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(Last updated: 4 Mar 2011)
Trends and opportunities
The market
Assessment of the health system
The Czech health system is characterised by:
- relatively low total healthcare expenditure as a share of GDP compared to western Europe
- low out-of-pocket payments distributed quite evenly across household income
- plentiful human resources, albeit with some significant regional disparities
- good results for a number of important health indicators
On the other hand, the standardised death rate for diseases of the circulatory system and malignant neoplasms are well above the EU27 average. The same applies to a range of healthcare utilisation rates, such as outpatient contacts and average length of stay in acute care hospitals. In short, there is substantial potential in the Czech Republic for efficiency gains and improved health outcomes. This has been recognised by the Czech Government, which has attempted to reduce inappropriate demand by increasing cost sparingly and to improve the quality of specialised care by identifying high-performing healthcare facilities and allowing for special contractual arrangements between them and the health insurance funds.
Principal reforms
Many recent reforms in the Czech health system have attempted to address the chronic financial instability that has marked the system since its inception in the early 1990s. Other recent reforms have focused on hospital ownership and management structures, or on improving purchaser-provider relationships, compliance with EU law and coordination between the systems of health and social care. The key challenge to health reform in the coming decades will be to keep high-quality care accessible to all, while taking into account economic development, demographic ageing and the capacity of the social health insurance (SHI) system.
Future reforms will focus on codifying patient rights, clarifying the purchaser-provider relationship and refining the SHI system. As of 2009, the system for defining and rationing benefits is fragmented, ad hoc and unwieldy. One of the most important pieces of proposed legislation would provide a more explicit definition of SHI benefits and redesignate them as entitlements, thus increasing transparency and strengthening the legal rights of all relevant parties to enforce them.
Pharmaceuticals
The pharmaceutical industry in the Czech Republic has been fully privatised, with much of it in foreign ownership. There are 81 drug manufacturers, a majority of which are small manufacturers. Only a few have a significant presence in the market: Zentiva (part of Sanofi-Aventis group), Slovakofarma, Ivax CR (now part of Teva), Pliva-Lachema (part of Teva) and Novartis’s Hexana. Notably in April 2007, Indian generics maker Glenmark gained a manufacturing foothold with the purchase of small local producer – Medicament.
Medical devices and equipment
Following EU accession in 2004, regulations for medical devices in the Czech Republic conform to EU guidelines. EU Medical Devices Directive 93/42/EEC covers the placing on the market and putting into service of devices. The directive enforces essential health, safety and environmental requirements for a wide range of medical equipment, from first aid bandages to heart valves and electrocardiographs. As with all EU member states, devices are classified according to the level of risk ranging from class I, which is low risk for the user, to class III, the highest risk for the user.
According to the Ministry of Trade and Industry, despite having a reasonably sized domestic industry, the Czech Republic still imports about 75 per cent of its medical devices. Leading import partners include Germany and the US, through companies such as Bausch & Lomb, GE Healthcare, Siemens and Carl Zeiss.
Physical and human resources
In 2008 there were 192 acute care hospitals with 63,622 beds and 154 other inpatient facilities with 22,191 beds. By European standards, the number of physicians in the Czech Republic is high, with 3.6 physicians per 1,000 people in 2007. The current age structure of primary care physicians represents a potential human resources problem in the near future. The nurse-to-population ratio is above the averages for the EU15 and the new EU Member States. Number of dentists per population is slightly above the EU27 average. In 2006, the pharmacist-to-population ratio was high compared to other central and south-eastern European countries, but low compared to many countries in Western Europe.
Financing
Total health expenditure in the Czech Republic has remained relatively low compared to Western Europe. The majority of expenditure flows through the SHI system, which is financed through compulsory, wage-based SHI contributions and through state SHI contributions on behalf of certain groups of economically inactive people. Health expenditure from public sources – as a share of total health expenditure – belongs to the highest in the World Health Organization in the European region.
Population coverage is virtually universal, and the range and depth of benefits available to insured individuals are unusually broad. Although health expenditure from private sources is low compared to other European countries, it is likely to rise due to a trend towards greater cost sharing. Private sources of expenditure are mainly used to cover the costs of over-the-counter (OTC) pharmaceuticals, some dental procedures, co-payments on medical aids and certain prescribed pharmaceuticals, and user fees for doctor visits and a number of other health services.
Opportunities
The market has a high and still increasing level of per-capita expenditure with continued steady but unspectacular long-term potential.
The Czech Republic has significantly developed biotech and nanotechnology sector potential, with a well-established clinical research industry and EU-aligned regulatory infrastructure.
The OTC sector’s growth potential remains considerable as self-treatment of minor ailments continues and loosening of the rules of where OTC products can be sold has been put forward.
Czech market for branded medicines should continue to grow thanks to demand for innovative treatments, although values will be challenged by pricing and reimbursement.
Opportunities for Australian exporters and investors are in following key growth areas:
- Hospital management software and other niche medical software
- Professional training for medical personnel (nurses, doctors)
- Medical equipment – innovative (unique selling points)
- Management and construction of aged care facilities plus health products, supplements and services for the ageing population
- OTC sector
- New methods and products for prevention, detection and treatment of cancer and skin cancer – diagnostics, products and medicaments
- Medical waste management
- Telemedicine
- Sterilisation equipment
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