Profits capped at 2% for health investors
Hungary will attempt to woo private investors into its
health insurance system by launching an international road show and employing
an international tender advisor, Health Minister Ágnes Horváth said last Tuesday.
The government recently passed a law that will see the
current central insurance fund replaced with 22 regional bodies, into which
private companies can invest up to a level of 49%.
Meagre profit
possibilities
Analysts question how attractive a proposition this
will be for private firms, and Horváth confirmed that investors could not
expect to make a major return on their investments.
“Healthcare is not a market where one can expect high
profit – we are talking about the care of ten million Hungarians,” she told
journalists at a press briefing.
Profits will be capped at 2% of each fund’s capitation
(a fixed “per capita” amount that is paid for each person served) Horváth said,
adding that investors will have to pay HUF 12,000 (EUR 46.25) for each person the fund will
insure in order to gain the 49% stake.
High
investment
Each fund is allowed to insure between 500,000 and 2
million people, meaning HUF 6 billion (EUR 23.12 million) needs to be stumped
up for the smallest fund. The minimum capital level for each fund will be HUF 3
billion (EUR 11.56 million) in the first year and 5% of the capitation income
subsequently. For the smallest funds, Horváth said this income would be around
HUF 50 billion (EUR 192.69 million).
Horváth said that the finance ministry would employ an
international advisor by the end of May to help track down insurance companies
that would be willing to participate. Road shows will also be launched in June
“to inform companies about the opportunities in Hungary”.
While the number of starting funds will be 22, the
minister foresees this whittling down to around 7-10 by the end of 2009.
Most against
changes
The insurance reform is part of a series of government
measures designed to cut the budget deficit, which have pushed the ruling
Socialist-liberal coalition’s popularity to extreme lows. Large sections of
society oppose the reform – including main opposition party Fidesz, medical
professionals and ordinary members of the public – and there have been many
protests against it.
Opponents say that allowing private investors into the
system would create a situation where the poorest members of society are left
behind. However, Horvath said that by allowing competition, current
inequalities in the healthcare system could be equalised and that resources
could be better utilised.
