-term Care in Slovakia: Comparison with other OECD Countries
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2. Current LTC Financing
Chart 9 Approaches to the Application of Co-payments
Victoria (AUS)
CO-PAYMENTS
Institutional care
Home and community
social care
Home and community health care
(income
paying
capability)
Additional
payments to
and cover real
costs
MEANS
TESTED
(income
paying
capability)
Ontario (CAN)
MEANS
MEANS
TESTED
Additional TESTED
income
payments to (overlimit)
cover real
- by province
costs
MEANS
TESTED
(income and
assets)
MEANS
TESTED
Austria
and
-
MEANS
TESTED
(income)
Netherlands
MEANS
TESTED
(income)
- for food and
housing
(nominal
amounts)
MEANS
TESTED
(by income)
- by province
-
MEANS
TESTED
Scotland
(UK)
Norway
SLOVAKIA
MEANS
TESTED
( assets )
- social only
(personal
care)
MEANS
TESTED
MEANS
TESTED
MEANS
TESTED
(so-called
optimum
payments)
MEANS
TESTED
By
local (by income)
administration
MAX. 80%
of client´s
income
(income
(in social
facilities only)
(not in Scotland)
-
(by income)
x (apart from
-
NHS)
nominal amounts
Source: Author, OECD (2003), Howe (2003)
Financing of Long-term Care in Slovakia: Comparison with other OECD Countries
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2. Current LTC Financing
Chart 10 Comparisons of Approaches to the LTC Integration
LTC system compared
to Health and Social
Sectors
Within the LTC system
Victoria
(AUS)
Austria
Ontario (CAN)
Netherlands
Norway
Scotland
(UK)
Social vs. Health LTC
Services
by
INTEGRATED Separated
service types a
INTEGRATED INTEGRATED
INTEGRATED separated
(partially
within health
within health on local level
sector
sector (AWBZ)
integratedc in
Scotland)
LTC services providers
INTEGRATED CONSISTENT
PRINCIPLES
INTEGRATED
within
health
sector
INTEGRATED
Target groups
LTC service vs. social and
health sectors
INTEGRATED INTEGRATED -
INDEPENDEN INDEPENDEN
T.
T.
(partially in
Scotland)c
INTEGRATED
within health
sector
PART OF
HEALTH
INTEGRATED SECTOR
(AWBZ)
SLOVAKIA
(diverse)d
- (diverse)
-
INTEGRATE
INTEGRATED D
WITHIN
on local level
SOCIAL
SECTOR
Source: Author, OECD (2003), Howe (2003)
Financing of Long-term Care in Slovakia: Comparison with other OECD Countries
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2. Current LTC Financing

Chart 11 Comparison of containing the costs of LTC
COST RESTRICTIONS
- on demand side
- on supply side
Victoria
(AUS)
Austria
x
(by asses.
committee
ACAT)
x
(stoppage
of
hospitalisation
benefit
disbursement)
x
(number of
places, level
resources, etc.
restricted)
Ontario
(CAN)
x
Netherlands
-
x
(benefit
reduction
in
certain
client
categories)
x
-
Norway
x
(professional
needs
assessment)
x
(partially, on
the basis of
resource
availability on
local level)
Scotland (UK)
SLOVAKIA
x
(budget
limitation
UK)
x
(e.g. by asses.
committee)
x
-
x
(budget limitations
on local level and
hard budgetary
constraints - Health
Ins. Companies)
Source: Author, OECD (2003), Howe (2003)
Financing of Long-term Care in Slovakia: Comparison with other OECD Countries
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3. Current problems and future risks

Main problems of current financing:
 excessive share of public financing and low pressure on
personal responsibility (particularly marginal private
financing in health part of LTC)
 absolutely different arrangements of LTC financing in
social and health parts (sector-based financing)
 financing does not correspond to character of expenses
(nursing care, related services...) and to different
responsibilities of payers
 Insufficient focusing on real needs clients, their families
and relatives as part of home and community care.
Financing of Long-term Care in Slovakia: Comparison with other OECD Countries
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3. Current problems and future risks
 insufficient cost restrictions, e.g. on demand side
followed from no strict „gate-keeper“ (missing clear link
between assessment and financing)
 huge portion of cash benefits, mainly allowances does
not relating to care (but income support) in comparison
with lack of services
 low weight of home and community services and their
problematic financing by Local and Regional Selfgovernments (with no clear responsibilities)
 inefficient financing with additional costs and negative
impacts on quality and efficient accessibility of services.
 Financing of Long-term Care in Slovakia: Comparison with other OECD Countries
21
3. Current problems and future risks

Community–institutional mix
Key problems of home and community care followed from:
• no strict responsibilities of local and regional selfgovernments for financing LTC (splited between them
each other and between them and central government),
e.g.
Example: contradictory responsibility in providing attendance
care by Local Governments and cash Home Care Benefit
(HCB) by Central Government
 RESULT: rapid increasing of recipients of HCB, thereby
increasing also costs = risks for financing in future
Financing of Long-term Care in Slovakia: Comparison with other OECD Countries
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3. Current problems and future risks

Pressures on the increase of LTC expenses due to:
• ageing of population – considerably increasing population
over 65 after 2011 (Chart 12) and earlier significant rising of
number citizens over 80 years (Chart 13),
• rising requirements of clients, their families and client
organizations to acquire more services with higher quality,
• expected increase in difficult diseases, incl. chronic
diseases various forms of handicaps...
• new, more expensive, technologies, devices...
Financing of Long-term Care in Slovakia: Comparison with other OECD Countries
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3. Current problems and future risks
Chart 12
Year on year increase of Slovak citizens over 65 years
27000
18000
9000
20
15
20
14
20
13
20
12
20
11
20
10
20
09
20
08
20
07
20
06
20
05
0
Source: Infostat (2003), Author, MoH SR
Financing of Long-term Care in Slovakia: Comparison with other OECD Countries
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3. Current problems and future risks
Chart 13
Number of Slovak citizens over 80 years
tis.
220
170
120
2005
2010
2015
2020
2025
Source: Infostat (2002), Author, MoH SR
Financing of Long-term Care in Slovakia: Comparison with other OECD Countries
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4. Systemic change of LTC financing

MAIN OBJECTIVE
= to create financially sustainable system, which will
support overall goal of new integrated LTC system
„improving quality, accessibility and effectiveness LTC
for persons with functional disabilities and thereby
improving quality of their life and quality of life their
famililies and relatives“.
Financing of Long-term Care in Slovakia: Comparison with other OECD Countries
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4. Systemic change of LTC financing

KEY PRINCIPLES
= universal entitlement of assessed individuals to care
on standard level with strictly controlled expenses
limited by the budget and with requirements of means
tested co-payments
= multi-source financing (public-private mix) with same
setting of conditions for all entities
= strict link between assessment and financing
= financing according to (real need of) client and type of
expenses
= preference financing of home and community-based
care in comparison with financing of institutional care
Financing of Long-term Care in Slovakia: Comparison with other OECD Countries
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4. Systemic change of LTC financing

PROPOSED FINANCING – conceptual framework
1. Public sources = financing LTC on a standard level
for assessed clients
1.1 Taxes – intended for financing social part of LTC
- State Budget: cash benefits (also for aids and
equipment)
- Local and Regional Budgets: financing social
services in home, community, and residential care
1.2 Public health insurance – intended for financing
health part of LTC (mainly nursing care)
Financing of Long-term Care in Slovakia: Comparison with other OECD Countries
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4. Systemic change of LTC financing
2. Private sources
2.1 Client = financing of costs on related services (total
cost of boarding and housing), but with regard his/her
financial possibilities
- responsibility of Local Government to finance part of
payment for client, who is not able to pay full costs
2.2 Other (voluntary) – from clients, relatives, sponsors...
DESIRABLE RESULTS:
 shifting weight of responsibility from
Government to clients and Self-Governments

Central
shifting weight of LTC expenditure from cash benefits
to home and community services...
Financing of Long-term Care in Slovakia: Comparison with other OECD Countries
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