The Czech healthcare system is under structural pressure. With 85% of expenditure financed through compulsory public insurance tied to payroll contributions, demographic ageing creates a double bind: rising demand for care combined with a shrinking contributor base. Healthcare spending is projected to increase by up to 3.7 percentage points of GDP by 2070. The question is not whether private contributions should play a greater role, but how large a role they can realistically play, and how to design that role well.
We addressed this using two methods: a survey of 1,373 Czech households conducted in early 2025, measuring stated willingness to contribute beyond current out-of-pocket spending, and fiscal microsimulation using the EUROMOD model to estimate revenue and distributional effects of alternative co-financing mechanisms.
What households say they can pay
Among respondents expressing positive additional payment capacity, the mean stated amount was 1,419 CZK per month, with a median of 500 CZK. Income is by far the strongest predictor of both willingness and magnitude. Age works in the opposite direction – each decade of age reduces stated capacity by several hundred CZK per month, a significant constraint given that older households have the highest healthcare needs.
Scaled to the national adult population with a conservative hypothetical bias correction, aggregate stated capacity reaches approximately 74 billion CZK annually. Fiscal simulations of mandatory mechanisms yield a more conservative range of 11 to 27 billion CZK. The gap reflects a fundamental distinction between voluntary stated preferences and enforceable mandatory collection – not a measurement error.
The private sector has an underutilised role
The gap between stated capacity and mandatory revenue is also a market signal. It points to latent demand for differentiated healthcare products and services that the public system does not currently offer. Competitive complementary insurance markets (structured around open enrollment, clear benefit definitions, and level-playing-field regulation) could mobilize these resources while improving service quality and consumer choice. France, where complementary insurance covers over 90% of the population, shows that private participation at scale is entirely compatible with universal access. For the Czech Republic, dental, optical, and enhanced hospital services are natural starting points where private demand already exists and public coverage is limited.
Three takeaways for policymakers
Private co-financing can meaningfully diversify the revenue base, but even ambitious scenarios cover only a fraction of the long-term financing gap. Design matters as much as scale: income-linked structures and exemptions for essential medicines are not just equity measures but conditions for political durability. And private financing works best as a complement to supply-side reform (prevention, digitalization, and efficiency gains) not as a substitute for it. The systems that have navigated this transition most successfully pursued both simultaneously.
This blog post summarizes findings from the IREF Working Paper “Sustainability of Healthcare Financing: Integrating Fiscal Incidence and Public Willingness to Pay” by Aleš Rod, Michael Fanta, and Jakub Kuneš.
