Pensions, health and long-term care. Former Yugoslav Republic of Macedonia

Type Report
Title Pensions, health and long-term care. Former Yugoslav Republic of Macedonia
Publication (Day/Month/Year) 2013
The last years have been under the influence of the recent economic and financial crisis, a
high unemployment rate and rigid labour market, as well as increased transfers from the State
Budget to finance the pay-out of pension benefits. In order to ensure revenues and to improve
the sustainability of the pension system, policy makers intervened with several reforms in the
pension sector. This included a gradual limitation of the management costs in the mandatory
fully funded pension component. Also, there has been a substantial change in the area of
pension funds’ supervision, where the Supervisory Authority’s previous proactive method of
supervision is now transformed into risk-based supervision (put into practice from 2013). The
challenge for the risk-based supervisor is to identify the main risks to the DC pension system
and to check that the mechanisms for mitigation of such risks are in place and are working
properly. The tendency of decreasing the contribution rate for public pensions has continued,
which creates an even bigger gap in the financing of the pension system and more frequent
necessity for larger borrowings and transfers from the State Budget (over 35%) for pay-outs
of current pensions.
The pension system and the labour market are closely connected by linking lifetime earnings
with the pension wealth. The Republic of Macedonia is characterized by long-term
unemployment, high youth unemployment and very low labour market participation of
women and elderly. These are all causes for great concern. This assessment has been
confirmed with the EU Progress Report for 2012 in the section “Social policy and
employment” where amongst other things it was stated that the national budget allocated to
the active labour market programme is low.
The Macedonian health system is struggling with the implementation of major reform
objectives, which might be partially explained by the poor economic growth and the
economic crisis, which is reflected in the overall financing of the public health sector in the
country. Also, it seems that policy objectives of the Government lack a clear vision. Several
investment policies have been introduced by the Ministry of Health aimed at refurbishment,
reconstruction and building of health facilities, provision of equipment and, therefore,
improving working conditions in public health institutions (PHI). Moreover, some additional
supportive measures regarding achieving high professional standards for medical
professionals and improved quality of health services have been undertaken, which have not
given the expected results. It is probable that the capacities of PHI are inadequate for the
current health needs of the population; poor management and the burden of a huge
administrative apparatus are still awaiting restructuring and downsizing. Any new health
policy changes and strategic goals should include the introduction of supplementary/voluntary
insurance, increased revenue collection and improvement or readjustment of system
Long-term care is still in its initiation. The need of structured, well-organised and multi-sector
approached implementation of long-term care services has to be appreciated. The national
strategy of elderly people presented by the Ministry of Labour and Social Policy recognised
needs in policy patterns and strategy commitments towards a solid basis for future
development. However, much needs to be improved, restructured and coordinated/correlated
regarding the gap between systematic linkage of health and social services provision.

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