CZECH GOVERNMENT TO CURB HOSPITAL EXPENDITURE ON EXPENSIVE TREATMENTS

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The Czech government is continuing its drive to cut healthcare expenditure by setting new spending limits on expensive drugs for hospitals in the public sector. Under the new regulations, these institutions are being asked to spend only 98% of their drug budget this year.

The Czech health system is currently labouring under debts of US$403mn and the government is aiming to cut spending by US$1.4bn by mid-2007. Prescribing controls in hospitals, coupled with increased monitoring, are expected to reduce drug costs by 6%. Other measures have included using the size of the public hospital system to generate economies of scale. This will be aided by a more organised system of bulk buying, while lower margins on pharmaceuticals and larger medical service fees are also being considered.

However, attempts at reform have been opposed by various sections of the industry. Pharmaceutical manufacturers groups have criticised a planned reduction in pharmacy mark-ups. Meanwhile, a number of health insurers are reported to be unhappy over government aims to consolidate the sector, unifying nine of the country's insurance agencies and giving state-controlled reimbursement body VZP a greater role.