Open Data Albania is analyzing budget expenditure for the Health sector, as outlined in the 2022 budget. If we refer to the functional classification, the Health sector is one of the ten functions guaranteed by the state. This feature includes expenses for: Medical products, appliances, and equipment; Outpatient services (for outpatients – i.e. who do not require hospitalization); Hospital services; Public health services; research and development in the Health sector etc., which are not classified but related to said sector.
The data explored for the purpose of this article has been extracted from the fiscal tables accompanying Law no. 115/2021 ‘On the 2022 Budget’. In the Expenditure for Healthcare item we have only expenditures covered by public funds, as the state is responsible for the provision of public health care, so the private provision of medical services has not been taken into account.
For 2022, about ALL 65 billion have from the Budget been planned for the provision and public insurance of the health function, of the ALL 638 billion that is the total budget dedicated to expenditures. Health expenditure makes up for 10.2% of the total annual budget expenditures. This rate foresees a nominal increase of budget support for Healthcare by around ALL 7.5 billion more than the 2021 budget plan.
Health expenditures account for 3.5% of Gross Domestic Product.
Of these funds, about 58 % or ALL 37.85 billion, are going towards financing the Mandatory Health Insurance Fund (CHIF) scheme, as planned for 2022.
Sources: MFE, INSTAT (2021)
Comments and analysis: Open Data Albania
Sources: MFE, INSTAT (2021)
Comments and analysis: Open Data Albania
Sources: MFE, INSTAT (2021)
Comments and analysis: Open Data Albania
Referring to the economic classification of expenditures as per the nature of the transaction, it is noted that Current expenditure dominates Health expenditure, with about 95.6 percent against only 4.4% ratio of Investments. Current records account for: salaries, bonuses and other staff costs; social and health insurance contributions; other goods and services; subsidies; internal current transfers; current transfers abroad; transfers to family budgets and individuals; special fund and reserves. On the other hand, Capital expenditures, or investments, are almost negligible in Healthcare with only 4.4% or ALL 2.9 billion.
Sources: MFE, INSTAT (2021)
Comments and analysis: Open Data Albania
Sources: MFE, INSTAT (2021)
Comments and analysis: Open Data Albania
Despite the increase in funding for Health expenditure, the average level of expenditure per capita in the Public Health sector remains low. Referring to the budget plan for 2022, if the total expenditure for Healthcare would be translated into expenditure per capita, about 22 679 ALL (twenty two thousand six hundred and seventy nine) are accounted as annual expenditures on healthcare per capita. This amount of healthcare coverage is almost as much as the direct payment of mandatory health contributions, paid by a person with an average salary (56 thousand ALL). Considering that the mandatory health contribution comprises 3.4 % of the monthly gross salary (1.7% from the employer and 1.7% from the employee) a persona with an average salary pays a total of about 23 thousand ALL per year. However, this is not the only mandatory payment citizens pay as health contribution.
There are also around 15 billion ALL from the state budget planned for the subsidizing of the Mandatory Health Care Fund, derived from contributions and other taxes, ie the deductions from the salary, while the majority, 37.8 billion ALL, is composed of transfers from the budget of state from taxes or other sources of income the State transfers to the Fund in order to cover the public healthcare as a whole. The transfers financed by revenues from taxes or other sources collected, translate as an additional annual payment with an average per capita of about 13 thousand ALL.
Therefore, a citizen who has an average salary pays directly 23 thousand ALL as mandatory health contribution, but also pays indirectly an average of 13 thousand ALL in the form of taxes or other payments to cover healthcare costs for the economically inactive population. The total mandatory annual health expenses for an employed person, with an average salary, is around 36 thousand ALL, while the expenses for healthcare dedicated to residents in Albania are less than 23 thousand ALL.
Sources: MFE, INSTAT (2021)
Comments and analysis: Open Data Albania
The cost-benefit analysis concludes that the charges due from a person with an average salary or above are much higher than the health coverage he benefits publicly from the state. But even a person with a minimum wage pays more for health coverage, directly and indirectly, compared to the average level of benefit. The higher the salary an employee receives, the higher the health contribution he pays, the deeper the charges-benefit gap becomes.
The shortcomings and Deficit in the Mandatory Public Scheme and Fund for Social and Health Insurance only deepen. This is also influenced by the fiscal policy, applied by the state, where only employees are taxed progressively. There are about 48% of employees in the country declared as employed on minimum wage or self-employed. The second category, more than a group with low income, coincides with individuals who have chosen to benefit from professional engagement as self-employed, where tax charges are minimal compared to those of people employed.
Download excel: Budget Expenditures for the Health Sector, Mandatory Health Contributions and Average Expenditure Per capita 2022Comments and Analysis: Open Data Albania
Translated by: Rezarta Caushaj
