THE ANNUAL REPORT FOR 2001

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					   G E N E R A L H E A LT H I N S U R A N C E C O M PA N Y
               OF THE CZECH REPUBLIC




T H E A N N UA L R E P O RT
        F O R 20 01




                    APRIL 2002
                                                                                                                              VZP CR

CONTENTS




                                                                                                                              CONTENTS
           1.   Introductory Data ...........................................................................           5


           2.   The Characteristic Features of Development in 2001 ........                                             9


           3.   Bodies of the Insurance Company ........................................... 15
                3.1 The Assembly of Representatives .........................................                         17
                3.2 The Board of Directors of the Central Insurance Office ......                                     17
                3.3 The Supervisory Board of the Central Insurance Office ......                                      18
                3.4 Boards of Directors and Supervisory Boards
                    of District Insurance Offices ...................................................                 19
                3.5 The Arbitration Body of the Insurance Company .............                                       20


           4.   Activities of the Insurance Company ...................................... 23
                4.1 Organisational Structure of the Insurance Company ......                                          25
                4.2 The Information System ..........................................................                 26
                4.3 Control and the System of Control
                    of the Insurance Company .....................................................                    27
                4.4 Assurance of the Insurance Company Activities
                    with Tangible and Intangible Assets ....................................                          36
                4.5 Health Policy ..............................................................................      37
                4.6 Legal Aspects .............................................................................       47
                4.7 Contractual Policy .....................................................................          49
                4.8 Other Services and Activities of the Insurance Company ..                                         52


           5.   The Insured of the Insurance Company and their Migration ... 59
                5.1 The Insured of the Insurance Company ............................. 61
                5.2 Migration of the Insurance Company Insured .................. 61


           6.   Creation and Drawing of the Insurance Company Funds
                6.1 The Capital Fund of Health Insurance ......................................
                                                                                                                      69
                                                                                                                      71
                6.2 The Operation Fund .................................................................              82
                6.3 The Fund of Capital Reproduction .......................................                          85
                6.4 The Social Fund .........................................................................         88
                6.5 The Surplus Fund ......................................................................           88
                6.6 The Prevention Fund ................................................................              93
                6.7 Other Taxable Activities ...........................................................              93
                6.8 Contractual and Complementary Insurance ......................                                    93



           7.   The Summary of Selected Indices on the Insurance
                Company Activities ........................................................................ 97
                7.1 The Survey of Selected Indices .............................................. 99
                7.2 Supplementary Data ................................................................ 99
                7.3 The Surrender of the Insurance Company Claims
                    against Premium Payers to the KoB (âKA) ........................ 99


           8.   Conclusions ...................................................................................... 103


           9.   Annex ................................................................................................. 107
                • Resolution of the Assembly of Representatives ....................                                109
                • Standpoint of the VZP CR Supervisory Board ........................                               110
                • Auditor’s Report on the Financial Statement
                  and Annual Report of VZP CR ....................................................                  112
                • Financial Statement ......................................................................        113




                                                                                                                              3
                    VZP CR




                    Part 1



INTRODUCTORY DATA
                                                                                     VZP CR
The Annual Report for 2001 is presented by:




                                                                                     INTRODUCTORY DATA
      THE GENERAL HEALTH INSURANCE COMPANY
      OF THE CZECH REPUBLIC

established according to the Act of the Czech National Council no.
551/1991, on the General Health Insurance Company of the
Czech Republic, on 1 January 1992



      The representatives of the General Health Insurance Company of CR:



                                          JUDr. Richard Schwarz
                                          Chairman of the Board of
                                          Directors of the Central
                                          Insurance Office of VZP CR




                                          Jana Dvofiáková
                                          Lady Chairman of the
                                          Supervisory Board of the Central
                                          Insurance Office of VZP CR




      The statutory representatives of the General Health Insurance Company of CR:




                                          Ing. Jifiina Musílková
                                          Managing Director of VZP CR




                                          Ing. Jifií Zahradník
                                          Office Manager of VZP CR




                                                                                     7
                                        Bank contact:
 THE ANNUAL REPORT OF VZP CR FOR 2001

                                              The Czechoslovak Commercial Bank
                                              trade network of IPB, Na Pfiíkopû 14, PRAGUE 1

                                              GE Capital Bank
                                              Hybernská 18, PRAGUE 1



                                        Contact data:
                                                         Orlická 4/2020, 130 00 Prague 3
                                                         Identification Number 41197518
                                                         Tax Identification Number 003-41197518
                                                         phone:      (02) 2175 1999, (02) 2175 2000
                                                         fax:        (02) 2175 4111
                                                         E - mail:   jirina.musilkova@vzp.cz
                                                         URL:        www.vzp.cz




VZP CR




                          8
                          8
                    VZP CR




                     Part 2



THE CHARACTERISTIC
FEATURES OF DEVELOPMENT
IN 2001
                                                                                                                            VZP CR

T    he 31 December 2001 meant the end of the
     tenth year of implementation of public he-
                                                             as the quality control of provided care. The
                                                             extinction of this structure enabled the es-




                                                                                                                        OF DEVELOPMENT IN 2001
                                                                                                                        THE CHARACTERISTIC FEATURES
alth insurance in Bohemia, Moravia and Silesia               tablishment of legally autonomous and inde-
as well as the tenth year of activities of the               pendently acting healthcare facilities owned
General Health Insurance Company of the                      by the state, community, church, commercial
Czech Republic (abbreviated as „the Insurance                companies or individuals.3 Their operation
Company“).1 Throughout the time of its exi-                  within the healthcare system had been then
stence the Insurance Company has been hol-                   based on the non-contractual or contractual
ding responsibility for changes in organisation              relation with the General Health Insurance
and funding of health care in the Czech Repub-               Company, which had the legal duty to conc-
lic. It had assumed this responsibility already in           lude the „Contract on Provision and Reim-
1992 and in the course of the past ten years it              bursement of Health Care“ with each health-
has not renounced it because it has been fully               care facility, which had asked for it within the
aware of its obligations and higher number of                course of the first two years.
duties ensuing from its primacy.
                                                                In the course of the following years the cor-
   At that time the main assignment of the In-               rect set-up of the system of general (public)
surance Company consisted in establishing and                health insurance has been confirmed with the
launching the system of general (public) health              increasing volume of collected premiums, gro-
insurance since 1 January 1992 and since that                wing up year by year thanks to the favourable
date all persons meeting the determined con-                 wage development in the Czech Republic. This
ditions of participation in this system (that is             put the Insurance Company in a position ena-
about 10,5 mil. persons) have become its sta-                bling to increase its expenditures on health ca-
tutory clients. In 1992 the Insurance Company                re from former 32 bil. CZK (of which the pro-
had been still administering the funds allocated             vision of health care for 10,5 mil. persons had
from the national budget of CR but already in                been covered in 1992) to current 93 bil. CZK
the course of that year it had created conditi-              (of which the health care provision for 7,3 mil.
ons, thanks to its intensive activities, enabling            insured is covered). The favourable financial
to start collection of premiums on general he-               development brought considerable benefits
alth insurance as well as its attributions2, that is         both for citizens as well as healthcare workers
payments which had become the source of in-                  in spite of the fact that sometimes there were
come of contractual healthcare facilities alrea-             some problems associated with application of
dy since 1 January 1993. This complex assign-                different systems of health care reimburse-
ment could have been accomplished thanks to                  ment or with higher than real consumption of
two well chosen system components provided                   financial means gained from premium collec-
by law: on the one hand it was the liability of              tion.
employers to collect premiums from their em-
ployees by the means of payroll deductions                      The new system of financing of provided he-
and transfer them, together with the employ-                 alth care has undoubtedly increased the living
er’s payment, to the account of the insurance                as well as professional standards of physicians
company providing the coverage, and on the                   and other healthcare workers. Particularly, the
other hand the liability of the state to pay pre-            fee-for-service system of health care reimbur-
miums for a group of persons determined by                   sement considerably endowed from the do-
law, comprising now more than 50 % of parti-                 minant financial share of the Insurance Com-
cipants in health insurance. At that time the                pany allowed privatisation of services or even
accomplishment of this enormous reformatory                  healthcare facilities, equipment of surgery ro-
step brought a lot of admiration and acknow-                 oms, out- and in-patient facilities with new di-
ledgement of the professional public to the In-              agnostic and therapeutic devices and utilisati-
surance Company as it normally takes many ye-                on of new technologies, methods and
ars to prepare a tax system reform.                          medicaments or medical aids. The payment
                                                             domination of the Insurance Company in „the
   The reform of healthcare system has                       market of health insurance and healthcare
brought the release of the rigid and hierar-                 services“, on which the prevailing part of he-
chic system of healthcare services concentra-                althcare facilities rely in their annual budgets,
ted into district or regional institutions of na-            is going on even after ten years. Its under-
tional health having lacked the modern                       standing attitudes to contractual partners, wil-
management, rational administration of                       lingness to negotiate as well as to seek and
funds according to public needs, decision-                   find fair or unconventional solutions is going
making based on economic principles as well                  on in the same way.


1   It has been established on 1 January 1992, by the Act of the Czech National Council no. 551/1991, on the General
    Health Insurance Company of the Czech Republic. All the other health insurance companies have started to im-
    plement general (now public) health insurance no sooner than in 1993 or later (according to the Act no. 280/1992,
    on resort, company and other health insurance companies).
2   See the Act no. 592/1992, on premiums on general health insurance.
3   See the Act no. 160/1992, on health care in non-governmental healthcare facilities.




                                                                                                                         11
 THE ANNUAL REPORT OF VZP CR FOR 2001
                                           The new system of health care provision          nominal wage reached to 8,8 % instead of
                                        and financing has brought the payment of            expected 5,3 %, the unemployment rate at
                                        premiums on general health insurance to             the insured of the Insurance Company then
                                        one half of citizens in this country and the        reached the mere 9,7 % instead of expected
                                        free choice of a physician, healthcare facility     11,4 %. This had a positive impact on the lo-
                                        and health insurance company as well as the         wer number of the unemployed insured of
                                        opportunity of complementary insurance or           the Insurance Company and thus also on the
                                        direct payment to all of them. Passing              higher than expected number of employed
                                        through study stays abroad of our physicians        persons.
                                        and utilisation of higher quality diagnostic
                                        and therapeutic methods, drugs and medical            The measures adopted in 2001also led to
                                        aids of home or foreign provenance had un-          the reduction of the pace of decrease in
                                        doubtedly a favourable impact on health             numbers of the insured from 3,6 % of the an-
                                        condition of individuals as well as the popu-       nual fall to 2,5 %, and this was a better out-
                                        lation as a whole. This is due to the fact that     come than estimated in the Health Insuran-
                                        now – compared with the period ten years            ce Plan. As to the point of view of the
                                        ago – it is possible to save more human lives,      Insurance Company revenues, in 2001 the fa-
                                        to cure successfully or at least better the hig-    vourable role has been also played by the
                                        her number of diseases and thus improve the         outcomes of premium collection control and
                                        quality of human lives as well as to extend         enhanced striking force and activity of law
                                        the average life expectancy of our children,        services of the Insurance Company.
                                        men and women.
                                                                                               The departments of premium collection
                                           At modelling and drawing of the Health In-       control, supplemented with new staff, imple-
                                        surance Plan for 2001 the Insurance Company         mented 42 % (about 14 thousand) controls
                                        presumed the dynamics of the Czech Republic         more, compared with 2000, made out 6 %
                                        economy to be rather lower in 2001 and this –       more of payment assessments for premiums
                                        together with the higher unemployment rate –        due and their attributions and achieved the
                                        would have an impact on the pace of growth          settlement of 87,3 % of written claims for
                                        of premiums gained per one insured and thus         premiums and their attributions. In 2001 the
                                        also on the lower growth of total income of the     law departments of the Insurance Company
                                        Insurance Company.                                  instituted more than 72 thousand administ-
                                                                                            rative procedures and submitted more than
                                           The Insurance Company wanted to stand up         77 thousand proposals for execution of law-
                                        to these expected tendencies – in the interests     ful payment assessments for claims amoun-
VZP CR                                  of maintenance of balanced financial situation      ting to 3,7 bil. CZK within the frame of the
                                        – by the means of adopting a number of mea-         agenda of exaction of due premiums, penal-
                                        sures leading to (compared with 2000) the re-       ties, fines and extra charges to premiums.
                                        duced pace of decrease in numbers of the in-        260 proposals for bankruptcy orders against
                                        sured on the one hand, and keeping the health       premium payers owing 214 mil. CZK were
                                        care expenses on the price level reached in the     submitted to the court and in 2 094 cases the
                                        2nd half of 2000 on the other hand. The basic       Insurance Company entered the instituted
                                        instrument of active health policy of the Insu-     bankruptcy proceedings with its claims for
                                        rance Company ought to have been represen-          premiums and penalties amounting to 1,3
                                        ted with the different attitude to allocation of    bil. CZK.
                                        resources of the capital fund of health insu-
                                        rance. The burdensome liabilities with the lap-        In 2001 a step of the Czech Republic Go-
                                        se maturity ought to have been solved by the        vernment initiated by the Ministry of Health
                                        Insurance Company with the aid of the state         has played an important role for the im-
                                        and separately from the annual plan of econo-       provement of the financial and negotiant po-
                                        mic management of public health insurance           sition of the Insurance Company – the ado-
                                        funds. The health-policy strategy of the Insu-      ption of „the Resolution of the Czech
                                        rance Company consisted in the intention to         Republic Government to transfer the claims
                                        support the importance of prevention and pre-       of health insurance companies to the Conso-
                                        ventive health care, to strengthen the impor-       lidation Bank“ (now the Czech Consolidation
                                        tance of primary health care, to target the de-     Agency). This step – together with the incre-
                                        livered health care at the needs of population      ase in payment for persons for whom premi-
                                        (that is not only at individual needs) and to im-   ums are paid by the state and introduction of
                                        plement the managed transfer of patients from       the new system of financial flow manage-
                                        hospital beds into the stationary care or home      ment inside the Insurance Company – has
                                        care.                                               led not only to the improvement of the Insu-
                                                                                            rance Company balance but in particular –
                                          In 2001 the actual trends were particularly       after some years of unsuccessfully exerted
                                        influenced with the fact that the Czech Re-         efforts – to elimination of liabilities of the In-
                                        public economy had an unexpectedly favou-           surance Company with the lapse maturity
                                        rable development – from the point of view          against health care providers.
                                        of macro-economic indices decisive for the
                                        level of revenues from premiums on public             All the favourable factors caused that the
                                        health insurance. The increase in the average       actual revenues of the Insurance Company



       12
       12
                                                                                                           VZP CR
from premiums on public health insurance           compared with the Health Insurance Plan for
were 6,3 % higher in 2001 compared with            2001, that is by about 5,8 bil. CZK. When con-




                                                                                                       OF DEVELOPMENT IN 2001
                                                                                                       THE CHARACTERISTIC FEATURES
2000 and 5,3 % higher than estimated in the        verted per one insured the health care costs
Health Insurance Plan for 2001.                    were 12 344 CZK, which is 668 CZK more
                                                   than estimates and 10 % more in compari-
   Financial instruments derived from the hig-     son with actual costs in 2000.
her income of the Insurance Company allo-
wed to reach the change in current health            In 2001 the Insurance Company reached
policy and health-policy goals declared in the     the positive income from its operations con-
Health Insurance Plan for 2001. These goals        cerning the capital fund of health insurance
consist in the transfer of the provided health     within the frame of public health insurance
care focus from the in-patient sphere into the     implementation, both in the difference bet-
stationary, out-patient, primary and home ca-      ween the creation and drawings from this
re sphere. In spite of the fact that the inten-    fund and in the difference between its inco-
tions of the Health Insurance Plan were app-       me and expenditure. The positive economic
roved by the House of Deputies of the Czech        outcome was achieved also at implementati-
Republic Parliament and thus ought to be           on of contractual insurance and complemen-
obligatory in general, the Provision of the        tary insurance. This financial contribution will
Government of CR on the point value and the        be used to improve the care about the Insu-
level of health care reimbursement covered         rance Company clients.
from public insurance for the 1st half as well
as the Regulation of the Ministry of Health-          In 2001 the Insurance Company has been
care (no. 211/2001) valid for the 2nd half of      also creating the prevention fund and has be-
the year, again allocated the gained funds to      en intensively using it in favour of its clients.
healthcare facilities providing in-patient care.   The employment of financial means of the
                                                   prevention fund has been consistently aimed
  The increased drawings from the capital          at promotion and implementation of health-
fund of health insurance from the side of          care measures and programmes which im-
inpatient care facilities, compared with the       prove health care particularly about the
plan as well as the reality (at hospitals by       young generation of the Insurance Company
7 %, at specialised curative institutions by       clients and work together against the incep-
13 % and at long-term care hospitals by            tion of their diseases or against worsening of
20 %) and the lack of financial means for im-      their health conditions. The Board of Direc-
plementation of the decisive turn in efficien-     tors of the Central Insurance Office and Bo-
cy of health care provision were the impacts       ards of Directors of district offices made the
of both these measures. Among the instru-          decisions on drawings from the prevention
ments for this turn having been completed          fund.
by the Insurance Company in 2001 and pre-
sented to organisations representing general          In 2001 the Insurance Company has paid
practitioners, there is for example the system     considerable efforts to those areas of activities
of bonuses for general practitioners (Global       which are set on it by valid legislative norms
Information for GPs), which financially sup-       and which make it different from other health
ports such behaviour that leads to rational        insurance companies. Among these activities
and efficient manners of patients’ treatment.      there was not only the management of regis-
                                                   ters of the insured, group or individual premi-
   In 2001 the objectives of the Insurance         um payers or healthcare facilities but also the
Company have not been achieved in the sp-          agenda associated with the operation of a spe-
here of drawings of means on drugs, presc-         cial account for premium re-distribution
ribed and dispensed on prescriptions, from         among health insurance companies. Also ot-
the capital fund of health insurance as the        her demanding activities associated with the
expenses of the Insurance Company in this          management of the Capitation Centre, Infor-
sphere grew up by 7 % compared with 2000           mation Centre and Analytic Committee of con-
and even by 12 % in comparison with the            certing proceedings were assured and in the
plan. Both the indistinct drug policy of the       course of the year 2001 it was necessary to gat-
state and the wording of regulations,              her and process great amounts of data for this
through which the level of reimbursement           purpose.
of individual pharmaceutical substances
and medical aids covered from public he-              The credibility of the Insurance Company,
alth insurance are determined, had some            proved and perceived in a long term, led to the
share – in addition to prescription behavi-        fact that in 2001 it has been consigned to en-
our of healthcare facilities – in this situation   sure the agenda of the Czech and German
as the valid version of these regulations so-      Fund for Future and it has been carrying out –
metimes did not fully conform with recom-          in co-operation with the Ministry of Foreign Af-
mendations of the Categorisation Commit-           fairs and the Co-ordinating Committee – the
tee.                                               payment of social assistance benefits in the
                                                   amount of about 187 mil. CZK.
  Drawing of the total volume of financial
means of the capital fund of health insuran-         If I look back on the year 2001 I can state
ce on health care benefits was 7 % higher          that it was a successful year for the Insurance



                                                                                                        13
 THE ANNUAL REPORT OF VZP CR FOR 2001
                                        Company. The liquidation of claims with the        consensual negotiations with various seg-
                                        lapse maturity and achievement of the positi-      ments or individuals and above all with sear-
                                        ve balance in the management of the capital        ching for and finding of the way going forward.
                                        fund of health insurance led to consolidation      I pay honour and thanks to all of those who to-
                                        of the financial position of the Insurance Com-    ok part in this work together with the Insuran-
                                        pany. It had a positive impact not only on the     ce Company: the legislative assembly, state ad-
                                        improvement of relations with health care pro-     ministration,      chambers,      trade   unions,
                                        viders but also on the slow but discernible lo-    professional societies, associations, federati-
                                        wering of the fall of the insured. In the sphere   ons, groups of healthcare workers or individu-
                                        of health policy we were asserting rational di-    als and particularly, not last, the companies. To
                                        rections and modern European trends. Not all       put it plain, to all who brought new ideas, the-
                                        the things were done successfully; the imple-      ir dedication and their personal efforts into the
                                        mentation of further plans will still demand       process of new system building.
                                        considerable working efforts.

                                          If I look back on the past years I can state
                                        that even they had been filled with the earnest
                                        and sometimes very toilsome work, with
                                        a number of purposeful activities, with many




VZP CR




       14
       14
                     VZP CR




                      Part 3



BODIES OF THE INSURANCE
COMPANY
                                                                                                     VZP CR
   In compliance with the valid wording of
the Act no. 551/1991, on the General He-          3.2




                                                                                                     BODIES OF THE INSURANCE COMPANY
alth Insurance Company of the Czech Re-
public, the appointed bodies of the Insu-
                                                  The Board of
rance Company were going on in their              Directors of the
working in 2001, namely the Assembly of
Representatives, the Board of Directors of        Central Insurance
the Central Insurance Office, the Superviso-
ry Board of the Central Insurance Office, 77
                                                  Office
Boards of Directors of district insurance of-     in 2001 it worked in this composition:
fices and 77 Supervisory Boards of district
insurance offices. On all the organisational      Chairman
levels of the Insurance Company these bo-            JUDr. Richard SCHWARZ
dies were accomplishing functions alloca-            (representative of the insured’s employers)
ted to them by the above-mentioned Act
and the Organisation Order of the Insuran-        Vice Chairman
ce Company.                                          Ing. Miloslav VANùK
                                                     (representative of the state)
                                                  Councillors
3.1                                               for economic issues
                                                      Ing. Jifií NEKOVÁ¤
The Assembly of                                       (representative of the insured’s employers)

Representatives                                   for health policy
                                                      MUDr. Dalibor STEJSKAL
  In 2001 the Assembly of Representatives             (representative of the insured’s employers)
consisted – the same as in previous years –       Members
of 30 members of the Board of Directors of
                                                  representatives of the state
the Central Insurance Office, 77 representati-
                                                     Ing. Katarína BARTÍKOVÁ
ves of Boards of Directors of district insuran-
                                                     Ing. Jarmila FUCHSOVÁ
ce offices and one representative of the top
                                                     PhDr. Bûla HEJNÁ
management of the Central Insurance Office.
In 2001 two sessions of the Assembly of Re-          Ing. Antonín HLAVÁâEK, CSc.
presentatives took place, on 3 May 2001 and          Ing. Roman KUâERA
on 12 October 2001                                   Ing. Oldfiich LEBL
                                                     MUDr. Antonín MALINA
  At the session of the Assembly of Repre-           MUDr. Jaroslav SKALICK¯
sentatives on 3 May 2001, chaired by JUDr.
                                                     Doc. Ing. Jifií VOLF, CSc.
Richard Schwarz, the Chairman of the Board
of Directors of the Central Insurance Office,     representatives of the insured
the submitted Annual Report of the General           Ing. Bohumír BOBÁK
Health Insurance Company of the Czech Re-            Jarmila BOHÁâKOVÁ
public for 2000 had been on the agenda and           MUDr. Milan CABRNOCH
after the discussion it was approved by all          MUDr. Rostislav âEVELA
the present members.                                 JUDr. Stanislav GROSPIâ
  The session of the Assembly of Repre-              (till 2. 12. 2001)
sentatives on 12 October 2001, chaired by            JUDr. Karel KOS
Ing. Miloslav Vanûk, the Deputy Chairman             (since 10. 7. 2001)
of the Board of Directors of the Central In-         Doc. Ing. Lubomír MIK·, CSc.
surance Office, discussed and approved the           (till 8. 7. 2001 and then since 13. 12. 2001)
Health Insurance Plan of the General He-             MUDr. Vladimír PLAâEK
alth Insurance Company of the Czech Re-              (since 28. 2. 2001)
public for 2002 by the majority of its mem-          Ing. Lucie TALMANOVÁ
bers. In addition it dealt with the issues           Ing. Monika TURNOVSKÁ
concerning activities of the Arbitration Bo-         Ing. Jan VRAN¯
dy of VZP CR and charged the Arbitration             (till 1. 4. 2001 and then since 22. 5. 2001)
Body with submitting the written material
aimed at making its activities more effici-       representatives of the insured’s employers
ent. The Assembly of Representatives also             JUDr. Eva BATUNOVÁ
dealt with issues of VZP CR clients and               JUDr. Antonín JÍZDN¯
charged the VZP CR with gathering drafts of           Ing. Franti‰ek H¯BNER
measures, aimed at both qualitative and               Ing. Zdenûk LI·KA
quantitative improvement of the clientele             Karel PFABIGAN
structure, from Boards of Directors and Su-           MUDr. Dalibor STEJSKAL
pervisory Boards of individual district offi-         Ing. Antonín SÒVA
ces and with preparing the paper that                 Jan WIESNER.
would be submitted to the session of the
Assembly of Representatives of VZP CR in            The sessions of the Board of Directors of the
spring of 2002.                                   Central Insurance Office with JUDr. Richard



                                                                                                     17
                                                                                            21 September 2001
 THE ANNUAL REPORT OF VZP CR FOR 2001
                                        Schwarz in the chair took place altogether 12 ti-
                                        mes in 2001. In the following survey there are        v Health Insurance Plan of VZP CR for
                                        presented the most important issues having be-          2002
                                        en on the agenda at the sessions of the Board of      v Control of the Supreme Board of Control
                                        Directors of the Central Insurance Company:             – remedial measures
                                                                                              v Jurisdiction of the Boards of Directors of
                                        16 January 2001                                         VZP CR district insurance offices
                                        there was an irregular meeting called for ne-
                                        gotiations on the impact and consequences           26 October 2001
                                        of the Czech Government resolution concer-            v Exaction of claims of the Insurance
                                        ning health care prices for the 1st half of 2001        Company, transition of the project to
                                        on the estimated economic development of                system solutions
                                        VZP CR in 2001 and on health care providers’          v Evaluation of compensation for in-pati-
                                        behaviour.                                              ent care for the 1st half of 2001
                                                                                              v Outcomes of concerting proceedings on
                                        30 January 2001                                         health care reimbursement
                                          v Information on the situation in surren-
                                             dering VZP CR claims against premium           23 November 2001
                                             debtors to the Consolidation Bank                v Accomplishing of policy for keeping the
                                          v Conclusions of the Committee for the                numbers of VZP CR insured
                                             prevention fund                                  v Co-operation of VZP CR with the pensi-
                                                                                                on fund Winterthur
                                        23 February 2001                                      v Financial outcome of in-patient care
                                          v Acceptance of the analytical phase of               compensation for the 1st half of 2001
                                            the Electronic Identifier Project                 v Draft for solution of ownership relations
                                          v Outcomes of measures leading to sur-                to some immovable assets of VZP CR
                                            render of VZP CR claims to the Consoli-
                                            dation Bank                                     21 December 2001
                                          v Funding of hospitals in the 1st half of 2001      v Information on the situation in the Ar-
                                                                                                bitration Body of VZP CR, measures for
                                        23 March 2001                                           making its operation more efficient
                                          v Information on the situation and chan-
                                                                                              v Information on approved projects finan-
                                            ges in exaction of VZP CR claims
                                                                                                ced from the prevention fund for 2002
                                          v Information on co-operation with the
                                                                                              v Investments (district offices in Jiãín, Pra-
                                            FIN-Servis at exaction of VZP CR claims
                                                                                                chatice, Hodonín, Brno – City).
                                          v Migration of the insured among health
VZP CR                                      insurance companies in individual di-              In addition to the above presented issues
                                            stricts of CR                                   the Board of Directors dealt at its sessions
                                          v Outcomes and evaluation of tenders for          with regularly submitted monthly materials,
                                            the 2nd half of 2000                            for example with Signal Reports on topical fi-
                                          v Proposals of VZP CR on system changes           nancial situation and premium reception,
                                            in the legislative arrangements in pre-         conducting information from the press,
                                            mium collection and claim exaction              monthly plans of tenders and other informa-
                                                                                            tive materials.
                                        20 April 2001                                          The same as in previous years, many of the
                                          v The Annual Report of VZP CR for 2000            decisions passed by the Board of Directors we-
                                          v Performance point values in individual          re positively influenced with standpoints of its
                                            segments of healthcare facilities               expert committees that are definitely appoin-
                                          v Information on contracts concluded              ted from members of the Board of Directors,
                                            with healthcare facilities for the 1st half     such as the economic committee, medical
                                            of 2001                                         committee, investment committee, committee
                                                                                            for informatics, salary committee, committee
                                        25 May 2001                                         for the prevention fund and others.
                                          v Propositions from the control of the Su-
                                            preme Board of Control
                                          v Distribution of the economic result of
                                            taxable activities for 2000                     3.3
                                          v The outcome of the invitation of tenders
                                            for the account and payment operation           The Supervisory
                                        22 June 2001                                        Board of the
                                          v Information on proceeding of works on
                                             the Electronic Identifier Project
                                                                                            Central Insurance
                                          v Starting points for the Health Insurance        Office
                                             Plan of VZP CR for 2002
                                                                                            in 2001 worked in the following composition:
                                        20 July 2001
                                        there was an irregular meeting called for decisi-   Chairman
                                        on-making on the implementation of the analy-          Jana DVO¤ÁKOVÁ
                                        tical phase of the Electronic Identifier Project.      (representative of the insured)



       18
       18
                                                                                                     VZP CR
Vice Chairman                                    its sessions. Thus the Supervisory Board
   Alena MA·KOVÁ                                 could be continuously informed on the




                                                                                                     BODIES OF THE INSURANCE COMPANY
   (representative of the insured’s employers)   current situation in VZP CR and on sessions
                                                 of the Board of Directors of the Central In-
Members                                          surance Office as well as on outcomes of
representatives of the state                     these sessions during all of its meetings.
   Ing. Ivan PROKOP                              The Supervisory Board continuously dealt
   Ing. Zdenûk TOMÁ·EK                           with suggestions and complaints delivered
   MUDr. Michael VÍT                             to it and co-ordinated these activities with
                                                 the chief auditor’s department of the Cent-
representatives of the insured                   ral Insurance Office and the VZP CR Direc-
   Ing. Jifií ST¤ÍTESK¯                           tor.
   Jan VIDÍM                                        On 1 November 2001 the Supervisory Bo-
                                                 ard organised a special seminar for chairmen
representatives of the insured’s employers       or representatives of Supervisory Boards of
   Ing. Petr JANÒ                                VZP CR district insurance offices. The Direc-
   Ing. Stanislav MORAVEC                        tor of VZP CR, VZP CR Office Manager, all the
                                                 top managers of professional departments of
   Negotiations of the Supervisory Board,        VZP CR, VZP CR chief auditor and other ma-
with Jana Dvofiáková in the chair, took place     nagerial staff of the Central Insurance Office
6 times in 2001, within the terms of statuto-    of VZP CR took the active part in this special
ry responsibilities of the Insurance Company     seminar.
bodies. In 2001 the particular dates of the
Supervisory Board negotiations were: 15 Ja-
nuary, 26 February, 23 April, 25 June, 1 Oc-
tober and 12 November.
                                                 3.4
   In 2001, in addition to its fundamental and
regular tasks, the Supervisory Board dealt
                                                 Boards of Directors
with the following issues on its sessions:       and Supervisory
v accomplishment of duties ensuing from          Boards of District
  the VZP CR Articles                            Insurance Offices
v standpoint of the Supervisory Board to the
  Annual Report of VZP CR for 2000                 In compliance with the Act no. 551/1991,
v standpoint to the Health Insurance Plan of     on the General Health Insurance Company of
  VZP CR for 2002                                the Czech Republic, the Boards of Directors
v plan of controls                               and Supervisory Boards go on to be establis-
                                                 hed in district insurance offices.
v report on activities and tasks being accom-      This Act explicitly specifies for the Boards
  plished by the department of the chief au-     of Directors to have nine members (of whom
  ditor of VZP CR                                5 members represent the insured and 4 re-
v report on outcomes of controls imple-          present the insured’s employers). At the da-
  mented by the Supervisory Board mem-           te of 31. 12. 2001 there were only 5 positi-
  bers                                           ons of the Board of Directors members
v evaluation of annual reports on activities     having been unoccupied, compared with the
  of Supervisory Boards of VZP CR district in-   determined number of 693 members (The
  surance offices                                Board of Directors of the district insurance
                                                 office (hereinafter only DO) in PlzeÀ – North,
v methodological documentation for opera-        Louny, âeská Lípa had 8 members, the Board
  tion of Supervisory Boards of VZP CR di-       of Directors of DO Náchod had only 7 mem-
  strict insurance offices                       bers). Thus in all of the Boards of Directors of
v discussion on the protocol on control of       district offices there were 688 members wor-
  the Supreme Board of Control                   king there in 2001. The negotiations of all the
v accomplishment of measures from previ-         Boards of Directors of district offices took
  ous controls of the Supreme Board of Con-      place altogether 497 times in 2001, that is
  trol, Ministry of Health and Ministry of Fi-   6,4 times a year in one district office in ave-
  nance                                          rage.
v engagement of the Supervisory Board              The legal number of Supervisory Board
  members in the VZP CR Arbitration Body         members is 5 (of whom 3 members represent
                                                 the insured and 2 members represent the in-
v negotiations concerning the draft of crite-    sured’s employers). At the date of 31. 12. 2001
  ria for provision of bonuses for the Super-    there were 3 positions of the Supervisory Bo-
  visory Board members.                          ard members having been unoccupied com-
                                                 pared with the determined number of 385
   The activities of the Board of Directors of   members (the Supervisory Board of DO PlzeÀ
the Central Insurance Office have been per-      – South, Louny and Náchod had 4 members).
manently monitored through the participa-        Thus in all of the Supervisory Boards of district
tion of the Supervisory Board Chairman in        insurance offices there were 382 members



                                                                                                     19
 THE ANNUAL REPORT OF VZP CR FOR 2001
                                           The survey on numbers of                          The survey on numbers of Supervisory
                                           Board of Directors negotiations                   Boards negotiations

                                           15 times a year in     1 district office          12 times a year in    6 district offices
                                           12 times a year in     6 district offices         11 times a year in    3 district offices
                                           11 times a year in     4 district offices         10 times a year in    3 district offices
                                           10 times a year in     4 district offices          9 times a year in    1 district office
                                            9 times a year in     3 district offices          8 times a year in    5 district offices
                                            8 times a year in     5 district offices          7 times a year in    5 district offices
                                            7 times a year in     7 district offices          6 times a year in    6 district offices
                                            6 times a year in     8 district offices          5 times a year in    9 district offices
                                            5 times a year in    15 district offices          4 times a year in   21 district offices
                                            4 times a year in    17 district offices          3 times a year in    9 district offices
                                            3 times a year in     5 district offices          2 times a year in    5 district offices
                                            2 times a year in     2 district offices          1 times a year in    5 district offices


                                        working there in 2001. The negotiations of all       v control of the Health Insurance Plan obse-
                                        the Supervisory Boards of district insurance of-       rvance
                                        fices took place altogether 426 times in 2001,       v control of contractual relations (lease con-
                                        that is 5,5 times a year in one district insuran-      tracts, contracts for work etc.)
                                        ce office in average.                                v controls of health care financing, contrac-
                                                                                               tual arrangements, payment terms etc.
                                          In 2001 the Boards of Directors of district        v proposals for improvement in the sphere
                                        insurance offices particularly dealt with the          of communication with clients, proposals
                                        following issues in the course of their sessi-         of measures for stabilisation of VZP CR in-
                                        ons:                                                   sured and increase in their number
                                        v development and exaction of claims aga-            v supervision of observance of legal and in-
                                           inst premium payers, proposals for soluti-          ternal rules
                                           on in given regions                               v settlement of complaints of the insured
                                        v economic management of DOs, control of               and healthcare facilities
VZP CR                                     drawings from the fixed financial budget          v financial statement for 2000, report on
                                        v decision-making on financial resources of            operation of district insurance offices.
                                           the prevention fund
                                        v problems in communication with the in-
                                           sured, trends in numbers of the insured
                                           and proposals for stopping the decrease in        3.5
                                           the VZP CR insured and their stabilising
                                        v healthcare facility financing, contractual
                                                                                             The Arbitration
                                           relations
                                        v improvement of premium collection from
                                                                                             Body of the
                                           premium payers                                    Insurance Company
                                        v quality of health care provided in contrac-
                                           tual healthcare facilities, accessibility of         The Arbitration Body of the Insurance
                                           health care for the VZP CR insured                Company (hereinafter only the Arbitration
                                        v control of proceedings of investing activi-        Body) is the body that has the authority pro-
                                           ties at those district insurance offices whe-     vided by law to make decisions on full and
                                           re the place of their settlement has been         exceptional remedies against payment as-
                                           built or reconstructed                            sessments made out by district insurance of-
                                        v discussion on the VZP CR Annual Report             fices within the administrative action. In ad-
                                           for 2000 and VZP CR Health Insurance              dition, it has the legal authority to abate the
                                           Plan for 2002.                                    obduracy that might appear at assessing pe-
                                                                                             nalties, fines and extra charges to premiums.
                                          In 2001 the Supervisory Boards of district            In 2001 the Arbitration Body worked in the
                                        insurance offices particularly dealt with the fol-   following composition:
                                        lowing issues in the course of their sessions:
                                        v control of the economic management of              Chairman
                                           the district insurance office, holding of the        JUDr. Marie HIRSCHOVÁ
                                           budget                                               representative of the Insurance Company
                                        v control of premium collection, solution of
                                           claim enforcing, controls of outstanding          Vice Chairman
                                           premium re-payments, controls of pay-                Mgr. Bûla PLACHÁ
                                           ment morals of companies and self-em-                representative of the Ministry of Labour
                                           ployed persons                                       and Social Affairs



       20
       20
                                                                                                           VZP CR
Members                                                 to the assessed debts in their appeals but
for the Board of Directors of ÚP VZP CR*                they have objected to the adverse financial




                                                                                                           BODIES OF THE INSURANCE COMPANY
    Karel PFABIGAN                                      and social situation, have pleaded ignoran-
    Ing. Jan VRAN¯                                      ce with legislative norms in the section of
    MUDr. Katarína BARTÍKOVÁ                            public health insurance, the employers ha-
                                                        ve objected to the secondary insolvency.
for the Supervisory Board of ÚP VZP CR *                With regards to the fact that the legal arran-
    Ing. Zdenûk TOMÁ·EK                                 gements being in force impose the duty of
    Alena MA·KOVÁ                                       exaction of due premiums and penalties
    Jan VIDÍM                                           upon the health insurance companies the
    (since 26. 2. 2001 till 30. 9. 2001,                Arbitration Body could not accept these ob-
    and since 1. 11. 2001 till 30. 11. 2001)            jections within the frame of the procedure
    Ing. Petr JANÒ                                      of appeal. At the assessment of objections
    (since 1. 10. 2001 till 31. 10. 2001)               concerning the adverse financial and social
    Ing. Ivan PROKOP                                    situation in case of penalties, fines and ex-
    (since 1. 12. 2001 till 31. 12. 2001)               tra charges to premiums, the Arbitration Bo-
                                                        dy applied the institute of the law obduracy
for the Ministry of Health of CR                        abatement.
    Ing. Miroslava ·ËASTNÁ, CSc.                           In 2001 the Arbitration Body made decisi-
                                                        ons on the obduracy abatement in 5 880 ca-
for the Ministry of Finance of CR                       ses and waived the total amount of 185 286
    Ing. Marie HERANOVÁ                                 thous. CZK. At deciding on the obduracy aba-
                                                        tement the Arbitration Body paid particular
*   ÚP VZP CR = the Central Insurance Office of         regard to the fact whether the due premi-
    VZP CR                                              ums, of which the penalty was derived, had
                                                        been already paid by the payer and to the
  In 2001 the Arbitration Body met at 36 all-           standpoint of the relevant district insurance
day working sessions where it dealt with                office.
7 322 cases of appeals of premium payers in                The final decisions of the Arbitration Body,
affairs concerning:                                     concerning premiums, penalties and extra
v fines and extra charges to premiums                   charges to premiums, issued at administrati-
v presumable levels of premiums                         ve action can be reviewed by court according
v controversial cases of payment of premi-              to the Act no. 99/1963, the Civil Procedure
   ums and penalties                                    Code. The Municipal Court in Prague is ap-
v controversial cases of re-payment of over-            plicable for revision of these decisions.
   charged premiums and reduction of pre-
   mium advances                                          In 2001 the premium payers brought to the
v abatement of the law obduracy that would              court altogether 4 suits. In this period the
   appear at levying fines, penalties and extra         court definitely decided 7 cases, of which 5
   charges to premiums.                                 accusations of premium payers were dismis-
                                                        sed and the action was abated, in 2 cases the
  In 2001 the Arbitration Body discussed                decision was annulled and returned for
5 982 appeals of premium payers against                 a new hearing.
payment assessments concerning penalties,
671 appeals against payment assessments
for premium due and 644 appeals against                   The general survey on the inter-year in-
payment assessments for fines for not fulfil-           crease in numbers of premium payers’ ap-
led duties of premium payers. The Arbitrati-            peals registered and discussed by the Ar-
on Body judged each notice of appeal in an              bitration Body, numbers of the Arbitration
individual manner; at each of them it exami-            Body sessions and on total amounts adju-
ned the legitimacy of the payment assess-               dicated since 1997 to 2001, is presented in
ment and the due process of the district in-            Table no. 1.
surance office.
  In most cases the payers have not had
doubts on claims of the Insurance Company



Table no. 1 – The inter-year increase in numbers of appeals to the Arbitration Body and num-
              bers of settled cases

     Year    Number of received         Number of the             Number of            Adjudicated
                 appeals          Arbitration Body sessions   discussed appeals    amounts in thous. CZK
    1997         3 587                        24                   2 842                207 183
    1998         6 102                        34                    3 971               230 734
    1999         8 717                        35                   5 580                321 214
    2000        11 955                        36                   6 348                363 415
    2001        15 095                        36                    7 322               227 552




                                                                                                           21
 THE ANNUAL REPORT OF VZP CR FOR 2001
                                           It is clear from Table no. 1 that in 2001,            arrangements being in force. The merits of
                                        compared with 2000, the number of new no-                legislative proposals of the Insurance Com-
                                        tices of appeal delivered to the Arbitration             pany in this sphere lie in a special legal ad-
                                        Body increased by 26 %, that is from 11 955              justment of the decision-making process and
                                        notices of appeal in 2000 to 15 095. It can be           delegation of decision-making competencies
                                        expected that this trend will be going on. In            in affairs concerning the obduracy abate-
                                        the interest of shortening the waiting times             ment on the first instance bodies under na-
                                        for settlement of individual cases, a number             med conditions.
                                        of organisational measures have been taken
                                        and they have positively influenced the in-                The general survey on numbers of decisi-
                                        crease of discussed cases from 6 348 in 2000             ons of the Arbitration Body in 2001 accor-
                                        to 7 322 in 2001, which represents the in-               ding to their subject, index of increase or de-
                                        crease of 15 %. The key and most effective               crease in numbers of these decisions and
                                        manner of solution of this problem how to                amounts prescribed through payment as-
                                        enhance the efficiency of decision-making                sessments and adjudicated by the Arbitrati-
                                        activities consists in the change of legislative         on Body in 2001 is presented in Table no. 2.



                                        Table no. 2 – Numbers of decisions of the Arbitration Body made out in 2001

                                                                                         Decision                           Amount
                                         Appeals concerning                       number         index      prescribed in              final in
                                                                                               2001/2000     thous. CZK              thous. CZK
                                         penalties                                 5 982           1,2        412 756                  207 905
                                         premiums due                                671           1,1         27 429                    17 764
                                         presumable level of premiums                  5           0,5              34                       32
                                         return of overpaid premiums                   9           0,6             294                      238
                                         fines for not presenting of documents
                                         for control                                 79          0,9              807                     227
                                         fines for not presenting of Records of
                                         OSVâ and Employers                         535          0,9             3 097                  1 067
                                         fines for not fulfilled
                                         liabilities to notify                       30          0,8              143                      63
VZP CR                                   extra charges to premiums                   11          1,8              311                     256
                                         fines for not delivered copies of             –           –                –                       –
                                         protocols on accidents at work
                                         Total 2001                               7 322          1,2           444 871                227 552
                                        Note: OSVâ = self-employed persons




       22
       22
                    VZP CR




                    Part 4



ACTIVITIES OF THE
INSURANCE COMPANY
                                                                                                        VZP CR

4.1                                                 the range of covered care or provided abroad
                                                    (travel health insurance).




                                                                                                        ACTIVITIES OF THE INSURANCE COMPANY
Organisational                                         The Central Insurance Office has assured
                                                    the agenda of information provision, laid
Structure of the                                    upon the Insurance Company by the Act no.
                                                    106/1999, on the free access to information.
Insurance Company                                   Applications for provision of information were
                                                    put in personally, in a written form and through
4.1.1                                               the telecommunication means. These applica-
The Central Insurance Office of                     tions were accepted both in the district insu-
                                                    rance offices and in the Information Centre.
VZP CR                                                 Though the questions of clients sent to the
(hereinafter only the Central Insurance Office)     Insurance Company with reference to the Act
was resident at the following addresses till        on the free access to information were nume-
31 May 2001:                                        rous, in the great majority they did not belong
Prague 2, Karlovo námûstí 5-7-8                     under the regime of the quoted act although
Prague 1, Hybernská ulice 8                         they had pleaded this statute. These questions
Prague 8, Za Invalidovnou 144                       were settled in compliance with other legisla-
Prague 10, KodaÀská 46                              tive norms in such a manner so that the man-
                                                    datory secrecy would not be broken.
and since 1 June 2001 only at the address              Within the frame of the Act no. 106/1999 al-
Prague 3, Orlická 4/2020.                           together 68 applications were delivered to the
                                                    VZP CR in 2001. The Insurance Company sett-
   According to the Organisation Order of the       led all of them within the determined period of
General Health Insurance Company of VZP             23 days. Although this Act gives, according to
CR the structure of the Central Insurance of-       § 17, the opportunity to the Insurance Compa-
fice is formed with these sections:                 ny to demand compensation of its costs asso-
v Director’s section                                ciated with information provision, even in 2001
v Office Manager’s section                          the Insurance Company has not been taking
v section of law                                    any advantage of using this provision and sett-
v economic section                                  led all demands of its clients free of charge.
v section of premiums and care about clients
v health care section
v information system section                        4.1.2
v operational-administrative and invest-            The Board of Management of the
   ment section.                                    Central Insurance Office
   In 2001 the department for public con-              In 2001 the Board of Management of the
tracts has been established and the informa-        Central Insurance Office had the following
tion system section has been radically re-or-       members:
ganised with the aim to make the activities in      Ing. Jifiina MUSÍLKOVÁ
this crucial sphere more effective.                                 Managing Director of VZP CR
   In 2001 altogether 415 people were emplo-        Ing. Jifií ZAHRADNÍK Office Manager of VZP CR
yed in individual sections of the Central Insu-     Ing. Vratislav MATYS
rance Office (the converted number), of whom           Executive Manager of the Economic Section
209 had the complete university education,          MUDr. Antonín PEâENKA
and they have been assuring with their execu-         Executive Manager of the Health Care Section
tive competence the implementation of pub-          JUDr. Karel HLAVÁâEK
lic health insurance, implementation of conc-            Executive Manager of the Section of Law
lusions, decisions and tasks set by the
Assembly of Representatives, Board of Direc-
tors and Supervisory Board of the Central In-       4.1.3
surance Office, Board of Management of the          District Insurance Offices of VZP CR
Central Insurance Office, Parliament of the
Czech Republic, the operational and methodo-           In compliance with the Act no. 551/1991, on
logical management of all the organisational        the General Health Insurance Company of the
bodies of the Insurance Company and have            Czech Republic, and the valid VZP CR Organi-
been accomplishing work described in general        sation Order the district insurance offices are
in later parts of this Annual Report.               established in 77 districts. Their operation has
   On the basis of the Act on public health in-     been assured with 4 489 workers. The district
surance and relevant permission of the Minis-       insurance offices have established their agen-
try of Finance of CR the Insurance Company          cies as other places of their office to bring the
has been implementing also contractual he-          services of the Insurance Company nearer to
alth insurance in 2001, especially for persons      its clients, premium payers and healthcare pro-
who are not covered under the Act on public         viders. In association with launching the re-
health insurance, as well as complementary in-      form of public administration and with the aim
surance of its clients to cover potential expen-    to assure co-operation with the new regional
ses of health care not covered from public he-      bodies, the Insurance Company has appointed
alth insurance, that is the care either exceeding   its plenipotentiaries for regional issues and



                                                                                                        25
 THE ANNUAL REPORT OF VZP CR FOR 2001
                                        their deputies from the rank of top managers         on system application into the new graphics
                                        of district insurance offices.                       environment within the client – server archi-
                                           District insurance offices and their agencies     tecture has been going on with the aim to achi-
                                        implement public health insurance on the ter-        eve the final structure of three-tier architectu-
                                        ritory of the given district and accomplish tasks    re. This conversion will be completed in 2002.
                                        within the range of competence committed to             In the course of the year other functions in
                                        them by the Act no. 551/1991, VZP CR Organi-         the graphics interface have been implemen-
                                        sation Order and internal organisational and         ted in the application „the District Insurance
                                        controlling rulings of the Insurance Company.        Office“: the function for medical inspectors
                                           Among the main objectives of district in-         „VZPP3“, the function for calculation of com-
                                        surance offices in 2001 there were the fol-          bined capitation and fee-for-service payment
                                        lowing ones:                                         and the economic part of the application. At
                                        v achievement of the highest possible level          the same time the preparatory work for the
                                           of premium collection and perseverant             second phase of the conversion of „VZPP2“
                                           exaction of premiums due, implementati-           application have been in progress.
                                           on of controls of premium payers                     The system of programmes for application of
                                        v making the claims with the lapse term mi-          mechanisms of regulation against healthcare
                                           nimal                                             facilities operating in the out-patient segment
                                        v reimbursement of health care provided to           has been finished. In 2001 the standard me-
                                           the insured by contractual healthcare facili-     chanisms of regulation as well as the volume
                                           ties and assurance of changes in reimburse-       regulation have been applied. In the course of
                                           ment systems and mechanisms of regulati-          2001 the system of bonuses giving the financi-
                                           on applied in individual halves of 2001           al advantage to those GPs, whose total costs
                                        v control of the volume as well as quality of        per one insured according to the monitored
                                           health care provided by contractual he-           groups of costs do not exceed 110 % of the di-
                                           althcare facilities and control of justificati-   strict or nation-wide average, has been su-
                                           on of this care settlement within the due         ccessfully agreed with the representatives of
                                           terms according to concluded contracts            GPs for adults and GPs for children and youth.
                                        v health care reviewing                              On the basis of the trial operation finished in
                                        v negotiations with healthcare providers on          2000 the whole system has been substantially
                                           individual Contracts on health care provisi-      extended and put into routine operation since
                                           on and coverage and on their sub-contracts        the 1st half of 2001.
                                           concerning particularly the implementation           The 1st phase of the function In-patient He-
                                           of changes in systems of reimbursement            althcare Facility Financing has been imple-
                                           and mechanisms of regulation                      mented, in addition to it the preparatory
VZP CR                                  v exaction of indemnities according to pro-          work on financing in 2002, application of the
                                           visions of § 55 of the Act no. 48/1997, on        International Agreement, work for data se-
                                           public health insurance                           lection for the Ministry of Health and for em-
                                        v conclusion of individual as well as group          ployees’ health insurance companies have
                                           policies for travel health insurance.             been in progress.
                                                                                                In the course of 2001 the project „Conva-
                                                                                             lescent Care“ has been launched. It consists
                                        4.2                                                  in the transfer of the existing processing of
                                                                                             this agenda in the PC database Clarion into
                                        The Information                                      the standard processing in the Oracle data-
                                                                                             base in the information system application.
                                        System                                                  Throughout the year of 2001 the pilot pro-
                                                                                             ject for transformation of selected docu-
                                           In 2001 – same as in previous years – the         ments on paper into the electronic form by
                                        Information System of the Insurance Compa-           the means of scanning has been going on
                                        ny has been providing support to all the acti-       according to the plan. In the course of the ye-
                                        vities for which the Insurance Company is            ar the project has been extended with presc-
                                        authorised and qualified under the law. The-         ription scanning. Outcomes and experience
                                        se basic activities are the following ones:          from this project are expected in 2002.
                                        v delivery, control, assessment and reimbur-            Building of Internet workplaces intended
                                            sement of provided health care                   for the public can be viewed as a special ser-
                                        v collection and control of premiums                 vice of the Insurance Company. In 2001 a pi-
                                        v administration of the central register of          lot project took a course in selected district
                                            the insured                                      insurance offices and after its evaluation the
                                        v management of the Information Centre of            further action will be considered.
                                            health insurance                                    Within the frame of the Insurance Company
                                        v assurance of the Capitation Centre operation       HW equipment up dating the purchase of com-
                                        v other important tasks.                             ponents for HP-UX servers has been made in
                                                                                             the course of 2001, particularly for district in-
                                           Within the course of 2001 the adjustment          surance offices. This concerned the up dating
                                        and completion of the information system ap-         of discs being unbacked and out of use. Then
                                        plications were implemented so that it might         the LAN cards of 100kb for UX serves have be-
                                        be possible to enhance its quality and functio-      en procured to enhance the network permea-
                                        nality. In 2001 the conversion of the informati-     bility and support the Internet technologies. Al-



       26
       26
                                                                                                        VZP CR
so the selected overloaded servers of the           controlling mechanisms. The systematic con-
K classification were boosted up. The disc ar-      trol over the Insurance Company activities is




                                                                                                        ACTIVITIES OF THE INSURANCE COMPANY
ray Symmetrix, bearing the data for applicati-      implemented within the hierarchic structure
ons of three servers especially for the purpose     of approval processes starting at the state ad-
of the Central Data Bank, has been extended         ministration bodies represented by the Mini-
in the Central Insurance Office. The disc capa-     stries of Health and Finance, followed by the
city was upgraded with about 4 TB.                  Government and the House of Deputies and
   The general enhancement in the field of          Senate of the CR Parliament. This form of
HP-UX created the conditions for transferring       control is focused on the basic documents as
the supervision system HP Open View on the          the draft of the health insurance plan, finan-
new server and the new server for assurance         cial statement and annual report reflecting
of demanding controls implemented by di-            the basic facts related to the economy and
strict insurance offices has been put into          activities of the Insurance Company. The fi-
operation. In the course of 2001 the loading        nancial statement and annual report of the
of the more reliable and safer operation sys-       Insurance Company have to be verified by an
tem has been launched on terminals. This is         external auditor, on the base of the status
the MS Windows 2000 Professional system.            duty. The auditor’s report together with the
At the same time 2 129 terminals were pro-          above-mentioned documents has to be sub-
cured and this considerably improved the            mitted to the state administration bodies.
HW equipment in this sphere.                           The above-mentioned bodies, together with
   The administration of network means and          the Ministry of Labour and Social Affairs, re-
clear arrangement of local networks of the          presentations of higher self-governing regions
Insurance Company has been substantially            and entrepreneur organisations create the
improved through application of the new             controlling settings which help to assert the in-
manner of IP address allocation. In the cour-       terests of the insured, their employers and the
se of 2001 also the permeability of the local       state by the means of electing or appointing
network of the District Insurance Office in         the members of the Insurance Company and
Prague – City has been upgraded and on-li-          district insurance office bodies. In 2001, besi-
ne connection with other agencies of district       des that also other subjects had their share in
insurance offices has been implemented and          control of the Insurance Company activities
this has improved the general accessibility of      and economy by the means of their specific
the Insurance Company services.                     methods, in particular, there were the public
   In 2001 also the pilot project testing the fe-   and mass-media among them.
asibility of transfer of the telephone vocal           The important element of the external con-
communication through data lines has been           trol is represented with thematic actions of
implemented, which could bring considerab-          control implemented by the state administrati-
le savings of telephone rentals.                    on bodies and the Supreme Board Control
                                                    (hereinafter only the „NKÚ“). In the course of
                                                    2001 the Insurance Company activities were
                                                    subject to 4 actions of control of this kind.
4.3                                                    In the first half of 2001 the NKÚ finished the
Control and the                                     control aimed at „Financial means expended
                                                    by VZP on investments“ in the course of which
System of Control                                   the Central Insurance Office and 27 district in-
                                                    surance offices were reviewed. Some findings
of the Insurance                                    have been rectified in the course of the control,
                                                    for several remaining findings the appropriate
Company                                             remedial measures have been taken. The NKÚ
                                                    conclusions of this control have not been yet
  In 2001 the control of the Insurance Com-         published in the Bulletin of NKÚ.
pany included:                                         The Ministry of Health was executing two
v external and internal control of activities       controls within the assessed period. In the first
   and economic management of the Insu-             quarter of the year the thematic control of pre-
   rance Company                                    mium collection was implemented in the Cent-
v settlement of complaints, suggestions and         ral Insurance Office. There was no need to work
   notices of clients and partners of the Insu-     out remedial measures for the protocol of con-
   rance Company                                    trol, the control outcomes were delivered to the
v controls of premium payers                        relevant managerial staff to make use of them.
v controls of health care providers.                Since the second quarter of the year there has
                                                    been in progress the control of utilisation of
                                                    means gained by the transfer of a part of the In-
4.3.1                                               surance Company claims against premium pay-
                                                    ers to the Consolidation Bank in Prague (since
External Control of Activities and                  1. 9. 2001 the Czech Consolidation Agency)
Economy of the Insurance Company                    and assigned for settlement of obligations aga-
                                                    inst healthcare providers. In the course of the
  The legal framework of control of the Insu-       first stage of this control it was, among others,
rance Company activities, which is set by re-       stated that the Insurance Company had been
levant acts, includes a number of types of          acting in compliance with the Provisions no.



                                                                                                        27
 THE ANNUAL REPORT OF VZP CR FOR 2001
                                        117/2001 of the Government and that it had          request of district insurance offices or in as-
                                        used all the means provided by the Consolida-       sociation with demands of the Insurance
                                        tion Bank in Prague for settlement of obligati-     Company management. For example the
                                        ons with the lapse term without any delay. The      controls aimed at premium collection, regu-
                                        other stage of this control, which is going on in   larity of medical aids prescription, repeated
                                        2002, is related to the final accounting of tran-   hospitalisation of the same insured in an in-
                                        sferred claims.                                     patient facility with the follow-up specialised
                                           In the third quarter of 2001 the Board for       nursing care and observance of equivalent
                                        Personal Data Protection has started the con-       conditions in pharmacy reimbursing were
                                        trol of „observance of duties provided by the       implemented on this basis. When the imple-
                                        Act no. 101/2000 in wording of later rules for      mented controls found any imperfections the
                                        the part of the General Health Insurance Com-       adequate measures of remedy were immedi-
                                        pany as an administrator, in association with       ately taken and their implementation was re-
                                        processing the insured’s data. By the end of        viewed within an adequate time horizon.
                                        the year the control of the information system
                                        section of the Central Insurance Office has be-
                                        en finished as well as of the part of the health    4.3.3
                                        care section of the Central Insurance Office.
                                        This control is going on in 2002.                   Settlement of Complaints,
                                                                                            Suggestions and Notices

                                        4.3.2                                                  In 2001 the chief auditor’s department, in
                                                                                            co-operation with other specialised sections
                                        Internal Control of Activities and                  of the Central Insurance Office and in co-or-
                                        Economy of the Insurance Company                    dination with district insurance offices, hand-
                                                                                            led altogether 247 notices, suggestions and
                                           The internal control system of the Insuran-      complaints and other lodgements (hereinaf-
                                        ce Company can be divided into three seg-           ter only „lodgements“). In 2001 the classifi-
                                        ments. The first of them is represented by the      cation of records was arranged in association
                                        mechanisms of control implemented as                with their character and in accordance with
                                        a part of approval and decision-making pro-         the Insurance Company needs.
                                        cesses of bodies of the Insurance Company              Compared with previous periods, the total
                                        and district insurance offices and by the top       number of complaints having been settled fell
                                        supervision of these bodies of rule observan-       down. In addition to the natural decrease also
                                        ce and economy of the Insurance Company.            the change in methodology of document re-
VZP CR                                  This segment represents a certain dividing li-      turning, which prefers the matter-of-fact sides
                                        ne between the external and internal control.       to the formal ones, had an impact in this sp-
                                           Controlling activities of the managerial         here. At the same time this decrease also ref-
                                        staff and special bodies of the Insurance           lects the progressive stabilisation of the net-
                                        Company represent the second component              work of contractual healthcare facilities and
                                        of the control system.                              quality of the Insurance Company activities.
                                           The third component of the internal control      The proportion of legitimate or partially legiti-
                                        system is represented by a specialised body of      mate complaints was 14,4 % of their total
                                        control – „the chief auditor’s department“. Af-     number and 20,6 % of the number of notices.
                                        ter a longer period, when co-ordination with            The predominant part of handled lodge-
                                        external controlling bodies and implementati-       ments were directed to the chief auditor’s de-
                                        on of extensive nation-wide actions of control      partment, the Insurance Company Managing
                                        laid considerable demands on its capacity, this     Director and managerial staff of the Central In-
                                        department has been going on in systematic          surance Office. The proportion of lodgements
                                        auditing of district insurance company activiti-    transferred by other bodies and organisations
                                        es in the form of complex controls. Re-opening      to direct settlement was 15 %. In this group
                                        of this systematic monitoring of the above-         there are also included the lodgements tran-
                                        mentioned organisational components of the          sferred from the Office of the Czech Republic
                                        Insurance Company has been accompanied              President, the House of Deputies of the Parlia-
                                        also by the qualitative change in the approach      ment and Ministry of Health.
                                        to controls, in particular by reinforcement of         Alike in previous years, the insured repre-
                                        the systematic approach and creation of con-        sent the largest group among the complaint
                                        ditions for their effectiveness enhancement.        and other lodgement writers. Medical care,
                                        This approach to controls has been also asso-       particularly the physician’s refusal to admit
                                        ciated with the preparation of conditions for       a patient with the reference to his/her full ca-
                                        implementation of postulates of the Act no.         pacity is the most frequent objcect of their
                                        320/2001, on financial control in the public        complaints. A significant group of complaints
                                        administration and on amendments of some            is aimed at the sphere of balneal care, in par-
                                        acts, within the internal control system of the     ticular at possibilities of its timely implemen-
                                        Insurance Company.                                  tation, quality, quantity of served meals and
                                           In addition to six complex controls of di-       lodging standard for the Insurance Company
                                        strict insurance offices also eight thematic        clients. The proportion of complaints aimed
                                        controls were implemented. The prevailing           at behaviour of the Insurance Company staff
                                        part of these controls was implemented by           is permanently kept on a very low level.



       28
       28
                                                                                                        VZP CR
   The sphere of contractual relations in tho-       ny, above the frame of regular controls accor-
se cases when a healthcare facility, unsu-           ding to the plan, were directed at these detec-




                                                                                                        ACTIVITIES OF THE INSURANCE COMPANY
ccessful in tenders, demands the contract            ted payers. The control consisting in detection
with the Insurance Company or extension of           of suspect payers with the aid of the informa-
capacity in a location where this kind of care       tion system usually preceded the personal
is sufficiently assured, nearly exclusively re-      control at employers. Due to the fact that till
presents the object of complaints of health-         June 1998 the claims for premiums could not
care facilities.                                     have been identified in any other way than
   The complaints of premium payers are ai-          through personal control at employers, the fin-
med at objections or refusals to pay premi-          ding of such claims represented the other ob-
ums due and assessed penalties.                      jective of controls. Since July 1998, under the
   The Insurance Company has paid a perma-           rule of law, the employers submit the records
nent attention to settlement of complaints and       on total premium level and total level of bases
other lodgements. In justified cases it adopted      of assessment together with their premium
adequate measures for remedy and monitored           payment. Not delivering of such records even
their implementation, or the contents of lod-        after the call thus represented another criteri-
gements or results of their examination served       on for selection of payers for personal control.
as a stimulus for implementation of adequate            Controls of premium payment at individual
controls. The Insurance Company considers            payers, that is at self-employed persons
the proper and timely settlement of compla-          („OSVâ“) and persons without taxable income
ints and other lodgements to be the integral         („OBZP“) at whom monthly claims for premi-
part of care about its clients and partners, that    ums are ensuing from annual records delive-
is the insured, healthcare facilities, individual    red to the Insurance Company after the tax re-
and group premium payers.                            turning or directly from law, were carried out
                                                     predominantly in the form of premium pay-
                                                     ment accounting on the basis of data obtained
Table no. 3 – The survey on the proportion of        from the information system. In cases deman-
                                                     ding a special attention from various reasons,
              the main categories of writers of
                                                     for example if the self-employed persons did
              notices, suggestions, complaints       not deliver the records or when differences
              and other lodgements (in %) and        were found in data presented in the record
              on their total number                  and in the tax return delivered to the tax aut-
                                                     hority, controls of accounting documents of
 Writer                  1999     2000    2001       self-employed persons were executed.
 The insured             48,9     46,7    48,2          The fundamental as well as the most impor-
 Healthcare facility     24,0     20,5    12,6       tant controlling activity of the Insurance Com-
 VZP employee              4,4      5,9     2,0      pany has been the control of premium pay-
                                                     ment according to § 22 of the Act no.
 Premium payer           15,3     10,0    19,4
                                                     592/1992, on premiums on general health in-
 Others                    7,4    16,9    17,8       surance, carried out through a personal control
 Total number             458      478     247       of documents at premium payers. In 2001 the
                                                     specialised auditors of district insurance offi-
                                                     ces of the Insurance Company executed within
                                                     the framework of controlling activities:
                                                         46 628 controls of premium payment
4.3.4                                                    on public health insurance and fulfilment
Control of Premium Payers                                of other duties of premium payers (this
                                                         represents the increase by 42,1 % com-
   The applied system of controls                        pared with 2000), of which:
   In 2001 the controls of premium payments                 40 372 controls were carried out at
were implemented in several manners and                     group premium payers, the registrati-
on different levels, in dependence on docu-                 on number of whom was 223 803 at
ments having been checked up and on the                     31.12.2001
determined methodology of controls.                         6 256 controls were carried out di-
    The basis of controlling activities of the In-          rectly at individual premium payers
surance Company has been represented with                   (OSVâ), the registration number of
employment of special functions built in the                whom was 718 447 at 31. 12. 2001.
information system and determined for identi-
fication of payers who did not keep to the due         Evaluation of methods of monthly
dates provided by law or the level of their pre-       employer’s records processing
mium payments did not correspond with the            delivered according to § 25 of the Act no.
number of their employees and the average le-        592/1992, on premiums on general health
vel of wages in a given region and field of pay-     insurance, in wording of later amendments.
ers’ activities. In this way those payers were de-     In 1998 there had been a legislative amend-
tected who did not pay any premiums at all or        ment adopted which imposed a duty upon
who had unexpected fluctuations in payment           employers to submit regular monthly records
or the level of their payments did not corres-       on total bases of assessment, total premium
pond with the estimates. Then the concrete           level and on numbers of employees covered
controlling activities of the Insurance Compa-       with a given health insurance company. This



                                                                                                        29
 THE ANNUAL REPORT OF VZP CR FOR 2001
                                        measure came in force since the premium pay-                      The results of controls led to the consequ-
                                        ment for 1998. At the same time the Act also                   ent exaction of due premiums or penalties.
                                        pays heed to the situation when the payer do-                  In case a payer himself had not paid due pre-
                                        es not deliver this record and in this case it al-             miums or penalties on the basis of an imple-
                                        lows health insurance companies to determi-                    mented control or after having received the
                                        ne the so-called presumable premium level                      premium accounting, the district insurance
                                        with possible penalty within the frame of an                   offices made out payment assessments wit-
                                        administrative action. The impact of this chan-                hin the administrative action. By the means
                                        ge can be seen in the fact that the health in-                 of payment assessments within the adminis-
                                        surance company knows the claim against                        trative action the district insurance offices al-
                                        a payer – employer without carrying out any                    so imposed fines for infringement of the lia-
                                        physical control. However, this amendment                      bility to notify, for not delivered documents
                                        has not reduced the importance of controls in                  for control, for not presented annual records
                                        any case, now the objective of them is to check                on the sum of advancements, income and
                                        up if the payer presented correct data in                      expenditure of self-employed persons or for
                                        his/her record. Thus the controls can become                   infringement of the liability of an employer to
                                        simpler on the one hand but at the same time                   send records on accidents at work to the In-
                                        they can become more intensive.4                               surance Company.
                                                                                                          The number of the made-out payment as-
                                           The number of implemented controls is                       sessments for due premiums, penalties and
                                        growing up each year. There were altogether                    fines is growing up each year. In 2001 the
                                        46 628 controls implemented in 2001, which                     VZP district insurance offices made out alto-
                                        is 13 821 controls more compared with 2000                     gether 127 667 payment assessments (here-
                                        and this represents the growth by 42,1 %. This                 inafter only „PA“), of which 51 442 PA were
                                        considerable increase reflects the improved or-                made out for premiums due, 63 508 PA for
                                        ganisation of controlling activities and growth                penalties and 12 717 PA for fines. Compared
                                        in number of staff both for controls of payers                 with 2000, the number of made-out PA grew
                                        and for premium exaction.5 However, even af-                   up by 7 403, which represents an increase by
                                        ter this increase in the number of controlling                 6,15 %.
                                        officers it is not possible to ensure controls of
                                        all the group premium payers within a short in-
                                        terval of 4 or 5 years in such a way so that the                 The survey on amounts of premiums, pe-
                                        claims of the Insurance Company could not be                   nalties and fines written through payment
                                        forfeited. That is why the emphasis has been                   assessments in 2001 is presented in Table
                                        still preferably put on controls of group payers               no. 4.
VZP CR                                  of whom 9 756 more were controlled in 2001,
                                        which is an increase by 31,9 %.                                   It is evident from this table that 4,6 billi-
                                           At controls carried out in 2001 the debt on                 on CZK were written through payment as-
                                        premiums was found in 19 807 cases and in                      sessments for due premiums, penalties and
                                        26 712 cases also the penalties were calcu-                    fines (without extra charges to premiums)
                                        lated. Within the same period also the num-                    and about 4 billion CZK were paid, that is
                                        ber of controls having find any debt grew up                   87,3 %. The merits for such a high percen-
                                        which can witness the fact that the premium                    tage of paid debts can be ascribed to pay-
                                        payers are getting into the habit of premium                   ment assessments for premiums of which
                                        paying and the district insurance offices are                  even 32 % more were paid in 2001 than we-
                                        not aimed only at the problematic payers.                      re written in the same year. This can be ex-
                                        The number of cases of calculated penalties                    plained with the fact that in 2001, due to
                                        is higher than the number of premium                           the purchase of claims by the Consolidation
                                        debts.6 In 2001 the most frequent findings of                  Bank and Czech Consolidation Agency also
                                        controls, alike in previous years, concerned                   the reimbursement of a great amount of
                                        premium evasion or delays in premium pay-                      payment assessments, which had been ma-
                                        ment due to payment indiscipline, although                     de out and not reimbursed in previous ye-
                                        in some cases this was caused by the secon-                    ars, was successfully achieved. The amend-
                                        dary insolvency. Only to a small extent the                    ment of the act, that had allowed the
                                        found imperfections concerned the fault set-                   debtors to pay due premiums first and only
                                        ting of bases of assessment and premium                        then the due penalties since the half of
                                        calculation. Other imperfections found                         2001, also influenced this situation. On the
                                        through controls concerned the infringement                    contrary, the lower percentage of reimbur-
                                        of premium payers’ liability to notify and the-                sement of payment assessments for penal-
                                        ir duty to deliver records on accidents at                     ties was the consequence of the same legal
                                        work.                                                          amendment.


                                        4   Still for a certain period of time the determination of claims against an employer will be the necessary part of con-
                                            trols for the period ending with June 1998.
                                        5   However, the mentioned growth of controlling officers will have more considerable impact on outcomes of con-
                                            trols no sooner than at least after one year of training.
                                        6   Penalties are calculated not only for the premium due but also for the delay in premium paying – premiums could
                                            have been paid but as they were paid after the due term the penalty was calculated.


       30
       30
                                                                                                       VZP CR
Table no. 4 – Amounts of premiums, penalties and fines written through payment assessments




                                                                                                       ACTIVITIES OF THE INSURANCE COMPANY
              and paid in 2001

                                    Writen                               Paid
        Payment assessments
                                 (thous. CZK)
                                                        (thous. CZK)                  (%)
I. n.               A                 B                       C                        D
  1         Premiums due          1 892 957               2 505 244                 132,3 %
  2         Penalties             2 665 427               1 445 596                  54,2 %
  3         Fines                    51 421                  71 909                 139,8 %
  4         Total                 4 609 805               4 022 749                  87,3 %


   Extra charges to premiums                      rance (particularly the Act no. 592/1992, on
  In 2001 the district insurance offices also     premiums on general health insurance):
employed the possibility to assess extra char-       Legal arrangements in the whole sphere of
ges to premiums to those employers at                premium collection are unjustifiably com-
whom accidents at work or occupational di-           plicated and therefore difficult for under-
seases repeatedly occurred from the same             standing both for the insured and premium
reason in 2000 (according to § 44 of the Act         payers as well as the Insurance Company
no. 48/1997, on public health insurance).            staff. This leads to the high complexity of
Through these payment assessments made               methods used at monitoring and PC pro-
out in the administrative action the extra           cessing of the premium collection agenda as
charges of 2 274 801 CZK were assessed.              well as at contacts with the insured or pre-
For the whole year of 2001 2 515 605 CZK             mium payers. The rules for assessing inclu-
were paid for extra charges to premiums,             sion or exclusion of the given income into
that is again more than was written in the           the bases of assessment for premium calcu-
course of this year. This is again caused with       lation at employees are particularly compli-
the reimbursement of extra charges having            cated. The useless intricacy in this case could
been written already in previous years.              be removed for example through the direct
                                                     linking-up with the tax base of an employee.
                                                     Deduction on premiums paid by the
   Premium and penalty write-offs                    state, at employees and self-employed
  In 2001, the bad debts of premium payers           persons for whom also the state is a pre-
were written off according to § 26c of the Act       mium payer, complicates enormously
no. 592/1992, on premiums on general health          implementation of retrospective ad-
insurance, in wording of later amendments.           justment in health insurance and conse-
The level of written-off premiums and pe-            quently also in taxes. Such retrospective
nalties is presented in Table no. 5.                 adjustment, for example at the pension

Table no. 5 – Premium and penalty write-offs in 2001

                               Premiums           Penalties            Fines            Total
        Write-offs
                                                          (thous. CZK)
I. n.               A              B                 C                   D               E
  1         Employers            44 748              –                   –               –
  2         Self-payers          19 614              –                   –               –
  3         Total                64 362           100 565              1 858          166 785


   There were several reasons to write off un-         assessment with several years backdate,
paid     premiums     and     penalties:   the         is a very frequent phenomenon in practi-
payer’s dissolution, his/her erasure from the          ce. The same can be said on additional
register, his/her death or limitation of a cla-        premium payments up to the minimum
im not paid within the period of five years. At        level of premium at employees.
penalties and fines the same reasons apply,            It would be reasonable to introduce such
in addition the decision of the Arbitration            legal amendments in the exaction sys-
Body on obduracy abatement plays some ro-              tem which would take into consideration
le here.                                               the fact that for example the exaction of
                                                       claims lower than about 2 000 CZK wit-
                                                       hin the administrative action is loss-ma-
                                                       king as the exaction costs are higher than
   Suggestions for legal regulation                    the exacted amount itself. At present ti-
   amendment                                           me the Insurance Company is obliged to
  Premium collection and control of their              exact premiums exceeding 50 CZK and
payment is made more difficult due to some             penalties exceeding 100 CZK in a year.
persisting imperfections in legislative norms          It would be purposeful to amend the law
concerning premiums on public health insu-             in such a manner that would restrict the



                                                                                                       31
 THE ANNUAL REPORT OF VZP CR FOR 2001
                                              more frequent cases of misusing the sys-                    quirements and implementation of selection
                                              tem of public health insurance by per-                      procedures directly in district insurance offices
                                              sons without legal residence in CR. The                     for a particular position). The Insurance Com-
                                              material dealing with the system misu-                      pany has started to apply these measures sin-
                                              sing is at disposal in the Insurance Com-                   ce 2000. Within the frame of medical inspecti-
                                              pany.                                                       on (inspecting activities) the obligatory
                                              The statutory existence of only one Ar-                     continuing education has been introduced.
                                              bitration Body for the whole Insurance                         In 2001, on the basis of above-mentioned
                                              Company, that is for all of 77 district in-                 changes, there were altogether 15 selection
                                              surance offices, which makes decisions                      procedures implemented in district insuran-
                                              on appeals against payment assessments                      ce offices – alike already in the course of
                                              and on applications for obduracy abate-                     2000 – and through them 23 new physicians
                                              ment represents another great technical                     have been enrolled. The selection procedu-
                                              and personnel problem.7                                     res in the district insurance offices always to-
                                                                                                          ok place under the methodological guidance
                                                                                                          and direct participation of staff from the de-
                                        4.3.5                                                             partment of health care inspection of the
                                                                                                          Central Insurance Office.
                                        Inspecting Activities                                                In 2001, the department of health care in-
                                                                                                          spection, led with the efforts to extend the
                                           In the end of 2001 there were altogether                       number and spectrum of medical inspectors –
                                        889 inspecting officers (3 more than in                           specialists for the need of district insurance of-
                                        2000), that is medical inspectors and other                       fices, organised 2 selection procedures for po-
                                        specialised healthcare officers qualified for                     sitions of medical inspectors – specialists and
                                        inspecting activities (hereinafter only specia-                   on the basis of them 11 applicants were en-
                                        lised inspectors), assuring inspection activiti-                  rolled in the district insurance offices, 2 appli-
                                        es as the specialised medical control, regula-                    cants were enrolled for this position for the de-
                                        tion (approvals and permissions) and                              partment of inspection of the Central
                                        assessment in district insurance offices. In                      Insurance Office (in specialisations ORL and
                                        this number there were included:                                  dermatovenerology). The participation in the-
                                             228 employed medical inspectors8 (229                        se centrally organised selection procedures
                                             in 2000)                                                     does not establish any right for employment
                                             90 specialised inspectors – medical in-                      with the Insurance Company. This is consequ-
                                             spector’s assistants9 (70 in 2000).                          ently, and according the needs, established di-
                                           At solution of problems in individual medi-                    rectly in particular district insurance offices.
VZP CR                                  cal specialisations there were the following                         It is evident from the above-mentioned da-
                                        officers co-operating with them:                                  ta, that also in 2001 the re-structuring of staff
                                             518 medical inspectors – specialists in parti-               that assures inspecting activities of the Insu-
                                             cular medical specialisations (550 in 2000)                  rance Company , started in 2000, has been
                                             26 specialised inspectors – specialists (37                  going on. Further increase in the number of
                                             in 2000), of whom 13 university graduates                    medical inspector’s assistants and stabilisati-
                                             (e.g. speech therapy) and 13 secondary                       on of the number of medical inspectors wor-
                                             school graduates (e.g. home care).                           king in 0,8 to full time job were the results of
                                             27 inspecting pharmacists for inspection                     the emphasis put on assurance of inspection
                                             of pharmacies.                                               with staff working for the highest possible
                                                                                                          proportion of full-time job.
                                           In 2001, after a long period of time, the staff                   Within the frame of amending the obligato-
                                        of employed medical inspectors has been su-                       ry system of continuous education of medical
                                        ccessfully stabilised, thanks to changed condi-                   inspectors employed in the Insurance Com-
                                        tions for their recruitment for the Insurance                     pany that had been launched in 2000, in 2001
                                        Company (standardisation of qualification re-                     the freshly enrolled medical inspectors – in

                                        7   In 2001 the amendment of the act according to which the Arbitration Body would decide the obduracy abatment
                                            only at amounts exceeding 20 000 CZK was submitted to the Parliament. The VZP district insurance office will be
                                            allowed to decide the amounts up to 20 000 CZK, even without any administrative action. Another important chan-
                                            ge included in the same amendment is making simpler the mechanism of checking the persons without taxable
                                            income, who will be obliged to pay monthly premiums only in case when their premiums are not paid by their em-
                                            ployer or by the state or who do not pay premiums as self-employed persons throughout the all calendar month.
                                            It also contains arrangements, which will make simpler the delivery of written documents. This ought to restrict the
                                            speculative behaviour of debtors who up to now avoid recourse by not taking the delivered mail from the Insu-
                                            rance Company. If the amendment passes the Senate discussion it should have to come in force since 1 July 2002.
                                        8   The employed medical inspector is an employee of VZP CR having the minimum of 0,8 of full-time job executing
                                            inspection activities within the scope determined by legislative norms and according to contractually agreed rules
                                            or rules determined by the Ministry of Health and regardless his/her medical specialisation. In case of need these
                                            medical inspectors use the cooperation with inspecting officers (physicians as well as non-physicians) specialised
                                            in particular specialisations.
                                        9   These health care workers with secondary school education have, together with medical inspectors, the direct share in
                                            inspecting activities including implementation of necessary investigations in healthcare facilities and/or with the insured.




       32
       32
                                                                                                                     VZP CR
addition to theoretical education – took part                   pert opinions or viewpoints to inquiries of in-
in obligatory 5-day training stays both in the                  dividual district insurance offices or to requ-




                                                                                                                     ACTIVITIES OF THE INSURANCE COMPANY
Section of Health Care of the Central Insuran-                  irements of other departments of the Central
ce Office and in selected district insurance of-                Insurance Office. In addition they provided
fices. Within the course of 2001 17 of freshly                  more than 200 on-the-phone consultations
enrolled medical inspectors went through tra-                   to the inspecting officers of district insurance
ining stays in the Central Insurance Office, 21                 offices on professional medical issues.
of them in district insurance offices.                             As it had been mentioned in the VZP An-
   In 2001 the professional education of in-                    nual Report for 2000, in November of that
specting officers of the Insurance Company in                   year the new Department of Healthcare Faci-
inspection medicine as well as in other medi-                   lity Inspection was established in ORZP ÚP
cal specialisations has been carried out not on-                VZP. In April of 2001 this department, after
ly in the form of training within the Insurance                 a short preparatory phase and personnel
Company or organisations appointed for this                     equipment of two field groups, has started
purpose (IPVZ Prague, IDVPZ Brno) but also in                   implementation of inspections of in-patient
the form of seminars, working days and parti-                   healthcare facilities in the Czech Republic.
cipation in symposia and congresses of pro-                     After 10 months of trial operation the unam-
fessional associations either within the frame                  biguous conclusions can be adopted that the
of the Czech Medical Association or outside it.                 intention to establish these field-inspecting
Thus in 2001 the medical inspectors took part                   groups of ORZP ÚP VZP proved to be the
in 1 125 specialised educational actions10. The                 right one. The achieved outcomes of inspec-
share in their assurance had:                                   tions unambiguously speak for their extensi-
     the department of inspection of the Cent-                  on in the next period.
     ral Insurance Office – 26 %                                   The contribution of inspections carried
     the sub-department of inspection medi-                     out by the inspecting groups of ORZP ÚP VZP
     cine of the Institute for Education of He-                 manifested itself on four basic levels:
     althcare Workers in Prague – 27 %                               in their preventive impacts consisting
     the professional society of inspection                          particularly in the fact that the inspection,
     medicine of the Czech Medical Associati-                        including check-up of in-patient facilities,
     on of JEP – 9 %                                                 is carried out by workers of the Central
     other institutions (Czech Medical Associ-                       Insurance Office who do not have any lo-
     ation, healthcare facilities, district autho-                   cal inter-relations
     rities etc.) – 42 %.                                            in the unified course of action of inspec-
   In 2001 the methodological guidance of in-                        ting officers against facts found in con-
specting activities of the Insurance Company                         tractual healthcare facilities
has been assured by the Department of He-                            in the direct economic effect in relation
alth Care Inspection of the Central Insurance                        to inspected facts
Office (hereinafter ORZP ÚP VZP). There were                         in education of inspecting officers of di-
9 physicians working in full-time job in ORZP                        strict insurance offices.
ÚP VZP at 31. 12. 2001. There were 27 medi-                        In 2001 the inspecting groups of ORZP ÚP
cal inspectors – specialists and 4 specialised                  VZP on their own carried out altogether 45
inspecting officers (with secondary and uni-                    inspections of 15 in-patient healthcare facili-
versity education) in altogether 29 specialisa-                 ties and in co-operation with district insuran-
tions co-operating with them (as well as with                   ce offices they took an active share in 5 in-
other departments of the Health Care Section                    spections of home-care agencies. All these
of the Central Insurance Office) in methodo-                    inspections were linked with direct check-up
logical guidance of inspecting activities in the                made in a healthcare facility, where the
form of consultations and professional view-                    accounted medical care could be compared
points. Already in the end of 2000 the labour-                  with entries in medical records. On the basis
law relations of these specialists have been                    of implemented inspection the total reim-
changed from commitments to work into the                       bursement for 7 944 177 points and in the
form of contracts on work.                                      amount of 4 115 525 CZK for irregularly or
   Within the frame of supervision of the in-                   unjustifiably returned and compensated me-
spection standard of district insurance offices                 dical care was refused.
the workers of ORZP ÚP VZP have carried out                        It is assumed that in future the Insurance
altogether 25 inspecting visits in 20 district in-              Company will proceed to implementation of
surance offices within the course of 2001. The                  so-called navigation analyses (carried over
produced protocols contain factual description                  the accounted medical care processed by the
of imperfections having been found and terms                    information system) which would become
for their elimination. The protocols on control                 one of the basic documents for preparation
were made out in the place of control and me-                   of structured inspection, with the aim to ma-
asures of remedy were proposed to the direc-                    ke the inspections carried out by the inspec-
tors of inspected district offices.                             ting groups of ORZP ÚP VZP, but particularly
   In 2001 the inspecting officers – specialists                the inspections implemented by individual
of ORZP ÚP VZP prepared altogether 194 ex-                      district insurance offices, more effective.


10   14 of these trainings fell in average upon the inspecting officers of one district office.




                                                                                                                     33
                                                                                                         The inspecting activities of district insu-
 THE ANNUAL REPORT OF VZP CR FOR 2001
                                           In 2001, to assure informedness and obse-
                                        rvance of unified methods by all medical in-                   rance offices in 2001 are summarised:
                                        spectors of the Insurance Company, the
                                        ORZP ÚP VZP has been issuing the ninth vo-                        in Table no. 6 – The summary of inspec-
                                        lume of a periodical called „the Information                      ting activities of the Insurance Compa-
                                        Bulletin of Medical Inspectors of VZP CR“                         ny in 2001
                                        where all topics in the healthcare system, ob-                    in Table no. 7 – The regulative part of in-
                                        ligatory instructions and recommendations                         spection – approvals and permissions
                                        for the course of action in the sphere of in-                     in Table no. 8 – The expert part of in-
                                        spection are regularly published. In 2001 this                    spection – assessments in 2001
                                        publication gave more space for inspection                        in Table no. 9 – The control part of in-
                                        activity case studies, in which the inspecting                    specting activities – inspections in 2001.
                                        officers of district insurance offices were de-
                                        eply interested. Some of the bulletin infor-                     The total effect of inspections implemen-
                                        mation meant also for physicians of contrac-                   ted in 2001 (ensuing from the summary of
                                        tual healthcare facilities was published in                    quarterly reviews compiled and delivered to
                                        parallel in the Bulletin of VZP CR.                            ORZP ÚV VZP by district insurance offices) is
                                           The district insurance offices have been re-                as follows:
                                        gularly delivering the statistical quarterly re-                   the sum of point values of refused or re-
                                        cords on activities of medical inspectors and                      placed medical services was 243 169 253
                                        specialised inspecting officers to ORZP ÚP                         points11 in total
                                        VZP. In 2001 the methodology for these data                        the value of other refused accounted
                                        recording and delivering has been revised so                       items (separately accounted material,
                                        that it might lead to considerable labour sa-                      separately accounted drugs) was
                                        ving in district insurance offices.                                80 862 228 CZK.

                                        Table no. 6 – Summary of inspecting activities of the Insurance Company in 2001

                                         Item                                        I. Q           II. Q         III. Q          IV. Q         Total
                                                         A                             B              C             D               E             F
                                         Inspections                                 4 925           5 254         3 898           4 399        18 476
                                         Approvals                                  56 047         56 429         50 611         60 852        223 939
                                         Permissions                                61 416         70 388         45 328         35 907        213 039
                                         Assessments                                42 822         36 658         33 825         34 937        148 242
VZP CR                                   Total                                     165 210        168 729        133 662        136 095        603 696

                                        Table no. 7 – The regulative part of inspecting activities – approvals and permissions in 2001

                                               Opinions                                  Of number             in %        Not approved          in %
                                         I. n.                A                               B                  C               D                 E
                                           1 to applications for approval („Z“, „X“)       223 939              51,25           6 445             2,88
                                                 of which: medicaments                     125 448              28,71           3 013             2,40
                                                            medical aids                    91 639              20,97           3 045             3,32
                                                            services                         6 852               1,57             387             5,65
                                           2 to applications for permission
                                               permission of full coverge                     88 821           20,33           1 446             1,63
                                                of which: medicaments *                       70 644           16,17             811             1,15
                                                            medical aids *                     7 137            1,63             185             2,59
                                                            services *                         1 063            0,24              48             4,52
                                                            other permissions *                  186            0,04              20            10,75
                                                            other exceptions **                9 791            2,24             382             3,90
                                               balneal care permission (confirmation)        112 508           25,75           1 709             1,52
                                                 of which: complex balneal care               93 592           21,42           1 333             1,42
                                                            contributory balneal care         18 916            4,33             376             1,99
                                               referrals to OLÚ for children                   4 102            0,94              44             1,07
                                               referrals to children conv. homes               7 608            1,74              93             1,22
                                               Total                                         436 978          100,00           9 737             2,23

                                        ** on the basis of delegation in § 16 of the Act no. 48/1997
                                        ** on the basis of delegation in other § of the Act no. 48/1997 and in regulation through which the List of Medical
                                           Services is published
                                        Note: OLÚ = Specialised Curative Institution

                                        11   The total economic effect cannot be expressed as a summary in crowns from these data with respect to the dif-
                                             ferent ways of reimbursement provided to individual types of healthcare facilities.




       34
       34
                                                                                                          VZP CR
Table no. 8 – The expert part of inspecting activities – assessments in 2001




                                                                                                          ACTIVITIES OF THE INSURANCE COMPANY
 Assessments                                     I. Q       II. Q          III. Q    IV. Q    Total
                         A                        B           C              D         E        F
 Service sets into the contract annex no. 2     4 642       2 171          3 338     2 941    13 092
 Third party liabilities                        6 926       6 514          5 228     6 172    24 840
 Individual accounts of the insured                546      1 028             324      955     2 853
 Contractual ins. (contract and accounting)    20 168      21 389         18 911    18 493    78 961
 Urgent and necessary care abroad                  430         393            844      841     2 508
 Material, technical and personnel assurance       907         791            940      890     3 528
 Private car use                                2 411       2 533          2 578     3 176    10 698
 Objections of CHCF to regulations                 146         230            604      377     1 357
 Other assessments                              6 646       1 609          1 058     1 092    10 405
 Total assessments                             42 822      36 658         33 825    34 937   148 242


Table no. 9 – Control part of inspecting activities – controls in 2001

 Number of controls                             I. Q        II. Q         III. Q     IV. Q     Total
                       A                          B           C             D          E         F
                planned                        2 431       2 252          1 849     2 197      8 729
                structured                     2 494       3 002          2 049     2 202      9 747
 of which controls
 only from the information system data         2 101       2 424          1 737     1 718      7 980
 completed with check up in HCF                2 766       2 733          2 114     2 638     10 251
 completed with check up at the insured            8           4              2         9         23
 check up both in HCF and at the insured          50          93             45        34        222
 Total number of controls                      4 925       5 254          3 898     4 399     18 476
 Objections against control conclusions
                partly accepted                   68          78             34        41       221
                fully accepted                    59          92             44        71       266
                not accepted                      70         112             80        60       322
 Total number of objections                      197         282            158       172       809

Note: HCF = healthcare facility, CHCF = contractual healthcare facility



   In the course of 2001 the module of the                 physicians were prescribing medica-
information system of the Insurance Com-                   ments to hospitalised patients although
pany called „the Medical Inspector’s Diary“                reimbursement of these medicaments
(hereinafter only „MID“) has been used, as                 during the hospitalisation is assured
in previous years, for the needs of control of             through lump sum payment for drugs
the expenditure part of public health insu-                contrary to the valid regulation of the Mi-
rance by inspecting officers as an instru-                 nistry of Health that issues the List of Me-
ment of the information system that ena-                   dical Services with their point values (he-
bles more precise registration and control                 reinafter only the List of Services) the
of approved items (drugs, medical aids, me-                physicians returned the clinical examina-
dical services) and issued permits for com-                tions together with medical services mar-
pensation. In 2001, the MID and other soft-                ked as „Q“ which cannot be combined
ware products of the information system for                with clinical examinations
inspecting activities (VZPP3, SLSTORNO,                    at hospitalised patients the services ag-
NBSTORNO) – enabling the unified method                    gregated into the services of a day of tre-
of control and inspection of documents on                  atment were returned
delivered health care accounting – have be-                physicians returned medical services the
en substantially revised to make their ope-                contents of which had not been fulfilled
ration simpler. The ORZP ÚP VZP co-opera-                  according to the entries in patient’s re-
tes with employees of the Information                      cords
System Section of the Central Insurance Of-
fice in further adjustment of the informati-               the entries on provided medical care in
on system instruments for the needs of con-                the insured’s records, in many times le-
trolling and inspecting activities.                        gible only with difficulties, were not suf-
                                                           ficient or they were completely absent
   It was evident from inspections of con-                 physicians of in-patient healthcare facili-
tractual healthcare facilities implemented                 ties were admitting patients for hospital
by inspecting officers of the Central Insuran-             care contrary to provisions of the Act no.
ce Office and district offices that:                       48/1997, on public health insurance



                                                                                                          35
 THE ANNUAL REPORT OF VZP CR FOR 2001
                                           (there were no reasons for hospitalisati-      hancement of capacity of the information
                                           on ensuing from entries in medical re-         system of the Insurance Company was ne-
                                           cords or reasons due to which the out-         cessary also in association with the central
                                           patient care could not be provided)            data bank building and optimising its archi-
                                           patients without proper indication were        tecture.
                                           admitted on beds of intensive care and            In the course of the year the information
                                           AR units or they are kept here even after      system of the Insurance Company has been
                                           the indication for this stay has passed        extended with new Hewlett-Packard servers
                                           over – according to the records on their       and with other components. The capacity of
                                           health condition                               the memory system Symmetrix has been ex-
                                           healthcare facilities having contracts on      tended. At the same time the licence for the
                                           treatment-day services on intensive care       higher version of relation database Oracle
                                           and AR units frequently return just the ex-    has been bought. In 2001 the inter-conne-
                                           pensive services of treatment days in spi-     ction of the basic information system bet-
                                           te of the fact that the health condition of    ween district insurance offices and their de-
                                           patients and provided care – according to      tached workplaces (agencies of district
                                           the entries in records – entitle them only     insurance offices) has also continued to be
                                           to return of cheaper codes                     extended and the upgrade set of routers has
                                           physicians of workplaces of the follow-up      been modified.
                                           in-patient care were admitting patients           In the course of 2001 the exchange of PC
                                           for hospitalisation although the medical       connected to NT servers was going on within
                                           reasons indicating their admission had         the frame of the Insurance Company , with
                                           not been found in the medical record           the prospect of the graphical output utilisati-
                                           entries and the patient’s admission into       on for programmes for data processing wit-
                                           the healthcare facility had a social back-     hin the frame of the basic information sys-
                                           ground. At doing this, the healthcare faci-    tem.
                                           lities only exceptionally ask for the statu-      In the course of 2001 small parts of land
                                           te of social hospitalisations according to     were bought to assure activities of district in-
                                           the Act no. 100/1998, on social security.      surance offices in KromûfiíÏ, Nov˘ Jiãín, Dû-
                                           The same case is when the reasons for in-      ãín and Karlovy Vary.
                                           patient care pass over during hospitalisa-        In the course of 2001 the reconstruction
                                           tion, the patients stay on bed from social     of the ÚP VZP premises – Flora has been fi-
                                           reasons without asking for the statute of      nished as well as the reconstruction of pre-
                                           social hospitalisation and thus their stay     mises in Louny and Opava. Throughout the
                                           is covered from funds of public health in-     whole year of 2001 the construction of pre-
VZP CR                                     surance                                        mises for OP VZP Brno-City has been in pro-
                                           referrals for balneal care in number of ca-    gress. In addition, there were partial techni-
                                           ses did not include all obligatory data, re-   cal adjustments of premises of district
                                           ferring physicians were not respecting         offices having been in progress, e.g. in Bfiec-
                                           the valid and contractually binding Met-       lav, DomaÏlice, Fr˘dek-Místek, Karlovy Vary,
                                           hodology for Procurement and Delivery          Litomûfiice, Most, Nov˘ Jiãín, Vsetín and Vy‰-
                                           of VZP CR documents and the Indication         kov.
                                           List of Balneal Care and did not respect
                                           balneal care contra-indications and this
                                           made the assessment and confirmation             At 31. 12. 2001 the following district in-
                                           of referrals by medical inspectors more        surance offices were settled in their own
                                           difficult.                                     premises gained either through purchase
                                                                                          or construction:
                                                                                          Beroun          Blansko          Brno-Country
                                                                                          Bfieclav         â. Budûjovice    Dûãín
                                        4.4                                               Fr˘dek-Místek   HavlíãkÛv Brod   Hradec Králové
                                        Assurance of the                                  Chomutov
                                                                                          Jeseník
                                                                                                          Chrudim
                                                                                                          Jihlava
                                                                                                                           Jablonec n. Nisou
                                                                                                                           JindfiichÛv Hradec
                                        Insurance Company                                 Kladno          Kolín            KromûfiíÏ
                                        Activities with                                   Kutná Hora      Liberec          Louny
                                                                                          Mûlník          Most             Náchod
                                        Tangible and                                      Nymburk         Olomouc          Opava
                                        Intangible Assets                                 Ostrava         Pelhfiimov        Písek
                                                                                          PlzeÀ-North     Prachatice       Prague-City
                                          In 2001, the substantial growth of the vo-      Prague-East     Prostûjov        Pfierov
                                        lume of users’ needs, data and functions pro-     Pfiíbram         Rakovník         Rokycany
                                        cessed by the information system of the In-       Rychnov n. Kn.  Semily           Sokolov
                                        surance Company and the necessity to keep
                                                                                          Teplice         Tfiebíã           Uh. Hradi‰tû
                                        to the time schedules at processing econo-
                                        mic, statistic, medical and other outputs cau-    Ústí n. Labem   Ústí n. Orlicí   Vsetín
                                        sed the need of further extension of its          Vy‰kov          Znojmo           Îìár n. Sázavou
                                        hardware and software capacities. The en-         ÚP VZP CR Prague.



       36
       36
                                                                                                                               VZP CR
  At 31. 12. 2001 the following district in-                    of Medical Services“), or to the point values
surance offices were settled in the leased                      and the level of reimbursement covered with




                                                                                                                               ACTIVITIES OF THE INSURANCE COMPANY
buildings:                                                      public health insurance (hereinafter „CP for
Brno-City           âeská Lípa          âesk˘ Krumlov           prices“).
Hodonín             Cheb                Klatovy                    In the course of 2001 there were 3 regular
Litomûfiice          PlzeÀ-South         PlzeÀ-City              days of negotiations of CP for the List of Me-
Prague-West         ·umperk             Tábor                   dical Services where the basic documents for
Tachov              Zlín.                                       the amendment of the List of Medical Servi-
                                                                ces had been discussed. This amendment is
  At 31. 12. 2001 the following district in-                    prepared by the Ministry of Health to be pub-
surance offices were using their premises                       lished in the form of a regulation (in the
on the basis of contracts on transfer of the                    course of 2002). The working group for CP
property management right:                                      for the List of Medical Services met altoget-
Bene‰ov             Bruntál             âeská Lípa              her 5 times in 2001. The representatives of
DomaÏlice           Jiãín               Karviná                 the Insurance Company managed all the ne-
Karlovy Vary        Mladá Boleslav      Nov˘ Jiãín              gotiations of this group, organised their cour-
Opava12             Pardubice           Strakonice              se, gathered all suggestions and comments
Svitavy             Trutnov.                                    of specialists having been involved in them,
                                                                prepared frequency analyses and models of
   The property and activities of the Insu-                     the proposed change impacts on expenditu-
rance Company are insured with so-called                        re on health care covered with funds of pub-
central property insurance. In 2001 84 loss-                    lic health insurance.
incurring events were registered. The level                        In 2001 „the Committee for the Assess-
of damages incurred was about 2 200 000                         ment and Allocation of Selected Medical
CZK.                                                            Appliances“ , established by the Ministry of
   At 31. 12. 2001 the liquidation of about                     Health, went on in its activities with partici-
75 % of loss-incurring events has been finis-                   pation of the Insurance Company represen-
hed with the prospect to finish the liquidati-                  tatives. This Committee had altogether 10
on of other cases in the first half of 2002. This               sessions and was assessing impacts of he-
concerns the loss-incurring events from the                     althcare facility applications concerning re-
4th quarter of the year and loss-incurring                      novation or acquisition of selected medical
events at which the precise level of damages                    appliances with high costs on expenditures
could not be calculated. Since the beginning                    from funds of public health insurance. The
of the existence of central property insuran-                   detailed information on numbers and alloca-
ce, that is since 1. 10. 1996 till 31. 12. 2001,                tion of medical appliances is at disposal in
the insurance benefits of about 12 000 000,-                    the Institute of Healthcare Information and
CZK were paid to the Insurance Company for                      Statistics, with which the Insurance Compa-
its property damages.                                           ny co-operates in methodology of data col-
                                                                lection.
                                                                   The ways of reimbursement and its level
4.5                                                             for particular segments of providers and for
                                                                both the halves of 2001 were discussed wit-
Health Policy                                                   hin the CP for prices. In the 1 st half of
                                                                2001 the agreement was achieved (on po-
  In 2001, health policy of the Insurance                       int values and levels of reimbursement for
Company has been from a major part put in-                      health care covered with public health insu-
to practice within the preliminary phases of                    rance) within the CP for prices with the re-
negotiations of concerting proceedings and                      presentatives of providers in the following
then within the frame of selection procedu-                     segments:
res for assurance of provision of out- and in-                       GPs for adults
patient health care to the insured, which to-                        GPs for children and youths
ok place before concluding contracts on                              dentists
provision and reimbursement of health ca-                            specialised out-patient health care inclu-
re.13 In the course of 2001, on the basis of                         ding haemodialysis
the Act no. 48/1997, on public health insu-                          home care
rance, the concerting proceedings were held                          health care provided by complement he-
either for the List of Medical Services with                         althcare facilities – laboratories, radio
Point Values (hereinafter only „CP for the List                      diagnostics



12   The VZP CR district office in Opava is presented twice as it is settled either in its own building and it is using pre-
     mises on the basis of a contract on transfer of property management right. Similarly, the VZP CR district office in
     âeská Lípa is using its premises on the basis of a contract on the transfer of property management right and at
     the same time it is settled in a leased building.
13   The selection procedures take place, according to relevant provisions of the Act no. 48/1997, on public health in-
     surance, either on the motion of the Insurance Company or on the motion of the healthcare facility which is qua-
     lified to provide health care in a relevant specialisation.




                                                                                                                               37
 THE ANNUAL REPORT OF VZP CR FOR 2001
                                             ambulance services, medical transport               rance) was achieved with the representatives
                                             services and medical rescue services                of providers in the same segments as in the
                                             physiotherapy                                       1st half of 2001 and the outcomes were pub-
                                             balneal care.                                       lished in a standard manner in the Bulletin of
                                           The outcomes of CP for prices, where the              the Ministry of Health of CR.
                                        agreement was achieved, were published as                   Due to the disagreement in the segment of
                                        obligatory for healthcare facilities and health          hospital care the level of reimbursement
                                        insurance companies in the Bulletin of the               (including regulation limits) was fixed by the
                                        CR Ministry of Health.                                   Ministry of Health of CR, on the basis of its
                                           The agreement (on point values and levels             authority ensuing from the amendment of
                                        of reimbursement for health care covered                 the Act no. 48/1997, on public health insu-
                                        with public health insurance) was not rea-               rance, by its Regulation no. 211/2001. The
                                        ched in the whole segment of healthcare fa-              price of one point fixed for the 1st half of
                                        cilities of hospital care (that is, in addition to       2001 has remained in effect even for the 2nd
                                        hospitals, also with specialised curative insti-         half of 2001.
                                        tutions, long-term care hospitals and health-
                                        care facilities returning the nursing bed care.            A short survey on the development and
                                        The point value and the level of health care             application of reimbursement mechanisms
                                        reimbursement were thus fixed by the De-                 for delivered health care in individual hal-
                                        cree of the CR Government, published in Bul-             ves of 2001 classified according to particu-
                                        letins of the Ministry of Health.                        lar segments of health care can be find in
                                           Within the frame of the CP for prices for             Tables no. 10.
                                        the 2nd half of 2001 the agreement (on po-
                                        int values and the level of reimbursement for              A commentary to particular segments of
                                        health care covered with public health insu-             health care follows these tables.




VZP CR




                                        Table no. 10 – Mechanisms of reimbursment for healthcare facilities

                                                            1st half of 2001                                      2nd half of 2001

                                                                                   GENERAL PRACTITIONERS

                                                                 1) KKVP                                                1) KKVP
                                                                  29 CZK                                                 29 CZK
                                             irreg. care and serv. over the per-capita paym.        irreg. care and serv. over the per-capita paym.
                                                            – 0,70 CZK/point                                       – 0,80 CZK/point
                                                          bonus system for GPs                                   bonus system for GPs

                                                      2) Fee-for-service payment                             2) Fee-for-service payment
                                                         point value of 0,46 CZK                                point value of 0,46 CZK
                                          perfomer’s time limit of 12 hours per a calendar day   perfomer’s time limit of 12 hours per a calendar day
                                                 max. reimbursement up to 100 % POÚ                     max. reimbursement up to 100 % POÚ
                                            total reimbursement up to the level of so-called       total reimbursement up to the level of so-called
                                                       maximum reimbursement                                  maximum reimbursement

                                             3) KKVP with setting off – „small practices“           3) KKVP with setting off – „small practices“
                                                   setting off up to 90 % of KKVP                         setting off up to 90 % of KKVP
                                                    conditions: less JRP than 70 %                        conditions: less JRP than 70 %
                                                     of the nation-wide average                             of the nation-wide average
                                                        bonus system for GPs                                   bonus system for GPs

                                                                                                            Table no. 10 continues on the next page


       38
       38
                                                                                                                VZP CR
Table no. 10 – continued




                                                                                                                ACTIVITIES OF THE INSURANCE COMPANY
                    1st half of 2001                                      2nd half of 2001

                                         OUT - PATIENT SPECIALISTS

                Fee-for-service payment                             Fee-for-service payment
                 point value of 1,00 CZK                             point value of 1,00 CZK
  perfomer’s time limit of 12 hours per a calendar day perfomer’s time limit of 12 hours per a calendar day
 preliminary reimbursement on the level of 100 % POÚ preliminary reimbursement on the level of 100 % POÚ
    total reimbursement up to the level of so-called     total reimbursement up to the level of so-called
                maximum reimbursement                               maximum reimbursement

                                       OUT - PATIENT HAEMODIALYSIS

                 Fee-for-service payment                                Fee-for-service payment
                  point value of 1,00 CZK                                point value of 1,00 CZK
  perfomer’s time limit of 12 hours per a calendar day   perfomer’s time limit of 12 hours per a calendar day
  preliminary reimbursement on the level of 100 % POÚ    preliminary reimbursement on the level of 100 % POÚ
        overheads on the level of 4 points/minute              overheads on the level of 4 points/minute

                                                 HOME CARE

      1) Fee-for-service payment – 1st alternative           1) Fee-for-service payment – 1st alternative
                 point value of 0,46 CZK                                point value of 0,46 CZK
  perfomer’s time limit of 12 hours per a calendar day   perfomer’s time limit of 12 hours per a calendar day
  preliminary reimbursement on the level of 103 % POÚ    preliminary reimbursement on the level of 103 % POÚ
       overheads of spec. 925 – 1,00 point/minute             overheads of spec. 925 – 1,00 point/minute

     2) Fee-for-service payment – 2nd alternative           2) Fee-for-service payment – 2nd alternative
              health care for 7 days a week                          health care for 7 days a week
                 point value of 1,00 CZK                                point value of 1,00 CZK
   perfomer’s time limit of 8 hours per a calendar day    perfomer’s time limit of 8 hours per a calendar day
  preliminary reimbursement on the level of 103 % POÚ    preliminary reimbursement on the level of 103 % POÚ
       overheads of spec. 925 – 1,00 point/minute             overheads of spec. 925 – 1,00 point/minute

      3) Fee-for-service payment – 3rd alternative           3) Fee-for-service payment – 3rd alternative
          health care for less than 7 days a week                health care for less than 7 days a week
                  point value of 1,00 CZK                                point value of 1,00 CZK
   perfomer’s time limit of 8 hours per a working day     perfomer’s time limit of 8 hours per a working day
  preliminary reimbursement on the level of 103 % POÚ    preliminary reimbursement on the level of 103 % POÚ
       overheads of spec. 925 – 1,00 point/minute             overheads of spec. 925 – 1,00 point/minute

                                               PHYSIOTHERAPY

                 Fee-for-service payment                                Fee-for-service payment
                  point value of 0,88 CZK                                point value of 0,90 CZK
  perfomer’s time limit of 10 hours per a working day    perfomer’s time limit of 10 hours per a working day
  preliminary reimbursement on the level of 100 % POÚ    preliminary reimbursement on the level of 104 % POÚ
      overheads of spec. 918 – 2,00 points/minute            overheads of spec. 918 – 2,00 points/minute

                                               LABORATORIES

                    Flat-rate payment                                      Flat-rate payment
     preliminary reimb. on the level of the product         preliminary reimb. on the level of the product
                  of 100 % POÚ and IZV                                   of 100 % POÚ and IZV
                             if:                                                    if:
  a) number of points is 97–103 % RPB                    a) number of points is 97–103 % RPB
     flat rate = product of 100 % POÚ and IZV               flat rate = product of 100 % POÚ and IZV
  b) number of points is less than 97 % RPB              b) number of points is less than 97 % RPB
     flat rate = product of 100 % POÚ and IZV minus         flat rate = product of 100 % POÚ and IZV minus
     not reached percentage of point number                 not reached percentage of point number
  c) number of points higher than 103 % RPB              c) number of points higher than 103 % RPB
     flat rate = product of 100 % POÚ and IZV               flat rate = product of 100 % POÚ and IZV
     plus exceeding percentage of point number              plus exceeding percentage of point number

                                                                     Table no. 10 continues on the next page


                                                                                                                39
                                        Table no. 10 – continued
 THE ANNUAL REPORT OF VZP CR FOR 2001

                                                             1st half of 2001                                         2nd half of 2001

                                                                                           X-RAY SERVICES


                                                            Flat-rate payment                                         Flat-rate payment
                                             preliminary reimb. on the level of the product            preliminary reimb. on the level of the product
                                                          of 100 % POÚ and IZV                                      of 100 % POÚ and IZV
                                                                     if:                                                       if:
                                          a) number of points is 97–103 % RPB                       a) number of points is 97–103 % RPB
                                             flat rate = product of 100 % POÚ and IZV                  flat rate = product of 100 % POÚ and IZV
                                          b) number of points is less than 97 % RPB                 b) number of points is less than 97 % RPB
                                             flat rate = product of 100 % POÚ and IZV                  flat rate = product of 100 % POÚ and IZV
                                             minus not reached percentage of point number              minus not reached percentage of point number
                                          c) number of points higher than 103 % RPB                 c) number of points higher than 103 % RPB
                                             flat rate = product of 100 % POÚ and IZV                  flat rate = product of 100 % POÚ and IZV
                                             plus exceeding percentage of point number                 plus exceeding percentage of point number


                                                                                            DENTAL CARE

                                          Reimbursement according to the rates published            Reimbursement according to the rates published
                                             in the part 13/2000 of the MH CR Bulletin                  in the part 6/2001 of the MH CR Bulletin


                                                                           MEDICAL AMBULANCE SERVICE – spec. 709

                                                          1) Flat rate payment                                        1) Flat rate payment
                                              flat rate = product of 104 % POÚ and IZPP                   flat rate = product of 104 % POÚ and IZPP
                                                                                                          preliminary reimbursement of 104 % POÚ

                                                      2) Fee-for-service payment                                2) Fee-for-service payment
                                                        point value of 0,95 CZK                                   point value of 0,97 CZK
VZP CR
                                                     TRANSPORT OF WOUNDED AND ILL PERSONS AND WOMEN IN LABOUR – spec. 989

                                                        Fee-for-service payment                                   Fee-for-service payment
                                                         point value of 0,86 CZK                                   point value of 0,86 CZK


                                                                              MEDICAL RESCUE SERVICES – spec. 003

                                             1) Fee-for-service payment – 1st alternative
                                                        point value of 0,70 CZK

                                                                                                                  Fee-for-service payment
                                             2) Fee-for-service payment – 2nd alternative                          point value of 0,80 CZK
                                                        point value of 0,80 CZK
                                            total reimbursement up to the level of so-called
                                                       maximum reimbursement
                                                maximum reimbursement = 110 % POÚ

                                                                                              HOSPITALS


                                           Combined flat rate and items reimbursed above             Combined flat rate and items reimbursed above
                                                       the frame of flat rate                                    the frame of flat rate

                                           flat rate is calculated for particular kinds of health    flat rate is calculated for particular kinds of health
                                           care – acute bed care, out-patient and other care,        care – acute bed care, out-patient and other care,
                                                         medical transport services                                medical transport services

                                            terms of reimbursement: at least 89 % points/1            terms of reimbursement: at least 89 % points/1
                                              unique insured and 90 % ZUM and ZULP /1                   unique insured and 90 % ZUM and ZULP /1
                                                            unique insured                                            unique insured


                                                                                                                Table no. 10 continues on the next page


       40
       40
                                                                                                                  VZP CR
Table no. 10 – continued




                                                                                                                  ACTIVITIES OF THE INSURANCE COMPANY
                    1st half of 2001                                        2nd half of 2001

                                  SPECIALISED CURATIVE INSTITUTIONS (OLÚ)

                   Combined payment                                        Combined payment
        a) in-patient care – fee-for-service paym.              a) in-patient care – fee-for-service paym.
                  (per day of treatment)                                  (per day of treatment)
                 point value of 1,00 CZK                                 point value of 1,00 CZK
       level of drug lump sum – according to the               level of drug lump sum – according to the
                     determined rate                                         determined rate
   b) out-patient and other care, transport – flat rate    b) out-patient and other care, transport – flat rate
      reimbursement = product of RPS and PUP                  reimbursement = product of RPS and PUP
                 point value of 0,89 CZK                                 point value of 0,89 CZK

                                        LONG-TERM CARE HOSPITALS (LDN)

   Fee-for-service payment (per day of treatment)           Fee-for-service payment (per day of treatment)
               point value of 1,00 CZK                                  point value of 1,00 CZK
     increase of overheads on a day of treatment              increase of overheads on a day of treatment
                     by 60 points                                             by 60 points
          compared with the 1st half of 2000                       compared with the 1st half of 2000
 drug lump sum increase by 10,00 CZK compared with        drug lump sum increase by 10,00 CZK compared with
                   1st half of 2000                                          1st half of 2000

                                       BALNEAL AND CONVALESCENT HOMES

               objectively regulated price                             objectively regulated price



 JRP   unit of a registered insured
 POÚ   (reimbursement for a reference period) - is equal to the reimbursement for the relevant calendar
       quarter of the last calendar year
 RPB reference number of points
 PS    flat rate
 IZV   index of change in productivity, defined as the ratio of the total number of returned and approved
       points in the relevant half of 2000 to the total number of returned and approved points in the same
       half of 1999
 IZPP index of change in number of the insured, defined as the ratio of unique numbers of the insured in
       the relevant quarter of 2001 to the number of insured in the same quarter of 2000
 PUP number of unique insured
 RPS reference flat rates for in- or out-patient or other care or for medical transport related to 1 unique
       insured
 Maximum reimbursement is equal to the product of treated insured in the relevant healthcare facility and
       average reimbursement for 1 treated insured in the relevant healthcare facility calulated from the
       reference period
 KKVP = combined per-capita and fee-for-service payment


General Practitioners                                        In the 2nd half of 2001, compared with the
   Even in 2001 the health care delivered by              1st half of 2001, the point value for services
GPs for adults and GPs for children and                   of irregular care and for services above the
youth has been reimbursed mainly in the                   frame of the capitation lump sum was incre-
form of „combined per-capita and fee-for-                 ased from 0,70 CZK to 0,80 CZK per a point.
service payment“ (hereinafter only „KKVP“).                  In the course of 2001 the following me-
In spite of the repeated efforts of the Insu-             chanisms of regulation were applied and
rance Company to introduce a signal code                  monitored:
„a patient’s visit at the GP having him/her                    for delivered health care, that is for me-
in register“, which would enable to have                       dical services, for induced health care
a survey on activities of GPs and to find                      and for prescribed drugs and medical
numbers of VZP CR insured who actually vi-                     aids (hereinafter PZT), except drugs and
sited their GP, this code could no be asser-                   medical aids obligatory liable to the app-
ted due to the absolute disagreement of                        roval of a medical inspector
the Association of GPs for Adults and GPs                      for the proportion of reimbursement for
for Children and Youth and of professional                     the treated not registered and registered
societies.                                                     insured



                                                                                                                  41
                                                                                          Laboratories, X-ray services
 THE ANNUAL REPORT OF VZP CR FOR 2001
                                             for health care provided to the not regis-
                                             tered insured.                                  In the course of the whole year 2001 the
                                           Since 1 January 2001 the Insurance Com-        flat rate payments have been used for the
                                        pany has introduced the so-called bonus           complement segment under the condition
                                        system for GPs in this segment of health ca-      that the preliminary reimbursement was pro-
                                        re providers and this is based on monitoring      vided on the level of the product of 100 % of
                                        of selected costs on health care for registe-     the standard volume of reimbursement for
                                        red insured of the Insurance Company . The        delivered care and the performance change
                                        bonus system was introduced with the aim          index. After the accounting period had been
                                        to motivate GPs through economic instru-          closed the volume of delivered health care
                                        ments to optimisation of a patient’s treat-       was assessed and the financial settlement
                                        ment so that it would correspond with             was implemented.
                                        his/her health condition and at the same ti-
                                        me fulfil the requirements of economical          Home care
                                        and effective utilisation of financial means.
                                                                                            In the course of 2001 there was no sub-
                                        For the 1 st half of 2001 altogether 187 mil.
                                                                                          stantial change in the way of reimbursing the
                                        CZK were paid to about 85 % of GP’s facili-
                                                                                          healthcare facilities providing home care.
                                        ties, which had met the determined criteria.
                                                                                          The fee-for-service method of reimburse-
                                        The accounts for the 2 nd half of 2001 will
                                                                                          ment without limitation with the maximum
                                        have been settled no sooner than the 2 nd
                                                                                          payment has been implemented and the re-
                                        quarter of 2002. It is expected that about
                                                                                          gulation of the performer’s time has been
                                        200 mil. CZK will be paid for bonuses in this
                                                                                          applied. The indirect costs of medical servi-
                                        half of the year. The evaluation of the bonus
                                                                                          ces were raised to 1 point per one minute of
                                        system effectiveness and impacts on the
                                                                                          the service time.
                                        change in prescription behaviour of GPs will
                                        be carried out in association with the
                                        account settlement.                               Physiotherapy
                                           Since the 2nd half of 2001 the Insurance         In the segment of physiotherapy the new
                                        Company has also introduced monitoring of         form of reimbursement was implemented
                                        quality of provided health care at GPs by the     The point value of 0,88 CZK in the 1st half of
                                        means of selected indices for so-called good      2001 grew up to 0,90 CZK per a point in the
                                        practice.                                         2nd half. The indirect costs of medical servi-
                                           Even in this year the work of the commit-      ces were determined on the level of 2 points
                                        tee for assigning the statute of so-called        per one minute of the service time.
                                        „small practice“ has been going on. The
VZP CR                                  supplementary payment for necessary practi-       Dental care
                                        ces with unfavourable location, from the eco-        In the segment of dental care the reim-
                                        nomical point of view , has been awarded to       bursement according to the tariff table „the
                                        altogether 22 physicians.                         Reimbursement of Standard Dental Care“
                                                                                          was applied also in 2001. In the course of
                                        Out-patient specialists                           the year the agreements on changes and
                                          In the course of 2001 the specialised out-      modification in orthodontic care returning
                                        patient health care has been reimbursed           and in dental and X-ray service returning
                                        according to the List of Medical Services with    were concluded. This step was led not only
                                        their point values, with the point value of       by the efforts to reach provision of comple-
                                        1,00 CZK and limited with the maximum re-         te dental care but also by the needs of con-
                                        imbursement, which was fixed in dependen-         trolling their correct and justifiable applica-
                                        ce on the number of treated insured. The fol-     tion. In 2001 the first negotiations between
                                        lowing mechanisms of regulation were              the representatives of the Czech Dental
                                        applied:                                          Chamber and health insurance companies
                                            for delivered health care (that is for me-    on issues of quality of provided dental care
                                            dical services and induced health care)       took place.
                                            for the volume of prescribed drugs and
                                            medical aids (except the drugs and me-        Ambulance services
                                            dical aids liable to the approval of a me-      Two alternatives of reimbursement were
                                            dical inspector)                              offered to healthcare facilities providing am-
                                            for the statutory regulation of the perfor-   bulance services in the 1st and 2nd half of
                                            mer’s time, which is 12 hours per a ca-       2001:
                                            lendar day.                                     A-alternative – flat rate equal to the pro-
                                                                                          duct of 104 % of reimbursement for delive-
                                          In 2001 the Insurance Company again of-         red health care within the reference period
                                        fered the fee-for-service alternative of reim-    and the change index of the number of trea-
                                        bursement without settling its maximum le-        ted patients (numbers of unique insured) in
                                        vel to several specialisations, only with the     a particular healthcare facility.
                                        statutory limitation of the performer’s time.       B-alternative – reimbursement through the
                                        These were the specialisations where the cal-     fee-for-service method according to the
                                        culation items of particular medical services     Regulation of the Ministry of Health of CR,
                                        had been made more realistic.                     no. 134/1998, in its valid wording, with the



       42
       42
                                                                                                                              VZP CR
point value of 0,95 CZK in the 1st half of                      sement in individual kinds of care and then
2001. In the 2nd half of 2001 the point value                   of the items paid about the frame of the flat




                                                                                                                              ACTIVITIES OF THE INSURANCE COMPANY
grew up to 0,97 CZK.                                            rate – according to the Decree of the CR Go-
                                                                vernment no. 487/2000 and the Regulation
                                                                of MH CR no. 211/2001. The reimbursement
Transport of wounded and ill                                    was conditioned with the fact that the hospi-
persons and women in labour                                     tal must reach at least 89 % of points per one
   In the 1st and 2nd half of 2001 the transport                unique insured and 90 % of the financial vo-
of wounded and ill persons and women in la-                     lume expended on procurement of separate-
bour (hereinafter „DRNR“) has been com-                         ly accounted medical and curative remedies
pensated in the form of fee-for-service pay-                    (ZUM and ZULP before) per one unique in-
ments according to the Regulation of the MH                     sured in each kind of care, compared with
CR no. 134/1998, in its valid wording, with                     the reference period in the statement of the
the point value of 0,86 CZK. In addition, the                   period having been accounted just at that ti-
following services were paid from public he-                    me. In the opposite case the flat rate was
alth insurance: transport of healthcare staff                   proportionally reduced.
within the frame of visiting services, payment                     The mechanism of regulation for drugs and
of the insured’s costs on private car travels                   medical aids on prescription has been appli-
and transport of the dead insured to autopsy                    ed in both the halves of the year, using the
and back (except transport to autopsy and                       principle of the number of drugs and medi-
back in case of suspicion that the death had                    cal aids prescribed per 1 unique insured tre-
a criminal cause).                                              aded in out-patient way. In November of
                                                                2001 the VCB for the 1st half of 2001 was ad-
In-patient care                                                 ditionally (with retroactive effect) raised by
                                                                4,369 % on the basis of the CR Government
   The healthcare facilities providing acute in-
                                                                Decree no. 487/2000 and this meant, from
patient care (hereinafter only hospitals) we-
                                                                the financial point of view, the growth of re-
re in most cases paid through flat rate per 1
                                                                imbursement to hospitals by 610 mil. CZK.
unique examined or treated insured in both
halves of 2001. At several hospital the indivi-
dually adjusted way of reimbursement has                        Long-term care hospitals („LDN“)
been allowed by contract due to specific con-                      Both in the 1st and 2nd half of 2001, the he-
ditions of the given facility.                                  alth care provided to the insured in LDN was
   The hospital care was classified according to                reimbursed through the fee-for-service pay-
4 kinds – acute in-patient care, out-patient ca-                ments per one day of treatment with the po-
re, medical transport and other care.14 The flat                int value of 1 CZK. Overheads per one day of
(financial) rate per 1 unique15 examined or tre-                treatment were increased by 60 points and
ated insured was calculated for each hospital                   the lump sum for drugs by 10 CZK in both the
and each kind of delivered care, on the basis                   halves of the year, compared with the 1st and
of health care delivered and returned within                    2nd half of 2000. There were no regulation
the reference period (in the 1st or 2nd half of                 mechanisms applied to prescribed drugs and
2000). This value was obtained through divisi-                  medical aids.
on of the returned care volume (defined with
the number of points) by the number of units
of treated insured within the reference period                  Specialised Curative Institutions
in each kind of care (see above).                               („OLÚ“)
   The performance point value („VCB“) de-                         Both in the 1st and 2nd half of 2001 the he-
pendant on the calculated individual perfor-                    alth care provided to the insured in OLÚ was
mance point value („IVCB“) in each hospital                     reimbursed through so-called combined pay-
within the reference period was used for cal-                   ments. In-patient care was reimbursed
culation. When IVCB was lower than 0,89                         through the fee-for-service system, that is
CZK, VCB was fixed on the level of 0,89 CZK,                    through payments per a day of treatment
when IVCB was higher than 0,89 CZK and lo-                      with the point value of 1 CZK. Out-patient ca-
wer than 1 CZK, VCB was calculated as IVCB                      re, medical transport services and other care
+ 0,01 CZK, when IVCB was higher than                           were paid on the principle of flat rate per 1
1 CZK then VCB was equal to IVCB. The flat                      unique insured treated in each kind of care.
rate calculated in this manner was multiplied                   The flat rate per 1 unique treated insured
by the number of unique insured treated wit-                    was calculated for each OLÚ in each kind of
hin the current period – that is in the 1st or                  care (except in-patient care) on the basis of
2nd half of 2001.                                               delivered and returned health care within the
   The resulting reimbursement for the hos-                     reference period (that is in the 1st or 2nd half
pital thus was equal to the sum of reimbur-                     of 2000).


14   As other care the care is meant which is provided in a particular healthcare facility but which was indicated by
     another contractual partner.
15   The unique patient means a persons defined with its personal number who was examined or treated in a parti-
     cular healthcare facility at least once within the accounting period. The lump sum is provided only once without
     respect to the number of hospitalisations or patient’s visits in a particular facility within the period under review.




                                                                                                                              43
                                                                                              to the main indicative groups and types of
 THE ANNUAL REPORT OF VZP CR FOR 2001
                                           The resulting reimbursement to an OLÚ was
                                        then equal to the sum of reimbursement in par-        balneal care (complex, contributory) is
                                        ticular kinds of care. The methodology was si-        presented in Table no. 11.
                                        milar to that one applied in hospitals, it differed
                                        in the unified fee-for-service price of a point,      Medicaments and medical aids
                                        which was 0,89 CZK. For both the halves of
                                        2001 the overheads per a day of treatment we-         (formerly PZT)
                                        re increased in such a way that the OLÚ might            In the course of 2001 there has been no
                                        reach the 10 % increase in reimbursement              principal amendment of legislative norms,
                                        compared with the reference period, but only          which would enable to get substantial influ-
                                        up to the maximum limit determined by the             ence on utilisation of medicaments and me-
                                        List of Medical Services with their Point Values.     dical aids both in the sense of rational presc-
                                           The mechanism of regulation for prescri-           ription as well as the development of total
                                        bed drugs and medical aids was applied both           costs on medicaments. The CR Government
                                        in the 1st and 2nd half of the year on the prin-      Resolution no. 641 from 23.6.1999, which
                                        ciple of comparing the level of costs on drugs        froze the maximum prices, has expired.
                                        and medical aids prescribed per 1unique in-              In 2001 the composition of the Categori-
                                        sured treated in out-patient care (that is the        sation Committee of the Ministry of Health,
                                        insured treated within the frame of out-pati-         where two members represent the Insurance
                                        ent or other care) with the 1st and 2nd half of       Company, have been changed, and the Co-
                                        2000, respectively.                                   ordination Council has been established,
                                                                                              where the Insurance Company has one re-
                                                                                              presentative. The work-style of the Categori-
                                        Balneal and convalescent care                         sation Committee of the Ministry of Health
                                           In 2001 the presumed drawings of financi-          has been changed in a substantial manner. In
                                        al means on balneal care were influenced              2001 the Insurance Company representati-
                                        with the referral activities of physicians and        ves in the Categorisation Committee focused
                                        standardisation of balneal care prices in the         their efforts particularly to:
                                        component concerning lodging and catering.                 continuing of comparable reimburse-
                                        This ensued from the outcomes of the Insu-                 ment introduction (so-called reference
                                        rance Company project of „Standardisation                  reimbursement) for drugs with the same
                                        of Balneal Care Prices and Revision of the In-             or similar effect
                                        dication List for Balneal Care“. The standardi-            reimbursement of the same or similar
                                        sed prices have come in effect since 1 Janu-               treatment methods on the comparable
                                        ary 2001. At 1 January 2001, contractual                   level and on the same conditions
                                        relations were concluded with 47 balneal in-               substantial decrease in reimbursement
VZP CR
                                        stitutions and with 9 institutions providing               from funds of public health insurance
                                        convalescent care for children.                            associated with introduction of generic
                                           On the basis of the Treaty on Provision and             preparations, at keeping the full level of
                                        Compensation of Health Care between the                    mediciament compensation or at fixati-
                                        Czech Republic and Slovak Republic, which                  on of a reasonable supplementary pay-
                                        has come in force since 1 April 2001, the                  ment (according to the medicament
                                        „Treaty on Provision and Compensation of                   character)
                                        Balneal Care“ was concluded with 5 contrac-                factual benefiting impact on patients
                                        tual balneal facilities in the Slovak Republic             from introduction of new medicaments
                                        in the course of 2nd half of 2001.                         with respect to existing treatment met-
                                           At 31 December of 2001 the number of                    hods and pharmaco-economic points of
                                        Czech contractual partners in balneal care                 view.
                                        decreased to 46 and thus the total number of             The release of prescription of hypolipide-
                                        contractual balneal facilities was 51. There          mics from the group of statins and for GPs as
                                        were no changes in numbers of convalescent            well as the extension of indication criteria for
                                        care providers in the course of the year and          their application can be taken for a substan-
                                        thus at 31 December of 2001 the convales-             tial progress. The Insurance Company sup-
                                        cent care was assured by the means of 9 con-          ported this change (although from the aspect
                                        tractual partners.                                    of demands on funds of public health insu-
                                           The number of the insured treated in balne-        rance this is one of the most costly groups of
                                        al care was lower in 2001 than expected in the        medicaments) because it believes this step
                                        health insurance plan and this was reflected in       will have a considerable positive impact on
                                        lower than expected drawings of costs on bal-         quality and length of life of a wide part of our
                                        neal care. This was caused by the fact that in        population.
                                        2001 there was either the decrease in the in-            Through preparation and publication of
                                        sured of those age categories to which the bal-       „Recommendations for Approval and Permis-
                                        neal care concerns, either the indications and        sion of Medicaments by Medical Inspectors
                                        assessment of submitted referrals for balneal         of VZP CR“, provided by the Insurance Com-
                                        care were more strict, which corresponds with         pany to other health insurance companies,
                                        the world-wide trends.                                its efforts to assure unified course of action
                                                                                              of district insurance office medical inspectors
                                          The survey on numbers of treated pati-              at approving and permitting medicine presc-
                                        ents and costs on balneal care according              ription were continuing.



       44
       44
                                                                                                                                          VZP CR
Table no. 11 – Costs on balneal care according to the main indicative groups of diseases




                                                                                                                                          ACTIVITIES OF THE INSURANCE COMPANY
               and types of balneal care (complex and contributory) in 2001
                                                 Number Number Number Index                    Costs       Costs        Costs     Index
        Indicative group                        of patients of pat. in % of patients 01/00 in thous. CZK share in % in thous. CZK 01/00
                                                   2001         2001        2000                2001       2001          2000
I. n.                          A               B       C        D       E       F                          G            H          I
                                          Complex balneal care – adult patients
  1      Diseases of musculo-skeletal system
          VII                                    32 763      44,51     33 904     0,97       622 355       44,52      596 884     1,04
  2      Cardiovascular diseases
          II                                     12 539      17,03     11 761     1,07       233 277       16,69      207 800     1,12
  3      Diseases of nerves
          VI                                      9 945      13,51      9 944     1,00       207 800       14,86      199 465     1,04
  4      Non-tuberculotic diseases
           V                                       6 244       8,48      6 299    0,99       137 034        9,80      128 650     1,07
         of resp. tract
  5 XI Gynaecological diseases                     2 752       3,74      2 821    0,98        53 796        3,85       50 353     1,07
  6 IV Endocrinological and                        2 476       3,36      2 492    0,99        29 099        2,08       27 179     1,07
         metabolic diseases
  7 III Diseases of digestive tract                2 320      3,15      2 519     0,92        34 351       2,46        34 634     0,99
  8 I Oncological diseases                         1 548      2,10      1 510     1,03        24 115       1,72        22 561     1,07
  9 VIII Diseases of urinary tract                 1 171      1,59      1 267     0,92        18 444       1,32        18 581     0,99
 10 X Dermatological diseases                        937      1,27        952     0,98        19 551       1,40        17 433     1,12
 11 IX Mental disorders                              921      1,25        913     1,01        18 220       1,30        17 377     1,05
 12      In total                                 73 616    100,00     74 382     0,99     1 398 042     100,00     1 320 917     1,06
                                      Contributory balneal care – adult patients
  1      Diseases of musculo-skeletal system
          VII                                     11 080      71,97     11 624    0,95        71 402       70,89       73 114     0,98
  2      Cardiovascular diseases
          II                                       1 384       8,99      1 565    0,88        10 367       10,29       11 721     0,88
  3      Diseases of digestive tract
          III                                        757       4,92        860    0,88         4 268        4,24        4 869     0,88
  4      Non-tuberculotic diseases
           V                                         726       4,72        876    0,83          4 704       4,67         5 736    0,82
         of resp. tract
  5 VI Diseases of nerves                            642       4,17        669    0,96          4 629       4,60        4 752     0,97
  6 IV Endocrinological and                          207       1,34        246    0,84          1 243       1,23        1 485     0,84
         metabolic diseases
  7 IX Mental disorders                              163      1,06         177    0,92         1 009       1,00         1 067     0,95
  8 I Oncological diseases                           142      0,92         154    0,92           845       0,84           926     0,91
  9 XI Gynaecological diseases                       141      0,92         177    0,80         1 194       1,19         1 519     0,79
 10 VIII Diseases of urinary tract                   122      0,79         125    0,98           809       0,80           799     1,01
 11 X Dermatological diseases                         31      0,20          41    0,76           254       0,25           342     0,74
 12      In total                                 15 395    100,00      16 514    0,93       100 724     100,00       106 330     0,95
                                     Complex balneal care – children and youth
  1 XXV Non-tuberculotic diseases                  4 122      36,54      4 630    0,89        119 924      38,10      123 875     0,97
           of resp. tract
  2 XXVI Diseases of nerves                        2 179      19,32      2 294    0,95         76 948      24,45       76 498     1,01
  3 XXXI Gynaecological diseases                   1 444      12,80      1 468    0,98         27 806       8,83       27 324     1,02
  4 XXVII Diseases of musculo-skeletal system      1 329      11,78      1 372    0,97         38 197      12,14       37 172     1,03
  5 XXIV Endocrinological and                        967       8,57        987    0,98         21 834       6,94       20 451     1,07
           metabolic diseases
  6 XXVIII Diseases of kidneys and                   433       3,84        460    0,94         10 582       3,36       10 503     1,01
           urinary tract
  7 XXX Dermatological diseases                      379      3,36         389    0,97         10 436       3,32        9 317     1,12
  8 XXIII Diseases of digestive tract                296      2,62         320    0,93          5 561       1,77        5 891     0,94
  9 XXII Cardiovascular diseases                     112      0,99         139    0,81          2 649       0,84        3 419     0,77
 10 XXI Oncological diseases                          18      0,16          28    0,64            761       0,24          995     0,76
 11 XXIX Mental disorders                              2      0,02           3    0,67             42       0,01           62     0,68
 12        In total                               11 281    100,00      12 090    0,93        314 740     100,00      315 507     1,00
                                   Contributory balneal care – children and youth
  1 XXVI Diseases of nerves                           11     55,00          25    0,44            107      57,53            286   0,37
  2 XXVII Diseases of musculo-skeletal system          7     35,00          14    0,50             66      35,48            111   0,59
  3 XXV Non-tuberculotic diseases                      2     10,00           4    0,50             13       6,99             32   0,41
          of resp. tract
  4       In total                                    20    100,00          43    0,47            186    100,00             429   0,43


                In the aggregate                 100 312              103 029     0,97      1 813 692               1 743 183     1,04




                                                                                                                                          45
 THE ANNUAL REPORT OF VZP CR FOR 2001
                                           Also in 2001 the Insurance Company has                         cells were added to 30 patients for whom
                                        been continuing to negotiate the so-called                        any suitable donor had not been found in the
                                        „agreed highest prices“ („AHP“) with phar-                        course of 2000. The haematogenous cells
                                        maceutical producers and suppliers. The                           were successfully find, taken and delivered
                                        agreed highest prices brought considerable                        for 27 patients. 23 suitable donors were
                                        savings of financial means for the Insurance                      found abroad, 4 donors in registers in CR.
                                        Company (mostly at drugs on prescription),
                                        non or lower supplementary payments for                             In 2001 another important activity of the
                                        patients and for the market the favourably in-                    Insurance Company consisted in the creati-
                                        fluenced price level of drugs bought by hos-                      on of VZP Code-Lists:
                                        pitals or drugs sold over the counter. By the                         of medicaments produced in mass
                                        means of this persisting efforts the prices of                        (HVLP)
                                        medicaments were lowered by the amount                                of individually prepared medicaments
                                        exceeding 1 bil. CZK (according to expert es-                         (IVLP)
                                        timates).                                                             of medical aids (PZT)
                                           In 2001 the Insurance Company went on in                           of dental products (STOMAG).16
                                        assurance of so-called bulk purchases of
                                        costly medicaments for treatment of several                          The Code-List of HVLP comprises informa-
                                        kinds of serious diseases. The treatment of                       tion on pharmaceuticals classified according
                                        these diseases is centralised in selected spe-                    to ATC groups (that is according to the active
                                        cialised or highly specialised centres, in most                   substance) as well as in alphabetical order
                                        cases situated in teaching hospitals and for-                     according to the pharmaceutical names. In
                                        mer regional hospitals. Costs on these medi-                      particular groups, the pharmaceutical are ar-
                                        cament purchases were more than 720 mil.                          ranged from the cheapest to the most ex-
                                        CZK in 2001. The factual savings of expenses                      pensive one, fully covered pharmaceuticals
                                        were – due to implementation of bulk pur-                         and pharmaceuticals with the agreed highest
                                        chases – more than 200 mil. CZK. The medi-                        price are pointed out separately. The maxi-
                                        caments bought in this way were used for                          mum possible supplementary payment of
                                        treatment of:                                                     a patient in a pharmacy is defined with the
                                             about 3 300 patients with erythropoetin                      difference between the compensation and
                                             about 300 children suffering with phynyl-                    the orientation price. The presented data gi-
                                             ketonuria and hereditary metabolic di-                       ve the opportunity to a physician to choose
                                             sorders with dietetics and other prepara-                    a suitable medicament with respect to a cer-
                                             tions                                                        tain degree of economic consideration (big-
                                             about 300 children suffering with the                        ger package determined for long-term treat-
VZP CR                                       growth deficit, and newly about 100                          ment uses to be cheaper when converted per
                                             adult clients of the Insurance Company                       daily costs, generics use to be without any
                                             having been after hypophysis surgery,                        supplementary payment compared with ori-
                                             with growth hormones                                         ginal drugs etc.), and to provide the patient
                                             diseases caused by puberty precocious at                     with information on full coverage with public
                                             children                                                     health insurance funds or on maximum level
                                             7 patients with Gaucher disease, where                       of the possible supplementary payment.
                                             the costs per one patient were within the                       In 2001 the level of financial costs expen-
                                             range of 4–5 mil. CZK                                        ded on dental products was at about the sa-
                                             825 patients with the diagnosis of cereb-                    me level as in the previous year because the
                                             rospinal sclerosis multiplex with interfe-                   level of prices calculated for fully covered
                                             rons, and thanks to the treatment with                       dental products had not changed. The dental
                                             these expensive drugs the major part of                      committee of the Insurance Company has fi-
                                             treated patients are able to work in a nor-                  nished the project of „Conception of Dental
                                             mal way and only a small part of them                        Care Covered with Public Health Insurance“
                                             have a partial or full disability pension.                   which is aimed predominantly at the deve-
                                                                                                          lopment of preventive dental care and its ob-
                                          In 2001, on the basis of contracts conclu-                      jectives are to make the patients interested
                                        ded between the Insurance Company and re-                         in responsible behaviour to their health. The
                                        gisters of bone morrow donors, the reimbur-                       improvement of care about oral health is mo-
                                        sement of costs connected with searching                          tivated through the form of bonuses indivi-
                                        for and delivering of haematogenous cells                         dually set for particular age categories of po-
                                        from unrelated donors was going on. The                           pulation. The draft of Conception has been
                                        search was organised both abroad and                              delivered for comments to the Czech Dental
                                        among the registered donors in CR. In                             Chamber and in the course of 2002 it will be
                                        2001other 56 new patients with indication to                      worked out with regards to the professional
                                        unrelated transplantation of haematogenous                        aspects (definitions of particular dental ser-

                                        16   The Code-Lists bring the basic information on assortment, reimbursement and prices of medicines and medical aids
                                             on the Czech market for healthcare facilities, distributors and implicitly for the insured. The Insurance Company per-
                                             manently tries to render timely and complex information by the means of these Code-Lists. The Insurance Company
                                             dependency on delivery of documents for their preparation from other subjects led to delayed issuing of their printed
                                             form, especially at the Code-List of HVLP, also in 2001. All information given in the Code-Lists is accessible for all the
                                             Internet users on the Insurance Company websites.




       46
       46
                                                                                                          VZP CR
vices and dental products) as well as legal          7 261 thous. CZK were adjudicated to the In-
aspects.                                             surance Company, within the criminal trial pro-




                                                                                                          ACTIVITIES OF THE INSURANCE COMPANY
   In the course of 2001 the work of the Cent-       ceedings 452 adhesive decisions were made
ral Insurance Office on making the costs on          on the amount of 11 478 thous. CZK.
medical aids (PZT) more transparent has be-             In 2001 the obliged persons paid total
en going on. The work on the new system of           157 879 thous. CZK. 1 137 thous. CZK of this
classification of individual orthopaedic and         amount were gained in 962 cases from the
prosthetic aids has been finished and it will        execution of sentence and the amount of
be applied since the half of 2002 and will           209 thous. CZK even from 112 repeated exe-
enable the more precise prescription of aids.        cutions of the judicial sentence in the matter
   During the all year the committees for al-        of recognised right of the Insurance Compa-
location of electric wheel chairs, myo-elec-         ny for indemnities.
tric prostheses, cochlear implants and hea-             In 2001 the Insurance Company has insti-
ring aids continued to work on the Central           tuted altogether 72 346 administrative acti-
Insurance Office ground. The new committee           ons within the agenda of exaction of due
for implanting the neuro-modulation sys-             premiums, penalties, fines and extra charges
tems of pain treatment has started its wor-          to premiums. 77 283 motions for enforce-
king. The activities of all committees are ai-       ment of powerful payment assessments for
med at expert assessment of legitimacy of            claims in the amount of 3 728 953 thous.
financial means expending on medical aids.           CZK were filed. 19 611 cases of this number
   In 2001 the highest costs were expended           were the recurrent motions. Payments ensu-
on absorption remedies for incontinence.             ing for administrative actions and exaction
These costs have not been influenced even            were 3 894 359 thous. CZK.
with the fact that four firms did not determi-          In 2001 the Insurance Company filed with
ne the maximum prices at 1. 7. 2001 and thus         courts 260 motions for declaration of bank-
their products were not covered with health          ruptcy on premium payers who owed 214 652
insurance within July and August. It is evident      thous. CZK. In other 2 094 cases the Insurance
that there were no problems for patients on          Company joined the instituted bankruptcy pro-
the market and the delivery failure of these         ceedings with claims on premiums and penal-
firms was compensated with competitive               ties on the level of 1 315 294 thous. CZK. In
aids.                                                2001 the VZP CR filed its claims for 177 mil.
   Within the assortment of products of sepa-        CZK within the bankruptcy adjudged against
rately accounted materials (ZUM), the most           the bankrupts among the employees’ and
costly groups were the groups of pacema-             branch health insurance companies.
kers, cardioverters and endoprostheses for              457 criminal trial proceedings were conduc-
orthopaedic purpose. The trend of cost gro-          ted against premium payers for the crime of
wing up can be expected also in 2002 with            not delivering premiums on health insurance.
regards to further extension of the assort-          The Insurance Company filed motions for in-
ment of ZUM aids reimbursed according to             stitution of these proceedings in 107 cases.
the Regulation of MH CR no. 458/2001 abo-               In 2001 the lawsuits were in progress
ve the frame of lump sum payment.                    where health care providers sued the Insu-
                                                     rance Company for financial benefits. As in
                                                     2000 the most extensive agenda was formed
                                                     with lawsuits concerning the so-called „Acti-
4.6                                                  on Frequency“, which had arisen due to the
                                                     fact that a number of hospital facilities were
Legal Aspects                                        casting doubts on implementation of the CR
                                                     Government Resolution no. 162 from 28. 2.
   In 2001 the Insurance Company continued           1996, which had adopted measures for solu-
to implement the agenda of indemnities,              tion of the public health insurance deficit.
according to the provisions of § 55 of the Act       The total financial amount prosecuted aga-
no 48/1997, on public health insurance in its        inst the Insurance Company is about 215 mil.
valid wording. In the course of the year alto-       CZK. On the basis of precedent decision of
gether 11 590 calls on payment of the total          the Supreme Court of CR in this matter more
amount of about 201 651 thous. CZK were              than one half of these lawsuits were dismis-
made out. At settlement of these cases the           sed in the course of 2001 and the actions of
VZP CR claims were made more precise and             health care providers were dismissed as
with regards to the lack of evidence they we-        groundless because the Court had not cast
re reduced to 10 957 calls in total amount of        doubt upon the validity of relevant clauses.
196 473 thous. CZK.                                     In 2001 the Insurance Company noted the
   In 2001, altogether 1 093 suits within the ci-    growth of actions of health care providers for
vil law proceedings were filed against the ad-       payment of conventional fines. Within this gro-
dressees of these calls, who did not pay vo-         wing agenda, the Insurance Company deals
luntarily even in the form of instalments, for       with the applied financial claims of providers
the amount of 15 386 thous. CZK. In 3 273 ca-        according to their reasons and level, in indivi-
ses the district insurance offices joined the cri-   dual cases on the basis of particular facts of the
minal trial proceedings with the claims of the       case. At those health care providers, who in the
damaged party for total 45 833 thous. CZK.           past period had not accepted the amendment
Within the civil law proceedings, in 357 cases       of contractual arrangements determining the



                                                                                                          47
                                                                                                       surance companies to implement contractu-
 THE ANNUAL REPORT OF VZP CR FOR 2001
                                        conventional fines or who had done this with
                                        a considerable delay although the wording of                   al health insurance and complementary in-
                                        general contracts had been agreed with their                   surance (in addition to public insurance) un-
                                        representatives and VZP CR representatives,                    der the condition that they will obtain
                                        the Insurance Company argues that the execu-                   permission to do this in accordance with the
                                        tion of such right is inconsistent with princip-               special Act on insurance system. Till the end
                                        les of fair trade relations.                                   of 2001 the Insurance Company had been su-
                                           In addition to these large circles of lawsuits              ccessfully developing its activities in this sp-
                                        as to their quantity, there were other lawsuits                here for several years, in consistence with the
                                        instituted in 2001, where the health care pro-                 above-mentioned provisions of the Act and
                                        viders claim financial benefits due to contro-                 on the basis of licence obtained from the Mi-
                                        versial definition of necessary and urgent care                nistry of Finance. However, with the Act no.
                                        or on the basis of their disagreement with out-                363/1999, on insurance system (hereinafter
                                        comes of delivered care inspection.                            only „the insurance system Act“), having co-
                                           In 2001 a new, not in practice tested agen-                 me in force the exceptions determined in the
                                        da has arisen for the Insurance Company, en-                   previous Act no. 185/1991, on insurance sys-
                                        suing from conclusion of international treaties.               tem, were repealed – from not fully clear re-
                                        In addition to impacts of the contract on pro-                 asons – including the so-called „adequate“
                                        vision and reimbursement of health care bet-                   application of this Act relating to implemen-
                                        ween the Czech Republic and Slovak Republic,                   tation of contractual health insurance and
                                        it was necessary to deal with issues ensuing                   complementary insurance by the Insurance
                                        from the contract on social security between                   Company or other health insurance compani-
                                        Austria and the Czech Republic. Provision of                   es. The new arrangement of the insurance
                                        necessary and urgent care to citizens in he-                   system admits, in its provision of § 3, art. 2,
                                        althcare facilities of the other contractual party             that the insurance business can be carried out
                                        is also the part of this contract. In consequen-               also by other legal entities than a joint-stock
                                        ce of this the Austrian insured, coming to the                 company or cooperative, under the condition
                                        Czech Republic, register at Czech health insu-                 that this is determined by a special legal re-
                                        rance companies (nearly all of them at VZP CR)                 gulation (the Act no. 48/1997, on public he-
                                        and these companies are then obliged, in case                  alth insurance, is, without any doubt, such
                                        an Austrian insured had obtained care in Czech                 a special regulation), however, on the other
                                        healthcare facilities, to pay him/her the delive-              hand the Insurance System Act does not give
                                        red care and, according to the contract, charge                unambiguous answer to its relations with this
                                        out the expended financial means to the rele-                  special legal regulation.
                                        vant Austrian sick fund or insurance company                      According to § 42, art. 4 and 5 of the Insu-
VZP CR                                  through „a contact place“. The similar course of               rance System Act the insurance companies
                                        action is applied for the Czech insured in Aus-                are obliged to reconcile their legal relations
                                        tria.                                                          with this act and to document these facts in
                                           With regards to the fact that the presumed                  a written form to the Ministry of Finance by 2
                                        „contact place“ for the sphere of health care                  years since this act has come in force, that is
                                        does not exist in the Czech Republic, the he-                  by 1. 4. 2002. As a matter of fact, this is a cer-
                                        alth insurance companies have created the                      tain form of re-licensing, for which the Mi-
                                        Centre of International Reimbursement,                         nistry of Finance together with the Board of
                                        which will fulfil these tasks. In addition to the              State Supervision of Insurance System and
                                        contract with Austria, the similar contract on                 Pension Supplementary Insurance has issued
                                        social security with Croatia has come in for-                  „a Methodology for Course of Action“.
                                        ce already since 2000. However, due to the                        However, documenting of above-mentio-
                                        non-existence of administrative arrange-                       ned facts in compliance with the relevant
                                        ments it implementation is very difficult.                     provisions of the Insurance System Act (inc-
                                           Within the frame of preparatory work for                    luding the relevant Methodology of the Mi-
                                        accession to the European Union the Insu-                      nistry of Finance) is in principle impossible,
                                        rance Company has engaged in activities of                     though from formal reasons17, for health in-
                                        the Committee for Social Security Co-ordina-                   surance companies and particularly for the
                                        tion between the Czech Republic and the Eu-                    General Health Insurance Company of CR,
                                        ropean Union. In the present time the Insu-                    which implements contractual health insu-
                                        rance Company staff are taking share in the                    rance on the basis of the relevant licence of
                                        Phare Programme – Implementation of Co-                        the Ministry of Finance for a long period of ti-
                                        ordination Orders of the EU (Orders no.                        me, due to several conditions and parame-
                                        1408/1971 and 574/1972).                                       ters of the Insurance System Act.
                                           The Article 54 of the Act no. 48/1997, on                      It cannot be omitted that, with regards to the
                                        public health insurance, allows the health in-                 fact the joint-stock companies and cooperati-

                                        17   For example: VZP CR is established by the law as a sui generis organisation, does not enter the commercial re-
                                             gister, that means no of the possible legal forms which the Insurance System Act takes into account does not su-
                                             it for it. Further on, the Insurance Company does not create the registered capital but for the sphere of contractu-
                                             al health insurance it creates a special „capital reserve fund“ instead of it, strictly separated from other accounts
                                             both in accounting and physical aspects than the funds of public insurance are kept. Then the manner of appoin-
                                             ting persons into the statutory and supervisory body is arranged for VZP in a different way from the aspects of the
                                             Insurance System Act, as well as the conflict of interest of this body’s members etc.




       48
       48
                                                                                                         VZP CR
ves are conceived by the Insurance System Act
as subjects of private law, the Insurance Sys-       4.7




                                                                                                         ACTIVITIES OF THE INSURANCE COMPANY
tem Act must determine particular special in-
struments of private as well as public law
                                                     Contractual Policy
through which the influence of the state on in-         In the first half of 2001 a number of nego-
surance business and stability of its operators      tiations to implementation of the Regulation
must be assured. However, the health insu-           of the MH no. 457/2000, through which the
rance companies are the subjects of public law       general contracts are issued, and to reach
and in their case the relevant public law in-        agreement in wording of individual contracts
struments are already included in the basic le-      in particular segments of health care provi-
gal arrangements and private law instruments         ders took place with the participation of VZP
are usually substituted with other supra-stan-       CR representatives and health care provider
dard instruments of public law, necessary for        representatives. These negotiations were fi-
assurance of the state influence on accom-           nished with the acceptance of protocols on
plishment of the health insurance company            concluded agreement in all 9 main segments
functions within the public sector and on sta-       of health care.
bility of health insurance companies as bodies
responsible for public and private health insu-
rance. Thus the health insurance companies              The contents of existing contracts on he-
fulfil the principal requirements on legal relati-   alth care provision and reimbursement have
ons determined by the Insurance System Act,          been adjusted or the new contracts have be-
although in their case they are ensuing from         en already concluded in the agreed wording
another legal arrangements; the purpose of           with the effect since 1. 7. 2001. The contracts
particular legal instruments according to the        thus have become an important instrument
acts on health insurance companies and insu-         for unification of contractual relations not
rance systems is in fact principally identical.      only inside particular segments of health ca-
   In other aspects a health insurance com-          re but to a large extent also among them. The
pany carries out contractual health insurance        contracts have created equal conditions for
under observance of all conditions of pru-           health care providers with identical or com-
dent insurance operation including the crea-         parable benefits in kind and this helped to
tion of technical provisions set by the act and      make the contractual relations between he-
keeping the rules of their economic manage-          althcare facilities and the Insurance Compa-
ment, structure of financial means place-            ny more stabilised and of better quality. In
ment, the requirement of insurance compa-            2001, the individual contracts have been
ny solvency and creation of the warranty             concluded with the following healthcare fa-
fund, that means under the conditions com-           cilities:
pletely identical with those valid for so called     1. providing the medical care of GPs for
commercial insurance companies.                          adults and GPs for children and youth
   Hence the way out can be seen in the              2. providing out-patient specialised care and
amendment of possibilities for assessing so-             care of gynaecologists (specialisations
me legal relations of health insurance com-              603–604) except healthcare facilities
panies according to the acts, which determi-             providing physiotherapy (specialisations
ne their establishment, legal position, and              902–918), ergo therapy and clinical spe-
other relations, that is according to the acts           ech therapy
on health insurance companies.                       3. providing out-patient care of dentists
   The draft of this solution is not controver-      4. providing medical care in hospitals, speci-
sial to the constitution, international treaties         alised curative institutions, specialised cu-
or administrative acts of the European Com-              rative and convalescent institutions for
munity and it also does not have any impacts             children and long-term care hospitals
on the national budget. On the contrary, it is       5. providing diagnostic care (specialisations
necessary to emphasise that it is no excepti-            222, 801–805, 807, 812–823, 809)
onal situation in the EU countries for health        6. providing home care, physiotherapy (spe-
insurance companies under the public law to              cialisations 902–918), ergo therapy and
implement also contractual insurance on the              clinical speech therapy
basis of legal arrangements which copy the           7. providing ambulance services and medi-
arrangements for „commercial“ insurance                  cal transport services
and in addition to this, it is known in the EU       8. of pharmaceutical care
that a fixed part of revenues of contractual         9. providing balneal care.
health insurance carried out by „commercial“
insurance companies is transferred into the             The publication of the Regulation of the
budget of public health insurance. Within the        Ministry of Health no. 457/2000, through
frame of the General Health Insurance Com-           which the general contracts are issued, me-
pany the practise is applied for the means ga-       ant the expiry of the former agreement on
ined from contractual health insurance that          settlement of disputes between contractual
they enhance the public insurance budget to          healthcare facilities and the Insurance Com-
the extent allowed by legislative arrange-           pany. In the second half of 2001, on the ba-
ments. From the factual aspects the propo-           sis of the above-mentioned Regulation, the
sed amendment does not contravene the Eu-            Insurance Company prepared the draft of
ropean Union law.                                    new „Rules of Arbitral Procedure“, which had



                                                                                                         49
 THE ANNUAL REPORT OF VZP CR FOR 2001
                                        been discussed and approved in the law de-                 Some annexes to contracts allow to
                                        partments of health insurance companies.                   mention more specialisation at a work-
                                        The draft will be discussed with health care               place (annex X, CB, CC). However, the
                                        providers because the Institute of Arbitral                choice has been made only for the first
                                        Procedure – as an opportunity for out-of-                  specialisation marked in the register as
                                        court settlement of contractual disputes –                 the „main“ one. The choice was done
                                        has found its raison d’etre even in 2001.                  according to the enumeration of con-
                                           In 2001 the health care providers filed 28              tractual specialisations, not author spe-
                                        motions for arbitral procedure instituting,                cialisations (for example 210 but 409,
                                        which is nine motions less compared with                   710 and 823 is not a contractual speci-
                                        2000. On the basis of filed motions altoget-               alisation).
                                        her 25 arbitral procedures took place. In 2 ca-       2.   The facilities (defined with their tax iden-
                                        ses the motions for arbitral procedure insti-              tification number) with specialisations of
                                        tuting were abandoned, in one case the                     one category (presented on a Table line)
                                        settlement has been achieved within the fra-               are included into out-patient facilities
                                        me of complaint procedure. In 15 cases of                  (specialisation 001–710). The numbers
                                        the total number of implemented arbitral                   of out-patient workplaces included into
                                        procedures the agreement has been achie-                   hospitals are not presented here (30 %
                                        ved, in 8 cases there was no agreement achi-               of care). However, the out-patient work-
                                        eved and in 2 cases the instituted arbitral                places associated with pharmacies and
                                        procedures have not been finished.                         opticians are presented here.
                                           The highest number of arbitral procedures          3.   Hospitals were determined according to
                                        concerned the disagreement with conclusi-                  the definition presented in the Regulati-
                                        ons of inspection reports and the application              on of MH no. 134/1998, as healthcare fa-
                                        of regulation according to § 41 of the Act no.             cilities of hospital care with at least one
                                        48/1997, on public health insurance. Dispu-                basic specialisation providing acute me-
                                        tes concerning the protection of insured on                dical care.
                                        the basis of patients’ complaints did not ap-         4.   Healthcare facilities of hospital care wit-
                                        pear.                                                      hout a basic specialisation but providing
                                           In 2001, the network of contractual he-                 acute care are included into other con-
                                        althcare facilities of out-patient, in-patient             tractual HCF (***).
                                        and other types, through which the Insuran-           5.   Curative institutions were determined
                                        ce Company assures health care provision for               according to the Regulation of MH no.
                                        its insured, has not experienced any consi-                134/1998 as healthcare facilities provi-
                                        derable changes, compared with 2000. The                   ding other than acute care.
VZP CR                                  growth index of contractual facilities selected       6.   Institutions with more types of health ca-
                                        according to determined criteria per year bet-             re and institutions providing specialised
                                        ween 2000 and 2001 was 1,02 and this me-                   curative and long-term care are included
                                        ans, in absolute figures, that the total num-              into the other specialised curative insti-
                                        ber of contractual facilities was 21 749 in                tutions.
                                        2000 and in 2001 grew up to 22 242.                   7.   Curative institutions with specialisation
                                           In present time there is no valid norm de-              9U7 and returning the code OD 00024
                                        fining the size and structure of the contrac-              (or healthcare facilities returning also
                                        tual healthcare facility network. This unsui-              the code 00005 at the same time) were
                                        table situation must be corrected, on the                  included into long-term care hospitals.
                                        basis of the broader consensus of subjects            8.   Healthcare facilities providing health ca-
                                        being involved, and the main burden of res-                re in more specialisations in parallel we-
                                        ponsibility ought to lie on the state adminis-             re included into the category of out-pati-
                                        tration. It ought to determine the number of               ent facilities of policlinic type.
                                        physician’s positions for particular specialisa-      9.   Healthcare facilities with specialisations
                                        tions per 100 000 inhabitants as an obliga-                128, 208, 301, 302, 303, 401, 402, 403,
                                        tory minimum limit. Thus the network of he-                407, 605, 706, 708 are included into ot-
                                        althcare facilities accessible for citizens could          her out-patient specialists.
                                        be determined.                                       10.   Into the other contractual facilities (***)
                                                                                                   the following ones are included:
                                          The general survey on numbers of con-                        out-patient facilities with specialisati-
                                        tractual healthcare facilities of the Insu-                    ons 901, 903, 927
                                        rance Company in 2001 is presented in                          HCF of hospital care (see item 3)
                                        Table no. 12.
                                                                                                       facilities having ambulance services
                                        Commentary                                                     and medical transport services
                                           At selecting a facility for filling in the data             opticians.
                                        of the Table MT/16/01ContrHCF the lower              11.   The pharmacies in hospitals and associ-
                                        presented definitions of particular catego-                ated out-patient facilities are not inclu-
                                        ries – with regards to the absence of any                  ded into the number of pharmacies. Al-
                                        methodological instruction for unified filling             so the healthcare facilities having only
                                        in – were determined:                                      the main specialisation 019 are inclu-
                                          1. The specialisation of a workplace is                  ded into the category of Medical Rescue
                                             presented in contracts in Annex no. 2.                Service.



       50
       50
                                                                                                              VZP CR
Table no. 12 – The system of contractual healthcare facilities of the Insurance Company




                                                                                                              ACTIVITIES OF THE INSURANCE COMPANY
 Categories of contractual                                          Number of HCF                  Index
 healthcare facilities                                     at 31. 12. 2000 at 31. 12. 2001         01/00
 Out-patient healthcare facilities (HCF)*
                                                               15 435          15 633                1,01
 of which:
 – GP for adults (spec. 001)                                    4 060           4 106                1,01
 – GP for children and youth (spec. 002)                        1 929           1 936                1,00
 – GP dentist (spec. 014-015, 019)                              5 287           5 232                0,98
 – out-patient specialists total                                4 159           4 359                1,05
 of which:
 – surgery (spec. 501-602)                                        334             363                1,08
 – intern medicine (spec. 101-109, 202)                           565             586                1,03
 – gynaecology (spec. 603, 604)                                   901             928                1,03
 – ORL (spec. 701, 702, 704)                                      327             340                1,04
 – opthalmology (spec. 705)                                       444             458                1,03
 – allergology (spec. 207)                                         92             102                1,10
 – neurology (spec. 209, 210)                                     292              311               1,06
 – orthopaedics (spec. 606, 607)                                  311             321                1,03
 – dermatology (spec. 404-406)                                    335             360                1,07
 – psychiatry (spec. 305-309)                                     312             326                1,04
 – rehabilitation (spec. 201)                                      58               61               1,05
 – other out-patient specialists**                                188             203                1,08
 In-patient HCF                                                   272              274               1,00
 – hospitals                                                      183             180                0,98
 – OLÚ (except of LDN and HCF returning only the code
   OD 00005)                                                       31               34               1,09
 of which: psychiatric                                             13               15               1,15
           rehabilitation                                            7               8               1,14
           TB and respiratory diseases                               4               4               1,00
           others                                                    7               7               1,00
 – LDN (independent HCF returning the code OD 00024)               46               47               1,02
 – independent HCF returning only the code OD 00005                12               13               1,08
 Out-patient facilities of policlinic type****                  2 127           2 256                1,06
 Home care (spec. 925)                                            398             406                1,02
 Rehabilitation HCF (spec. 902 and 918)                           571             589                1,03
 HCF of complement (spec. 222, 801-805, 807, 809, 812-823)         71               72               1,00
 Daily care HCF                                                    17               18               1,05
 Balneal facilities                                                47               51               1,09
 Convalescent homes                                                  9               9               1,00
 Medical transport services                                       199             198                0,99
 Medical rescue service workplaces                                 14               11               0,78
 Ambulance services (spec. 709)                                      4               2               0,50
 Pharmacies and PZT dispensaries                                1 410           1 478                1,05
 Other contractual HCF***                                         977           1 062                1,08
 TOTAL SUM of contractual HCF                                  21 751          22 259                1,02

                                                                                          MT/16/01-ContrHCF
Note: OLÚ = Specialised Curative Institution, LDN = Long-Term Care Hospital




   *   out-patient HCF having contract for spec. 001 – spec. 708, 710
  **   the specialisation of out-patient specialists will be specified in commentary
 ***   the type of HCF and its specialisation will be specified in commentary
****   the subject having more specialisations

On the line of complement HCF there are included only those HCF providing exclusively complemental care.
Concructual HCF is defined with its statistical identification number.




                                                                                                              51
                                                                                                      ject aimed particularly at prevention of
                                        4.8
 THE ANNUAL REPORT OF VZP CR FOR 2001
                                                                                                      children’ injuries (the project of the Offered
                                        Other Services and                                            Hand Days – Childhood without Injuries, the
                                                                                                      Safe District and Community) by the means
                                        Activities of the                                             of screening the TV series „Make a Decision!“
                                                                                                      focused on particular kinds of injuries and
                                        Insurance Company                                             possibility of their prevention. Czech TV will
                                                                                                      telecast the series.
                                        4.8.1                                                            In 2001, the further support was given to
                                                                                                      the projects aimed at drug addiction pre-
                                        Prevention Fund Utilisation and                               vention, especially to the composed pro-
                                        Healthy Life-Style Support                                    grammes called „Say NO to Drugs“ which,
                                                                                                      due to their wide acceptance, have been re-
                                           The prevention fund of the Insurance Com-                  peatedly organised for primary and seconda-
                                        pany has been established in compliance                       ry schools in particular districts with the par-
                                        with provisions of § 7, art. 2, letter b) of the              ticipation of specialists in issues of drug
                                        Act no 551/1991, on the General Health In-                    addiction and artists who can influence this
                                        surance Company of the Czech Republic. The                    age group. Furthermore, within the frame of
                                        employment of financial means of the pre-                     this project the informative materials with
                                        vention fund is aimed at the promotion and                    the name of „Choose Health“ were prepared
                                        implementation of medical measures and                        and distributed to all types of schools and
                                        programmes which improve the health care                      they were focused on legal and illegal addic-
                                        about the Insurance Company insured and                       tive substances, sexually transmitted disea-
                                        act together against inception of their disea-                ses and meant for risk population of children
                                        ses or against their health condition worse-                  and adolescents. Together with this informa-
                                        ning. In 2001 the Board of Directors of the                   tive materials the video cassettes with five
                                        Central Insurance Office and Boards of Di-                    films were made and distributed to schools
                                        rectors of district insurance offices made the                and they focused on risks and impacts of pu-
                                        decisions on drawings from the prevention                     re heroin application, perils of population
                                        fund, according to the approved rules.                        health streaming from application or con-
                                           In 2001 the Insurance Company has con-                     sumption of legal drugs (as tobacco and al-
                                        tributed from its prevention fund (see also                   cohol), risks of mass dissemination of C he-
                                        the commentary to „the prevention fund“ in                    patitis not only among drug addicts, on the
                                        the economic part of this annual report) to                   impact of drug addiction on the crime-rate
                                        curative and convalescent stays at the seasi-                 among the youth including its connection
VZP CR                                  de, organised under the name of the „Sea-                     with injury rates at children and youth.
                                        Horse 2001“, indicated for chronically ill                       The Insurance Company promoted the is-
                                        children. Asthma, spastic bronchitis, recur-                  sue and distribution of „the Health and Va-
                                        rent lung inflammations, recurrent nasal ca-                  ccination Card for Children and Youth“ which
                                        vity inflammations, severe hay fever, atopic                  had gained the support of physicians and pa-
                                        eczema and psoriasis represent indications                    rents and which repeatedly gains a favourab-
                                        for these stays.                                              le evaluation from the World Health Organi-
                                           Altogether 5 524 children of 7 400 registe-                sation. The promotion of handicapped
                                        red ones took part in this programme, of                      sportsmen achieved a considerably positive
                                        whom 2 717 were in Croatia and 2 807 in                       acceptance, which – on the basis of their su-
                                        Greece.18 The convalescent stays for oncolo-                  ccess on Paralympic Games 2000 in Sydney
                                        gical patients (both children and adults),                    – has been rendering strong incentives to ot-
                                        mentally handicapped children (at whom                        her handicapped citizens for demanding ac-
                                        this handicap is combined with other associ-                  tive sporting.
                                        ated diseases, mostly of the respiratory tract                   Alike in previous years the Insurance Com-
                                        and skin) continued to be promoted, as well                   pany traditionally promoted blood donation
                                        as for children with severe handicaps (e.g. af-               and tick encephalitis prevention as well as
                                        ter poliomyelitis, children on wheel chairs,                  another programme, having been launched
                                        cardiac patients etc.) and convalescent stays                 in 2000, for prevention of colorectal carci-
                                        for chronically ill children with combined aff-               noma. For the second year, the Insurance
                                        liction (asthma, severe bronchitis, eczema                    Company has been taken share in preventi-
                                        combined with lipid metabolism disorders,                     on of dental diseases at children, namely
                                        seasonal pollen, food or solar allergy etc.).                 through the „Healthy Teeth“ educational pro-
                                        These convalescent stays, where about 2 900                   gramme for which the Insurance Company
                                        children took part, took place in Croatia,                    has already issued the second publication
                                        Switzerland and Greece.                                       „Healthy Teeth for the Whole Family“. This ti-
                                           In 2001 the Insurance Company also pro-                    me this is meant for pregnant women, babi-
                                        moted the continuation of the long-term pro-                  es, toddlers and children at pre-school age.


                                        18   About 500 more children ought to take part in these stays in Greece in the 6th turns. With regards to the fact that
                                             the departure for the 6th turns ought to have been on 11th and 12th September, where the U.S.A. were attacked
                                             by terrorists, the departure of children – due to the insecure situation – had been preventively cancelled.




       52
       52
                                                                                                      VZP CR
   Furthermore, in 2001 new pilot medical          particular, to prevent repetition of already
programmes have been launched, as for              made examinations, prescription of already




                                                                                                      ACTIVITIES OF THE INSURANCE COMPANY
example testing of feasible considerate and        prescribed drugs and other care. Evaluation
effective care at haemorrhoid surgery treat-       of the pilot phase of the project is expected in
ment by so called Long’s method, treatment         the half of 2002.
of chronic pain of non-oncological origin and         In 2001 other pilot projects of the Insuran-
further on testing of possibilities to catch the   ce Company have been prepared which are
minimum stages of breast tumours at wo-            focused mainly on primary, secondary and
men without symptoms by the means of int-          tertiary prevention and are also aimed at tes-
roduction of easily accessible preventive exa-     ting of new technologies, on health care qua-
mination of mammary glands within the              lity development and application of modern
most endangered age group on the basis of          European trends in the health care system.
their own decision and without referrals.          With regards to the crucial position of the In-
   The purpose of the project of haemorrho-        surance Company, their outcomes can be
id operation by Long’s method is to test the       used within the whole system of health care
hypothesis that the new surgery method with        and health insurance in CR.
higher primary costs represents the more ef-          In 2001 the Insurance Company has been
fective alternative of existing surgery met-       supporting healthy life-style, mainly
hods from long-term aspects. The indication        through promotion of mass participation of
criteria, intervention safety, possible compli-    the insured in preventive sporting. Among
cations and relapses, analgesic consumption,       them the traditionally successful Terry Fox
patient’s comfort after operation are monito-      Running Race must be mentioned which to-
red and tested as well as other aspects asso-      ok place in 234 places of the Czech Republic
ciated with this method of surgery treatment.      with participation of nearly 100 thousand
   Women are the target group of the mam-          people. They contributed to cancer investiga-
mography-screening project. It is aimed at ti-     tion in the Czech Republic with about 3,5
mely and good quality diagnostics of breast tu-    mil. CZK by their voluntary shares. The total
mours. The long-term intention of this project     number of organised places of Terry Fox Run-
is to create the network of specialised units of   ning Race and number of its participants puts
integrated mammary diagnostics as a substitu-      the Czech Republic on the 1st place in the
tion of existing situation with trends to unco-    world, in international comparison.
ordinated mammography screening in gene-              The public running races under the name
ral, which has been abandoned in a number of       of „We are Running for Health with VZP CR“
countries with developed health care.              have already become a traditional and inte-
   The purpose of the project aimed at treat-      gral part of the Czech Running Cup as well as
ment of chronic pain of non-oncological            a great show of keeping fit sports. The aim of
origin is to check up the actual costs of a he-    these races is to involve as many people re-
althcare facility on operation of a daily care     gardless to their age for physical exercise. In
workplace dealing with chronic pain treat-         the first five months of 2001 the sport and
ment and to determine the real level of re-        preventive action “Swim and Be Fit with VZP
imbursement from funds of public health in-        CR“ has been going on and its contents we-
surance. These facts will serve as                 re formed with swimming courses for non-
fundamental materials for definition of the        swimmers and beginners, courses of rehabi-
Daily Care Centre for chronic pain treatment.      litation swimming and free swimming for
   In the end of 2001 the Insurance Company        families. This action took place at 34 places
has started to support the pilot project aimed     of the Czech Republic with participation of
at making possible the Internet access of pa-      nearly 30 thousand VZP CR insured.
tients to medical information on their he-            Within the frame of promotion of preventi-
alth condition. The objective of this project is   on and care about health – by the means and
to create a database of patient’s medical in-      methods of health education – there were
formation on the basis of his/her request and      other two publications issued in 2001. The
on condition that healthcare providers would       topics of the first one were prevention of de-
enter the summary information on delivered         pressive disorder, the topics of the other one
health care in these records. The record is pla-   were aimed at proper speech development
ced in secured public data network – Internet      at children. Thus the number of titles direc-
and only the client has an access for reading.     ted at prevention of diseases and issued by
The record allows the client to provide infor-     the Insurance Company has grown up to 15.
mation on health care delivered to him/her            For further improvement of informedness
and on its outcomes to his/her attending phy-      of the insured on their rights and duties the
sicians or other persons on the basis of           information leaflets have been published in
his/her own decision. This project presumes        2001. With the aim to improve the informed-
the improvement of communication among             ness of its insured as well as other partici-
particular physicians – with the patient’s con-    pants in the public health insurance system,
sent they can share for example conclusions        the VZP administered its own Internet web
of clinical examinations, results of laboratory    sites and also other media were used as in-
and other tests in real time and this ought to     formation channels. The VZP Bulletin served
lead to quicker and more correct decision-         for professional public informing and it has
making on diagnosis and treatment, preventi-       been – as in previous years – freely distribu-
on of uselessly delivered medical care and in      ted to contractual partners.



                                                                                                      53
                                        4.8.2                                              4.8.3
 THE ANNUAL REPORT OF VZP CR FOR 2001

                                        Provision of Other Health Care                     Contractual Health Insurance and
                                        Abroad                                             Complementary Insurance
                                           In 2001, as in previous years, the Insuran-        In 2001 the Insurance Company continued to
                                        ce Company has been compensating the de-           use the opportunity to implement contractual
                                        livery of planned health care to its insured       health insurance and complementary insuran-
                                        abroad in exceptional cases. At permitting         ce. The basic conception objective in this sphe-
                                        the compensation of this care it kept to the       re of activities was the innovation of fundamen-
                                        methodology having been worked out for             tal insurance products and extension of services
                                        this purpose already in the last but one year.     beneficial particularly for constant clients.
                                           The Treaty between the Czech Republic              In the sphere of contractual health insu-
                                        and Slovak Republic on provision and com-          rance there was a new kind of insurance
                                        pensation of health care has come in force         prepared for persons with short-term stay
                                        since 1. 4. 2001 and it gives a legislative fra-   on the territory of the Czech Republic with
                                        me to the possibility of permitting and reim-      limited insurance validity only to this terri-
                                        bursing of the planned health care for the         tory. This kind of insurance has been crea-
                                        Czech citizens on the territory of the Slovak      ted for clients who are travelling to the
                                        Republic. The permission of the planned ca-        Czech Republic from non-commercial rea-
                                        re abroad is also enabled by the Contract on       sons directly from their home country, in-
                                        Social Security between the Czech Republic         tend to stay on the Czech Republic territory
                                        and Austria being in effect since 1. 7. 2001.      for one year running without any interrupti-
                                           In the course of 2001 the healthcare facili-    on and thus the insurance events occurring
                                        ties or the Insurance Company insured asked        in transit countries are not the object of in-
                                        for provision and compensation of health ca-       surance benefits. This means in practice
                                        re abroad in 21 cases (that is 1 case more         that the reimbursement of necessary and
                                        than in 2000). In six cases of this number the     urgent care in healthcare facilities in the
                                        permission of treatment abroad was refused         Czech Republic and possible transport to
                                        due to the fact that it had been found in the      the home country implemented by Czech
                                        course of approving proceedings that the re-       contractual partners are covered from this
                                        quired care can be provided in healthcare fa-      policy to its holders.
                                        cilities in CR or that the request has concer-        In 2001 there were altogether 10 070 par-
                                        ned the retroactive compensation of health         ticipants in „the Contractual Health Insuran-
                                        care abroad which had not been pre-autho-          ce Scheme for Persons with Short-Term Stay
VZP CR                                  rised.                                             on the Territory of the Czech Republic“, of
                                           8 of 15 permitted cases consisted in im-        whom 18,7 % covered persons were from
                                        plementation and compensation of genetic           Ukraine, 11,6 % from Poland, 7,3 % from the
                                        or enzymatic examinations of biological ma-        U.S.A., 7,0 % from Russia, 5,8 % from Viet-
                                        terial (of patients for whom these examinati-      nam and then from other countries. Insuran-
                                        ons were necessary for diagnosis confirmati-       ce benefits of this kind of insurance were 3,3
                                        on) or for prenatal examination of pregnant        mil. CZK in 2001.
                                        women with adverse genetic taint.                     In 2001, users of the insurance product of
                                           Among the financially demanding care the-       „the Contractual Health Insurance Scheme
                                        re were two cases requiring the approval of        for Persons with Long-Term Stay on the Ter-
                                        transplantation, lung transplantation in one       ritory of the Czech Republic“ enjoyed the
                                        case of these two where the patient died be-       offer of the range of insurance benefits ex-
                                        fore the intervention, and heart and lung          tended with acute dental care and at wo-
                                        transplantation in the other case, which have      men with the alternative for pregnant wo-
                                        not been carried out up to now due to the          men. In 2001, there were altogether 9 303
                                        fact that a suitable donor has not been found      participants in this kind of contractual insu-
                                        yet. In both these cases the Insurance Com-        rance, of whom 41,3 % of covered persons
                                        pany gave its consent. Further on 1 case of        were from Vietnam, 18,9 % from Ukraine,
                                        reimbursement of liquorhea surgery treat-          8,6 % from Russia, 3,7 % from Slovakia,
                                        ment has been approved at a patient who            2,5 % from China and then from other
                                        had been recurrently treated in CR without         countries. Insurance benefits of this kind of
                                        any adequate effect, within the frame of the       insurance were 47 mil. CZK in 2001.
                                        Contract between the Czech Republic and               In 2001 a special offer of a family kind of
                                        Austria. In 1 case the reimbursement of tre-       complementary travelling health insurance
                                        atment of extensive vain malformation was          for parents and their dependant children has
                                        permitted to a woman patient in a speciali-        been presented to the Insurance Company in-
                                        sed radio neurology workplace in Switzer-          sured. This is a coverage of repeated short-
                                        land. The remaining 3 cases of authorised          term stays abroad within 365 days (called „the
                                        treatment abroad concerned hospitalisation         Annual Family Flat Rate“ which enables to co-
                                        in a specialised institution for rheumatic di-     ver parents and all their dependant children
                                        seases in Slovakia in 2 cases and making of        with one policy with a special rate. The parti-
                                        individual orthopaedic footwear in Germany         cular travels with stays abroad are not conditi-
                                        for a patient with severe deformation of lo-       oned with the departure of the whole family as
                                        wer limbs in 1 case.                               each insured has his/her own identity card.



       54
       54
                                                                                                     VZP CR
This product was introduced on the market be-      amendment deleted the provisions placing
fore the school holidays and summer holiday        the duty to submit the documents on health




                                                                                                     ACTIVITIES OF THE INSURANCE COMPANY
period. Before Christmas the offer was exten-      insurance on applicants for visa. It only defi-
ded with the possibility to conclude an annual     ned the duty of a foreigner to submit such
sport policy for a family serving for repeated     a document at frontier control at police re-
short-term travels abroad within the course of     quest. This fact has changed the approach of
365 days (called „the Universal“). This policy     many foreigners to coverage of provision and
covers the family (parents and their dependant     compensation of health care during their stay
children) for the purpose of their participation   in the Czech Republic. Hence the total num-
in sport competitions, races and for dangerous     ber of clients of contractual health insurance
sporting activities during their stays abroad.     has considerably decreased compared with
   Within the frame of collaboration with bu-      2000.
siness partners (the Czech Entrepreneurial            Since 1 April 2001 the Treaty between the
Insurance Company and Firemen Mutual In-           Czech Republic and Slovak Republic on Pro-
surance Company) the completion of above-          vision and Compensation of Health Care
mentioned kinds of complementary travel            has come in force. A higher percentage of
health insurance with accident policies, lug-      travelling citizens decided to use the possi-
gage insurance, insurance against third-party      bility of health care delivery and reimburse-
liability have been agreed.                        ment by the means of this Treaty in the
   In 2001, there were altogether 940 660 cli-     course of their stay in Slovakia. The remai-
ents participating in complementary health         ning part of travellers continued to prefer
insurance. The insurance benefits reached          the advantages of complementary travel he-
the amount of 96,2 mil. CZK. 25,2 % of insu-       alth insurance, where can be named parti-
red persons travelled to Croatia, 14,2 % to        cularly the aid and counselling of the assi-
Italy, 12,4 % to Germany, 12,2 % to Austria,       stance service as well as the immediate
5,8 % to Slovakia, 5,2 % to France, 3,8 % to       compensation of expended cash payments
Greece and 3,7 % to Spain.                         and expenses associated with the transport
   The offer of insurance products of contrac-     of mortal remains.
tual travel health insurance is accompanied           The Contract between the Czech Republic
with services of the assistance service owned      and Austria on Social Security from 20 July
by the Insurance Company, the offer of com-        1999 is another international treaty, which
plementary travel health insurance with ser-       has come in force in 2001. After its coming in
vices of foreign assistance AXA Assistance CZ,     force the interest of the Czech Republic citi-
Ltd. Re-insurance of insurance activities is as-   zens in complementary travel health insuran-
sured through conclusion of re-insurance           ce especially for short-term travels and stays
contracts with the biggest re-insurance com-       on the Austrian territory has not fallen down
panies, namely with the German Munchener           yet.
Ruckversicherungsgesellschatt and French              The impacts of terrorist attacks against the
insurance company Les Mutuelles du Mans            U.S.A, which caused the drop of the interest
Assurance.                                         in travelling, led to the decrease in numbers
   In the end of the year the analytical work      of the complementary travel health insuran-
for preparation of bonuses for constant cli-       ce clients and foreign clients of contractual
ents of complementary travel health insuran-       health insurance for short-term stays on the
ce was in progress in the Insurance Company.       Czech Republic territory, represented other
The advantageous offer of complementary            factors of influence. The Insurance Company
travel health insurance for operators of con-      solved this situation with returning the full
tractual healthcare facilities and for so-called   premium to afflicted clients from the period
“common clients“, that is for those Insurance      of September events.
Company insured who are participants in               The outcomes achieved in the financial ba-
pension fund Winterthur or clients of the Ra-      lance of taxable activities of the Insurance
iffeisen Building Savings Bank, was prepared.      Company can be – in spite of the impact of
The methodological course of action was            above-mentioned influences – evaluated as
worked out for the mediating activities of the     positive. The interest of clients in comple-
Insurance Company concerning the product           mentary travel health insurance and contrac-
of “Insurance of the healthcare facility opera-    tual health insurance is going on, the actions
tor’s liability for damages“, in collaboration     which include the attention and care about
with the Czech Entrepreneurial Insurance           clients meet with wide acceptance as they
Company and the Firemen Mutual Insurance           express the needs of certain target groups as
Company.                                           are the families with children, sportsmen,
   The economic effect of 2001 was influ-          students, working teams, unpaid blood do-
enced particularly with the impact of legis-       nors, medical public etc.
lative changes associated with health insu-
rance of foreigners staying on the territory         The graphic survey of above-mentioned
of the Czech Republic and with conclusion          indices of evaluation of particular insuran-
of new international treaties and their co-        ce products is presented in Figures no. 1
ming in force.                                     and 2.
   The Act no. 326/1999, on the stay of fore-
igners on the Czech Republic territory, has
been amended by the Act no. 140/2001. The



                                                                                                     55
                                                                                              THE ANNUAL REPORT OF VZP CR FOR 2001




                                                                                     VZP CR




56
56
     Figure no. 1a – Number of the insured with contractual health insurance in geographical division
                            Long-term health insurance                                                       Short-term health insurance

                                                                                                 OTHERS                                             UKRAINE
            BELARUS             OTHERS



            BULGARIA

                                                                                              YUGOSLAVIA
                                                                                              YUGOSLAVIA
                                                                                                                                                     POLAND
              U.S.A                                                 VIETNAM



           YUGOSLAVIA
           YUGOSLAVIA
                                                                                               SLOVAKIA
                                                                                               SLOVAKIA
                                                                                                                                                      RUSSIA
             CHINA



            SLOVAKIA
            SLOVAKIA             RUSSIA                            UKRAINE                       ROMANIA        GERMANY                  VIETNAM       U.S.A.




     Figure no. 1b – Number of the insured with contractual health insurance according to their age
                        Long-term health insurance                                                           Short-term health insurance
             years                years     years   over   years                                                          years
                                                                                                     years     years              over    years

                                                                                                                                                    years
             years                                                                                   years



             years                                                                                   years


                                                                                                     years
             years

                                                                             years                   years


                                                                                                     years
             years

                                                                                                     years



             years      years       years                                                            years        years                     years   years
                Figure no. 2a –Number of the insured covered with CZP according to destinations

                                                    2000                                              2001

                                                                                       OTHERS
                                                               CROATIA
                                                               CROATIA                                          CROATIA
                                                                                                                CROATIA
                             SWITZERLAND   OTHERS
                                                                                       HUNGARY
                                                                                       HUNGAR

                               GREECE
                                                                                           SPAIN
                                                                                           SPAIN

                                 SPAIN
                                 SPAIN
                                                                                       GREECE

                                FRANCE
                                                                      ALY
                                                                    ITAL                                               ALY
                                                                                                                     ITAL
                                                                                        FRANCE

                                AUSTRIA
                                                                                        SLOVAKIA
                                                                                        SLOVAKIA


                               SLOVAKIA
                               SLOVAKIA                           GERMANY
                                                                                         AUSTRIA                  GERMANY




                Figure no. 2b – Number of insurance events of CZP according to destinations

                                                    2000                                              2001

                              OTHERS                            U.S.A.
                                                                                         OTHERS                   U.S.A.




                           GREAT BRITAIN
                           GREAT BRITAIN                            GERMANY              SLOVAKIA
                                                                                         SLOVAKIA


                              FRANCE                                                     FRANCE                  GERMANY


                               SPAIN
                               SPAIN                                                     GREECE


                                                               CROATIA
                                                               CROATIA                        SPAIN
                                                                                              SPAIN
                               AUSTRIA


                              SLOVAKIA
                              SLOVAKIA                   ALY
                                                       ITAL                                AUSTRIA              CROATIA
                                                                                                                CROATIA
                                                                                                          ALY
                                                                                                        ITAL




     Note: CZP = travel health insurance




57
                                                                                  ACTIVITIES OF THE INSURANCE COMPANY
                                                                                                                             VZP CR
                    VZP CR




                    Part 5



THE INSURED OF THE
INSURANCE COMPANY AND
THEIR MIGRATION
                                                                                                         VZP CR

5.1                                                 1 560 719 persons (616 207 men and




                                                                                                    AND THEIR MIGRATION
                                                                                                    THE INSURED OF THE INSURANCE COMPANY
                                                    944 512 women) at the age over 60 ye-
The Insured of the                                  ars, that is 81,4 % of the total number of
                                                    persons at the age over 60 years and
Insurance Company                                   22,1 % of the total number of the Insu-
                                                    rance Company insured (the nation-wide
  In compliance with the definition presen-         proportion of persons at the age over 60
ted in the valid wording of the Act no.             years was 18,8 % in 2001).
48/1997, on public health insurance, in 2001
the participants in general health insuran-        The weakest quantitative representation
ce were the persons who:                         (of the total number of persons in a given
    were resident on the territory of the        age group) among the Insurance Company
    Czech Republic (regardless of their natio-   insured had:
    nality) and for whom were (at law) held          the age groups of 0–4 years (63,46 %)
    also the foreigners with the granted sta-        and 25–29 years (62,28 %) at men
    tute of „a refugee”                              the age groups of 0–4 years (63,6 %) and
    were employed by an employer resident            25–34 years (63,0–63,4 %) at women.
    on the territory of the Czech Republic (on     The strongest quantitative representation
    condition this labour law relation had be-   (of the total number of persons in a given
    en concluded according to the legislative    age group) among the Insurance Company
    norms being in force in the Czech Re-        insured had
    public) although they were not perma-            the age groups over 65 years at men (wit-
    nently resident on the territory of the          hin 77,7–90,9 %)
    Czech Republic.                                  the age groups over 65 years at women
  From the total number of 10 327 807 per-           (within 81,2–94,5 %).
sons (of whom 10 197 715 were citizens of the
Czech Republic and 130 092 were foreigners),       The quantitative distribution of the Insuran-
who participated in public health insurance      ce Company insured in particular districts of
at 31 December 2001, 69,50 % of all these        the Czech Republic (of the total number of
participants were the Insurance Company          persons registered in a district) has not been
insured, that is altogether                      even in 2001, too, and fluctuated within the
                                                 span from 27,4 % to 91,15 %.
           7 177 318 persons,
and this is 183 288 persons less than the
number of the insured found at 31 Decem-
ber 2000. Of the given number of the Insu-
                                                 5.2
rance Company insured 7 064 935 persons          Migration of the
were citizens of the Czech Republic and
112 383 persons were foreigners.                 Insurance Company
  In the total number of the Insurance Com-
pany insured in 2001 there were:
                                                 Insured
    3 493 160 men (including 64 166 foreig-
                                                    The registered number of all persons in the
    ners), that is 69,14 % of the total number
                                                 Czech Republic who were fulfilling the conditi-
    of men (and 75 222 men less than in
                                                 ons for participation in general health insuran-
    2000)
                                                 ce has decreased by 18 211 persons since 31
    3 684 158 women (including 48 217 fo-
                                                 December 2000, when 10 346 018 persons
    reigners), that is 69,83 % of the total
                                                 had been registered, to 31 December 2001,
    number of women (and 108 066 women
                                                 when 10 327 807 persons had been registe-
    less than in 2000).
                                                 red. Within the same period of time the num-
 In the presented number of men and wo-          ber of the Insurance Company insured fell
men (without foreigners) there were:             down from 7 360 606 persons to 7 177 318,
   1 519 606 persons (778 821 men and            and thus the registered number of the Insu-
   740 785 women), at the age up to 19 ye-       rance Company insured decreased by 183 288
   ars, that is 65,9 % of the total number of    persons within the scope of one calendar ye-
   persons at the age up to 19 years and         ar, that is by 2,5 %.
   21,5 % of the total number of the Insu-
   rance Company insured (the nation-wide           After the period of accelerated migration of
   proportion of persons up to 20 years was      the insured in 1999 and 2000, their migrati-
   22,6 % in 2001)                               on has slightly slowed down in 2001. The to-
   3 984 610 persons (2 033 966 men and          tal number of the insured in 2001, compared
   1 950 644 women),at the age from 20 to        with 2000:
   59 years, that is 66,7 % of the total num-        has considerably decreased in 6 districts
   ber of persons at the age from 20 to 59 ye-       – index 0,93-0,95
   ars and 56,4 % of the total number of the         has slightly decreased in 33 districts – in-
   Insurance Company insured (the nation-            dex 0,96-0,98
   wide proportion of persons at the age from        has not been factually changed in v 38 di-
   20 to 59 years was 58,5 % in 2001)                stricts – index 0,99-1,0.



                                                                                                      61
 THE ANNUAL REPORT OF VZP CR FOR 2001
                                           The internal migration of the insured, ex-               stûjov, Bruntál, Fr˘dek-Místek, Nov˘ Jiãín,
                                        pressed in absolute numbers of persons ap-                  Olomouc, Opava, Ostrava a Karviná.
                                        purtenant to the main age groups of the in-                    Among the groups of persons who in 2000
                                        sured, continued to indicate the decrease in                came to the Insurance Company without
                                        numbers of newly born persons and general                   “transition” from other health insurance
                                        ageing of the Czech Republic population in                  companies (that is those who had not been
                                        2001. The changes were observed also in in-                 insured up to now) there were again for
                                        dividual categories of the insured. The num-                example the new-born babies or foreigners
                                        ber of employees fell down and the number                   (if they fulfilled the conditions of participati-
                                        of self-employed persons, persons without                   on in the health insurance schemes for
                                        taxable income and persons for whom pre-                    example through getting an employment at
                                        miums are paid by the state grew up (for                    an employer resident on the territory of CR).
                                        example the number of registered applicants                 Among the persons who leave the Insurance
                                        for job and pensioners grew up etc.).                       Company without “transition” to other health
                                           The data presented in tables on migration of             insurance companies (that is those who con-
                                        the insured (“The survey on the insured who                 tinue not to be covered) there are for exam-
                                        came from other health insurance companies                  ple persons who leave abroad (for ever or for
                                        to the Insurance Company“ and ”The survey on                a period for which they can deregister from
                                        the insured who left the Insurance Company                  participation in health insurance) or those
                                        for other health insurance companies“) enable               who died.19
                                        to create an idea on numbers of persons who
                                        ”came“ to the Insurance Company in individu-                   The survey on numbers of the insured
                                        al quarters of 2001 (in the course of the year              according to their age structure by 5 years
                                        26 843 persons have come) and who “left“ it                 and according to their gender at 31. 12. 2001
                                        (173 468 persons in the course of the year). In             is presented in Table no. 13 and Figure no.
                                        2001 the more dynamic migration of the insu-                3.
                                        red of the Insurance Company was observed in                   The survey on average numbers of the
                                        the 1st and 2nd quarter of the year, the slowest            insured according to their age structure by
                                        one – as traditionally – in the 4th quarter of the          5 years and according to their gender, found
                                        year.                                                       at 31. 12. 2001 is presented in Table no. 14
                                           The decrease of 19-21 year old men follo-                (MT/12/01-AgeS)
                                        wed with the increase of 20-24 year old                        The trend in numbers of the insured sin-
                                        men can be explained with their transfers                   ce 31. 12. 2000 to 31. 12. 2001 classified
                                        (implemented in compliance with law) bet-                   according to the age structure and gender is
                                        ween the Insurance Company and the Army                     presented in Table no. 15 (MT13/01-Insu-
VZP CR                                  Health Insurance Company. The decrease in                   red)
                                        the number of the insured in the age group                     The survey on migration of the Insuran-
                                        of 0-4 years can be partially explained with                ce Company insured in 2001 classified
                                        the decline of the birth-rate. The other part               according to particular quarters of the year
                                        of the decrease in this group and decrease                  and according to age groups is presented in
                                        in other groups of the insured is influenced                Tables no. 16 a, b, and Figure no. 4.
                                        with their transfers to other health insu-                     The survey on migration of the Insuran-
                                        rance companies and this can be partially                   ce Company insured since 31. 12. 2000 to
                                        imputed to competitive efforts of other he-                 31. 12. 2001 classified according to parti-
                                        alth insurance companies (which provide                     cular districts is presented in Table no. 17.
                                        higher volume of benefits not covered with
                                        funds of public health insurance to some                       The survey on numbers of the insured clas-
                                        age groups), partially to the efforts of health             sified according to categories of premium
                                        care providers (trying to gain certain advan-               payers forms a part of the table “Total premi-
                                        tages or to avoid for example the adverse                   um income including the impact of redistri-
                                        regulative deductions). In 2001 the decrea-                 bution according to categories of payers”
                                        se of the insured manifested itself most sig-               (MT/11/01-Redist.pay) that is included into
                                        nificantly in Prague and in districts Kladno,               the part 6.1 of this Annual Report called “the
                                        Ústí nad Labem, Brno-City, Hodnonín, Pro-                   Capital Fund of Health Insurance”.




                                        19   From these reasons it is not possible to find out the absolute increase of the insured in 2001 through the mere
                                             deduction of figures presented in the lines no. 21 of the Tables “The Survey on the insured who came to the In-
                                             surance Company from other health insurance companies” and “The Survey on the insured who left the Insuran-
                                             ce Company for the other health insurance companies”. However, this survey is enabled in table “The Trend in
                                             numbers of the insured of the Insurance Company between 31. 12. 2000 and 31. 12. 2001”.




       62
       62
     Table no. 13 – The age structure of the Insurance Company insured in 2001                                                                situation at 31. 12. 2001

                                                Men                                              Women                                 Citizens of CR
      Age group                                      of whom VZP                                       of whom VZP                               of whom VZP
                               In total                                           In total                                 In total
                                               number             %                              number             %                      number            %
      I. n.         A             B               C                D                 E              F               G         H               I               J
         1     0–4 years        230 880         146 524         63,46              218 166        138 812         63,63      449 046        285 336         63,54
         2     5–9 years        274 260         183 166         66,79              260 143        173 329         66,63      534 403        356 495         66,71
         3    10–14 years       331 765         221 545         66,78              316 134        209 700         66,33      647 899        431 245         66,56
         4    15–19 years       346 196         227 586         65,74              329 968        218 944         66,35      676 164        446 530         66,04
         5    20–24 years       412 135         275 999         66,97              389 226        256 775         65,97      801 361        532 774         66,48
         6    25–29 years       449 593         280 010         63,28              427 382        269 584         63,08      876 975       549 594          62,67
         7    30–34 years       353 179         234 682         66,45              338 056        214 438         63,43      691 235       449 120          64,97
         8    35–39 years       352 450         237 492         67,38              338 880        217 973         64,32      691 330        455 465         65,88
         9    40–44 years       328 865         224 801         68,36              320 649        210 702         65,71      649 514       435 503          67,05
       10     45–49 years       389 515         269 628         69,22              386 576        257 692         66,66      776 091        527 320         67,95
       11     50–54 years       399 611         278 683         69,74              407 637        275 457         67,57      807 248        554 140         68,65
       12     55–59 years       327 798         232 671         70,98              351 676        248 023         70,53      679 474       480 694          70,75
       13     60–64 years       228 540         166 564         72,88              262 374        197 749         75,37      490 914        364 313         74,21
       14     65–69 years       188 059         146 189          77,74             238 088        193 549         81,29      426 147        339 738         79,72
       15     70–74 years       166 158         135 619         81,62              241 912        203 112         83,96      408 070        338 731         83,01
       16     75–79 years       117 209          97 945         83,56              209 441        182 088         86,94      326 650        280 033         85,73
       17     80–84 years        50 345          43 618         86,64              105 340         94 077         89,31      155 685       137 695          88,44
       18     85–89 years        22 160          19 562         88,28               57 158         52 584         92,00       79 318         72 146         90,96
       19     90–94 years         6 558           5 938         90,55               19 642         18 381         93,58       26 200         24 319         92,82
       20     over 94 years         849             772         90,93                3 142          2 972         94,59        3 991          3 744         93,81
       21     Total sum       4 976 125       3 428 994         68,91            5 221 590      3 635 941         69,63   10 197 715     7 064 935          69,28
       22     Foreigners         76 063          64 166         84,36               54 029         48 217         89,24      130 092        112 383         86,39
       23     In total        5 052 188       3 493 160         69,14            5 275 619      3 684 158         69,83   10 327 807     7 177 318          69,50




                                                                                             AND THEIR MIGRATION




63
                                                                                                                                                                      VZP CR




                                                                                             THE INSURED OF THE INSURANCE COMPANY
                                                                     THE ANNUAL REPORT OF VZP CR FOR 2001




                                                       VZP CR




64
64
                               Figure no. 3 – The age structure of the insured in 2001


           Age                                                                                           Age

     over 94                                                                                        over 94
            90–94                                                                                             90–94
      85–89                                                                                          85–89
            80–84                                                                                             80–84
      75–79                                                                                          75–79
            70–74                                                                                             70–74
      65–69                                                                                          65–69
            60–64                                                                                             60–64
      55–59                                                                                          55–59
            50–54                                                                                             50–54
      45–49                                                                                          45–49
            40–44                                                                                             40–44
      35–39                                                                                          35–39
            30–34                                                                                             30–34
      25–29                                                                                          25–29
            20–24                                                                                             20–24
      15–19                                                                                          15–19
            10–14                                                                                             10–14
      05–09                                                                                          05–09
            00–04                                                                                             00–04

                 600 000   400 000      200 000                 0       200 000      400 000   600 000

                                                  Number of the insured
                                     Men VZP       Men CR           Women VZP     Women CR
                                                                                                                         VZP CR
Table no. 14 – The age structure of the Insurance Company Insured




                                                                                                                    AND THEIR MIGRATION
                                                                                                                    THE INSURED OF THE INSURANCE COMPANY
                                       Average number of the insured
        Age                                                                                        Index 01/00
                            2000                        2001 - reality
       group                                                                                         in total
                          in total           men           women                  in total
        0–4                271 995          132 564         125 550                258 114            0,95
        5–9                402 357          185 286         175 320                360 606            0,90
       10–14               451 231          223 585         211 899                435 484            0,97
       15–19               473 802          232 787         221 521                454 308            0,96
       20–24               583 574          275 343         260 180                535 523            0,92
       25–29               550 393          281 922         273 478                555 400            1,01
       30–34               459 249          236 422         217 033                453 455            0,99
       35–39               467 346          239 087         220 160                459 247            0,98
       40–44               470 246          226 365         212 529                438 894            0,93
       45–49               554 311          271 597         259 761                531 358            0,96
       50–54               577 132          281 311         277 833                559 144            0,97
       55–59               464 857          235 431         250 141                485 572            1,04
       60–64               364 502          169 093         199 546                368 639            1,01
       65–69               364 463          149 378         195 860                345 238            0,95
       70–74               352 953          139 814         206 845                346 659            0,98
       75–79               296 676          103 263         188 447                291 710            0,98
       80–84               125 335           47 440           99 703               147 143            1,17
        85+                127 675           31 699          85 082                116 781            0,91
       others               91 472           61 221          45 485                106 706            1,17
      In total          7 449 569         3 523 608       3 726 373              7 249 981            0,97
                                                                                             MT/12/01-AgeStruct

Note: The decisive date for inclusion of the insured into an age group is the year of birth.
it goes for tables MT/12/01, MT/13/01
Data on total numbers of the insured for 2000 and 2001 – relation to table MT/1/01-Basln, I. 2




Table no. 15 – The trends in numbers of the Insurance Company Insured in 2001 according
               to their age structure
      Age              Situation at 31. 12. 2000                 Situation at 31. 12. 2001             Index
     group          men         women         in total        men         women         in total       01/00
      0–4          154 284      146 007        300 291       146 524      138 812        285 336        0,95
      5–9          204 138      193 225        397 363       183 166      173 329        356 495        0,90
     10–14         228 894      217 239        446 133       221 545      209 700        431 245        0,97
     15–19         234 734      229 632        464 366       227 586      218 944        446 530        0,96
     20–24         300 783      279 259       580 042        275 999      256 775        532 774        0,92
     25–29         272 776      271 002        543 778       280 010      269 584        549 594        1,01
     30–34         235 780      218 866        454 646       234 682      214 438        449 120        0,99
     35–39         240 235      222 956        463 191       237 492      217 973        455 465        0,98
     40–44         239 678      226 361        466 039       224 801      210 702        435 503        0,93
     45–49         278 972      269 668       548 640        269 628      257 692        527 320        0,96
     50–54         285 088      285 144        570 232       278 683      275 457        554 140        0,97
     55–59         220 743      238 302        459 045       232 671      248 023        480 694        1,05
     60–64         162 694      196 748        359 442       166 564      197 749        364 313        1,01
     65–69         154 182      203 783        357 965       146 189      193 549        339 738        0,95
     70–74         136 459      207 854        344 313       135 619      203 112        338 731        0,98
     75–79          99 529      186 410        285 939        97 945      182 088        280 033        0,98
     80–84          37 702        80 764       118 466        43 618       94 077        137 695        1,16
      85+           31 196        83 224       114 420        26 272       73 937        100 209        0,88
     others         50 515       35 780         86 295        64 166       48 217        112 383        1,30
    In total     3 568 382 3 792 224 7 360 606             3 493 160 3 684 158 7 177 318                0,98
                                                                                                 MT/13/01-Insured
Situation at 31. 12. 2000 and 2001 – relation to the table MT/1/01-Basln, I. 1




                                                                                                                      65
                                        Table no. 16a – The survey on the insured who came from other health insurance
 THE ANNUAL REPORT OF VZP CR FOR 2001
                                                        companies to the Insurance Company

                                         Age group                     I/01         II/01         III/01           IV/01    2001
                                         I. n.          A                B            C              D               E        F
                                            1      0–4 years            132           159           128              122      541
                                            2      5–9 years            116           193           136              113      558
                                            3     10–14 years           132           211           140              135      618
                                            4     15–19 years           168           250           315              393    1 126
                                            5     20–24 years         5 066         3 874         3 850            4 354   17 144
                                            6     25–29 years           593           670           406              647    2 316
                                            7     30–34 years           183           242           162              150      737
                                            8     35–39 years           166           187           137              107      597
                                            9     40–44 years           140           149           135               89      513
                                          10      45–49 years           158           157           124               98      537
                                          11      50–54 years           182           172           147               92      593
                                          12      55–59 years           152           127           105               93      477
                                          13      60–64 years             94          105             89              62      350
                                          14      65–69 years             77           55             64              42      238
                                          15      70–74 years             52           58             32              24      166
                                          16      75–79 years             50           54             31              26      161
                                          17      80–84 years             23           33             17              15       88
                                          18      85–89 years             11           13              8              11       43
                                          19      90–94 years             18            7              5               5       35
                                          20      over 94 years            1            2              1               1        5
                                          21        In total          7 514         6 718         6 032            6 579   26 843




VZP CR




                                        Table no. 16b – The survey on the insured who left the Insurance Company
                                                        for other health insurance companies

                                         Age group                     I/01          II/01        III/01        IV/01        2001
                                         I. n.          A                B             C             D            E            F
                                            1      0–4 years          2 827         3 080         2 499         2 502       10 908
                                            2      5–9 years          3 956         3 872         2 729         2 610       13 167
                                            3     10–14 years         4 398         4 075         2 878         2 647       13 998
                                            4     15–19 years         5 012         4 708         5 433         4 404       19 557
                                            5     20–24 years         7 563         6 518         4 813         5 203       24 097
                                            6     25–29 years         5 086         5 261         3 833         3 726       17 906
                                            7     30–34 years         3 696         3 773         2 785         2 438       12 692
                                            8     35–39 years         3 397         3 322         2 256         1 996       10 971
                                            9     40–44 years         2 769         2 600         1 905         1 588        8 862
                                          10      45–49 years         3 189         2 874         2 007         1 620        9 690
                                          11      50–54 years         3 355         3 058         1 954         1 739       10 106
                                          12      55–59 years         2 316         2 177         1 439         1 211        7 143
                                          13      60–64 years         1 413         1 266           935           822        4 436
                                          14      65–69 years         1 135            920          706           683        3 444
                                          15      70–74 years           930            716          598           568        2 812
                                          16      75–79 years           733            523          434           417        2 107
                                          17      80–84 years           284            243          182           185          894
                                          18      85–89 years           143             87            76           99          405
                                          19      90–94 years             71            50            69           46          236
                                          20      over 94 years           12             7             8           10           37
                                          21        In total         52 285        49 130        37 539        34 514      173 468




       66
       66
                                          Figure no. 4 – The age structure of the insured who came to and left VZP CR




     Number of insured
                         00–04 05–09 10–14 15–19 20–24 25–29 30–34 35–39 40–44 45–49 50–54 55–59 60–64 65–69 70–74 75–79 80–84 85–89 90–94 over 94


                                                                                   Age

                                                                  Left                               Came to




                                                                             AND THEIR MIGRATION




67
                                                                                                                                                     VZP CR




                                                                             THE INSURED OF THE INSURANCE COMPANY
                                        Table no. 17 – Trends in numbers of the Insurance Company insured in 2001 according
 THE ANNUAL REPORT OF VZP CR FOR 2001

                                                       to CR districts

                                                                          Number of VZP                                         Number of VZP
                                                                              insured       Index                                   insured         Index
                                                District              situation situation 01/00           District          situation situation     01/00
                                                                      at 31. 12. at 31. 12.                                 at 31. 12. at 31. 12.
                                                                        2000        2001                                      2000        2001
                                        I. n.              A              B           C       D     l. n.          A            B           C        D
                                           1     Prague-City          950 019 908 635 0,96           40 Teplice               104 400 103 041       0,99
                                           2     Bene‰ov                70 913      69 868 0,99      41 Ústí nad Labem         63 515      60 734   0,96
                                           3     Beroun                 44 883      43 555 0,97      42 HavlíãkÛv Brod         70 619      69 462   0,98
                                           4     Kladno                 94 970      89 376 0,94      43 Hradec Králové        101 838 100 325       0,99
                                           5     Kolín                  82 835      81 986 0,99      44 Chrudim                88 246      87 432   0,99
                                           6     Kutná Hora             42 725      41 491 0,97      45 Jiãín                  61 873      61 305   0,99
                                           7     Mûlník                 80 663      78 653 0,98      46 Náchod                 91 426      90 257   0,99
                                           8     Mladá Boleslav         28 409      27 582 0,97      47 Pardubice             130 558 129 629       0,99
                                           9     Nymburk                66 585      66 076 0,99      48 Rychnov nad KnûÏnou    57 816      56 971   0,99
                                         10      Prague-East            74 216      72 767 0,98      49 Semily                 64 476      64 125   0,99
                                         11      Prague-West            68 000      67 224 0,99      50 Svitavy                91 395      90 606   0,99
                                         12      Pfiíbram                91 628      90 457 0,99      51 Trutnov                69 619      68 060   0,98
                                         13      Rakovník               44 260      42 828 0,97      52 Ústí nad Orlicí        92 612      90 501   0,98
                                         14      âeské Budûjovice     118 093      117 180 0,99      53 Blansko                83 453      82 630   0,99
                                         15      âesk˘ Krumlov          44 504      44 099 0,99      54 Brno-City             266 159     256 549   0,96
                                         16      JindfiichÛv Hradec      72 110      71 567 0,99      55 Brno-Country          118 304     115 139   0,97
                                         17      Pelhfiimov              63 277      62 735 0,99      56 Bfieclav                96 929      95 029   0,98
                                         18      Písek                  57 041      56 165 0,98      57 Hodonín               109 429 104 602       0,96
                                         19      Prachatice             37 159      36 937 0,99      58 Jihlava                97 453      97 141   1,00
                                         20      Strakonice             53 456      52 822 0,99      59 KromûfiíÏ               65 828      63 584   0,97
                                         21      Tábor                  65 156      63 723 0,98      60 Prostûjov              64 939      61 710   0,95
                                         22      DomaÏlice              49 506      49 119 0,99      61 Tfiebíã                 96 815      95 670   0,99
                                         23      Cheb                   65 845      65 502 0,99      62 Uherské Hradi‰tû      103 543     101 592   0,98
VZP CR                                   24      Karlovy Vary           99 178      98 072 0,99      63 Vy‰kov                 63 334      61 935   0,98
                                         25      Klatovy                67 747      66 974 0,99      64 Zlín                  174 216     171 689   0,99
                                         26      PlzeÀ-City           104 342      100 911 0,97      65 Znojmo                 76 642      75 683   0,99
                                         27      PlzeÀ-South            51 295      50 573 0,99      66 Îìár nad Sázavou       95 266      92 849   0,97
                                         28      PlzeÀ-North            51 442      50 671 0,99      67 Bruntál                68 004      65 103   0,96
                                         29      Rokycany               32 756      32 045 0,98      68 Fr˘dek-Místek         105 646     101 799   0,96
                                         30      Sokolov                68 789      67 631 0,98      69 Karviná               145 480     134 871   0,93
                                         31      Tachov                 39 170      38 421 0,98      70 Nov˘ Jiãín            102 677      98 757   0,96
                                         32      âeská Lípa             82 304      81 079 0,99      71 Olomouc                94 456      89 067   0,94
                                         33      Dûãín                103 653 102 020 0,98           72 Opava                 116 097     110 744   0,95
                                         34      Chomutov              104 413     103 334 0,99      73 Ostrava               130 769 123 380       0,94
                                         35      Jablonec nad Nisou     74 111      73 542 0,99      74 Pfierov                104 034     102 178   0,98
                                         36      Liberec              130 057      128 472 0,99      75 ·umperk                93 986      91 456   0,97
                                         37      Litomûfiice             93 211      92 262 0,99      76 Vsetín                118 346     116 475   0,98
                                         38      Louny                  74 484      73 654 0,99      77 Jeseník                29 663      28 745   0,97
                                         39      Most                 107 540 106 485 0,99           78 Czech Republic      7 360 606 7 177 318     0,98




       68
       68
                       VZP CR




                       Part 6



CREATION AND DRAWING
OF THE INSURANCE
COMPANY FUNDS
                                                                                                          VZP CR
   The management of the Insurance Compa-          the Czech Republic and higher unemploy-
ny financial funds is presented according to       ment rate as well as slower pace of growth of




                                                                                                      INSURANCE COMPANY FUNDS
                                                                                                      CREATION AND DRAWING OF THE
individual activities of the Insurance Compa-      premiums per one insured and thus lower
ny. Implementation of public health insuran-       sum of total income ensuing from the dyna-
ce is the basic activity of the Insurance Com-     mic factors.
pany; implementation of contractual and               The Insurance Company wanted to resist
complementary insurance is its supplement.         these expected influences and trends by the
Other taxable activities are the by-product of     means of reducing the pace of decrease in
the Insurance Company activities.                  numbers of the insured and adopting
   In 2001 the economy of the Insurance Com-       a number of measures to keep the health ca-
pany has been kept under review through the        re costs on the price level reached in the 2nd
Insurance Company funds on separate                half of 2000. With regards to relatively low
accounts, where (in consistence with the valid     opportunity to influence the health care
wording of the Act no. 551/1991, on the Gene-      costs, the Health Insurance Plan for 2001 as-
ral Health Insurance Company of CR) belong:        sumed the change in the Insurance Compa-
                                                   ny health policy. The differentiated approach
6.1 the Capital Fund of Health Insurance           to allocation of resources from the capital
    (Table no. 18 and supplementary tab-           fund of health insurance among the particu-
    les)                                           lar segments of healthcare providers ought
6.2 the Operation Fund (Table no. 22)              to become the basic instrument of the new
6.3 the Fund of Capital Reproduction (Table        and active health policy of the Insurance
    no. 23)                                        Company. In 2001 the Insurance Company
6.4 the Social Fund (Table no. 24)                 intended to support:
6.5 the Surplus Fund (Table no. 25)                    prevention and preventive character of
6.6 the Prevention Fund (Tables no. 26a, 26b)          delivered health care
6.7 the Fund of Other Taxable Activities               segments of primary care
    (Table no. 27)                                     health care aimed at population needs
6.8 the Fund of Contractual and Comple-                (that is not only individual needs)
    mentary Insurance (Table no. 28)                   managed transfer of patients from hospi-
                                                       tal care to daily care, out-patient care and
                                                       home care.
  Each of the above-mentioned funds has
been kept under review from two methodo-
                                                      At the same time the Health Insurance
logical aspects, namely:
                                                   Plan of the Insurance Company for 2001 dec-
    from the aspect of creation and drawing,       lared that the payment of lapse term liabiliti-
    which features economic operations in          es against healthcare providers (in the
    their sequence of time (that is with clas-     amount of 4 039 mil. CZK in the end of 2000)
    sification into that period when they had      would be possible only with the aid of the
    been materially generated) in the form of      state and separately from the annual econo-
    an accounting standard (that means it re-      mic plan for the capital fund of health insu-
    cords and includes into the outcome the        rance.
    arisen claims on cost and expenditure re-         In 2001, the actual development of macro-
    gardless of their actual fulfilment) inclu-    economic indices was more favourable than
    ding transfers among individual funds of       the expected one. The growth in nominal wa-
    the Insurance Company (always the part         ges reached to actual 8,8 % instead of 5,3 %
    A of a particular table)                       which were estimated, the unemployment
    from the financial aspect which features       rate of the Insurance Company insured was
    the actual transfers of financial means        only 9,7 % instead of 11,4 % which were
    from the point of view of their actual in-     planned. This manifested itself in the lower
    come and expenditure on current                number of the unemployed insured of the In-
    accounts and in cash (always the part          surance Company (for whom premiums are
    B of a particular table).                      paid by the state) and in the higher number
                                                   of employees (whose premium payments
                                                   are higher than those of the state). Since 1. 7.
6.1                                                2001 the amendment of the Act no.
                                                   592/1992, on premiums on general health
The Capital Fund of                                insurance, has come in force and raised the
                                                   basis of assessment of the insured whose
Health Insurance                                   premiums are paid by the state to 3 250 CZK.
                                                      Thanks to measures taken in 2001 the
  The Capital Fund of Health Insurance             trend in numbers of the Insurance Company
(„ZFZP“ in short) plays the decisive role in the   insured has been considerably more favou-
development in the Insurance Company eco-          rable and their fall down was lower than ex-
nomy because it features the economic ma-          pected in the plan. The number of the insu-
nagement of the Insurance Company domi-            red reached to 7 177 318 in the end of the
nant activity, that is the sphere of pubic         year and this was 77 318 persons more than
health insurance.                                  estimated.
  For 2001 the Insurance Company expected             The positive development in all presented
rather slow dynamism of economic growth in         factors had an impact both on higher than es-



                                                                                                       71
 THE ANNUAL REPORT OF VZP CR FOR 2001
                                        timated creation of the capital fund of health                This project approved by the Government
                                        insurance and in its higher income (the inter-             gave the possibility to the Insurance Company
                                        year growth index was 1,08) and this made                  to transfer to the Consolidation Bank its claims
                                        possible to increase the drawings from the                 up to the level of 4 507 mil. CZK. However, at
                                        fund on health care benefits in kind in an ade-            the same time this project required from the
                                        quate manner. In spite of the Insurance Com-               transferred claims to meet the condition of
                                        pany efforts the drawing of the capital fund of            debtor’s bankruptcy declaration, to be higher
                                        health insurance and allocation of financial               than 500 thous. CZK in individual cases, to be
                                        means in particular, have not been going on in             found within the review proceedings or within
                                        compliance with intentions of health care po-              the settlement proceedings and from the who-
                                        licy expressed in the Health Insurance Plan for            le process of claim transferring to take place
                                        2001, approved by the House of Deputies of                 since 12. 2. till 31. 10. 2001 and hence it is lo-
                                        the CR Parliament. In spite of the planned ob-             gical that within this period some formerly se-
                                        jective to support the segments providing pri-             lected claims ceased to meet these strictly de-
                                        mary care and the process of patient transfer              fined conditions. In the course of claim
                                        from hospital care into home care, in reality 20           transferring, in a number of cases the bank-
                                        mainly the in-patient healthcare facilities were           ruptcy proceedings were suspended due to
                                        supported due to the interest to gain funds for            the lack of the bankrupt’s property or the re-
                                        the increase of average wages promised by the              view proceedings did not take place. However,
                                        state administration (the inter-year growth in             these claims could not be – unfortunately –
                                        drawings of funds by about 8 %, the growth in              substituted with other ones.
                                        drawings in the out-patient care segments on-                 In the course of 2001, the Ministry of Fi-
                                        ly by 3 %). Another item, which had conside-               nance revealed its legal opinion that the
                                        rably different development than the plan, was             transfer of claims for premiums on general
                                        the consumption of prescribed drugs and this               health insurance has changed the character
                                        led to the increased drawings from the capital             of income reached through this transaction
                                        fund of health insurance by 7 % between 2000               and this income is not gained from public he-
                                        and 2001.                                                  alth insurance but from the claim transfer.
                                                                                                   With regards to the fact that the income from
                                          Hence the drawings from the capital                      claim transfer is not excluded from the object
                                        fund of health insurance on health care                    of the tax of health insurance companies, it
                                        benefits in kind were 89 492 million CZK                   must be presented in the tax statement as ta-
                                        and compared with 2000 it was 6,8 % hig-                   xable income included into the tax base. The
                                        her. The particular benefits in kind had the               Insurance Company gained opinions of an
                                        following share in the growth of financial as-             auditor, tax adviser and the National Accoun-
VZP CR                                  set consumption:                                           ting Council to these issues. All the three in-
                                            0,6 billion CZK more were expended on                  stitutions concur in their opinion that the
                                            out-patient health care benefits (provi-               opinion of the Ministry of Finance would be
                                            ded by non-hospital healthcare facilities)             hold true in case when accounting operati-
                                            (that is 3 % more compared with 2000)                  ons were passed through the accounts of ex-
                                            3,4 billion CZK more were expended on                  penditure and income. With regards to the
                                            hospital care benefits (that is 8 % more               fact that all this transaction was kept only on
                                            compared with the previous year)                       accounts of claims, liabilities and on the
                                            1,3 billion CZK more were expended on                  bank account of the capital fund of health in-
                                            prescribed pharmaceuticals (that is 7 %                surance, that is as a property operation, it
                                            more compared with the previous year)                  had not been reflected in the economic out-
                                            5,7 billion CZK of the total drawings from             come, nor it had influenced the tax base. The
                                            ZFZP were expended on balneal care be-                 Ministry of Finance confirmed this possibility
                                            nefits, treatment abroad and on medical                after a consultation. Thus the Insurance
                                            aids (compared with the previous year                  Company did not account the tax from legal
                                            this is 0,4 bil. CZK more).                            entity income ensuing from claims transfer-
                                                                                                   red to the Consolidation Bank.
                                          According to the Resolution of the Govern-                  In compliance with the relevant provisions
                                        ment of the Czech Republic no. 117 from                    of the Regulation of the Ministry of Health on
                                        7 February 2001 the Insurance Company cla-                 general contracts between health insurance
                                        ims with the lapse term against premium                    companies and healthcare providers, the In-
                                        payers were transferred to the Consolidation               surance Company has revised the terms of
                                        Bank (later the Czech Consolidation Agency).               claim reimbursement from previous 10 wor-
                                        The total sum of these transferred claims was              king days to 20 calendar days in its individu-
                                        3 762 mil. CZK, of which 1 941 mil. CZK we-                al contracts (and in some cases even to mo-
                                        re claims for premiums on public health in-                re than 20 days) and thus has got nearer to
                                        surance and the remaining part represents                  the reimbursement terms of other health in-
                                        their attributions (that is sanctions).                    surance companies.


                                        20   Through „the Order of the Government from 18 December 2000, which determines the point values and level of
                                             reimbursement of health care covered with public health insurance for the 1st half of 2001” and then through
                                             “the Regulation of the Ministry of Health from18. 6. 2001, which determines the level of reimbursement of he-
                                             alth care covered with public health insurance including regulation limits for the 2nd half of 2001”




       72
       72
                                                                                                            VZP CR
   Since 1. 3. 2001 the Insurance Company              surance company, ensuing from applica-
has introduced the new system of financial             tion of international treaties on health ca-




                                                                                                        INSURANCE COMPANY FUNDS
                                                                                                        CREATION AND DRAWING OF THE
flow management by the means of the „cash-             re accounting.
pooling“ system, which enables to make the
daily re-distribution of financial means           Table of ZFZP, part A III. – Drawing (the
among particular district insurance offices        inter-year growth index is 1,07)
and thus use them more efficiently within              Drawings of ZFZP on health care benefits
the system of delivered health care financing.         presented on the line 1 represent the vo-
   Combination of above-mentioned facts                lume of claims (invoices) of healthcare fa-
and measures led to the fact that the finan-           cilities for health care provided in the given
cial situation of the capital fund of health in-       year, which is 6,87 % higher than estima-
surance has moved to the level of balance,             ted in the Health Insurance Plan for 2001;
due to the fact that the liabilities with the          final accounting of health care at in-patient
lapse term against healthcare providers were           healthcare facilities for the 2nd half of the
successfully done away. In the course of the           year will be possible (due to the complexi-
year only short-term lack of resources for ti-         ty of calculations and information gathe-
mely reimbursement could be observed.                  ring) no sooner than in the 1st half of 2002,
   The survey on creation, drawings, income            that is why it is presented here on the le-
and expenditure of the capital fund of he-             vel of paid preliminary reimbursement; the
alth insurance is given in Table no. 18, the           details on drawing of health care costs by
survey on income from premiums and from                particular segments of providers can be
premium redistribution according to catego-            found in the cost tables (20a, 20b) concer-
ries of payers provides Table no. 19, the sur-         ning ZFZP.
vey on costs expended on the main kinds of             on the line 2 the drawing of bank and po-
health care benefits having been drawn is in           stal charges are expressed in numbers
Table no. 20a and converted per one insured            on the line 4 the transfers into other
in Table no. 20b, the summary of total costs           funds of the Insurance Company are nu-
expended on individual age groups of men               merically expressed (commentaries are
and women classified by 5 years is in Table            added to surveys on particular funds);
no. 21a and their conversion per one insu-             the amount of 216 mil. CZK transferred to
red of a given age group is in Table 21b.              the surplus fund represents the savings
                                                       of the operation fund achieved in 2001
Commentary to particular lines of the Tab-             and transferred into the surplus fund
le on creation and drawing of ZFZP:                    through ZFZP
                                                       on the line 6 the financial expression of
Table of ZFZP, part A II.– Creation (the in-           the written-off claim volume is included
ter-year growth index is 1,06)                         on the line 7 there is the amount claimed
    On the line 1 and 2 there is presented the         by healthcare providers for the insured
    premium assessment which is higher,                treatment according to international tre-
    compared with the plan, due to the lower           aties on health care accounting.
    than expected decrease in the insured              The line IV represents the ZFZP balance at
    and to better development in macro-eco-            31. 12. 2001. However, this balance is
    nomic indices                                      protected only with the Insurance Com-
    on the line 3 and 4 there is presented the         pany claims against premium payers
    assessment of premium attributions and             (with difficult recovery).
    indemnities
    on the line 5 there is presented the level     Table of ZFZP, Part B II. – Income (the in-
    of received interests; the balanced eco-       ter-year growth index is 1,08)
    nomy and cash-pooling introduction ena-            on the line 1 and 2 there are presented the
    bled to achieve these better than plan-            premium revenues and income from sett-
    ned outcomes                                       lement of special account for re-distributi-
    on the line 6 there are figured mainly the         on of premiums among health insurance
    exchange rate profits (at health care re-          companies; on the line 1 also the part of
    imbursement abroad) and revenues from              revenues is included, coming from the
    formerly written-off debts                         transfer of claims to the Consolidation
    on the line 7 there is presented the tran-         Bank (now the Czech Consolidation Agen-
    sfer of                                            cy) in the amount of 1 941 mil. CZK; it can
       the operation fund savings from 2001            be stated, after the subtraction of these
       in the total of 216 mil. CZK                    transaction impacts, that the income from
       transfer from the surplus fund in the to-       premiums on public health insurance grew
       tal of 212 mil. CZK (this amount repre-         up by 7,3 %, compared with 2000 (l. 1), the
       sents the operation fund savings from           growth of income reached from settlement
       2000 transferred to the surplus fund            of the special account for re-distribution of
       according to the valid regulations)             premiums among health insurance com-
       transfer of 3 million CZK from the eco-         panies was 4,1 %; the growth of income
       nomic outcome of taxable activities af-         from obtained premiums thus was 6,3 %
       ter taxation                                    in total, compared with 2000
    on the line 9 there is presented the               on the line 3 and 4 the revenues from
    amount claimed from a foreign health in-           sanctions are presented



                                                                                                         73
                                        Table no. 18 – The survey on creation and drawing of the Capital Fund
 THE ANNUAL REPORT OF VZP CR FOR 2001

                                                                                                                                  2001          2001
                                         A. The Capital Fund (ZFZP) – Creation and Drawing
                                                                                                                                   ZPP        actuality
                                                                                                                               thous. CZK    thous. CZK
                                          I. Opening balance at 1. 1. in the period under review                                6 831 196     8 273 235

                                           Total Creation:
                                         II.                                                                                   90 756 950    96 634 834
                                          1Premiums from public health insurance                                               59 792 000    64 328 454
                                          2Clearing with the specific account of health insurance +/–                          28 673 000    28 929 444
                                          3Penalties, fines and extra charges to premiums                                       2 079 000     2 721 058
                                          4Indemnities                                                                            190 000       182 101
                                          5Interests from management of ZFZP                                                       20 800        40 343
                                          6Other income according to the Regulation of MF 227/1998                                                  605
                                          7Transfers from other funds                                                               1 000       432 492
                                          8Transfer of ZFZP balance in case of takeover or marger of ZP
                                          9Written payment from a foreign ins. company (that is claimed
                                           reimbursement of „in advence“ paid health care for foreigners)                                           337
                                        10 Others – property sale income                                                            1 150

                                        III.   Total Drawings:                                                                 87 165 960    93 297 243
                                          1    Health care benefits inc. correction, revision and reimbursement to other ZP    83 741 000    89 492 369
                                          2    Other drawings (bank fees and postage connected with ZFZP)                          41 600        62 428
                                          3    Credit interest
                                          4    Transfers to other funds (4a+4b+4c+4d)                                           3 356 000     3 572 689
                                               including:
                                        4a      – to the surplus fund                                                                           216 689
                                        4b      – to the operation fund                                                         3 106 000     3 106 000
                                        4c      – to the prevention fund                                                          250 000       250 000
                                        4d     Extraordinary transfer to the PF at the Army Health Ins. Company
                                         5     Written transfer to the Reinsurance Fund
VZP CR                                   6     Deprecation of due premiums, penalties, extra charges and fines                     27 360      169 383
                                         7     Written settlement of health care invoiced to the insurance company
                                               by Czech HCF for foreigners, including outcomes of revision                                          337
                                          8    Assessment of income tax from purchase of attributions                                   X
                                          9    Others – exchange rate loses                                                                          37

                                        IV. Closing balance at the last day of the period under review = I + II – III          10 422 186    11 610 826

                                                                                                                                  2001          2001
                                         B. The Capital Fund (ZFZP) – Income and Expenditure
                                                                                                                                   ZPP        actuality
                                                                                                                               thous. CZK    thous. CZK
                                          I. Opening balance at 1. 1. in the period under review                                  350 000       431 410

                                        II.Total Income:                                                                       87 535 950    95 871 058
                                         1 Premiums from public health ins. (premiums received since 1/1 till 31/12)           58 050 000    64 309 170
                                         2 Clearing with the specific account of health insurance (since 1/1 till 31/12) +/–    28 673 000    28 970 614
                                         3 Financial income from fines, penalties and extra charges                               600 000       563 565
                                         4 Financial income from indemnities                                                      190 000       160 931
                                         5 Income from interests from ZFZP management                                               20 800       40 343
                                         6 Other income according to the Regulation of MF 227/1998                                                   274
                                         7 Financial transfer from other funds                                                      1 000          3 009
                                         8 Transfer of ZFZP financial balance in case of takeover or merger of ZP
                                         9 Taken bank credits
                                        10 Taken repayable financial assistance
                                        11 Receipt of reimbursement for health care from a foreign ins. company
                                           paid for foreigners
                                        12 Receipt of financial assets for claims bought by KoB – attributions                                1 821 071
                                        13 Others – from property sales                                                             1 150
                                        14 Other internal income                                                                                  2 081
                                                                                                                  Table no. 18 continues on the next page




       74
       74
                                                                                                                          VZP CR
Table no.18 continued




                                                                                                                      INSURANCE COMPANY FUNDS
                                                                                                                      CREATION AND DRAWING OF THE
                                                                                           2001          2001
 B. The Capital Fund (ZFZP) – Income and Expenditure
                                                                                           ZPP         actuality
                                                                                        thous. CZK    thous. CZK
III.   Total Expenditure:                                                               87 535 950    95 613 743
  1    Expenses on h.c. benefits incl. correction, revision and reimburs. to other ZP   84 145 350    92 727 761
  2    Others (bank fees and postage connected with ZFZP)                                   41 600        62 134
  3    Credit interests
  4    Financial allocation to bank accounts of other funds (4a+4b+4c+4d)                3 349 000     2 823 811
       including:
 4a     - to the bank account of the surplus fund
 4b     - to the bank account of the operation fund                                     3 099 000      2 573 811
 4c     - to the bank account of the prevention fund                                      250 000       250 000
 4d    Extraordinary allocation to PF at the Army Health Ins. Company
  5    Financial transfer to the Reinsurance Fund
  6    Credit instalments
  7    Payment of repayable financial assistance from the state budget
  8    Payment of loans from the Consolidation Bank
  9    Expanses on health care for foreigners paid by Czech HCF
 10    Others – exchange rate losses                                                                          37

 IV. Closing balance at the last day of the period under review = I + II – III             350 000       688 725


 C.    Supplementary indices to Section B II/1 (= sum of lines C/1 to C/4)
 1     Premium revenues from employers                                                  52 591 716   58 755 506
 2     Premium revenues from self-employed persons                                       4 654 359    5 553 664
 3     Premium revenues from other payers                                                  803 925
 4     Not identified payments
                                                                                                     MT/2/01-ZFZP

1 At the closing balance at the last day of the period under review in secction B there is the sum of the
  remainder on the bank account, remainder in cash (if it relates to ZFZP) and remainder of financial assets being
  on route and placed on term deposits (if they are kept on another account).
2 If ZP enters interests, fines, penalties and extra charges primarily in the ZFZP and then tranfers them from ZFZP
  into prevention fund it will use for this purpose both the line A III 4c), and the line B III 4c).
3 The calculation of the allocation limit for the operation fund is based on sec. B II ZFZP.
4 ZP fills in sums on lines II., III. and IV. in sec. A and B.
5 In case of extraordinary accounting situations health insurance companies can follow the methodology
  (that is to use free lines of particular sections).
6 Section A III/8 – this an extraordinary item concerning only those health insurance companies, which took part
  in the project according to the government resolution no. 117/2001.

Note: ZPP = health insurance plan, ZP = health insurance company, HCF = healthcare facility


       on the line 5 the level of received interests              on the line 2 the other expenses associa-
       is presented; the balanced economy and                     ted with ZFZP administration are presen-
       cash-pooling introduction enabled to achi-                 ted
       eve better than planned financial outcomes                 on the line 4 the financial transfers into
       on the line 6 particularly the revenues                    other funds of the Insurance Company
       from exchange rate profit are included                     are presented.
       on the line 7 the settlement of financial
       transfer from the economic outcome of                     It can be stated in general, that the econo-
       taxable activities after taxation is presen-           mic management of the capital fund of health
       ted (see the line 7 of part A – creation).             insurance has been balanced in 2001. The ma-
                                                              in objective, that is to eliminate the negative
Table B III. – Expenditure (the inter-year                    remainder from 1994 to 1998 leading to crea-
growth index is 1,10)                                         tion of liabilities with the lapse term, has been
   on the line 1 the expenses of the Insurance                successfully accomplished, particularly thanks
   Company spent on reimbursement of he-                      to the surrender of claims with the lapse term
   althcare facility accounting submitted for de-             to the Consolidation Bank on the basis of the
   livered health care (see part A, III – drawing,            Government Resolution initiated by the Minis-
   l. no. 1) which is 10,3 % higher than in 2000              try of Health.



                                                                                                                       75
                                                                                                                 THE ANNUAL REPORT OF VZP CR FOR 2001




                                                                                                     VZP CR




76
76
     Table no. 19 – Total premium income including the impact of re-distribution according to categories of premium payers

                                                                                                2000 – actuality                   2001 – actuality                     Index 01/00
      l. n.   Category of payers                                                      average number premium income average number premium income average number premium income
                                                                                       of the insured      after redistr. of the insured      after redistr. of the insured      after redistr.
                                                                                         (persons)        in thous. CZK     (persons)        in thous. CZK
       1      Employees (40 % of income)                                                 2 855 350          21 328 155      2 792 104          23 502 202         0,98               1,10
       2      Self-employed persons (OSVâ 40 % of income)                                  723 946           1 360 453         719 553          1 574 131         0,99               1,16
       3      Persons without taxable income (40 % of income)                              100 853             559 734         101 193            647 335         1,00               1,16
       4      Pers. for whom prem. are paid by state (state p. inc. redistr.)            4 338 478          62 680 359       4 207 866         67 556 116         0,97               1,08
              of whom:
              – dependant children                                                       1 682 866                x               1 609 631        x               0,96               x
              – pensioners                                                               2 036 232                x               2 008 720        x               0,99               x
              – women on maternal leave and family allowance recipients                    204 647                x                 193 329        x               0,94               x
              – applicants for job                                                         323 573                x                 311 812        x               0,96               x
              – others                                                                      91 160                x                  84 374        x               0,93               x
       5      Total premium written incl. redistribution                                                      85 928 701                      93 279 784

     Related to ZFZP, section B/II/1,2 of the particular year 2000 or 2001                                                                                            MT/11/01–Redistrib.-payers

     Note:
     1. In case of concurrence of more categories at one insured the insured is calculated as a payer in all concurrent categories.
     2. On I. 4 there will be presented the difference of total income after redistribution from I. 5 after deducting I. 1, 2, 3.
     Table no. 20a – Health care costs according to particular segments

                                                                                                                                                                                             Index    Index
                                                                                                                                           cur.         2000         2001         2001
     l. n. Index                                                                                                                                                                              act.    act. 01
                                                                                                                                           unit       actuality      ZPP        actuality
                                                                                                                                                                                             01/00   /ZPP 01
      I.   Total costs on health care reimbursed from section A of ZFZP (sum of lines. 1–10)                                             thous. CZK 83 807 319     83 741 000   89 492 369    1,07     1,07
           including:
      1    the aggregate of out-patient care (HCF not returning any code OD, costs on ZULP, ZUM are included, costs on
           prescribed drugs and medical aids on vouchers are not included)                                                               thous. CZK 18 089 088     18 743 000   18 703 238   1,03     1,00
           of which:
           a) on dental care (spec. 014, 015, 019)                                                                                       thous. CZK   4 968 423     4 990 000    5 061 856   1,02     1,01
           b) on GPs’ care (spec.. 001, 002)                                                                                             thous. CZK   4 186 886     5 000 000    4 359 227   1,04     0,87
           c) on gynaecological care (spec. 603, 604)                                                                                    thous. CZK                     x
           d) on physiotherapeutical care (specialisations 902, 918)                                                                     thous. CZK     677 330         x          707 042   1,04
           e) on diagnostic health care (specialisations 222, 801–805, 807, 809, 812–823)                                                thous. CZK   2 684 448         x        2 615 263   0,97
           f) on home medical care (HOME CARE, spec. 925)                                                                                thous. CZK     374 314         x          412 673   1,10
           g) costs on spec. out-patient care (not specified specialisations a)–f) and not meeting conditions for inclusion into I. 2)   thous. CZK   5 197 687         x        5 547 177   1,07
      2    the aggregate of in-patient care (HCF returning code OD, costs on ZULP, ZUM are included, lump sum for drugs
           or contracted out- patient and dental care, transport services provided within the frame of in-patient HCF except
           costs on prescribed drugs and medical aids)                                                                                   thous. CZK 41 420 343     41 923 000   44 817 953   1,08     1,07
           including:
           a) hospitals                                                                                                                  thous. CZK 37 108 857          x       39 805 154   1,07
           b) specialised curative institutions (OLÚ, except those presented in lines 2c) and 2d)                                        thous. CZK  2 366 609          x        2 672 555   1,13
           c) LDN (long-term care hospitals, independent HCF returning code OD 00024)                                                    thous. CZK  1 944 877          x        2 340 244   1,20
           d) nursing care beds (independent HCF returning code OD 00005)                                                                thous. CZK                     x
      3    Costs on balneal care                                                                                                         thous. CZK  1 785 177      1 930 000    1 816 809   1,02     0,94
      4    Costs on convalescent care                                                                                                    thous. CZK     56 213         80 000       60 884   1,08     0,76
      5    Costs on transports (include medical transport services including individual transport, transport services in the I. 2 and
           I. 1 are not included)                                                                                                        thous. CZK    902 058        938 000      951 386   1,05     1,01
      6    Costs on medical ambulance services (spec. 709, HCF not returning any code OD)                                                thous. CZK    513 317        536 000      571 496   1,11
      7    Total costs on prescribed drugs                                                                                               thous. CZK 17 941 487     17 171 000   19 198 453   1,07     1,12
           including:
           a) prescribed in out-patient HCF (independent out-patient HCF)                                                                thous. CZK   12 366 700       x        12 962 416   1,05
           of which: at GPs                                                                                                              thous. CZK                    x
                      on specialised out-patient care                                                                                    thous. CZK                    x
           b) prescribed in in-patient HCF                                                                                               thous. CZK    5 574 787       x         6 236 037   1,12

                                                                                                                                                                    Table no. 20a continues on the next page


                                                                                                                                   INSURANCE COMPANY FUNDS




77
                                                                                                                                                                                                                VZP CR




                                                                                                                                   CREATION AND DRAWING OF THE
                                                                                                             THE ANNUAL REPORT OF VZP CR FOR 2001




                                                                                                 VZP CR




78
78
     Table no. 20a continued

                                                                                                                                                                                      Index    Index
                                                                                                                                   cur.         2000        2001          2001
      l.n. Index                                                                                                                                                                       act.    act. 01
                                                                                                                                   unit       actuality     ZPP         actuality
                                                                                                                                                                                      01/00   /ZPP 01
       8 Total costs on medical aids dispensed on vouchers                                                                       thous. CZK   2 423 758   2 393 000     2 587 549      1,07     1,08
         including:
         a) prescribed in out-patient HCF (independent out-patient HCF)                                                          thous. CZK   1 631 486       x         1 722 418     1,06
         b) prescribed in in-patient HCF                                                                                         thous. CZK     792 272       x           865 131     1,09
      9 Costs on treatment abroad (necessary and urgent care)                                                                    thous. CZK      23 026      27 000         6 524     0,28     0,24
      9a Costs on treatment abroad on the basis of concluded international treaties                                              thous. CZK           0           0            31
      10 Other costs on health care (that cannot be included into previous items – to be explained in notes what they include)   thous. CZK     652 852           0       778 046     1,19

       II. Costs on improvement of health care drawn from other funds                                                            thous. CZK    200 618    308 550    318 993          1,59     1,03
      III. Total costs on health care (sum of l.I. + l.II.)                                                                      thous. CZK 84 007 937 84 049 550 89 811 362          1,07     1,07

                                                                                                                                                                                    MT/14/01–HCCosts.
     l. I: the date is based on sec. A III/1 ZFZP
     l. II: the date is based on sec. A III/1 of the Prevention Fund
     l. 10: includes centrally assured medicines prescribed in in-patient facilities (remedies for treatment of growth hormone deficiency, sclerosis multiplex, metabolic disorders at children, treat-
     ment of dialysed patients with erythropoetin, cochlear implants) and costs associated with bone marrow donation.

     Note HCF = health care facility, ZPP = health insurance plan, OD = day of treatment, ZULP = separately accounted drugs, ZUM = separately accounted material
     Table no. 20b – Health care costs per 1 insured according to particular segments

                                                                                                                                                                                       Index    Index
                                                                                                                                           cur.     2000       2001          2001
     l.n. Index                                                                                                                                                                         act.    act. 01
                                                                                                                                           unit   actuality    ZPP         actuality
                                                                                                                                                                                       01/00   /ZPP 01
      I.   Total costs on health care reimbursed from section A of ZFZP (sum of lines 1–10)                                                CZK       11 250     11 676        12 344    1,10     1,06
           including:
      1    the aggregate of out-patient care (HCF not returning any code OD, costs on ZULP, ZUM are included,
           costs on prescribed drugs and medical aids on vouchers are not included)                                                        CZK        2 428      2 613         2 580   1,06     0,99
           of which:
           a) on dental care (spec. 014, 015, 019)                                                                                         CZK          667          696         698   1,05     1,00
           b) on GPs’ care (spec. 001, 002)                                                                                                CZK          562          697         601   1,07     0,86
           c) on gynaecological care (spec. 603, 604)                                                                                      CZK                   x
           d) on physiotherapeutical care (specialisations 902, 918)                                                                       CZK           91      x                98   1,07
           e) on diagnostic health care (specialisations 222, 801–805, 807, 809, 812–823)                                                  CZK          360      x               361   1,00
           f) on home medical care (HOME CARE, spec. 925)                                                                                  CZK           50      x                57   1,14
           g) costs on spec. out-patient care (not specified specialisations a) – f) and not meeting conditions for inclusion into I. 2)   CZK          698      x               765   1,10
      2    the aggregate of in-patient care (HCF returning code OD, costs on ZULP, ZUM are included, lump sum for drugs or
           contracted out-patient and dental care and transport services provided within the frame of in-patient HCF except
           costs on prescribed drugs and medical aids)                                                                                     CZK        5 560      5 845         6 182   1,11     1,06
           including:
           a) hospitals                                                                                                                    CZK        4 981      x             5 490   1,10
           b) specialised curative institutions (OLÚ, except HCF presented in lines 2c) and 2d)                                            CZK          318      x               369   1,16
           c) LDN (long-term care hospitals, independent HCF returning code OD 00024)                                                      CZK          261      x               323   1,24
           d) nursing care beds (independent HCF returning code OD 00005)                                                                  CZK                   x
      3    Costs on balneal care                                                                                                           CZK          240          269         251   1,04     0,93
      4    Costs on convalescent care                                                                                                      CZK            8           11           8   1,05     0,75
      5    Costs on transports (include medical transport services including individual transport, transport services in the I. 2 and
           I. 1 are not included)                                                                                                          CZK          121        131           131   1,08     1,00
      6    Costs on medical ambulance services (spec. 709, HCF not returning any code OD)                                                  CZK           69         75            79   1,14     1,05
      7    Total costs on prescribed drugs                                                                                                 CZK        2 408      2 394         2 648   1,10     1,11
           including:
           a) prescribed in out-patient HCF (independent out-patient HCF)                                                                  CZK        1 660      x             1 788   1,08
           of which: at GPs                                                                                                                CZK                   x
                     on specialised out-patient care                                                                                       CZK                   x
           b) prescribed in in-patient HCF                                                                                                 CZK          748      x               860   1,15

                                                                                                                                                              Table no. 20b continues on the next page


                                                                                                                                 INSURANCE COMPANY FUNDS




79
                                                                                                                                                                                                          VZP CR




                                                                                                                                 CREATION AND DRAWING OF THE
                                                                                                               THE ANNUAL REPORT OF VZP CR FOR 2001




                                                                                                    VZP CR




80
80
     Table no. 20b continued

                                                                                                                                                                                    Index    Index
                                                                                                                                   cur.       2000         2001          2001
     l.n. Index                                                                                                                                                                      act.    act. 01
                                                                                                                                   unit     actuality      ZPP         actuality
                                                                                                                                                                                    01/00   /ZPP 01
       8 Total costs on medical aids dispensed on vouchers                                                                         CZK            325            334         357     1,10     1,07
         including:
         a) prescribed in out-patient HCF (independent out-patient HCF)                                                            CZK            219        x               238    1,08
         b) prescribed in in-patient HCF                                                                                           CZK            106        x               119    1,13
      9 Costs on treatment abroad (necessary and urgent care)                                                                      CZK              3             4            1    0,30     0,24
      9a Costs on treatment abroad on the basis of concluded international treaties                                                CZK                                         0
      10 Other costs on health care (that cannot be included into previous items – to be explained in notes what they include)     CZK             88             0          107    1,22

       II. Costs on improvement of health care drawn from other funds                                                              CZK             27            43           44    1,63     1,02
      III. Total costs on health care (sum of l.I. + l.II.)                                                                        CZK         11 277        11 719       12 388    1,10     1,06

                                                                                                                                                                                   MT/15/01–HCCost.
     l. I: the date is based on sec. A III/1 ZFZP
     l. II: the date is based on sec. A III/1 of the Prevention Fund
     Relation to Tab. Health care costs 14 with usage of the average number of the insured in tab. Basln 1 – I. 2

     Note 2: HCF = health care facility, ZPP = health insurance plan, OD = day of treatment, ZULP = separately accounted drugs, ZUM = separately accounted material
                                                                                                                                 VZP CR
Table no. 21a – Total costs on health care according to the age structure of the insured




                                                                                                                             INSURANCE COMPANY FUNDS
                                                                                                                             CREATION AND DRAWING OF THE
                                       Total costs on health care in thous. CZK                               Index
       Age
                          2000                                     2001                                       01/00
      group
                          total                 men              women                    total                total
       0–4              2 331 817             1 536 605         1 190 398               2 727 002              1,17
       5–9              1 973 018            1 084 864             920 296              2 005 160              1,02
      10–14             2 175 942             1 256 397          1 065 017              2 321 414              1,07
      15–19             2 542 929             1 247 475         1 446 290               2 693 765              1,06
      20–24             3 305 883             1 277 691         1 964 703               3 242 394              0,98
      25–29             3 547 516             1 442 835         2 281 020               3 723 855              1,05
      30–34             2 849 440             1 344 445         1 702 206               3 046 651              1,07
      35–39             3 087 473             1 531 279         1 785 649               3 316 929              1,07
      40–44             3 984 804             1 895 181         2 065 104               3 960 285              0,99
      45–49             5 658 544             2 830 589         3 054 800               5 885 389              1,04
      50–54             7 719 396             3 861 476         4 086 446               7 947 922              1,03
      55–59             7 560 517             4 339 189         3 953 526               8 292 715              1,10
      60–64             6 535 960             3 416 564          3 556 032              6 972 595              1,07
      65–69             8 176 750            3 867 427          4 388 218               8 255 644              1,01
      70–74             8 581 265             4 008 887         5 228 825               9 237 713              1,08
      75–79             7 599 593             3 131 786         5 085 393               8 217 178              1,08
      80–84             2 904 715             1 319 327         2 469 045               3 788 372              1,30
       85+              3 271 756               878 066         2 340 344               3 218 410              0,98
      others                                    318 340            320 636                638 976
     Total *)          83 807 319           40 588 423         48 903 946              89 492 369              1,07
                                                                                               MT/17/01-TotHCCost-age

*) Based on data of ZFZP sec. A/III/1 for 2000, 2001 with usage of the average number of the insured – tab. MT/1/01 – I. 2


Table no. 21b – The average costs on health care per one insured according to their age structure

                                 Average costs on health care* per 1 insured in CZK                             Index
       Age
                                      2000                                2001                                   01/00
      group
                        men         women        total        men       women                    total           total
      0–4               9 157         7 696       8 449      11 591       9 481                 10 565           1,25
      5–9               5 117         4 558       4 846       5 855       5 249                   5 561          1,15
    10–14               4 975         4 542       4 764       5 619       5 026                   5 331          1,12
    15–19               4 898         5 718       5 300       5 359       6 529                   5 929          1,12
    20–24               4 210         7 070       5 601       4 640       7 551                   6 055          1,08
    25–29               4 868         7 870       6 368       5 118       8 341                  6 705           1,05
    30–34               5 024         7 299       6 121       5 687       7 843                   6 719          1,10
    35–39               5 487         7 637       6 521       6 405       8 111                  7 223           1,11
    40–44               7 801         8 968       8 367       8 372       9 717                  9 023           1,08
    45–49               9 221        11 002     10 095       10 422      11 760                 11 076           1,10
    50–54              12 505        13 954     13 229       13 727      14 708                 14 214           1,07
    55–59              17 438        14 780     16 064       18 431      15 805                 17 078           1,06
    60–64              19 354        16 284     17 684      20 205       17 821                 18 914           1,07
    65–69              24 323        20 446     22 132      25 890       22 405                 23 913           1,08
    70–74              26 480        22 338     24 000       28 673      25 279                 26 648           1,11
    75–79              28 218        23 762     25 334       30 328      26 986                 28 169           1,11
    80–84              27 225        20 841     22 902       27 810      24 764                 25 746           1,12
      85+              26 287        24 963     25 328       27 700      27 507                 27 559           1,09
    others                                                    5 200       7 049                  5 988
     Total             10 569        11 888     11 250       11 519      13 124                 12 344           1,10
                                                                                             MT/18/01-HCCost-1ins-age

Relation to ZFZP, sec A/III/1 and relation to tab. MT/17/01
* total costs on men (resp. women, resp. total) divided with the converted average numbers of men (resp. women,
  resp. total number of the insured – tab. MT/1/01 l. 2)

Note: on the line Total the weighted average is presented




                                                                                                                              81
                                        6.2
 THE ANNUAL REPORT OF VZP CR FOR 2001
                                                                                                     tual healthcare facilities (for delay in delivered
                                                                                                     health care reimbursement), the Insurance
                                        The Operation Fund                                           Company drawn 2 703,8 mil. CZK to cover its ac-
                                                                                                     tivity costs, that is 2,82 % of its total income and
                                           The creation and disposing of the operati-                when converted per 1 Insurance Company in-
                                        on fund are determined by the Regulation of                  sured this is about 373 CZK in 2001. However,
                                        the Ministry of Finance no. 227/1998.21 The                  in 2001 the Insurance Company had the right –
                                        resources of the operation fund are drawn                    on the basis of its actual income – to transfer
                                        particularly for reimbursement of operating                  the amount of 3 401,7 mil. CZK from ZFZP for
                                        expenses of the Insurance Company associa-                   coverage of its operating expenses (which is the
                                        ted with implementation of public health in-                 maximum level of the annual limit according to
                                        surance, on transfers into the fund of capital               the above-mentioned Regulation of MF). Com-
                                        reproduction („FRIM“) and on allocations in-                 pared with this limit the amount that had not
                                        to the social fund („SF“). The allocation of fi-             been drawn was 512 mil. CZK.
                                        nancial means from the capital fund of he-
                                        alth insurance represents the main source of                   The survey on the creation and drawings,
                                        the operation fund, the level of allocation is               income and expenditure of the operation
                                        determined by the above-mentioned regula-                    fund is presented in the following Table
                                        tion. In the Health Insurance Plan for 2001,                 no. 22.
                                        the creation and drawing of this fund was                      Commentary to the survey on the opera-
                                        planed on the level of 3 107 mil. CZK. The                   tion fund
                                        creation of the fund was accounted on the
                                        planned level, the actual drawings were 217                  Part B. II – income (the inter-year index of
                                        mil. CZK lower, compared with the plan. Un-                  the fund income is 0,95)
                                        consumed resources were transferred into                         on the line 4 there are included the reve-
                                        the surplus fund through the ZFZP.                               nues from sales of blank forms, methodo-
                                           In 2001, the lower than expected drawing                      logies and code-lists, revenues from kee-
                                        of the fund resources was reached in items                       ping of registers (the central register of the
                                        of consumed purchases and services, due to                       insured, information centre of health insu-
                                        both economy measures and not drawn fi-                          rance, capitation centre) and other revenu-
                                        nancial means caused by the time delay of                        es not coming from commercial activities
                                        thoroughly implemented selection procedu-                        on the line 9 there are included the reve-
                                        res. The other reason of such substantial sa-                    nues from sales of fixed assets (e. g. reti-
                                        vings was the postponement of identity card                      red cars, copying machines, safety appli-
                                        replacement at the insured, for which about                      ances, computing devices); the resources
VZP CR                                  128 mil. CZK were singled out in the Health                      were transferred to the fund of capital re-
                                        Insurance Plan for 2001. This happened due                       production (“FRIM”) in the level of the
                                        to the inter-resort clarification and negotiati-                 positive difference between the purchase
                                        ons on the way how to introduce the system                       and net book value of sold assets
                                        of chip identity cards. Furthermore, the staf-                   on the line „Internal“ there are included
                                        fing levels not completed according to the                       the internal transfers among the operati-
                                        plan caused that the estimated personnel                         on fund, social fund and fund of capital
                                        costs had not been drawn to the full extent.                     reproduction.
                                           The drawing of the operation fund was al-
                                        so influenced with the operation fund reve-                  Part B. III – expenditure (the inter-year in-
                                        nues (for example from non-commercial sa-                    dex of the fund expenditure is 0,97)
                                        les of blank forms, methodologies and                           on the line 2 there is presented the tran-
                                        code-lists), which were 14,5 mil. CZK higher,                   sfer of financial means to the FRIM bank
                                        compared with the plan. The expenses of the                     account on the level of depreciation of all
                                        operation fund were exceeded in the item of                     capital assets and the net book value of
                                        fines and penalties (assessed by contractual                    depreciated assets
                                        healthcare facilities) by about 86 mil. CZK22                   on the line 3 – the lower transfer than
                                        and in the expense item of fixed asset de-                      planned for 2001 is caused by the un-
                                        preciation by 37 mil. CZK.                                      compromising approach to selection pro-
                                           Expenses of the operation fund represent                     cedures according to the Act no.
                                        3,02 % of the total income of the Insurance                     199/1994, on public order placing, that
                                        Company in 2001 and converted per 1 Insuran-                    increased the time demands on tenders
                                        ce Company insured they are about 399 CZK                       particularly for computer technique and
                                        per a calendar year. After subtracting penalties                due to this fact they could not be closed
                                        assessed to the Insurance Company by contrac-                   by the end of 2001.

                                        21   The Regulation of the Ministry of Finance no. 227/1998 in wording of later provisions, which determines the mo-
                                             re detailed definition of the coverage and level of income and expenditure of funds of public health insurance of
                                             health insurance companies, conditions for their creation, employment, admissibility of mutual transfer of finan-
                                             cial means and their economic management, limits of expenses on activities of health insurance companies co-
                                             vered with resources of the capital fund, including the method of this limit calculation.
                                        22   According to the original assumptions the penalties ought to be lower than 100 mil. CZK in 2001. The actual le-
                                             vel of penalties reached to about 186 mil. CZK due to the rigid approach of providers to the VZP.




       82
       82
                                                                                                                                 VZP CR
Table no. 22 – The survey on creation and drawing of the Operation Fund




                                                                                                                             INSURANCE COMPANY FUNDS
                                                                                                                             CREATION AND DRAWING OF THE
                                                                                                      2001         2001
  A.    The Operation Fund – Creation and Drawing                                                     ZPP        actuality
                                                                                                   thous. CZK   thous. CZK
  I.    Opening balance at 1. 1. in the period under review                                                 0

  II.   Total creation:                                                                            3 107 000    3 106 673
  1     Transfer from the capital fund of health insurance                                         3 106 000    3 106 000
  2     Transfer from the fund of capital reproduction approved by the Board of Directors
  3     Transfer of means of the Operation Fund in case of takeover or merger of ZP
  4     Income from property sales                                                                     1 000          673
  5     Extraordinary transfer to Army ZP of CR from the capital fund

 III.   Total Drawings:                                                                            3 107 000    3 106 673
  1     Drawing of OF on settlement of the account 658 with the account 558                        2 795 540    2 577 821
  2     Transfer to the Fund of Cap. Reproduction approved by the Board of Directors                 290 000      290 000
  3     Transfer to the Social Fund                                                                   21 460       21 230
  4     Transfer to the Capital Fund of Health Insurance                                                          216 689
  5     Drawing of financial means on health insurance payment on liquidator’s decision
  6     Positive difference between the selling and depreciated price – transfer to FRIM                              933

 IV.    Closing balance at the last day of the period under review = I + II – III                          0            0


                                                                                                      2001         2001
  B.    The Operation Fund – Income and Expenditure                                                   ZPP        actuality
                                                                                                   thous. CZK   thous. CZK
  I.    Opening balance at 1. 1. in the period under review                                          126 143      102 223

  II.   Total Income:                                                                              3 280 560    2 772 466
  1     Financial transfer from the bank account of ZFZP                                           3 099 000    2 573 811
  2     Financial transfer from the bank account of the Fund of Capital Reproduction
  3     Interests                                                                                        560          449
  4     Other income                                                                                  30 000       46 996
  5     Transfer of financial balance of OF in case of takeover or merger of ZP
  6     Taken bank credits
  7     Receipt of advances and final clearing for compensation of the cost proportion               150 000      150 119
        on contractual and additional insurance and other taxable activities
 7a     Receipt of advances on specific funds holding (Army ZP)
 8      Extraordinary transfer to Army ZP of CR from the capital fund
 9      Income from property sales                                                                     1 000          539
 10     Security sales in their accounting value
 11     Income from security sales and financial placement
 12     Others – internal income                                                                                      552

 III.   Total Expenditure:                                                                         3 249 000    2 820 983
  1     Operating costs on public health insurance                                                 2 530 000    2 231 976
  2     Fin. transf. to bank acc. of FRIM of all FA deprec., incl. fin. value of deprec. price       258 000      305 458
  3     Financial transfer to bank acc. of FRIM in amount approved
        by the Board of Directors                                                                    290 000      112 000
  4     Financial transfer to the bank account of the Social Fund                                     21 000       21 164
  5     Financial transfer to the bank acc. of the Capital Fund of Health Ins.
  6     Financial drawings on reimbursement of health ins. on liquidator’s decision
  7     Settlement of advances on reimb. of expenditure proportion of contractual                    150 000      150 119
        and complementary insurance and other taxable activities
 7a     Clearing of advances for specific funds holding (Army ZP)
  8     Repaying of credits connected with the Operation Fund
  9     Purchase of paper securities
 10     Alloc. to FRIM – positive differ. between selling and deprec. price of the sold property                      266
 11     Loss on security sales and loss on financial placement
 IV.    Closing balance at the last day of the period under review = I + II – III                    157 703       53 706
                                                                               Table no. 22 continues on the next page




                                                                                                                              83
                                        Table no. 22 continued
 THE ANNUAL REPORT OF VZP CR FOR 2001

                                                                                                                                       2001          2001
                                          C.    The Operation Fund – Supplementary Data                                                ZPP         actuality
                                                                                                                                    thous. CZK    thous. CZK
                                          I.    Supplementary data to section A III. item 1 – data from acc. 658 total                  30 560        44 915
                                                of which: a) interests related to the operation account                                    560           449
                                                          b) other returns                                                              30 000        44 466

                                          II.   Supplementary data to section A III. item 1 – data from acc. 5..
                                                Total operating costs:                                                              2 826 100      2 622 736
                                                of which: a) wages incl. other personal costs                                       1 080 000      1 075 472
                                                           b) premiums on health insurance for employees                               97 200         95 694
                                                           c) premiums on social insurance for employees                              280 800        280 560
                                                           d) rebates for BD and SR and the Arbitration Body                           24 800         17 228
                                                           e) depreciation incl. the net book value of retired property               260 000        297 244
                                                           f) interests                                                                    10
                                                           g) fines and penalties                                                     100 000        186 165
                                                           h) financial costs connected to sales of paper securities
                                                           i) other operating costs                                                   983 290        670 373

                                                                                                                                       2001          2001
                                          D.    The Operation Fund – Supplementary Data                                                ZPP         actuality
                                                                                                                                    thous. CZK    thous. CZK
                                          II.   Specification of expenditure of B III/1
                                                Total operation expenditure: (sum of I. a to I. h):                                 2 530 000      2 231 976
                                                of which: a) wages incl. other personal costs                                       1 078 000      1 055 637
                                                            b) premiums on health insurance for employees                              97 020         95 048
                                                            c) premiums on social insurance for employees                             280 280        279 427
                                                            d) bonuses for BD and SR and the Arbitrary Body                            24 800         16 803
                                                            e) interests                                                                    7
                                                            f) fines and penalties                                                     65 000         76 905
VZP CR                                                      g) financial costs connected to sales of paper securities
                                                            h) other operating cost                                                   984 893        708 156

                                          E.    Supplementary Information to Section B
                                          1     Paper securities holding at 1. 1. in the period under review                                 0             0
                                          2     Paper security holding at the last day of the period under review                            0             0
                                                                                                                                                     MT/3/01-OF
                                        Note:
                                        1 ZP fills in the sums in L. II., III. and IV. in sec. A and B and further on the sums in sections C II and D II.
                                        2 The balance of B IV. must financially correspond to the statement of the bank account including term deposits, mo-
                                          ney on route, cash balance.
                                        3 The proportion of shared expenses on taxable activities, primarily reimbursed from the operation fund is shown on
                                          I. B III/7 with the exception of depreciation.
                                        4 The difference of sums C II – C I must be equal to the date in item 1 of section A III.
                                        5 Within the annual clearing the remainder B II/7 should conform to remainder B III/7.
                                        6 If ZP uses other numbers of analytical accounts at operating expense accounting it will include them in other
                                          income or in other operating expenses.

                                        Note 2: ZPP = Health Insurance Plan, ZP = health insurance company, BD = Board of Directors, SR = Superviso-
                                        ry Board, ZFZP = capital fund of health insurance


                                        Part C. I – supplementary data                                       on the line i) there are presented the
                                           on the line 2 the public health insurance                         costs on consumed purchases (materials,
                                           revenues from non-commercial activities,                          energies), services (repairs and mainte-
                                           e.g. from keeping of the registers, sales of                      nance, travelling costs, costs on repre-
                                           blank forms, methodologies or code-lists                          sentation and other services) and further
                                           are included.                                                     on taxes, financial costs and other opera-
                                                                                                             ting expenses.
                                        Part C. II – supplementary data
                                           on the line g) there are included the expen-                 Part D. II – supplementary data
                                           ses on fines and penalties for delayed pay-                     on the line f) there are included the pa-
                                           ment of invoices for health care provision                      id contractual fines and penalties for de-
                                           delivered by healthcare facilities                              layed payment of invoices for health ca-



       84
       84
                                                                                                                                     VZP CR
      re provision delivered by healthcare fa-
      cilities                                                   6.3




                                                                                                                                 INSURANCE COMPANY FUNDS
                                                                                                                                 CREATION AND DRAWING OF THE
      on the line h ) there are included other                   The Fund of Capital
      operating expenses among which be-
      long not only the necessary purchases of                   Reproduction
      standard supplies (e.g. blank forms for
      premium collection, for health care                           The Fund of Capital Reproduction24
      accounting, for physicians’ referrals and                  („FRIM“) is determined for procurement of
      delivery of obligatory reports etc., then                  capital assets of the Insurance Company. Fi-
      magnetic data carriers, xeroscopic and                     nancial resources from this fund are drawn
      tabulation paper and toners for copying                    for particular investments needed for inno-
      machines, office supplies and tangible                     vation and protection of the Insurance Com-
      property), but also costs on consumpti-                    pany information system as well as for ex-
      on of energies, fuel etc, costs on rents                   tension of analytical data and outputs, for
      and on maintenance and repairs of ow-                      reconstruction and construction of buildings,
      ned or leased premises, on repairs and                     for payment of credits and credit interests for
      maintenance of other technical devices,                    procurement and reconstruction of Flora pre-
      costs on operation support of the Basic                    mises obtained in 1999, and further on for
      Information System of the Insurance                        innovation and procurement of technical de-
      Company, costs on adjustment of the in-                    vices of investment character as for example
      formation system software, further on                      are the office machinery, copying machines,
      costs on communication, travelling                         telephone switching systems, cars etc.
      costs, costs on promotion, on delivered                       The opening balance of the FRIM (created
      cleaning services, guarding of premises,                   according the Regulation of the Ministry of
      advertising, procurement of data from                      Finance no. 227/1998 in wording of later
      prescriptions and blank forms, costs on                    provisions) was negative to 1. 1. 2001 (table
      fees for forwarding services, counselling                  of part A I), due to the liabilities of the Insu-
      services, audits, costs on professional                    rance Company accrued in 1999 from credits
      training of the Insurance Company staff                    obtained for procurement and reconstructi-
      and other accounting items.                                on of Flora premises.
                                                                    the accounting of depreciation of all the
                                                                 capital assets of the Insurance Company
   In 2001, the Insurance Company has been                       (table A II, line 1) was the basic resource for
also carrying on the activities liable to the tax                the FRIM creation (table of part A II) and the
from income of legal entities. Provision of                      transfer from the operation fund of the Insu-
contractual and complementary insurance                          rance Company in the level approved by the
according to the Act no. 185/1991, on the in-                    Board of Directors was its supplementary re-
surance system, is the essential activity in                     source (table A II, line 2). Interests represent
this sense. In consistence with the Regulati-                    the other resources of FRIM (table A II, line
on of MF CR no. 227/1998, § 3, art. 6, the In-                   3). The total creation of FRIM was planned
surance Company keeps the accounting of all                      on the level of 565 mil. CZK for 2001.
direct as well as indirect operating costs as-                      The survey on creation and drawing as
sociated with these activities on separate                       well as on income and expenditure of
accounts.23                                                      FRIM is presented in Table no. 23.




23   The proportion of operation overheads falling on taxable activities is determined in the following way: costs that
     can be directly assigned to a particular activity (public health insurance or a taxable activity) are accounted as a di-
     rect cost. Costs of institutional character that are common are divided with the proportion of the number of em-
     ployees and level of their employment commitments (needed for implementation of particular activities) in the
     total number of employment commitments of the Insurance Company. Among the direct costs (directly assigned)
     there are included the following ones: supplies consumption – blank forms, travelling costs, expert opinions, trans-
     lations, legal services, advertisments, assistance service, bank charges and expenses, wages of employess dealing
     only with contractual and additional insurance and their social and health insurance, taxes etc. Among the indirect,
     allocated costs there is for example included the consumption of energy, consumption of magnetic media, oil and
     fuel, freight charges, repairs and maintenance, communication, operation of buildings, rents etc. At other taxable
     activities, that is particularly at leasing of not dwelling premises, the common (institutional) costs are classified es-
     pecially according to the square metres of the leased area, for example energy consumption, heath supply, pro-
     perty insurance, ammortisation. Labour costs are classified according to the employment commitments.
24   In the commentary to this fund the term „capital assets“ is used (in compliance with the wording of the Regulati-
     on of Ministry of Finance no. 227/1998 in wording of later provisions, which determine the more detailed defini-
     tion of the range and level of income and expenditure of funds of public health insurance of health insurance
     companies and the Provision of the Ministry of Health no. 12/2001, which determines the economic indices of
     health insurance companies for the period of 2001 although – according to the diction of the Act on income ta-
     xes – rather the term „tangible and intangible assets“ ought to be used.




                                                                                                                                  85
                                        Table no. 23 – The survey on creation and drawing of the Fund of Capital Reproduction (FRIM)
 THE ANNUAL REPORT OF VZP CR FOR 2001

                                                                                                                                                2001         2001
                                          A.    FRIM – Creation and Drawing                                                                     ZPP        actuality
                                                                                                                                             thous. CZK   thous. CZK
                                          I.    Opening balance at 1. 1. in the period under review                                           –178 047      –2 934

                                          II.   Total creation:                                                                               565 035      607 317
                                          1     Creation of the fund on the level of depreciation (returned on acc. 558)                      275 000      316 371
                                          2     Transfer from the Operation Fund on level approved by Board of Directors                      290 000      290 000
                                          3     Interests                                                                                          35           13
                                          4     Gifts
                                          5     Transfer of the fixed amount of the operating result after taxes
                                          6     Transfer of the FRIM balance in case of takeover of merger of ZP
                                          7     Specific subsidies
                                          8     Transfer from OF – positive differ. between the selling and deprec. price of sold property                     933

                                         III.   Total Drawings:                                                                               543 935      391 403
                                          1     Acquisition of fixed assets                                                                   543 905      388 656
                                          2     Interests                                                                                                    2 655
                                          3     Banking fees and postage                                                                            30          92
                                          4     Financial transfer to the Operation Fund

                                          IV.   Closing balance at the last day of the period under review = I + II – III                    –156 947      212 980


                                                                                                                                                2001         2001
                                          B.    FRIM – Income and Expediture                                                                    ZPP        actuality
                                                                                                                                             thous. CZK   thous. CZK
                                          I.    Opening balance at 1. 1. in the period under review                                                100        3 761

                                          II.   Total Income:                                                                                 560 035      417 895
VZP CR                                     1    Fin. income of FA deprec. from the bank acc. of OF, incl. depr. price of retired assets       270 000      305 458
                                           2    Financial income in amount approved by BD from the bank acc. of OF                            290 000      112 000
                                           3    Interests                                                                                          35           13
                                           4    Gifts
                                           5    Financial income from transfer of a part of operating result after taxes
                                           6    Financial transfer of balance of FRIM in case of takeover or merger of ZP
                                           7    Income from subsidy
                                           8    Received bank credits
                                           9    Allocation from OF in amount of positive differ. betw. selling and deprec.
                                                price of sold property                                                                                         266
                                         10     Others                                                                                                         158
                                         III.   Total Expenditure:                                                                            560 035      419 074
                                          1     Expenses on investments including advances                                                    519 550      374 498
                                          2     Interests from credits                                                                         16 809       16 813
                                          3     Banking fees and postage                                                                           30           92
                                          4     Financial transfer on the bank account of the Operation Fund
                                          5     Re-paying of bank credits                                                                       23 646      23 646
                                          6     Others                                                                                                         171
                                          7     Internal                                                                                                     3 854

                                          IV.   Closing balance at the last day of the period under review = I + II – III                         100        2 582


                                          C.    Supplementary Information to Section B
                                          1     Paper securities holding at 1. 1. in the period under review                                         0           0
                                          2     Paper securities holding at the last day of the period under review                                  0           0
                                                                                                                                      MT/4/01/FRIM
                                        Note:
                                        1 In comments the health insurance company will present the reasons for enhancement of FRIM ensuing from de-
                                          cision of BD in case this has not been included into the Health Insurance Plan for 2001.
                                        2 ZP fills in the sums in lines II., III. and IV. in Sec. A and B.
                                        ZPP = health insurance plan, ZP = health insurance company, OF = Operation Fund, BD = Board of Directors,
                                              FA = fixed assets

       86
       86
                                                                                                               VZP CR
   The drawings from the fund on procurement               on extension of disk array for the needs
of capital assets for 2001 were planned on the




                                                                                                           INSURANCE COMPANY FUNDS
                                                                                                           CREATION AND DRAWING OF THE
                                                           of the central data bank of the Central In-
level of 543,9 mil. CZK, including bank and po-            surance Office
stal charges (table A III). The debit closing ba-          on completion of the router renovation
lance of this fund at the last day of the period           and up-dating of the internal network of
under review expressed the estimated level of              some district insurance offices
liabilities (credits) of the fund in the end of the        on building and extension of communi-
period under review (table A IV).                          cation infra-structure for the new agenci-
   The total financial expenses from the bank              es and to enhance the accessibility of the
account of this fund ought to have reached –               Insurance Company for its clients
according to the plan – the level of the fund              on continuation of the transition of the IS
total income. Thus the expenses of 519,5 mil.              terminal operation into the graphics en-
CZK (table B III, line 1) ought to have been               vironment
expended on procurement of capital assets                  on development and implementation of
in the following categories: innovation and                new applications ensuing especially from
development of the information system                      the amendment of legislative norms and
(290,0 mil. CZK), building investments                     required by specialised sections of the In-
(202,9 mil. CZK), other investments (26,6                  surance Company
mil. CZK), credit interests (16,8 mil. CZK –
                                                           on making the Extranet pilot operation
table B III, line 2) and payment of bank cre-
                                                           possible
dits (23,6 mil. CZK – table B III, line 5).
   The investment goals planned for 2001                   on further stage of PC replacement wit-
were achieved only in part. The higher level               hin the whole Insurance Company
of reached depreciations increased the total               on investments associated with the Central
creation of the fund by 42,3 mil. CZK (table               Insurance Office moving into the new buil-
A II). Expenses on payment of credits and                  ding (mainly in the sphere of networks).
credit interests were kept on the planned le-
vel (table B III, line. 2 and 5). However, the            The planned investment objectives in the
actual expenses were not kept on the plan-             sphere of IS have not been implemented to
ned level, they were 145,0 mil. CZK lower              the full extent in 2001, because some invest-
(table B III, line 1). Of this amount, the in-         ment actions were taking place in a longer pe-
vestments into the information system were             riod of time than had been estimated. This
112 mil. CZK lower, building investments we-           particularly concerned the negotiation and
re 22 mil. CZK lower and other investments             purchase of software licences for products of
were 11 mil. CZK lower. This also influenced           Oracle and Microsoft companies, up dating of
the procurement of capital assets (table A III,        disks in district insurance offices, purchases of
line 1) which was 155,2 mil. CZK lower (the            PCs and printers and modification of applica-
relevant credit interests are included in the          tion software. These orders have been fini-
value of procured assets).                             shed on the turn of the year and invoiced no
   These factors led to the fact that the closing      sooner than in the beginning of 2002. This de-
balance of FRIM was 212,9 mil. CZK at the last         lay was caused, among others, due to the
day of the period under review (table A IV).           strict observance of provisions of the Act no
   Financial resources of this fund were (and          199/1994, on public order placement, which
still are) used for concrete actions (according        lead to the situation that the preparation (inc-
to the long-term plans of capital asset procu-         luding the observance of procedures and
rement) and their effectiveness is discussed by        terms for tenders) and implementation of in-
the Investment Committee of the Board of Di-           vestment actions continues to be much more
rectors and is approved by the Board of Direc-         demanding from organisational, time and ad-
tors of the Central Insurance Office. With re-         ministrative aspects. Financial means having
gards to the fact that the timely settlement of        not been used for the information system in
liabilities for delivered health care is the priori-   2001 will be transferred into the year of 2002
ty in utilisation of the available financial assets    and used in its 1st quarter.
of the Insurance Company, the financial assets            In the sphere of building investments the
were transferred into the FRIM account not             financial means were used to complete the
according to the plan but according to actual          reconstruction of the building for the Central
needs and this is the reason why the FRIM in-          Insurance Office in Prague quarter Flora, to
come and expenditure (Table B) considerable            finish the building of the new premises for
differs from the FRIM creation and drawing             the District Insurance Office in Louny, to go
(Table A).                                             on in reconstruction of the premises for the
                                                       District Insurance Office in Opava and to bu-
  In 2001, to assure the operation of the In-          ild the new premises for the District Insuran-
surance Company Information System („IS“),             ce Office in Brno-City.
the financial assets were spent in particular:            In the sphere of building investments the
    on keeping of the serviceability of IS as          engineering works in the amount of 22 mil.
    well as enhancement of its computing ca-           CZK have not been implemented in 2001 due
    pacity through up-grading of servers and           to the postponement of the date of opening
    enhancement of disk capacities in district         and then finishing of some building actions
    insurance offices and in the Central Insu-         caused again with the uncompromising app-
    rance Office                                       roach to tenders (according to the Act no.



                                                                                                            87
                                                                                          6.5
 THE ANNUAL REPORT OF VZP CR FOR 2001
                                        199/1994 – see above). At actions, where
                                        their finishing was postponed by the end of
                                        the year, the settlement of invoices has been
                                        implemented no sooner than in January
                                                                                          The Surplus Fund
                                        2002. The planned reconstruction of district         The Insurance Company estimated in its
                                        insurance office premises in Hradec Králové,      Health Insurance Plan for 2001 that the cre-
                                        Karviná and Vsetín have been from a number        ation of the surplus fund (Table no. 25)
                                        of reasons transferred to the year of 2002.       would not be possible, due to the extreme
                                          In the sphere of other building investments     tension of relation between income and ex-
                                        the financial means were spent in complian-       penditure tending rather to zero or to the de-
                                        ce with the plan of renovation and procure-       bit. The actual economic development con-
                                        ment of technical devices of investment cha-      firmed the accuracy of this estimate. In spite
                                        racter, with the exception of the renovation      of the fact that the financial balance of the
                                        of the planned number of cars (11 mil. CZK).      capital fund of health insurance has been su-
                                        The plan of car renovation has not been im-       ccessfully made up (and the liabilities with
                                        plemented because the public tender had to        the lapse term have been thus eliminated),
                                        be invited (according to the Act no.              there had never been reached such a finan-
                                        199/1994), within the course of which one         cial surplus within the course of twelve
                                        of the persons concerned appealed to the          months which could have been drawn for the
                                        Board for Economic Competition in Brno. The       surplus fund creation. This was with respect
                                        decision on proper course of action has be-       to the possible risks for the financial stability
                                        en delivered to the Insurance Company no          of the capital fund of health insurance, which
                                        sooner than in January of 2002 and only then      would nearly immediately manifest themsel-
                                        the tender could have been finished.              ves in the form of remaining liabilities of the
                                                                                          Insurance Company with the lapse term aga-
                                                                                          inst healthcare facilities. Thus in the course
                                        6.4                                               of 2001 the Board of Directors – in consi-
                                                                                          stence with the Act no. 551/1991, on the Ge-
                                        The Social Fund                                   neral Health Insurance Company, in wording
                                                                                          of later amendments – decided to transfer
                                                                                          the opening balance of the surplus fund in
                                           In 2001 the social fund (Table no. 24) was     the amount of 212 800 thous. CZK (after sub-
                                        filled (in consistence with the valid wording     traction of 6 thous. CZK as the basic deposit
                                        of the Regulation no. 227/1998) with the          on the surplus fund current account) into the
                                        2 % allocation from the total volume of wa-       capital fund of health insurance. This ope-
VZP CR                                  ge means (without other personal costs            ning balance of the surplus fund was due to
                                        accounted by the operation fund and by the        the lower drawing of costs on the Insurance
                                        transfer of a part of the positive economic       Company activities (operation fund savings)
                                        outcome from activities liable to the tax from    in 2000.
                                        income of legal entities having been reached         With regards to the fact that in 2001 the In-
                                        in 2000. The other components of this fund        surance Company has not again drawn all
                                        creation were represented with income from        costs on its activities according to the appro-
                                        employees, instalments of loans rendered to       ved Health Insurance Plan (see also the com-
                                        employees and received interests.                 mentary to the operation fund) the reached
                                           In the course of 2001, the drawings from       savings in the amount of 217 mil. CZK were
                                        the social fund were done according to the        transferred (according to the Regulation of
                                        Collective Agreement provisions and associ-       the Ministry of Finance no. 227/1998) into
                                        ated internal guidelines, which enable to         the surplus fund through the capital fund of
                                        draw money for some kinds of activities only      health insurance, by the means of accoun-
                                        after the approval of the Health Insurance        ting of mutual claims and liabilities between
                                        Plan (which has been approved by the Hou-         particular funds, and here it will be handled
                                        se of Deputies of the CR Parliament no soo-       as the savings from the previous years.
                                        ner than in May of 2001). The postponement           In 2001, the minimum level of the Insuran-
                                        of terms influenced the drawings as well as       ce Company surplus fund ought to have rea-
                                        expenditure of the social fund                    ched (according to § 7, art.1, letter b) of the
                                           The financial income of this fund was hig-     above-mentioned Act) to 3 % of the average
                                        her than planned because the interests from       annual expenses of the capital fund of health
                                        the social fund account had been nearly 200       insurance for the three immediately preceding
                                        thous. CZK higher. The income of this fund        years (1998, 1999, 2000), that is about 2,5 bil.
                                        also reflects the internal settlement of a cla-   CZK. However, the financial filling of the surp-
                                        im in the amount of 433 thous. CZK, which         lus fund up to this level would lead to financi-
                                        were put on the account due to the fact that      al imbalance of the capital fund of health in-
                                        the fund income for December 2000 had on-         surance of the Insurance Company and thus to
                                        ly the form of internal claim against the ope-    the secondary insolvency of its contractual he-
                                        rational fund, which had been factually sett-     althcare facility system.
                                        led no sooner than in 2001. This fact caused
                                        the different level of the social fund closing
                                        balance and closing balance of its current
                                        account.



       88
       88
                                                                                                                  VZP CR
Table no. 24 – The survey on creation and drawing of the Social Fund




                                                                                                              INSURANCE COMPANY FUNDS
                                                                                                              CREATION AND DRAWING OF THE
                                                                                       2001         2001
  A.    Social Fund – Creation and Drawing                                             ZPP        actuality
                                                                                    thous. CZK   thous. CZK
  I.    Opening balance at 1. 1. in the period under review                           13 920       13 933

  II.   Total Creation:                                                              32 900       32 851
  1     Transfer from the Operation Fund                                             21 460       21 230
  2     Interests                                                                       200          394
  3     Other income                                                                    300          242
  4     Transfer of a part of operating result                                       10 730       10 800
  5     Transfer of the Social Fund balance in case of takeover or merger of ZP
  6     Re-paying of employees’ loans                                                   210          185

 III.   Total Drawings:                                                              42 460       27 584
  1     Drawing according to internal guidelines (1a+1b)                             42 320       27 274
 1a     of which: loans                                                                 140          120
 1b              other drawings                                                      42 180       27 154
  2     Banking fees and postage                                                        140          310

  IV.   Closing balance at the last day of the period under review = I + II – III     4 360       19 200


                                                                                       2001         2001
  B.    Social Fund – Income and Expenditure                                           ZPP        actuality
                                                                                    thous. CZK   thous. CZK
  I.    Opening balance at 1. 1. in the period under review                           12 028       13 198

  II.   Total Income:                                                                32 440       33 325
  1     Financial transfer from the bank account of the Operation Fund               21 000       21 164
  2     Interests                                                                       200          394
  3     Other income                                                                    300          349
  4     Transfer of a part of operating result                                       10 730       10 800
  5     Transfer of financial balance of SF in case of takeover or merger of ZP
  6     Re-paying of employees’ loans                                                   210          185
  7     Internal income                                                                              433

 III.   Total Expenditure:                                                           42 670       27 567
  1     Expenses according to internal guidelines (1a+1b)                            42 530       27 257
 1a     of which: loans                                                                 140          120
 1b              other expenses                                                      42 390       27 137
  2     Banking fees and postage                                                        140          310

  IV.   Closing balance at the last day of the period under review = I + II – III     1 798       18 956


  C.    Supplementary Information to Section B
  1     Situation in employees’ loans at 1. 1. in the period under review               280          188
  2     Situation in employees’ loans at the last day of the period under review        210          123
                                                                                                 MT/5/01-SF
Note:
1 ZP fills in the sums in lines II., III. and IV. in sections A and B
2 ZPP = health insurance plan, ZP = health insurance company, SF = social fund




                                                                                                               89
                                        Table no. 25 – The survey on creation and drawing of the Surplus Fund
 THE ANNUAL REPORT OF VZP CR FOR 2001

                                                                                                                                 2001          2001
                                         A.     The Surplus Fund – Creation and Drawing                                          ZPP         actuality
                                                                                                                              thous. CZK    thous. CZK
                                          I.    The opening balance at 1. 1. in the period under review                               5      212 800

                                         II.    Total Creation:                                                                      0       216 689
                                         1      Transfer from the Capital Fund of Health Insurance                                           216 689
                                         2      Interests
                                         3      Gifts
                                         4      Income from financial placements and security sales
                                         5      Transfer of balance of the Surplus Fund in case of takeover or merger of ZP
                                         6      Applicant’s bail

                                         III.   Total Drawings:                                                                      0       212 794
                                          1     Transfer into the Capital Fund of Health Insurance                                           212 794
                                          2     Banking fees and postage
                                          3     Loss from financial placements
                                          4     Health care reimbursement on the liquidator’s decision

                                         IV.    Closing balance at the last day of the period under review = I + II – III            5       216 695


                                                                                                                                 2001          2001
                                         B.     The Surplus Fund – Income and Expenditure                                        ZPP         actuality
                                                                                                                              thous. CZK    thous. CZK
                                          I.    Opening balance at 1. 1. in the period under review                                   5             6

                                         II.    Total income:                                                                        0             0
                                         1      Financial transfer from the bank account of the Capital Fund of Health Ins.
                                         2      Interests received
VZP CR                                   3      Gift received
                                         4      Income from financial placements and income for paper security sales
                                         5      Transfer of financial balance of SpF in case of takeover or merger of ZP
                                         6      Sales of paper securities
                                         7      Applicant’s bail

                                         III.   Total Expenditure:                                                                   0             0
                                          1     Financial transfer to the bank account of the Capital Fund of Health Ins.
                                          2     Banking fees and postage
                                          3     Loss from financial placements
                                          4     Health care reimbursement on liquidator’s decision
                                          5     Purchase of paper securities

                                         IV.    Closing balance at the last day of the period under review = I + II – III            5             6


                                          C.    Supplementary Information to Section B
                                          1     Paper securities holding at 1. 1. in the period under review                          0             0
                                          2     Paper securities holding at the last day of the period under review                   0             0
                                                                                                                                           MT/6/01/SpF




       90
       90
                                                                                                                                 VZP CR
Supplementary table – Calculation of the Surplus Fund limit




                                                                                                                             INSURANCE COMPANY FUNDS
                                                                                                                             CREATION AND DRAWING OF THE
Year Basis for calculation – Expenses from the ZFZP                                               thous. CZK
1998                                                                                 81 375 492
1999                                                                                 85 611 903
2000                                                                                 87 165 330
     Average expenses for 1998, 1999, 2000:                                                       84 717 575
     3 % of the average:                                                                           2 541 527

Note:
1 Data in B. I. express only the situation in financial means without financial investments, which are the part of the
  surplus fund in compliance with § 7 art. 1b) of the Act no. 551/1991, in wording of later regulations and § 18 of
  the Act no. 280/1992 in wording of later regulations.
2 ZP fills in the sums in lines II., III. and IV. in Sec. A and B
3 The data from Section B of ZFZP determined for health care and the implemented transfer of allocation to OF will
   be used as a basis for calculation of the allocation to SpF for 1999. At ZZP this calculation will also include the to-
   tal transfer to the reinsurance fund implemented by 31. 12. 2000.

Note: ZPP = health insurance plan, SpF = surplus fund, ZFZP = capital fund of health insurance, ZP = health insu-
rance company



Table no. 26a – The survey on creation and drawing of the Prevention Fund

                                                                                                     2001         2001
  A.     The Prevention Fund – Creation and Drawing                                                  ZPP        actuality
                                                                                                  thous. CZK   thous. CZK
   I.    Opening balance at 1. 1. in the period under review                                          5 377      73 193

  II.    Total creation:                                                                           304 950      352 001
  1      Creation based on the Act no. 551/1991 and 280/1992, in wording of later provisions       259 850      299 523
  1a     of which: transfer from the operating result                                                9 850       49 523
  1b                share according to § 19 art. 1 of the Act no. 280/1992
  1c                share according to § 6 art. 7 of the Act no. 551/1991                          250 000      250 000
  2      Interests accrued on the bank account of the Prevention Fund                                  100          168
  3      Others (gifts)                                                                                           1 634
  4      Written contributions of the insured                                                       45 000       50 676

  III.   Total Drawings:                                                                           308 850      324 039
   1     Preventive programmes                                                                     308 550      318 993
   2     Interests from credits
   3     Others (banking fees)                                                                         300          423
   4     Depreciation of penalties, extra charges and fines to premiums
   5     Clearing of accounts with the insured                                                                    4 623

  IV.    Closing balance at the last day of the period under review = I + II – III                   1 477      101 155


                                                                                                     2001         2001
  B.     The Prevention Fund – Income and Expenditure                                                ZPP        actuality
                                                                                                  thous. CZK   thous. CZK
   I.    Opening balance at 1. 1. in the period under review                                          5 489      33 585

  II.    Total Income:                                                                             304 950      351 379
  1      Fin. income based on the Act no. 551/1991 and 280/1992, in wording of later provisions    259 850      299 523
  1a     of which: transfer from the operating result                                                9 850       49 523
  1b                share according to § 19 art. 1 of the Act no. 280/1992
  1c                share according to § 6 art. 7 of the Act no. 551/1991                          250 000      250 000
  2      Interests accrued on the bank account of the Prevention Fund                                  100          168
  3      Others (gifts)                                                                                           1 634
  4      Received credit
  5      Receipt of additional payments from the insured                                            45 000       50 054
                                                                                 Table no. 26a continues on the next page




                                                                                                                              91
                                        Table no. 26a continued
 THE ANNUAL REPORT OF VZP CR FOR 2001

                                          III.    Total Expenditure:                                                                   308 850        318 837
                                           1      Expenses on preventive programmes                                                    308 550        313 235
                                           2      Interests from credits
                                           3      Others (banking fees)                                                                     300            423
                                           4      Re-paying of credits
                                           5      Refunds to the insured                                                                                 4 613
                                           6      Internal                                                                                                 566

                                          IV.     Closing balance at the last day of the period under review = I + II – III               1 589         66 127

                                          C.      Supplementary Information
                                          1       Paper securities holding at 1. 1. in the period under review                                 0                0
                                          2       Paper securities holding at the last day of the period under review                          0                0
                                                                                                                                            MT/7/01/Fprev
                                        Note:
                                        1 ZP fills in the sums in lines II., III., and IV. in Sec. A and B
                                        2 The closing balance in B IV. corresponds with the sum of the balance on the bank account, balance of financial me-
                                          ans on term deposits (if they are kept on another bank account) and the prevention fund balance in hand.


                                                                                                                      col. 1              col. 2    col. 3 = 1+2
                                               The structure of the allocation into the prevention fund for that
                                         I. n. part of allocation, which is not done through the transfer from ZFZP                     transfer
                                                                                                                    thous. CZK                          total
                                                                                                                                      from ZFZP
                                                  To sec. A/II                                                                         250 000        250 000
                                          1       Income from fines and penalties
                                          2       Income from extra charges to premiums
                                          3       Income of fines of HCF
                                          4       Yields from ZFZP interests                                                                             total
                                                                                                                                                    col. 3 = 1 + 2
                                                  To sec. B/II                                                                         250 000        250 000
VZP CR                                    1       Income from fines and penalties
                                          2       Income from extra charges to premiums
                                          3       Income from fines of HCF
                                          4       Yields from ZFZP interests


                                        If ZP implements the allocation on I. A II 1b) and B II 1b) by both the possible manners (that is by transfer from ZFZP
                                        and directly to the prevention fund, it will fill col. 1 and col. 2 in the table. The sum of col. 1 and 2 ought to conform
                                        to data on A II 1b) or B II 1b).




                                        Table no. 26b – Costs on preventive health care covered with the prevention fund in 2001

                                                                              Number of      2000     2001       2001         %            %
                                                Cost item                     participants actuality  ZPP      actuality actual. 2001 actual. 2001
                                                                                in 2001 thous. CZK thous. CZK thous. CZK ZPP 2001 actual. 2000
                                         1 Health care programmes
                                                                                               10 530       67 900       25 660         0,38            2,44
                                           in total
                                         2 Convalescent stays in total
                                                                                 5 405        190 088       240 650     293 333         1,22            1,54
                                           (Sea-Horse)

                                         3 Other activities

                                         Total costs on preventive
                                                                                    X         200 618       308 550     318 993         1,03            1,59
                                         health care
                                                                                                                                          MT/19/01-prevent.h.c.
                                        *) Related to data in the Prev. Fund Table, secction A III 1)

                                        Note: ZPP = health insurance plan


       92
       92
                                                                                                         VZP CR

6.6                                               pared with the plan – from these taxable ac-
                                                  tivities.




                                                                                                     INSURANCE COMPANY FUNDS
                                                                                                     CREATION AND DRAWING OF THE
The Prevention                                       Also the costs associated with other taxable
                                                  activities were 1 137 thous. CZK higher in 2001
Fund                                              – compared with the plan. The tax from legal
                                                  entity income was included into the item „ot-
   With regards to the fact that the prevention   her operating expenses” (see the line 1h in
fund financial resources (tables no. 26a, 26b)    part A II of the Other Taxable Activity Table).
are used to improve the care about the Insu-         The economic outcome of other taxable
rance Company clients, the commentary con-        activities reached, after taxation, 4 071 thous.
cerning actions and activities financed from      CZK in 2001.
this fund in 2001 was included into the part
4.8.1 of this Annual Report, called „the Pre-
vention Fund Utilisation and Healthy Life-Style
Promotion“ and here we refer to this part.        6.8
   In 2001 the prevention fund was created
with the balance of this fund from 2000           Contractual and
(33,5 mil. CZK), allocation from the Insu-
rance Company income defined by the Act
                                                  Complementary
no. 551/1991, on the General Health Insu-         Insurance
rance Company, in wording of later amend-
ments (that is the income flowing from fi-          With regards to the contents of activities
nes, penalties and extra charges to               associated with implementation of contrac-
premiums in the amount of 250 mil. CZK),          tual and complementary health insurance
then through the transfers of a part of posi-     (Tables no. 28, 29), which have the charac-
tive operating result created by the Insuran-     ter of services, the commentary dealing with
ce Company at implementation of taxable           these issues was included into the part 4.6 of
activities (that is particularly contractual      this Annual Report called „Legal Aspects“ and
and complementary insurance in the                into the part 4.8 called „Other Services and
amount of 49,5 mil. CZK), gifts and interests     Activities of the Insurance Company“.
received from the bank account of this fund.        Revenues from implementation of contrac-
   In 2001, the total fund income was 351,3       tual and complementary insurance represent
mil. CZK, its expenditure was 318,8 mil. CZK.     the most important item among all the ta-
25,6 mil. CZK were spend on medical pro-          xable activities of the Insurance Company. In
grammes, 293,3 mil. CZK were spent on con-        2001 they reached 1 056,7 mil. CZK, of which
valescent stays. The fund remainder forms its     the revenues from assessment of gross pre-
opening balance for 2002.                         miums on contractual and complementary
                                                  insurance were about 36 %.
                                                    In 2001, the total costs of contractual and
6.7                                               complementary health insurance, that is
                                                  costs on insurance benefits, creation of tech-
Other Taxable                                     nical reserves and payments to reinsurers,
                                                  operating and other expenses, reached 993,7
Activities                                        mil. CZK. Due to the time lag in insurance be-
                                                  nefits of contracts concluded in the second
   Other taxable activities of the Insurance      half of 2000 by 2001, the costs associated
Company (Table no. 27) are formed with de-        with these benefits grew up by about 15 %
livered services liable to the tax from income    compared with the estimates.
of legal entities. Revenues of other taxable        The economic outcome of contractual and
activities were thus for example formed with      complementary health insurance for 2001
revenues from sales of methodologies and          was 93 mil. CZK before taxation and about
code-lists to other than healthcare users, re-    63 mil. CZK after taxation. The final indices
venues from lease, from sales of comple-          can be taken for successful with regards to
mentary pension insurance and other servi-        the objective negative impacts and circu-
ces. In 2001 the Insurance Company                mstances, which had accompanied the
managed, compared with the Health Insu-           implementation of insurance products of
rance Plan, to reach 1 948 thous. CZK higher      contractual health insurance and comple-
revenues from services liable to the income       mentary travelling health insurance in 2001
tax. These revenues, after taxation, took sha-    and which are described in above-mentio-
re in the higher than estimated profit – com-     ned other parts of this Annual Report.




                                                                                                      93
                                        Table no. 27 – The survey on other taxable activities
 THE ANNUAL REPORT OF VZP CR FOR 2001

                                                                                                                                       2001           2001
                                          A.     Other Taxable Activities                                                              ZPP          actuality
                                                                                                                                    thous. CZK     thous. CZK
                                           I.    Total income                                                                         22 805         24 753
                                           1     Income from taxable activities                                                       22 733         24 715
                                           2     Interests                                                                                72             38
                                           3     Income from sale of financial investments and securities

                                         II.     Total Costs                                                                          19 545         20 682
                                         1       Costs on taxable activities of the Insurance Company                                 19 545         20 682
                                         1a      – wages incl. other personnel costs                                                   3 126          3 092
                                         1b      – premiums on health insurance of VZP employees                                         281            275
                                         1c      – premiums on social insurance of VZP employees                                         813            802
                                         1d      – depreciation of fixed assets – see note 3                                           7 544          8 118
                                         1e      – interests
                                         1f      – fines and penalties
                                         1g      – financial costs connected with security sales
                                         1h      – other operating costs                                                                7 781         8 395

                                          III.   Operating Result = I – II                                                              3 260         4 071


                                          B.     Supplementary Information
                                          1      Paper securities holding at 1. 1. in the peroid under review                               0              0
                                          2      Paper securities holding at the last day of the peroid under review                        0              0
                                                                                                                                             MT/8/01/TaxAct
                                        Note:
                                        ZP fills in the sums in lines I. and II.
                                        1 The table includes all the taxable activities carried out in compliance with the Rules of the Insurance Company,
                                           except contractual and complementary insurance
VZP CR                                  2 Costs on taxable activities express total costs on these activities, including the share of costs paid primarily (in
                                           advance) from the operation fund.
                                        3 Depreciation will be presented here as registered although it has been already included into the summary amount
                                           of the operation fund.
                                        4 Paper securities – only relating to this activity

                                        Data on I. 1d) are not kept in registers, the proportion of depreciation secondarily transferred from the operation fund
                                        is shown here.
                                        ZPP = health insurance plan, ZP = health insurance company




       94
       94
                                                                                                                               VZP CR
Table no. 28 – Contractual and Complementary Insurance




                                                                                                                           INSURANCE COMPANY FUNDS
                                                                                                                           CREATION AND DRAWING OF THE
                                                                                               2001       2001
  A.     Contractual and Complementary Insurance                                               ZPP      actuality
                                                                                            thous. CZK thous. CZK
   I.    Total income                                                                         797 000 1 056 712
   1     Income from written gross premiums on contract. insurance                             80 000   148 844
   2     Income from written gross premiums on complem insurance                              200 000   228 422
   3     Income from fines and penalties                                                                      46
   4     Income from financial investments                                                    350 000   531 434
   5     Clearing of technical provisions                                                     120 000   194 979
   6     Reinsurers’ share in income                                                          –23 000   –57 076
   7     Interests                                                                                         1 395
   8     Others                                                                                70 000     8 668

  II.    Total costs                                                                           771 800      993 751
  1      Operating costs on contractual and complementary insurance                            504 256      696 186
  1a     – wages incl. other personnel costs                                                    70 000       48 410
  1b     – premiums on health insurance of VZP employees                                         6 300        4 333
  1c     – premiums on social insurance of VZP employees                                        18 200       12 512
  1d     – depreciation – see note                                                               7 456       10 918
  1e     – interests
  1f     – fines and penalties                                                                                   10
  1g     – financial costs connected with security sales                                       310 000      516 813
  1h     – remaining operating costs                                                            92 300      103 190
  2      Claims paid on contractual insurance                                                   60 000       50 527
  3      Claims paid on complementary insurance                                                100 000       96 186
  4      Creation of financial provisions                                                      110 000      169 584
  5      Payments to reinsurers                                                                –20 000      –34 169
  6      Others                                                                                 17 544       15 437

  III.   Operating Result = I – II                                                              25 200       62 961

  B.     Supplementary information
  1      Paper securities holding at 1. 1. in the period under review                          230 000      131 184
  2      Paper securities holding at the last day of the period under review                   240 000      180 155
                                                                                                    MT/9/01/Contrlns

Note:
I. I A 6 includes the reinsurers’ share in income and provision usage, I. II A 5 includes the reinsurers’ share in costs
and creation of provisions.

1 Operating costs on contractual and complementary insurance express all operating costs including the share of
  operating costs paid primarily (in advance) from the operation fund (from advances provided from the contractu -
  al insurance funds).

2 ZP fills in the sums in lines I., II. and III.

Data on I. 1d) are not kept in registers, the proportion of depreciation secondarily transferred from the prevention
fund is presented here.
ZPP = health insurance plan, ZP = health insurance company




                                                                                                                            95
 THE ANNUAL REPORT OF VZP CR FOR 2001
                                        Table no. 29 – The survey on selected indices of commercial insurance only for VZP CR

                                                                                                                                             2001
                                         l. n. Index
                                                                                                                                           actuality
                                           1   Total income from commercial insurance                                               1 056 712 thous. CZK
                                           2   Total premiums written                                                                 377 266 thous. CZK
                                           3   Gross premium written, transferred to reinsurers                                       –57 076 thous. CZK
                                           4   Total costs                                                                            993 751 thous. CZK
                                           5   Total costs on insurance benefits                                                      146 713 thous. CZK
                                           6   Costs on insurance benefits rendered to reinsurers                                     –34 169 thous. CZK
                                           7   Income from financial placements                                                       531 434 thous. CZK
                                           8   Total profit                                                                            62 961 thous. CZK
                                           9   Number of concluded policies                                                           583 856
                                          10   Number of cancelled policies                                                             2 021
                                          11   Claims record                                                                            39,15 %
                                          12   Technical provisions                                                                   190 279 thous. CZK
                                               of which:
                                               – provision for outstanding claims                                                      57 526 thous. CZK
                                               – provision for unearned premiums                                                       90 659 thous. CZK
                                               – provision for rebates and bonuses                                                     42 094 thous. CZK
                                               – other technical provisions

                                                                                                                                        MT10/01–Comlns.VZP

                                        Note:
                                        l. 11 of Table 29: The claims record is the proportion of insurance benefits (line 5) in gross premium written (line 2),
                                        that means line 11 = line 5/line 2.




VZP CR




       96
       96
                     VZP CR




                      Part 7


THE SUMMARY OF SELECTED
INDICES ON THE INSURANCE
COMPANY ACTIVITIES
                                                                                                                             VZP CR

7.1                                                          of 2000 (increase by 0,9 %), claims against pre-
                                                             mium payers with the lapse term have even




                                                                                                                        THE INSURANCE COMPANY ACTIVITIES
                                                                                                                        THE SUMMARY OF SELECTED INDICES ON
The Survey of                                                slightly fallen down in 2001. The claims against
                                                             health care providers (part A, III, line 26 c) grew
Selected Indices                                             up by 490 mil. CZK, particularly due to rather
                                                             high claims of the Insurance Company for he-
(tab-MT/1/01-BasIn)                                          alth care accounting (delivered to the insured by
    In the end of 2001 the number of the insured             in-patient facilities) arisen in the 1st half of 2001,
was 7 177 318 persons and thus it was 77 318                 exaction of which at a number of providers is
persons higher than had been estimated in the                possible only with the aid of long-term instal-
Health Insurance Plan for 2001. However, the                 ment plan.
number of the insured was about 183 thousand                    In other claims (part III, line 26 e, f) there are
persons lower than in 2000. The proportion of                included the Insurance Company claims against
insured for whom premiums are paid by the sta-               the special account for premium re-distribution
te was 58 % (part A, I. – line 1,2).                         among health insurance companies in the
    In 2001 the Insurance Company acquired tan-              amount of 284 mil. CZK and claims of this
gible and intangible fixed assets in the amount              account against other health insurance compa-
of 367 mil. CZK (part A, II. – line 4). Its financial        nies in the amount of 259 mil. CZK, further on
investments, coming from placements of tech-                 claims for indemnities in the amount of 184 mil.
nical provisions of contractual and complemen-               CZK, claims of contractual and complementary
tary insurance, grew up by 49 mil. CZK (part A,              insurance amounting to 70 mil. CZK and claims
II. – line 5, 6).                                            of other funds of the Insurance Company in the
    In the course of 2001, the Insurance Compa-              amount of 142 mil. CZK.
ny has been regularly paying back the loans re-
ceived for the fund of capital reproduction (the
fixed annuity was 23,6 mil. CZK. The balance of
received loans was 174,5 mil. CZK in the end of
                                                             7.2
the year (part A, II. – line 9).                             Supplementary Data
    The converted number of the Insurance Com-
pany employees was 4 927 persons at 31 De-                      In 2001 the Insurance Company has been as-
cember 2001 (part A, II. – line 20).                         suring the agenda of the Czech and German
    The maximum possible limit of costs on the               Fund for Future and it has been implementing
Insurance Company activities in 2001 that was                for it – in close co-operation with the Ministry of
altogether 3 402 mil. CZK according to the Re-               Foreign Affairs and the Committee for Co-ordi-
gulation of the Ministry of Finance of CR25 has              nation – the payment of social assistance bene-
been kept with sufficient reserve. The actual al-            fits. In 2001 the benefits in the amount of about
location into the operation fund of the Insuran-             187 mil. CZK were paid.
ce Company was 3 106 mil. CZK in 2001 (part                     Premium redistribution and administration of
A, II. – line 23, 24).                                       the bank account for premium redistribution
    The total liabilities of the Insurance Company           among health insurance companies, according
against healthcare facilities fell down, in the              to the valid wording of the Act no. 592/1992, on
course of the year also the liabilities with the             premiums on general health insurance – was
lapse term against healthcare facilities were su-            the other agenda committed to the Insurance
ccessfully eliminated – see also the commenta-               Company. Claims and liabilities of this account
ry to ZFZP (part A, III. – line 25 a, b).                    are included into the table called „the Summa-
    In the amount of „other liabilities within the           ry of Basic Indices on the Health Insurance
due term“ (part A, III. – line 25 c) there are inc-          Company Activities“ (part A, III. – line 25 c, d).
luded the closing balances of liabilities of the
operation fund (446 mil. CZK, of which 227 mil.
CZK are the liabilities ensuing from sanctions
assessed by contractual partners), of the capital            7.3
reproduction fund (64 mil. CZK, the received
credits are not included here), of the special
                                                             The Surrender of
account for premium re-distribution among he-
alth insurance companies, which is administe-
                                                             the Insurance
red by the Insurance Company (387 mil. CZK),                 Company Claims
of the prevention fund, social fund and contrac-
tual and complementary insurance (44 mil.                    against Premium
CZK).
    The claims of the Insurance Company featu-
                                                             Payers to the KoB
red on the line 26 of part A, III. grew up only by           (âKA)
3,6 % in 2001, compared with 2000. Due to the
transfer of claims in the amount of 3,7 bil. CZK               The detailed survey on the surrender of the
to the Consolidation Bank the claims against                 Insurance Company claims against premium
premium payers were kept nearly on the level                 payers to the Consolidation Bank (now the

25   Also the income from claims transferred to the Consolidation Bank was included into the basis for calculation of
     the maximum limit, because they represented the income of the capital fund of health insurance.




                                                                                                                          99
 THE ANNUAL REPORT OF VZP CR FOR 2001
                                         Recapitulation                                                                       CZK

                                         1 Maximum surrender value determined by the CR
                                           Government Resolution no. 117/2001                                          4 507 190 752,00

                                         2 Assets received from premium surrender                                      1 941 344 211,12
                                           – of which: included into re-distribution                                   1 941 344 211,12

                                         3 Assets received from attribution surrender                                  1 820 940 940,08

                                         4 Total assets received from KOB (resp. âKA)                                  3 762 285 151,20
                                           – of which: total assets received at 30. 11. 2001                           3 762 415 151,20
                                                       recovery of assets 5. 2. 2002                                     – 130 000,00

                                         5 The difference compared with the maximum limit of the surrender
                                           according to the CR Government Resolution no. 117/2001                       744 905 600,08


                                        Czech Consolidation Agency) and on the cour-        some of the attributes conditioning their sur-
                                        se of this surrender is enabled in the following    render within this period. This led, just in the
                                        systematical recapitulation.                        preparatory phase of the project, to negotiati-
                                           In compliance with the project of surrende-      ons on the possibility to substitute these cla-
                                        ring the claims with the lapse term against pre-    ims with others, which would meet the sur-
                                        mium payers the Insurance Company declared          render conditions within the total approved
                                        1 373 concrete claims in total approved limit va-   limit value. However, this measure could not
                                        lue of 4 507 190 752 CZK to be surrendered to       be implemented because the Government of
                                        the KoB, and each of them had to meet the fol-      CR approved the originally declared claims in
                                        lowing conditions:                                  the form of the obligatory list, where even the
                                             the bankruptcy proceedings against the         partial changes in claims were not allowed
                                             bankrupt were declared and have not been       and which became the part of the general
                                             finished in the time of the surrender          contract in this form
                                             the claim against the bankrupt was higher         Due to the impossibility to substitute the exc-
VZP CR                                       than 500 000 CZK                               luded claims with others, 330 declared claims
                                             the claim has been found within the review     could not be surrendered to the Consolidation
                                             negotiations or settlement proceedings.        Bank (âKA) because in 212 cases the bankrupt-
                                                                                            cy proceedings were stopped due to the lack of
                                          With regards to the fact that the factual sur-    the bankrupt’s property or they were terminated
                                        render of claims on the basis of individual         through scheduled decision, in 67 cases the re-
                                        contracts ought to have been done since 12.         view negotiations did not take place and in 51
                                        2. 2001 (that is since the general contract         cases there were other reasons found (e.g. not
                                        conclusion) till 31. 10. 2001, it was evident       terminated incident dispute or the claim drop-
                                        that a number of declared claims would loose        ped down under 500 000 CZK etc.).




100
100
      Table no. 30 – The survey on the basic indices on operation of the Insurance Company in 2001

                                                                                                                       Unit of       2000          2001          2001
       l. n. The Index Name
                                                                                                                       measure     actuality       ZPP         actuality
             SECTION A
        I.   The insured
         1   Total number of the insured at the last day of the period under review                                    persons     7 360 606    7 100 000    7 177 318
                of whom: covered by the state                                                                          persons     4 262 556    4 236 900    4 148 287
        2    Average number of the insured in the period under review                                                  persons     7 449 569    7 172 000    7 249 981
                of whom: covered by the state                                                                          persons     4 338 478    4 265 750    4 207 866
                of whom: up to 60 years                                                                                persons     2 782 358    2 719 250    2 665 836
                         over 60 years                                                                                 persons     1 556 120    1 546 500    1 542 030

       II.   Other indices
        3    Fixed assets incl. provided advances acquired at the last day of the per. under review                   thous. CZK   3 451 217    3 907 475     3 502 387
        4    Fixed assets incl. provided advances acquired within the period under review                             thous. CZK     534 646      543 905       367 542
                  incl.: a) investments on operation of VZP                                                           thous. CZK     534 646      543 905       367 542
                         b) other investments                                                                         thous. CZK
        5    Financial investments at the last day of the period under review                                         thous. CZK    131 184       240 000      180 155
        6    Financial investments within the period under review                                                     thous. CZK    –89 417        10 000       48 972
        7    Sum of taken bank credits (credit side of relevant acc., without lines 10, 13 and 16)                    thous. CZK     68 102
                  incl.: a) long-term credits                                                                         thous. CZK     68 102
                         b) short-term credits                                                                        thous. CZK
        8    Total repaying of short- and long-term bank credits (debit side of relevant acc.)                        thous. CZK     16 065        23 646       23 646
        9    Unpaid balance of bank credits at the last day of the period under review                                thous. CZK    198 147       174 501      174 501
       10    Received interest-free loans from the KoB in the period under review                                     thous. CZK
       11    Repaying of the interest-free loan from the KoB in the period under review                               thous. CZK
       12    Unpaid balance of the int.-free loan from KoB at the last day of the per. under review                   thous. CZK
       13    Received soft loan on the basis of Government Res. no. 352/1997 (from KoB)                               thous. CZK
       14    Repaying of soft loan received on the bas. of Government Res. no. 352/1997 (from KoB)                    thous. CZK    200 000
       15    Unpaid balance of the soft loan received on the basis of G.R. no. 352/1997 (from KoB)                    thous. CZK
       16    Received repayabe emergency loans from the natinal budget in the per. under review                       thous. CZK
       17    Repaying of repayable emerg. loans from the national budget in the per. under review                     thous. CZK
       18    Unpaid balance of repayable emerg. loans from the national budget in the per. under review               thous. CZK
       19    Received financial gifts and non-repayable subsidies                                                     thous. CZK
                                                                                                                                   Table no. 30 continues on the next page



                                                                                                          THE INSURANCE COMPANY ACTIVITIES




101
                                                                                                                                                                           VZP CR




                                                                                                          THE SUMMARY OF SELECTED INDICES ON
                                                                                                                   THE ANNUAL REPORT OF VZP CR FOR 2001




                                                                                                       VZP CR




102
102
      Table no. 30 continued

                                                                                                                                                       Unit of        2000             2001           2001
       l. n. The Index Name
                                                                                                                                                      measure       actuality           ZPP         actuality
       20     Converted number of employees at the last day of the period under review *)                                                              persons        5 181            4 990          4 927
       21     Average converted number of employees *)                                                                                                 persons        4 765            4 990          4 896
       22     Calculation of cost limit on activities accor. to the regulation of MF **)                                                                  %              3,54              3,55          3,55
       22a    Distribution basis for calculation of allocation into the Operation Fund                                                               thous. CZK    86 652 849       87 513 000     95 825 220
       23     Maximum cost limit on activities from the actual distribution basis                                                                    thous. CZK     3 067 511        3 106 712      3 401 795
       24     Actual allocation from ZFZP into the Operation Fund                                                                                    thous. CZK     2 866 800        3 106 000      3 106 000

       III.   Liabilities and Receivables
       25     Total liabilities at the last day of the period under review                                                                           thous. CZK     12 778 911     12 949 000      10 020 268
                 incl.: a) liabilities against healthcare facilities within the due term                                                             thous. CZK      7 720 617      7 680 000       9 077 548
                          b) liabilities against healthcare facilities after the due term                                                            thous. CZK      4 039 594      4 569 000               0
                           c) other liabilities within the due term                                                                                  thous. CZK      1 018 700        700 000         942 720
                          d) other liabilities after the due term                                                                                    thous. CZK
        26    Total receivables at the last day of the period under review                                                                           thous. CZK    20 613 387      22 383 731       21 339 821
                 incl.: a) receivables from premium payers within the due term                                                                       thous. CZK     5 763 151       5 881 000        6 051 223
                          b) receivables from premium payers after the due term                                                                      thous. CZK    13 246 655      15 941 000       13 145 700
                           c) receivables from healthcare facilities within the due term                                                             thous. CZK       640 525         159 000        1 130 938
                          d) receivables from healthcare facilities after the due term                                                               thous. CZK
                          e) other receivables within the due term                                                                                   thous. CZK        860 324         300 000         909 228
                           f) other receivables after the due term                                                                                   thous. CZK        102 732         102 731         102 732
       *) ZP will present integers witout decimal fractation                                                                                                                                      MT/1/01–Basln
      **) l. 22 limit must be rounded off to 2 decimal places

        27    Volume of financial investments in the Capital Asset Fund                                                                              thous. CZK               0               0               0
      Note:
      1 On l. 13, 14, 15 there is the relation only to the Government Resolution no. 352/1997 (applies only VZP CR).
      2 On I. 5 there is presented the total volume of financial investments of a given ZP-that is the sum of I. 2 from tables of individual funds, other taxable activities and contractual insurance, in case of
         need supplemented with the value of financial investments presented in the Capital Asset Fund.
      3 On I. 6 there will be presented the total sum of the difference between lines 2–1 of the supplementary table on paper securities holding at all funds, taxable activities and contractual insurance, in
         case of need also the increase or decrease in the Fund of Capital Assets.
      4 Into liabilities on I. 25 there are not included liabilities on lines 9, 12, 15 and 18.
      5 On I. 1- the insured numbers at 31. 12., ZP will present the data from re-distribution, or correction for the twelfth month.
      6 On I. 2 for calculation of the insured average number the ZP will apply the data on numbers of the insured from re-distribution, from correction for particular months/divided by 12.

      ZPP = health insurance plan, KoB = Consolidation Bank, ZFZP = capital fund of health insurance, MF = Ministry of Finance, ZP = health insurance company
              VZP CR




              Part 8



CONCLUSIONS
                                                                                                            VZP CR
   Achievement of the balanced capital fund of            rance, the balance of current accounts was
health insurance and thus also of the improved            higher than the balance of received credits




                                                                                                            CONCLUSIONS
financial balance of healthcare facilities, then          in the end of 2001.
slowing down of the decrease in the numbers          2.   The Insurance Company had no liabilities
of the Insurance Company insured and impro-               with the lapse term against healthcare
vement of their structure as well as the chan-            providers at 31. 12. 2001. These liabilities,
ge of healthcare policy, which ought to have              which have been still 4 039 mil. CZK at
been achieved through differentiated appro-               1. 1. 2001, fell down thanks to the combi-
ach to allocation of the capital fund resources           nation of already mentioned factors, that
among the segments of healthcare providers,               is by surrendering the claims against pre-
were the fundamental objectives of the Insu-              mium payers (arisen due to the not paid
rance Company for 2001.                                   premiums on public health insurance and
   It can be stated that the first objective, that        its attributions) to the KoB, by extension of
is the achievement of the balanced financial              contractual terms of delivered health care
position of the Insurance Company, has been               reimbursement and last but not least, by
accomplished. The Resolution of the Czech Re-             better economic development in the
public Government concerning the surrender                Czech Republic.
of health insurance company claims to the            3.   In 2001 the surplus fund of the Insurance
Consolidation Bank (now the Czech Consoli-                Company has not been filled up to the es-
dation Agency), extension of contractual terms            timated level. In 2001, the minimum level
of reimbursement for healthcare providers                 of the Insurance Company surplus fund
from 10 working days to 20 calendar days and              ought to have reached 3 % of average an-
relatively favourable development in average              nual expenses from the capital fund of he-
nominal wage and unemployment rate in the                 alth insurance for the 3 immediately pre-
Czech Republic, compared with expectations,               ceding years (1998, 1999, 2000), that is
had a considerable positive share in this situa-          about 2,5 billion CZK (according to § 7, art.
tion. The balanced financial situation has been           1, letter b) of the valid wording of the Act
the important factor for further development              no. 551/1991, on the General Health In-
of competitive position of the Insurance Com-             surance Company of CR). However, finan-
pany among other health insurance compani-                cial filling of the surplus fund to this level
es, which use just their better financial positi-         (by withdrawal of money from circulation
on as a comparative advantage in comparison               and money depositing) would lead not
with the Insurance Company.                               only to financial imbalance of the capital
   The second objective of the Insurance                  fund of health insurance of the Insurance
Company having been accomplished in                       Company but also to financial difficulties
2001, was the achievement of slower decre-                or secondary insolvency of the whole sys-
ase in the insured and improvement of their               tem of its contractual healthcare facilities.
structure (as to the categories of the insured       4.   The funds which are kept and administer by
and premium payment). In spite of the fact                the Insurance Company in consistence with
that even the better than planned outcome                 the valid wording of the Act no. 551/1991, on
has been achieved, it cannot be omitted that              the General Health Insurance Company of
it will be necessary to analyse again this side           CR, have been filled in the course of 2001
of the Insurance Company activities because               according to the plan of income and expen-
the drop in the number of the insured by                  diture, however not through regular calendar
about 183 thousand persons can indicate                   allocations but in the time of arisen financial
that the relations with clients have not been             need of the fund. In some funds (see PF,
yet on the desirable or expected level.                   FRIM and others) the whole estimated volu-
   The change in fund allocation in relation to           me of financial means has not been drawn.
particular segments of healthcare providers               Allocations to funds were created through
has not been reached. This was due to the fact            clearing of mutual claims among particular
that in 2001 the financial priority continued to          funds in consistence with the valid wording
be given to in-patient care both in the price de-         of the quoted act and the Regulation of the
velopment and in delivered care reimburse-                Ministry of Finance no. 227/1991.
ment. However, this was not the decision of          5.   The balance of 688 725 thous. CZK was on
health insurance companies but the decision               current accounts of the capital fund of he-
of the state administration, which tended to              alth insurance in the end of 2001. Compa-
respect the pressing demands of employees of              red with the balance in the beginning of
in-patient care facilities.                               the year (431 410 thous. CZK), its level
   The methodological instruction for elabo-              grew up by 257 315 thous. CZK.
ration and presentation of annual reports of         6.   The Insurance Company claims within the
active health insurance companies for 2001,               due term against premium payers relating
issued by the Ministry of Health in co-opera-             to the capital fund of health insurance
tion with the Ministry of Finance, determines             grew up by 288 mil. CZK in 2001, those
the criteria, which must be evaluated in                  against healthcare facilities grew up by
conclusions of the annual report for 2001 by              490 mil. CZK and thus together they rea-
each health insurance company.                            ched 7 182 mil. CZK. Other claims within
1. With regards to the fact that the Insurance            the due term grew up by 49 mil. CZK. Cla-
    Company has not taken any credit for the              ims against healthcare providers grew up
    needs of the capital fund of health insu-             mainly in the sphere of accounting of he-



                                                                                                            105
 THE ANNUAL REPORT OF VZP CR FOR 2001
                                           alth care delivered by in-patient healthca-       assistance received for the capital fund of
                                           re facilities for the 1st half of 2001, when      health insurance. The credit taken from
                                           considerable high claims and liabilities ha-      the Consolidation Bank in 1997 have been
                                           ve arisen for the Insurance Company. In           fully paid back already in 2000.
                                           spite of the fact that the Insurance Com-      9. The transaction of surrendering of the In-
                                           pany paid its liabilities in a single pay-        surance Company claims in the level of 3,7
                                           ment, exaction of claims required to conc-        bil. CZK to the Consolidation Bank repre-
                                           lude the periodic payment plan with               sents a specific event of the year 2001 as
                                           a number of providers. The Insurance              it led to the consolidation of the financial
                                           Company liabilities within the due term           position of the Insurance Company. The
                                           relating to the capital fund of health insu-      other measure of consolidation associated
                                           rance grew up by 1 282 mil. CZK, compa-           with the year 2001 is the extension of con-
                                           red with 2000, due to the increase in he-         tractual terms of reimbursement for deli-
                                           alth care prices and extension of                 vered health care and last but not least,
                                           contractual terms of reimbursement                the introduction of the new manners of
                                        7. Total claims of the Insurance Company             health care reimbursement for GPs, which,
                                           with the lapse term relating to the capital       in their consequences, ought to lead to
                                           fund of health insurance grew up only to          more effective behaviour of the whole sys-
                                           a minimum level , compared with 2000,             tem of health care provision.
                                           (growth by 0,9 %). Claims with the lapse
                                           term against premium payers have even            The year 2001 was a successful year for the
                                           decreased by about 100 million CZK bet-        Insurance Company. It continues to be an
                                           ween the two years and have reached            important institution in public health insu-
                                           about 13 145 mil. CZK. This decrease was       rance, financially consolidated and prepared
                                           caused by the surrender of claims with the     to provide good quality services to its clients,
                                           lapse term on the level of 3,7 bil. CZK to     to develop sound relations with its business
                                           the Consolidation Bank.                        partners and other institutions operating in
                                        8. In 2001 the Insurance Company has not          the healthcare system.
                                           been registering any credits or financial                                       2 April 2002




VZP CR




106
106
        VZP CR




        Part 9



ANNEX
                                                                                                VZP CR
            Resolution of the Assembly of Representatives




                                                                                                ANNEX
              of the General Health Insurance Company
                       of the Czech Republic

  In consistence with provisions of § 19 of the valid wording of the Act no. 551/1991, on the
General Health Insurance Company, the Assembly of Representatives as the supreme body
of the Insurance Company, on its session hold on 25 April 2002

1. discussed the Annual Report of the General Health Insurance Company for 2001, which
   consists of
       • the report on the Insurance Company activities in 2001
       • the report on situation and migration of the Insurance Company insured in 2001
       • analytically categorized income and expenditure accounting in particular funds of
         the Insurance Company achieved in 2001
       • profit and loss statements, the survey on assets and liabilities and the achieved
         balance of the Insurance Company in 2001


2. gave hearing to the standpoint of the Supervisory Board of the Central Insurance Office to
   the submitted Annual Report and saw the auditor’s statement


3. approved the Annual Report of the General Health Insurance Company for 2001 in the
   presented wording


4. recommended to the Board of Management of the Central Insurance Office to pass the
   approved Annual Report of the General Health Insurance Company to the Parliament of
   the Czech Republic in the usual manner and by the means of the Government of the Czech
   Republic.



In Prague on 25 April 2002




                                                       JUDr. Richard SCHWARZ
                                              Chairman of the Assembly of Representatives




                                                                                                109
                                                                        THE STANDPOINT
 THE ANNUAL REPORT OF VZP CR FOR 2001

                                                       of the VZP CR Supervisory Board
                                        to the Annual Report of the General Health Insurance Company
                                                        of the Czech Republic for 2001

                                          This standpoint is based on the Annual Report of VZP CR for 2001 and its annexes, on re-
                                        ports from internal controls and its own findings, on regular participation in negotiations of
                                        the Board of Directors of the Central Insurance Office of VZP CR.

                                          At its session hold on 15 April 2002 the Supervisory Board came to the following conclu-
                                        sions:

                                          The Supervisory Board states that the Annual Report of VZP CR for 2001 objectively featu-
                                        res the activities of VZP CR in the given year and meets the requirements placed upon an-
                                        nual reports. Also in this year all the principal questions were decided by the Board of Di-
                                        rectors of the VZP CR Central Insurance Office on its regular meetings, often on the basis of
                                        conclusions and recommendations of its professional committees.

                                          The Supervisory Board states that in 2001 VZP CR assured accessible health care for its in-
                                        sured and managed to eliminate its liabilities with the lapse term against healthcare providers.

                                          In 2001 the VZP CR economic management was controlled by the means of separate
                                        accounts of VZP CR funds in consistence with the valid wording of the Act no. 551/1991, on
                                        the General Health Insurance Company of CR.


                                                              The Insured of the Insurance Company
                                          In 2001 the decrease in numbers of the VZP CR insured was successfully slowed down,
                                        compared with previous years, the decrease is 2,5 % lower than had been estimated in the
                                        Health Insurance Plan of VZP CR for 2001. However, the structure of VZP CR insured conti-
                                        nues to change in the direction to the more costly ones. The VZP CR management as well as
VZP CR                                  the Board of Directors of the VZP CR Central Insurance Office regularly analyse the causes of
                                        this situation and seek for manners of their solution.


                                                                   Health Policy and its Financing
                                          Higher than expected income enabled to increase the drawings from the fund on health
                                        care benefits in kind. Contrary to the objective to support more considerably the segments
                                        providing primary health care, the in-patient healthcare facilities got more substantial sup-
                                        port thanks to the Government Resolution. Also the prescribed drug consumption conside-
                                        rably shifted out of the plan.

                                          The Government project of surrendering the VZP CR claims with the lapse term against pre-
                                        mium payers to the Consolidation Bank (later the Czech Consolidation Agency) contributed
                                        to the timely financing of health care. The VZP CR used 3 762 mil. CZK from the possible
                                        amount of 4 507 mil. CZK. The complete utilisation of the total sum was obstructed due to
                                        objective reasons.

                                          Thanks to adopted measures, including the new system of financial flow management by
                                        the means of „cash-pooling”, which enables to implement daily re-distribution of financial re-
                                        sources among particular district insurance offices, the financial situation of the VZP CR has
                                        been successfully advanced to the balanced level.


                                                                                   Income
                                          In 2001 the actual income from premiums on public health insurance after re-distribution
                                        was 6,3 % higher than in 2000 (without including the income from surrendered claims of
                                        VZP CR to the Consolidation Bank).


                                                                         The System of Control
                                          In 2001 external controls were carried out in VZP CR (implemented by the Supreme Board
                                        of Control and the state administration) and they were aimed particularly at investment ac-



110
110
                                                                                                   VZP CR
tions, premium collection and utilisation of assets gained from the surrender of the part of
VZP CR claims against premium payers to the Consolidation Bank. It is satisfying that there is




                                                                                                   ANNEX
no infringement of the regulations having been found within these controls. The internal sys-
tem of control is functional and the Supervisory Board permanently monitors its activities and
outputs. The departments of premium collection control, strengthened with new staff, im-
plemented 42 % controls more, compared with 2000.


                       The Capital Fund of Health Insurance
   The drawings of the total volume of financial means from the capital fund of health insu-
rance on health care benefits were 7 % higher, compared with the VZP CR Health Insurance
Plan for 2001. Converted per on insured, the costs on one insured were 668 CZK higher, in
comparison with estimates, and compared with the actuality in 2000 they were 10 % higher.
The Supervisory Board takes for important that in November 2001, on the basis of the CR Go-
vernment Decree no. 487/2000, the VZP CR increased the performance point value for in-pa-
tient facilities by 4,369 % for the 1st half of 2001, with additional and retroactive effect.



                                   The Operation Fund
  In 2001 VZP CR draw 2 703,8 mil. CZK on coverage of its activity costs, that is 2,82 % of its
total income. Compared with the plan, 216,7 mil. CZK were saved, in comparison with the li-
mit determined by the Regulation of the Ministry of Finance, 512 mil. CZK have not been
drawn.


                                    The Surplus Fund
  Although the financial balance of the capital fund of health insurance has been success-
fully reached in the course of 2001, there was never sufficient surplus reached in the course
of the twelve months that could be drawn for the surplus fund creation without endangering
the capital fund financial stability. After transferring the opening balance of the surplus fund
into the capital fund of health insurance in the course of 2001 the savings achieved for 2001
in the amount 216,689 mil. CZK were again transferred into the surplus fund.


                                        Conclusion
  On the basis of general assessment of VZP CR activities the Supervisory Board ex-
presses its consent with the Annual Report of VZP CR for 2001. It recommends the An-
nual Report of VZP CR for adoption in the VZP CR Assembly of Representatives and the
House of Deputies of the Parliament of CR.


  In Prague on 15 April 2002




                                                           Jana DVO¤ÁKOVÁ
                                              Lady Chairman of the VZP CR Supervisory Board




                                                                                                   111
 THE ANNUAL REPORT OF VZP CR FOR 2001

                                                        Prague, Ltd.
                                                        auditing, tax and counselling services
                                                        member of PKF worldwide


                                                                              AUDITOR’S REPORT
                                             on the Financial Statement and Annual Report of the General Health Insurance
                                                                      Company of CR for 2001

                                        We have carried out the audit of the enclosed financial statement of the General Health In-
                                        surance Company of CR, resident in Prague 3, Orlická 4/2020, identification number
                                        41197518, at 31 December 2001. The management of the General Health Insurance Compa-
                                        ny of CR is responsible for drawing up the financial statement. Our objective is to pronoun-
                                        ce the conclusions on this financial statement on the basis of our audit.

                                        The audit has been carried out in consistence with the act on auditors and auditors’ guideli-
                                        nes of the Chamber of Auditors of CR. These guidelines demand to plan and carry out the au-
                                        dit in such a way that the auditor might gain the sufficient level of certainty that there was
                                        no significant incorrectness in the final statement. The audit includes the selective verificati-
                                        on of completeness and conclusiveness of amounts and information presented in the finan-
                                        cial statement. The audit also includes the assessment of correctness and appropriateness
                                        of applied actuarial methods and significant estimates made by VZP CR and evaluation of the
                                        complete presentation of the financial statement. We are convinced that the implemented
                                        audit provides a sufficient basis for pronouncement of the auditor’s statement.

                                        According to our opinion the financial statement is faithfully reflecting the assets, liabi-
                                        lities and owned property, including the capital fund of health insurance of the General
                                        Health Insurance Company of CR in all its essential aspects at 31 December 2001, fi-
                                        nancial situation and the outcomes of economic management of commercial activities
                                        for 2001 in consistence with the act on accounting and relevant rulings of the Czech Re-
VZP CR
                                        public.

                                        We have verified the consistency of information presented in the Annual Report of the
                                        General Health Insurance Company of CR for 2001 with the financial statement. Accor-
                                        ding to our opinion this set of information is in all its important aspects in compliance
                                        with this financial statement, from which it had been taken.


                                        In Prague on 3 April 2002




                                        Ing. Jifií ¤ehák                                             HZ Prague, Ltd.
                                        certificate on registry in the list                         certificate on registry in the list
                                        of auditors no. 980                                         of auditing companies no. 31
                                                                                                    Pod dvorem 2
                                                                                                    162 00 Prague 6




112
112
                                                                                                                                                  VZP CR
Ministry of Finance of CR                                                                      The Statement of Acc. of ZP 1 - 01
approved under ref. no. 283/71 862/1998




                                                                                                                                                  ANNEX
with an effect for accounting entities                                                               Name and place of the acc. entity
keeping books according to the accounting system
for health insurance companies


                                              BALANCE SHEET                                                                  VZP CR
                                                                                                                             Orlická 4/2020
                                                              at 31. 12. 2001                                                Prague 3
                                                                  (in thous. CZK)


                                          L. n.        IKF           Year       Month         Identification number
                                           01       850098          2001              12            41197518


The accounting entity will deliver:
1x to the relevant financial
body                                                                                             Past        Gross      Adjustment     Net
                                                                                      l. n.     period      amount                    amount
                                      a                                                 b         1            2            3           4
I. ASSETS                                                                               x
Intangible assets                                                              (20)     11      129 253      580 486      476 060      104 426
  Acquisition expenses                                                        (201)     12
  Goodwill                                                                    (202)     13
Financial placements (investments)                                       (10 to 14)     14     2 541 030    3 400 973     335 093     3 065 880
  Land and buildings (real property)                                           (10)     15     2 409 846    3 220 818     335 093     2 885 725
     Land and premises for operation                               (101AE, 102AE)       16     2 409 846    3 220 818     335 093     2 885 725
  Fin. placements in third-party enterprises and other long-term receivables (11)       17
     Capital participation in enterprises with decisive influence             (111)     18
     Capital participation in enterprises with substantial influence          (112)     19
     Obligations and other bonds, loans - enterpr. with decisive infl. (113, 114)       20
     Obligations and other bonds, loans - enter. with substantial infl. (115, 116)      21
     Other capital participation and other long-term receivables        (117, 118)      22
  Other financial placements                                                   (12)     23      131 184      180 155                   180 155
     Floating yield securities                                                (121)     24       59 175
     Fixed yield securities                                                   (122)     25       72 009      180 155                   180 155
     Financial placemenets in investment trusts and investment funds (123AE)            26
     Financial placements in corporations with legal subjectivity          (123AE)      27
     Financial placements in corporations without legal subjectivity       (123AE)      28
     Mortgage loans                                                           (124)     29
     Other loans                                                              (125)     30
     Bank deposits                                                            (126)     31
     Other financial placements                                               (127)     32
  Receivables from deposits received                                          (131)     33
  Financial placements in the name of insurees                                 (14)     34
Receivables                                              (30, 31, 32, of 35, of 37)     35    20 613 387   21 339 821                21 339 821
  Receivables from direct insurance and reinsurance operations                 (30)     36        53 637       34 925                    34 925
     Receivables from insurees                                       (301, 308AE)       37        36 787       22 665                    22 665
     Receivable from agents                                          (302, 308AE)       38         2 531        2 510                     2 510
     Receivables from reinsurance operations                         (303, 308AE)       39        14 319        9 750                     9 750
  Receivables from public health insurance                                     (31)     40    20 415 688   21 174 018                21 174 018
  Receivables from subscribed share capital                                   (321)     41
  Other receivables                                              (32, of 35, of 37)     42       144 062      130 878                   130 878
Other assets                                                             (21 to 25)     43     2 105 261    2 991 776    1 264 164    1 727 612
  Tangible fixed assets                                                        (21)     44       291 366    1 543 444    1 264 164      279 280
     Operation fixed assets                                                (211AE)      45       290 608    1 542 686    1 264 164      278 522
     Not depreciated tangible assets                                          (216)     46           758          758                       758
  Acquisition of assets                                                        (22)     47       620 752      232 957                   232 957
     Deposits on acquisition of tangible and intangible assets                (222)     48       333 120       14 200                    14 200
  Other assets                                                                 (25)     49        33 508       48 896                    48 896
  Cash value and other financial assets                                        (23)     50     1 159 635    1 166 479                 1 166 479
     Current accounts                                                   (234, 235)      51       675 545      396 338                   396 338
     Cash and other cash values                                      (231, 232AE)       52         6 255        7 702                     7 702
     Cheques                                                               (232AE)      53
     Own shares                                                               (237)     54
     Special accounts for funds of public health insurance                     (24)     55      477 835      762 439                   762 439
Temporary asset accounts                                                    (of 39)     56       14 141       24 302                    24 302
  Interests and rents                                                      (391AE)      57        2 121        5 468                     5 468
  Acquisition costs on policies                                            (391AE)      58
  Other temporary asset accounts                                            (of 39)     59       12 020       18 834                    18 834
Outstanding loss from previous years                                          (414)     60
Loss from the current accounting period                                                 61
TOTAL ASSETS                                                                            62    25 403 072   28 337 358   2 075 317    26 262 041
                            Check number of assets                                    999     80 458 751   90 591 609   7 349 148    83 242 461




                                                                                                                                                  113
 THE ANNUAL REPORT OF VZP CR FOR 2001
                                                                                                                                            Past        Gross      Adjustment     Net
                                                                                                                                l. n.      period      amount                    amount
                                                                               a                                                  b          1            2            3           4
                                         II. LIABILITIES                                                                          x
                                         Share capital and funds                                                    (40,41)       63      3 543 016                              3 856 771
                                           Share capital                                                              (401)       64
                                           Share premium                                                              (402)       65
                                           Other capital accounts                                                (403, 404)       66
                                           Surplus fund from revaluation                                              (405)       67
                                           Capital funds of health insurance                                   (406 to 409)       68      3 377 731                              3 670 308
                                           Legal reserve fund                                                         (411)       69         75 244                                 75 244
                                           Other funds                                                                (412)       70         90 041                                111 219
                                         Funds of public health insurance                                               (43)      71      8 486 035   11 827 520                11 827 520
                                         Technical provisions                                              (44 except 446)        72        212 194      202 258      11 979       190 279
                                           Provision for unearned premiums                                            (441)       73        128 974       96 333       5 674        90 659
                                           Live assurance provision                                                   (442)       74
                                           Provision for outstanding claims                                           (443)       75        43 913        63 831       6 305       57 526
                                           Provision for rebates and bonuses                                          (444)       76
                                           Equalisation provision and other technical provisions                 (445, 449)       77        39 307        42 094                   42 094
                                         Provision for life insurance in case of investment risk bearers               (446)      78
                                         Provisions for other risks and losses                                          (45)      79
                                           Legal provisions                                                           (451)       80
                                           Other provisions                                                      (452, 459)       81
                                         Liabilities from deposits received                                            (461)      82
                                         Subordinated liabilities                                 (especially of 36, of 48)       83
                                         Liabilities                                     (33, 34, of 35, 36, of 37, 47, 48)       84     12 977 058                             10 194 770
                                           Liabilities from direct insurance and reinsurance                            (33)      85         12 946                                 10 880
                                              Liabilities against the insured                                 (331, 338AE)        86         12 911                                 10 858
                                              Liabilities against agents                                      (332, 338AE)        87             35                                     22
                                              Liabilities from reinsurance operations                         (333, 338AE)        88
                                           Liabilities from public health insurance                                     (34)      89     12 443 142                              9 697 893
                                           Loans secured with bonds                                              (367, 487)       90
                                              Loans secured with bonds in convertible currency              (367AE, 487AE)        91
                                           Bank credits                                                     (365, 366, 471)       92       198 147                                174 501
                                           Tax liabilities                                                           (of 37)      93        55 468                                 15 618
                                           Payables due to social security and health insurance institutions       (of 355)       94        45 208                                 46 987
                                           Payables due to enterprises with decisive influence                        (481)       95
                                           Payables due to enterprises with substantial influence                     (482)       96
                                           Other liabilities                               (of 35, of 36, of 37, 472, of 48)      97       222 147                                 248 891
VZP CR                                   Temporary liability accounts                                                (of 39)      98        67 446                                  71 669
                                         Undistributed profits from previous periods                                   (413)      99                                                54 000
                                         Profit from the current period                                                         100         117 323                                 67 032
                                         TOTAL LIABILITIES                                                                      101      25 403 072                             26 262 041
                                                                         Check number of liabilities                            999      67 551 358   12 232 036      23 958    66 776 782

                                         Dispatched on:                  Stamp:                        Chief’s signature                Responsible person
                                                                                                                                                             Ing. ·merdová


                                                                                                                               Telephone number:              21752560

                                        ZP = health insurance company
                                        Some explanatory notes
                                        1. Items of the balance sheet are summed from below upward (e.g. l. 23 includes the sum of lines from 24 to 32).
                                        2. Method of calculation of some items:
                                           a) l. 14 = l. 15 + l. 17 + l. 23 + l. 33 + l. 34
                                           b) l. 15 includes l. 16, which represents the date „of which“.
                                           c) l. 35 = l. 36 + l. 40 + 41 + 42
                                           d) l. 36 includes lines 37 to l. 39, which represent the data „of which“.
                                           e) l. 43 = l. 44 + l. 47 + l. 49 + l. 50.
                                           f) l. 44 includes l. 45 and l. 46, which represent the data „of which“. L. 47 includes l. 48, which represents the date „of which“.
                                               l. 49 Other assets: if it includes so called cheque postal credits information on them will be presented in the Annex.
                                               l. 50 includes lines 51 to 55, which represent the data „of which“.
                                           g) l. 56 includes lines 57 to 59, which represent the data „of which“.
                                           h) l. 58: it is the date relating to accounts 511 or 532.
                                           i) l. 62 includes the sum of lines 11, 14, 35, 43, 56, 60, 61.
                                           j) l. 999 Check number of assets. This number includes the algebraic sum of data values on the asset side of the balance sheet.
                                           k) l. 63 includes lines 64 to 70, which represent the data „of which“.
                                           l) l. 72 includes lines 73 to 77, which represent the data „of which“.
                                           m) l. 79 includes l. 80 and l. 81, which represent the data „of which“.
                                           n) l. 84 = l. 85 + l. 89 + l. 90 + l. 92 to 97. Liabilities divided according to liabilities against companies where
                                               the health insurance company has the decisive influence and those where its influence is substantial
                                               are presented in the Annex in case this categorisation has not been already evident in the balance sheet (l. 95 and l. 96).
                                               Items of liabilities presented on l. 83 Subordinated liabilities are not again presented in l. 84.
                                           o) l. 85 includes lines 86 to 88, which represent the data „of which“. L. 90 includes l. 91, which represents the date „of which“.
                                           p) l. 101 includes the sum of lines 63, 71, 72, 78, 79, 82, 83, 84, 98, 99, 100.
                                           r) l. 999 Check number of liabilities. This number includes the algebraic sum of data values on the
                                               liability side of the balance sheet.
                                        3. On the asset side in col. 3 Adjustment there are presented the data on adjusting entries or valuation at relevant items.
                                        4. On the liability side of the balance sheet at the item „Technical provisions“- lines 72 to 77 and l. 78 their gross amount is presented in
                                           column 2. In col. 3 Adjustment there are presented the amounts of provisions which represent the reinsurers’ share. At other items of
                                           liabilities columns 2 and 3 are not filled in.
                                        5. Among the liabilities of the balance sheet the relevant data with variation according to paragraph 4
                                           are presented for the current period only in col. 4 Net amount.
                                        6. L. 11, item Software (account 204) will be presented in the Annex.
                                        7. Provision from the account 445 and provisions from account 449 from l. 77 will be presented as separate items in the Annex.
                                        8. In the Annex there will be presented the active exchange-rate differences (acc. 395) and passive exchange-rate differences (acc. 396)
                                           from l. 59 and l. 98.



114
114
                                                                                                                                   VZP CR
Ministry of Finance of CR                                                                  The Statement of Acc. of ZP 2 - 01
approved under ref. no. 283/71 862/1998




                                                                                                                                   ANNEX
with an effect for accounting entities                                                         Name nad place of the acc. entity
keeping books according to the accounting system
for health insurance companies




                     P R O F I T A N D L O S S S TAT E M E N T                                                      VZP CR
                                                                                                                Orlická 4/2020
                                                          at 31. 12. 2001                                          Prague 3
                                                              (in thous. CZK)

                                         L. n.      IKF          Year       Month      Identification number
                                         01      851098         2001            12             41197518


The accounting entity will deliver:
1x to the relevant financial
body


                                                                                             Line     Base     Sub-sum   Result
                                Legend
                                                                                            number
                                    a                                                          b       1          2        3
I. Technical account for non-life insurance business                                          x         x         x         x
1. Earned premiums, net                                                                       11        x         x         x
   Gross premiums written                                                         (601)       12     377 266      x         x
      Outward reinsurance premiums                                                (602)       13      45 545   331 721      x
   Change in provision for unearned premiums                                  (505–605)       14      39 197      x         x
      Change in provision for unearned premiums, reinsurers’ share            (506–606)       15       –882     38 315   370 036
2. Income from financial placements trnasferred from non-technical acc            (611)       16        x         x
3. Other technical income, net                                                (618–619)       17        x         x        157
4. Claims incurred, net                                                                       18        x         x         x
   Claims paid                                                                    (501)       19     146 713      x         x
      Reinsurers’ share of claims paid                                            (502)       20      20 408   126 305      x
   Change in provision for outstanding claims                                 (503–603)       21      11 015      x         x
      Change in provision for outstanding claims - reinsurers’ share          (504–604)       22       2 598    13 613   139 918
5. Change in other technical provisions - net                     [(507–607)–(508–608)]       23        x         x
6. Rebates and bonuses, net                                                   (514–515)       24        x         x
7. Net operating expenses                                                                     25        x         x         x
   Acquisition costs on policies                                                  (511)       26        x       15 438      x
   Deferred acquisition costs                                                   (511AE)       27        x                   x
   Administrative expenses                                                        (512)       28        x      143 515      x
   Reins. commissions (613) and profit comm. from particip., net (616–61)           (–)       29        x        5 711   153 242
8. Other technical expenses, net                                              (518–519)       30        x         x
9. Change in equalisation provision                                           (509–609)       31        x         x        2 787
10. Result for technical account for non-life insurance                          (=712)       32        x         x       74 246
II. Technical account for life insurance                                                      x         x         x         x
1. Earned premiums, net                                                                       33        x         x         x
   Gross premiums written                                                          (621)      34        x                   x
      Outward reinsurance premiums                                                 (622)      35        x                   x
   Change in provision for unearned premiums - net                 [(523–623)–(524–624)]      36        x
2. Income from financial placements                                                           37        x         x         x
   Income from capital participations         (634) incl.:                                    38        x                   x
   and incl.: decisive influence           (634AE)
   Income from other financial placements             incl.:                                  39        x         x         x
   and incl.: decisive influence
      Revenues from land and buildings                                             (635)      40                  x         x
      Income from other components of financial placements                         (636)      41                            x
   Allocation of adjusting entries for financial placements                        (637)      42        x                   x
   Income from financial placements                                                (638)      43        x
3. Not realized value increments of financial placements                              *)      44        x         x         x
4. Other technical income, net                                                 (647–648)      45        x         x
5. Claims paid, net                                                                           46        x         x         x
   Claims paid                                                                     (521)      47                  x         x
      Reinsurers’ share of claims paid                                             (522)      48                            x
   Change in provision for outstanding claims                                  (525–625)      49                  x         x
      Change in provision for outstanding claims - reinsurers’ share           (526–626)      50
6. Change in other technical provisions                                                       51        x         x         x
   Change in provisions for life-insurance premiumus                           (527–627)      52                  x         x
      Change in provisions for life-ins. premiums - reinsurers’ share          (528–628)      53                            x
   Change in other provisions - net                                [(529–629)–(531–631)]      54        x




                                                                                                                                   115
 THE ANNUAL REPORT OF VZP CR FOR 2001
                                         7. Rebates and bonuses, net                                                 (536–541)           55        x             x
                                         8. Net operating expenses                                                                       56        x             x          x
                                            Acquisition costs on policies                                                (532)           57        x                        x
                                            Deferred acquisition costs                                                 (532AE)           58        x                        x
                                            Administrative expenses                                                      (533)           59        x                        x
                                            Reins. commissions (643) and profit comm. from particip. - net (641–6)         (–)           60        x
                                         9. Expenses connected with financial placements                                                 61        x             x          x
                                            Expenses connected with financial placements                                 (535)           62        x                        x
                                            Creation of adjusting entries for financial placements                       (537)           63        x                        x
                                            Expenses connected with implementation of financial placements               (538)           64        x
                                         10. Not realized decrease in value of financial placements                         *)           65        x             x          x
                                         11. Other technical expenses, net                                           (547–548)           66        x             x
                                         12. Switch in income from financial placements to non-technical account (–)     (649)           67        x             x
                                         13. Result for the technical account for life insurance                        (=713)           68        x             x
                                         III. Non-technical account                                                                      x         x             x          x
                                         1. Result for the technical account for non-life insurance                  (result of I. 32)   69        x             x         74 246
                                         2. Result for the technical account for life insurance                      (result of I. 68)   70        x             x
                                         3. Income from financial placements                                                             71        x             x          x
                                            Income from capital participation           (651) incl.:                                     72        x                        x
                                            and incl.: decisive influence            (651AE)
                                            Income from other financial placements              incl.:                                   73        x             x          x
                                            and incl.: decisive influence
                                               Revenues from land and buildings                                                (652)     74                      x          x
                                               Income from other components of financial placements                            (653)     75      16 481         16 481      x
                                            Allocation of adjusting entries for financial placements                           (654)     76        x                        x
                                            Income from implementation of financial placements                                 (655)     77        x           514 953    531 434
                                         4. Income from fin. placements transferred from the tech. account for life ins.       (656)     78        x             x
                                         5. Expenses connected with financial placements                                                 79        x             x          x
                                            Expenses connected with financial placements                                       (551)     80        x                        x
                                            Creation of adjusting entries for financial placements                             (554)     81        x                        x
                                            Expenses on implementation of financial placements                                 (555)     82        x           516 813    516 813
                                         6. Switch in income from financial placements to tech. account for non-life ins.      (657)     83        x             x
                                         7. Other income                                                            (658, 659, 661)      84        x             x         34 046
                                         8. Other expenses                                                          (558, 559, 561)      85        x             x         24 609
                                         9. Income tax from current operating activities                            (571, 572, 575)      86        x             x         31 863
                                         10. Operating result after taxes                                                    (711AE)     87        x             x         66 441
                                         11. Extraordinary income                                                              (663)     88        x             x            658
                                         12. Extraordinary expenses                                                            (563)     89        x             x              2
                                         13. Extraordinary operating result                                                  (711AE)     90        x             x            656
VZP CR
                                         14. Income tax on extraordinary activities                                       (573, 574)     91        x             x
                                         15. Other taxes and charges                                                           (562)     92        x             x              65
                                         16. Operating result for the fiscal year                                              (711)     93        x             x          67 032
                                          Check number                                                                                   99     658 341      1 722 865   2 088 251


                                         Dispatched on:                  Stamp:                       Chief’s signature           Responsible person
                                                                                                                                                       Ing. ·merdová


                                                                                                                            Telephone number:           21752560


                                        ZP = health insurance company




116
116
                                                                                                       VZP CR
 SUPPLEMENT TO THE FINANCIAL STATEMENT FOR 2001




                                                                                                       ANNEX
  (Provision of MF CR ref.no. 283/71 861/1998 from 12 October
                               1998)

                                              Art. I

                                      General Contents
1) Information on the health insurance company (ZP) and its change:

  a) Trade name and place of business of ZP: The General Health Insurance Company of
                                                 the Czech Republic,
                                                 Karlovo nám. 8, Prague 2,
                                                 since 6. 6. 2001 Orlická 4/2020, Prague 3
  b) Identification number: 41197518
  c) Subject of enterprise:
     The Insurance Company implements:
     1. public health insurance – determined by § 2, art. 1 of the Act no. 551/1991, in its sta-
        tutes at large
     2. insurance activities according to the Act no. 363/1999 in its statutes at large, §2, let-
        ter c) – on the basis of MF CR license
     3. agent services within the insurance system according to the Act no. 363/1999 in its
        statutes at large, §2, letter f)
     4. other activities – implemented on the basis of the trade certificate
        4.1 leasing of housing and business premises – according to the trade licence
             reg. no. 310002-0094496, issued by the district authority for the town ward
             Prague 2 on 6. 3. 1996
        4.2 lodging services – according to the trade certificate reg. no. 310002-0274896, is-
             sued by the district authority for the town ward Prague 2 on 22.7.1996
        4.3 selling goods – according to the trade certificate reg. no. 310002-0094296, is-
             sued by the district authority for the town ward Prague 2 on 6.3.1996
   d) Statutory bodies:
      According to provisions of § 15, art.. 3 of the Act no. 551/1991 in its statutes at large, the
      Managing Director of the Insurance Company and Office Manager of the Insurance Com-
      pany are the statutory representatives of the Insurance Company and act in its name.
         Managing Director of IC: Ing. Jifiina Musílková
         Office Manager of IC: Ing. Jifií Zahradník
   e) Date of establishment of ZP: VZP CR established on 1. 1. 1992 by the Act no. 551/1991,
      on the General Health Insurance Company of the Czech Republic
2) The evaluation of property of the Insurance Company is governed by the Act no.
   563/1991, on accounting, in its valid wording and by the Regulation of MF CR no.
   283/71 861/1998 from 12 October 1998, in which the account classification and methods
   of accounting for health insurance companies are determined.
   Inventory pricing is done by the means of acquisition expenses including costs associa-
   ted with its acquisition, as are for example transportation and assembly costs. Accounting
   of the decrement in these values at the same kind of inventory is carried out according to
   the method when the first price for the increment evaluation is used as the first price for
   the decrement evaluation (the FIFO system).
   At acquisition of tangible and intangible fixed assets the price limits determined by the
   Act no. 586/1992, on income taxes, in its valid wording, are observed. The classification
   of fixed assets of the Insurance Company into depreciation groups is governed by the Stan-
   dard Classification (SKP).
   Property is depreciated according to the method of even depreciation. Tangible assets in
   purchase prices are accounted on analytical accounts of accounting groups 10 and 21.
   Other financial placements and capital participation are kept on analytical accounts of
   groups 11 and 12. Purchased securities are evaluated by the purchase price.
   At converting data in foreign currency at the Czech currency the daily exchange rates ma-
   de out by the Czech National Bank are applied.
   The economic management of the Insurance Company is determined by the Regulation no.
   227/1998 in its valid wording, which specifies to more details the range and level of income



                                                                                                       117
 THE ANNUAL REPORT OF VZP CR FOR 2001
                                          and expenditure of public health insurance funds of health insurance companies, conditions
                                          of their creation, utilisation, admissibility of mutual transfers of financial assets and their eco-
                                          nomic management, limits of costs on health insurance company activities covered with re-
                                          sources from the capital fund including the calculation method of this limit.
                                          According to the annex 2 of the methodological instruction for accounting for health in-
                                          surance companies, par. 11, the Insurance Company does not create the adjusting ent-
                                          ries, neither accounts them.
                                          The Insurance Company creates only technical provisions in the sphere of commercial in-
                                          surance and complementary insurance. Creation and utilisation of technical provisions of
                                          contractual and complementary insurance, their placement and inventory are subject to
                                          the consent of the actuary.

                                        3) Securities at 31. 12 .2001
                                        Fixed yield bonds
                                               ISIN              Name of securiry             Number                 Purchase price
                                          CZ 0003700460       âSOB VAR/02                      1 500               15 007 492,50 CZK
                                          CZ 0003700569       âes. poji‰Èovna VAR/06               9                8 923 500,00 CZK
                                          CZ 0003700429       KB VAR/02                        1 000               10 009 600,00 CZK
                                          CZ 0003700486       IPB VAR/08                       2 000               20 498 000,00 CZK
                                          CZ 0003700486       IPB VAR/08                         250                2 542 499,31 CZK
                                          CZ 0001500094       PRAHA VAR/11                        10               10 010 000,00 CZK
                                          XS 0096969976       EBRD 7/04                          275                7 079 875,00 CZK
                                          XS 0086385357       DENMARK 13,75 %/02                 400               10 866 000,00 CZK
                                          XS 0086385357       DENMARK 13,75 %/02                 370                9 842 000,00 CZK
                                          XS 0101674934       EBRD 6,5/02                        800               20 194 000,00 CZK
                                          CZ 0001000681       State bonds 6,9 %/03             1 000               10 247 000,00 CZK
                                          XS 0109212109       ZLB 6,5 %/03                       250                6 296 875,00 CZK
                                          CZ 0001000756       State bonds 6,05 %               3 515               36 380 250,00 CZK
                                          CZ 0002000136       âMHB 8,2/04                        978               10 758 000,00 CZK
VZP CR
                                                              Total                           12 357               178 655 091,81 CZK


                                        4) Liabilities with maturity date over 5 years

                                          a) Mortgage credit for real estate purchase – Flora premises
                                             (Contract on mortgage credit extension from 6. 2. 1998
                                             reg. number: 800/000001/98/0/01/00)
                                             This credit was given in 1998 in the amount of 75 000 thous. CZK and has to be repa-
                                             id by the end of 2008. At 31. 12. 2001 the unpaid balance of the credit principal was
                                             53 989 747,83 CZK. This credits is secured by the mortgage right in real estate – Flora
                                             premises, for the benefit of the finance company (the Czech and Moravian Mortgage
                                             Bank) on the basis of the Security Agreement.

                                          b) Mortgage credit for reconstruction of Flora premises
                                             (Contract on mortgage credit extension from 30. 7. 1999
                                             reg. number: 8900/013624-01/99/01-001/00/R)
                                             This credit was taken from the Czech and Moravian Mortgage Bank for reconstruction of
                                             Flora premises in the amount of 120 mil. CZK. This credit was drawn in 1999 and 2000
                                             and has to be repaid in 2010. At 31. 12. 2001 the unpaid balance of the credit principal
                                             was 105 819 383,88 CZK. It is secured by the mortgage right in real estate – Flora pre-
                                             mises, for the benefit of the finance company (the Czech and Moravian Mortgage Bank)
                                             on the basis of the Security Agreement.

                                          c) Credit for reconstruction of Flora premises
                                             (Contract on Credit no. 200099016 from 16. 11. 1999)
                                             This credit was taken from the Czech Commercial Bank for real estate reconstruction in
                                             the amount of 80 mil. CZK. In 2000, 28 102 000,- CZK were drawn from it. By the Supp-
                                             lement no. 200099016D001 from 1. 2. 2001 the provided amount was lowered to
                                             28 102 000 CZK and the maturity date of this credit has been altered to 31. 8. 2003. At
                                             31. 12. 2001 the unpaid balance of the credit principal was 14 692 000,- CZK. This cre-
                                             dits is secured by the mortgage right in real estate for the benefit of the finance com-
                                             pany on the basis of the Security Agreement.



118
118
                                                                                                                VZP CR
5) All the financial liabilities of the Insurance Company are presented in the Balance Sheet.




                                                                                                                ANNEX
6) The average converted number of employees of VZP CR within the examined period was
   4 896 persons, the converted number of employees at the last day of the examined peri-
   od was 4 927 persons. The total volume of gross wages (including wages for taxable ac-
   tivities) amounted to 1 112 731 thous. CZK and the volume of other personnel costs was
   14 243 thous. CZK.

7) Within the course of accounting period the Insurance Company has not been changing the
   ways of evaluation, depreciation methods. Since 1. 1. 1999 the Insurance Company is con-
   ducting its accounting procedures in compliance with the Provision of MF CR, which deter-
   mines the account classification and accounting methods for health insurance companies,
   with ref. no. 283/71 861/1998 from 12 October 1998, the financial statement was carried
   out in compliance with the Provision of MF CR ref. no. 283/71 862/1998 from 12 October
   1998, which determines the structure and defines the contents of financial statement items
   of health insurance companies.

8) Information on tax liabilities is included in the Balance Sheet.

9) Rebates in the amount of 17 849 thous. CZK were awarded and paid to members of admi-
   nistrative, managing or supervisory bodies for the current accounting period.



                                                    Art. II

                                           Special Contents
1) See Supplement no. 1

2) See the Annual Report for 2001, Chapter 6

3) In the course of the accounting period the Insurance Company did not kept its funds on the
   account no. 403.

4) Analytical classification of other expenses and income (accounts 558 and 658)

                                                      Contractual and                      Other Taxable
                                                  Complementary Insurance                    Activities
 Other expenses
 a) purchased services, of which:                                    0                   6 219 thous.   CZK
    558 11* consumed purchases                                       0                     649 thous.   CZK
    558 12* power consumption                                        0                   3 034 thous.   CZK
    558 13* repairs and maintenance                                  0                     176 thous.   CZK
    558 14* other services                                           0                       2 thous.   CZK
    558 15* other services                                           0                   1 980 thous.   CZK
    558 16* other services                                           0                     378 thous.   CZK
 b) 558 2* fixed asset depreciation                                  0                   8 118 thous.   CZK
 c) labour costs, of which:                                          0                   3 092 thous.   CZK
    558 3* labour costs incl. OPC                                    0                   3 092 thous.   CZK
 d) social expenses, of which:                                       0                   1 173 thous.   CZK
    558 41* legal soc. expenses                                      0                   1 077 thous.   CZK
    558 42* other soc. expenses                                      0                      96 thous.   CZK
 e) various other costs, of which:                    5 701 thous. CZK                     306 thous.   CZK
    558 5* various other cost                         5 701 thous. CZK                     306 thous.   CZK
 Other income
 a) income from services, of which:                   8 129 thous. CZK                   7 519 thous. CZK
    658 12* revenues from service sales               8 129 thous. CZK                   7 519 thous. CZK
 b) 658 2* other income                              1 801 thous. CZK                   16 597 thous. CZK

Classification by elements of costs and income is presented in Supplement no. 2   OPC = other personnel costs




                                                                                                                119
                                                                                    Art. III
 THE ANNUAL REPORT OF VZP CR FOR 2001


                                                                              Other Contents

                                        a) Within the course of the accounting period the Insurance Company has not been accounting
                                           life insurance.

                                        b) Within the course of the accounting period the Insurance Company has not been accounting
                                           financial placements on accounts no. 125.

                                        c) The insurance Company has no substantial or decisive influence in any company.

                                        The VZP CR is accounting other funds on the account no. 412 (all these funds are not formed
                                        from profit), this concerns the Fund of Loss Prevention of Contractual and Complementary Insu-
                                        rance, Prevention Fund, Redistribution Fund and Fund for Future. These Funds are kept separa-
                                        tely in the financial reporting. The largest share in the closing balance of these funds amounting
                                        to 111 219 thous. CZK have the Prevention Fund (101 155 thous. CZK) and Fund for Future (6 013
                                        thous. CZK).

                                        f) At creation of provisions for unearned premiums the Insurance Company applies the method
                                           of „pro rata temporis”.

                                        g) l) p) the Insurance Company does not create technical provisions for rebates and bonuses.

                                        h) i) Within the course of the accounting period the Insurance Company has not been accoun-
                                              ting technical provisions on accounts no. 449 and 459.

                                        m) Contractual and complementary insurance – administrative expenses - accounts 512



                                            512   110      Consumed purchases
                                            512   111                                  –   blank forms
VZP CR                                      512   120                                  –   power consumption
                                            512   130                                  –   repairs and maintenance
                                            512   140                                  –   other services
                                            512   141                                  –   travel expenses
                                            512   142                                  –   assistance service
                                            512   143                                  –   information materials
                                            512   144                                  –   expert opinions, translations
                                            512   145                                  –   telecommunication fees
                                            512   146                                  –   postage
                                            512   147                                  –   legal services and advisory
                                            512   148                                  –   costs on representation
                                            512   200                                  –   fixed asset depreciation
                                            512   311                                  –   labour costs – gross wages
                                            512   312                                  –   labour costs - OPC
                                            512   321                                  –   rebates for members of BD
                                            512   411                                  –   legal soc. expenses – soc. security
                                            512   412                                  –   legal soc. expen. – health insurance
                                            512   421                                  –   catering contribution
                                            512   506                                  –   statutory premiums (125/93)
                                            512   508                                  –   bank charges
                                            512   900                                  –   others



                                        n) o) The Insurance Company does not transfer the income, this is primarily accounted on
                                              accounts of the accounting group 60 to 61. The Insurance Company does not adminis-
                                              ter life insurance.

                                        q) On accounts of the sub-balance registration (acc. group 72*) there are registered the
                                           pledged values, leased property, loans for employees from the social fund, Winterthur vou-
                                           chers, long-term reserves of the prevention fund (UF), liabilities on leasing, and debt wri-
                                           tes-off of the income part of the capital fund of health insurance on the accounts of the acc.
                                           Group 73*.



120
120
                                                                                                VZP CR
   Information to statements of the Balance Sheet and Profit and Loss




                                                                                                ANNEX
                               Statement


Balance Sheet

– the balance of the account 204 – Software from the line 11/2 is 543 864 thous. CZK,
  depreciated price of software from the line 11/4 is 98 933 thous. CZK.

  Intangible assets(in thous. CZK)      purchase price     adjustment        deprec. price
  Total                                   580 486           476 060            102 426
     of which – software                  543 864           444 931             98 933
              – others                    36 622             31 129              3 493

– the balance of the account 445 from the line 77 – Equalisation provision and other provi-
  sions – is 42 094 thous. CZK, the account no. 449 has not been used.

– the balance of the acc. 395 from the line 59 – Active exchange-rate differences is 0 thous.
  CZK.

– the balance of the account 396 from the line 98 – Passive exchange-rate differences is
  12 thous. CZK.



Profit and Loss Statement

result for the non-technical account calculated according to the methodology presented in ex-
planatory notes (item 30) to the Statement is 173 076 thous. CZK.

operating result before taxes calculated according to the methodology presented in explana-
tory notes to the Statement (item 4) is 98 960 thous. CZK.




                                                                                                121
                                                                   Supplement no.1
 THE ANNUAL REPORT OF VZP CR FOR 2001

                                                 to the Supplement to the Financial Statement
                                                           for 2001 – art. II, item 1)



                                        The Statement of the Capital Fund of Health Insurance (ZFZP)
                                        Fund balance at 31. 12. 2001                       11 610 826 thous.
                                        Financial position at 31. 12. 2001                    688 725 thous.
                                        difference                                         10 922 101 thous.

                                        of which: balance of receivables and liabilities   10 922 101 thous.


                                        Receivables at 31. 12. 2001

                                        –   from premium payers                            19 196 923   thous.
                                        –   from contractual HCF                            1 130 938   thous.
                                        –   from re-distribution                              386 546   thous.
                                        –   from indemnities                                  183 733   thous.
                                        –   others                                             17 029   thous.
                                        –   internal                                          253 741   thous.

                                        total                                              21 168 910 thous.


                                        Liabilities at 31. 12. 2001

                                        – against contractual HCF                           9 077 548 thous.
                                        – others                                               23 007 thous.
                                        – internal                                          1 146 254 thous.
VZP CR
                                        total                                              10 246 809 thous.


                                        The Statement of the Fund of Capital Reproduction (FRIM)
                                        Fund balance at 31. 12. 2001                          212 980 thous.
                                        Financial position at 31. 12. 2001                      2 582 thous.
                                        difference                                            210 398 thous.

                                        of which: balance of receivables and liabilities     384 899 thous.
                                                  unpaid credit balance                      174 501 thous.


                                        Receivables at 31. 12. 2001

                                        – internal                                           384 899 thous.

                                        total                                                384 899 thous.


                                        Liabilities at 31. 12. 2001

                                        – investment credit                                   174 501 thous.

                                        total                                                 174 501 thous.




122
122
                                                                      VZP CR
The Statement of the Social Fund




                                                                      ANNEX
Fund balance at 31. 12. 2001                        19 200 thous.
Financial position at 31. 12. 2001                  18 956 thous.
difference                                             244 thous.

of which: balance of receivables and liabilities       244 thous.

Receivables at 31. 12. 2001

– external (invoices, advances)                          8 thous.
– from employees                                        11 thous.
– internal                                           1 678 thous.

total                                                1 697 thous.


Liabilities at 31. 12. 2001

–   external (invoices)                                170   thous.
–   against employees                                   60   thous.
–   income tax                                          34   thous.
–   internal                                         1 189   thous.

total                                                1 453 thous.


The Statement of the Surplus Fund
Fund balance at 31. 12. 2001                       216 695 thous.
Financial position at 31. 12. 2001                       6 thous.
difference                                         216 689 thous.

of which: balance of receivables and liabilities   216 689 thous.


Receivables at 31. 12. 2001

– internal                                         216 689 thous.

total                                              216 689 thous.


Liabilities at k 31. 12. 2001

                                                         0 thous.

total                                                    0 thous.


The Statement of the Prevention Fund
Fund balance at 31. 12. 2001                       101 155 thous.
Financial position at 31. 12. 2001                  66 127 thous.
difference                                          35 028 thous.

of which: balance of receivables and liabilities    35 028 thous.


Receivables at 31. 12. 2001

– external                                          36 395 thous.

total                                               36 395 thous.




                                                                      123
                                        Liabilities at 31. 12. 2001
 THE ANNUAL REPORT OF VZP CR FOR 2001

                                        – external                                              1 288 thous.
                                        – internal                                                 79 thous.

                                        total                                                   1 367 thous.


                                        The Statement of the Operation Fund
                                        Fund balance at 31. 12. 2001                                0 thous.
                                        Financial position at 31. 12. 2001                     53 706 thous.
                                        difference                                           – 53 706 thous.

                                        of which: balance of receivables and liabilities    –106 790 thous.
                                                   stock level at 31. 12. 2001                53 084 thous.


                                        Receivables at 31. 12. 2001

                                        –   invoices for customers                             11 612   thous.
                                        –   operation advances                                 59 058   thous.
                                        –   for employees                                          72   thous.
                                        –   others                                             26 488   thous.
                                        –   internal                                        1 082 845   thous.

                                        total                                               1 180 075 thous.


                                        Liabilities at 31. 12. 2001

                                        –   fines, penalties                                  210 758   thous.
                                        –   invoices for suppliers                             71 740   thous.
                                        –   received operation advances                            68   thous.
                                        –   against employees                                  60 561   thous.
VZP CR                                  –   against org. of health ins. and soc. security      46 987   thous.
                                        –   others                                             98 020   thous.
                                        –   internal                                          798 731   thous.

                                        total                                               1 286 865 thous.




124
124
                                                                                                                    VZP CR
                                       Supplement no. 2




                                                                                                                    ANNEX
 to the Supplement to the Financial Statement for 2001 – Art. II, item 4)


558 – Other expenses

 558 1* – Purchased services   558 11* – Consumed purchases     558 111 – Blank forms
                                                                558 112 – Office supplies
                                                                558 113 – Property 1-40 thous.
                                                                558 114 – Fuel and oil
                                                                558 115 – Professional literature
                                                                558 116 – Daily press
                                                                558 119 – Others
                               558 12* – Power consumption      558 121 – Electricity
                                                                558 129 – Others
                               558 13*- Repairs and maintenance 558 131 – Building owned
                                                                558 132 – Building leased
                                                                558 133 – IS, contracts on support
                                                                558 139 – Others
                               558 14* – Other services         558 141 – Travel expenses
                                                                558 142 – Representation expenses
                                                                558 143 – VZP bodies
                                                                558 144 – Intangible property registr.
                                                                558 145 – Education
                                                                558 146 – Postage
                                                                558 147 – Publicity, promotion
                                                                558 148 – Freight
                               558 15* – Other services         558 151 – Building rent
                                                                558 152 – Leasing, other rents
                                                                558 153 – Oper. costs on build. – owned
                                                                558 154 – Oper. costs on build. – leased
                                                                558 155 – Guarding – owned buildings
                                                                558 156 – Guarding – leased buildings
                               558 16* – Other services         558 161 – Tel. rentals – on-line
                                                                558 162 – Tel. rentals – mobile
                                                                558 163 – Tel. rentals – data transfers
                                                                558 164 – Data procurement
                                                                558 165 – Court costs
                                                                558 166 – Tech. valorisation to 40 thous.
                                                                558 167 – Enterprise preventive care
                                                                558 169 – Others
 558 2* – Immovable                                             558 201 – Building amortisation
 asset depreciation                                             558 202 – Intangible asset depreciation
                                                                558 203 – Tangible asset depreciation
                                                                558 204 – Depr.price of sold buildings
                                                                558 205 – Depr. price of sold int. assets
                                                                558 206 – Depr. price of sold tang. assets
                                                                558 207 – Depr. price of sold not amort. property
 558 3* – Labour costs         558 31* – Labour costs           558 310 – Gross wages
                                                                558 311 – Other personnel costs
                               558 32* – Rebates to BD members. 558 320 – Rebates to members of BD....
 558 4* – Social expenses      558 41* – Legal social expenses  558 411 – Soc. security
                                                                558 412 – Health insurance
                               558 42* – Other soc. expenses    558 421 – Catering contribution
                                                                558 429 – Others




                                                                                                                    125
 THE ANNUAL REPORT OF VZP CR FOR 2001
                                         558 5* – Other expenses                                                     558 521 – Conventional sanctions from
                                                                                                                               contractual HCFs
                                                                                                                     558 522 – Fines, penalties, interests from delay
                                                                                                                     558 523 – Other fines and penalties
                                                                                                                     558 524 – Sanctions from premium payers
                                                                                                                     558 531 – Debt write-off (taxable)
                                                                                                                     558 532 – Debt write-off (not taxable)
                                                                                                                     558 550 – Exchange-rate losses
                                                                                                                     558 560 – Mandatory insurance 125/93
                                                                                                                     558 570 – Insurance
                                                                                                                     558 580 – Bank fees, forwarding
                                                                                                                     558 590 – Others
                                                                                                                     558 591 – Fixed asset sales

                                        Explanatory notes: The Insurance Company keeps the costs related to public health insurance on above-presented accounts, other
                                                           taxable activities and direct costs on contractual and complementary insurance (key costs on contractual and com-
                                                           plementary insurance are kept on accounts 512)




                                        658 – Other income

                                         658 1* – Income from services        658 12* – Revenues from                658 121 – Blank forms, methodologies
                                                                              service sales                                    and code-lists.
                                                                                                                     658 122 – Operation of CRP, ICZP and KC
                                                                                                                     658 123 – Lease revenues
                                                                                                                     658 124 – Comp. pension insurance
                                                                                                                     658 125 – Commerc. meth. sales
                                                                                                                     658 126 – Recreation – employees
                                                                                                                     658 127 – Recreation – others
VZP CR                                                                                                               658 128 – Cancelled policies
                                                                                                                     658 129 – Others
                                         658 2* – Other various income                                               658 210 – Fines, penalties, interests from delay
                                                                                                                     658 220 – Debt write-off
                                                                                                                     658 230 – Interests
                                                                                                                     658 240 – Exchange-rate profit
                                                                                                                     658 250 – Fees for method. usage
                                                                                                                     658 260 – Lease
                                                                                                                     658 280 – Material sales
                                                                                                                     658 290 – Others

                                        CRP = Central Register of the Insured, ICZP = Information Centre of the Insurance Company, KC = Categorisation
                                              Centre

                                        Explanatory notes:
                                                         accounts marked like this belong to public health insurance
                                                         accounts marked like this belong to other taxable activities
                                                         accounts marked like this belong to contractual and complementary insurance
                                                         on not marked accounts there is accounted the income connected with all activities



                                        Note:
                                        The analytical registration of expense and income accounts common for all activities is based on the analytical
                                        approach „ÚTVAR“.




126
126
                                                                                                         VZP CR
                                    Supplement no. 3




                                                                                                         ANNEX
 to the Supplement to the Financial Statement for 2001 – Art.III, item j)

     Operating expenses of contractual and complementary insurance

Operating expenses, incurred by implementation of products of contractual and complemen-
tary insurance, are calculated, accounted and financed separately from operating expenses
on general health insurance.
A) Direct operating expenses, expended exclusively in favour of activities of contractual and com-
   plementary insurance, are accounted directly to the debit of these activities and paid directly
   from the bank accounts of these activities, both in district insurance offices and Central Insu-
   rance Office.
B) The level of above mentioned operating expenses in district insurance offices (key expenses in
   DIO VZP) is related to the gross premiums written and in these insurance offices it covers the
   costs on material and power consumption and on other services, labour costs and legal social
   and health insurance.
   At the beginning of a month, VZP district insurance offices transfer the advance on these key ex-
   penses from the bank account of contractual and complementary health insurance to the ope-
   ration account. After the expiry of a month period the actual situation is cleared and eventual
   difference is made up within the frame of the next advance.
C) Calculation of the share of other operating expenses on activities of contractual and comple-
   mentary health insurance in the operating expenses of VZP CR (the key expenses of VZP CR) is
   derived from internal guidelines of VZP CR for purchases and operation assurance and from
   numbers of employees participating in these activities.
   v the share of activities of contractual insurance in VZP operating expenses paid by the Cent-
     ral Insurance Office for the needs of all district offices including the Central Insurance Office
     (the ratio of all employees implementing contractual insurance to all VZP CR employees)
   v the share of activities of contractual insurance in VZP operating expenses paid by the Cent-
     ral Insurance Office for its own needs (the ratio of employees implementing contractual he-
     alth insurance in the Central Insurance Office of VZP to all VZP CR employees)
   v the share of activities of contractual insurance in VZP operating expenses paid by the Cent-
     ral Insurance Office for its own needs (the ratio of employees implementing contractual he-
     alth insurance in the Central Insurance Office of VZP to all employees of the Central Insu-
     rance Office of VZP)
   v the share of activities of contractual insurance in VZP operating expenses paid by the Cent-
     ral Insurance Office for its own needs (the ratio of employees implementing contractual he-
     alth insurance in the Central Insurance Office of VZP reduced by the number of employees,
     at whose workplace the telecommunication fees represent the direct cost, to all employees
     of Central Insurance Office of VZP).

For enumeration of operating expenses on activities of contractual and complementary health in-
surance the data on numbers of employees in individual quarters of the year are used. The advan-
ce from the account of contractual insurance is transferred to the operation account. Accounting of
VZP CR key expenses is carried out quarterly.




                                                                                                         127
                                                                    Creation of technical provisions
 THE ANNUAL REPORT OF VZP CR FOR 2001

                                        Technical provisions are determined for forward covering of liabilities of the Insurance Company
                                        against the insured, which are presumable or certain, but their level is uncertain as well as the mo-
                                        ment of their inception. Their creation is governed by the Act no. 363/1999 and internal rules of
                                        the Insurance Company.

                                        VZP CR creates the following provisions:
                                        v provision for unearned premiums
                                        v provision for outstanding claims
                                        v equalisation provision

                                        Technical provisions are created and kept separately for each product. At their accounting and usa-
                                        ge (drawing) both their gross amount and the reinsurers’ share in them are accounted.

                                        Provision for unearned premiums (formerly provision for premiums of other periods)
                                          Provision is created from the part of premiums which is related to future accounting periods.
                                          Provision is reinsured.
                                          This provision is created at conclusion of insurance contracts, both in district insurance offices
                                          of VZP CR and in VZP CR itself. It is broken down in the place of its creation. The reinsurers’ sha-
                                          re in creation of provision as well as its break down is done in the Central Insurance Office of
                                          VZP CR.
                                          Analytical classification of this provision is done according the individual insurance products.

                                        Provision for outstanding claims
                                          It is determined for coverage of insurance event liabilities
                                          a) accrued, reported within the current accounting period but not liquidated within this period.
                                          It is determined as the aggregate of expenses on insurance benefits calculated for individual in-
                                          surance events
VZP CR
                                          b) accrued within the current accounting period but not reported within this period.
                                          It is assessed by the method of qualified estimate.
                                          Provision is reinsured.
                                          Provision for outstanding claims (including the reinsurers’ share in its creation or drawing) is cre-
                                          ated in the Central Insurance Office according to data from district insurance offices of VZP and
                                          OSML of Central Insurance Office of VZP CR.

                                          Analytical classification of provisions for outstanding claims is done according the individual in-
                                          surance products.

                                        Equalisation provision (formerly the provision for equalisation of extraordinary risks)
                                          Provision is created from a part of premiums and is determined for equalisation of increased ex-
                                          penses on insurance benefits arisen due to fluctuation in damage ratio, caused by facts inde-
                                          pendent on the insurance company will. The method for assessment of this provision level and
                                          conditions for its drawing are determined by the Ministry through a regulation.

                                          Provision is not reinsured.
                                          Provision is created in the Central Insurance Office of VZP CR.
                                          Analytical classification of equalisation provision is done according to individual insurance pro-
                                          ducts.
                                        The level, creation, drawing and financial placement structure of technical provisions are subject to
                                        the consent of an accountable actuary. The statement on creation of technical provisions and struc-
                                        ture of financial placements, in compliance with the Act no. 363/1999, on insurance business, is
                                        submitted to the Ministry of Finance of CR.




128
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