Ageing and the Challenge to Finance Health Care in Europe ... · Public health spending: exp....
Transcript of Ageing and the Challenge to Finance Health Care in Europe ... · Public health spending: exp....
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Reinhard Busse, Prof. Dr. med. MPH FFPHFG Management im Gesundheitswesen, Technische Universität Berlin
(WHO Collaborating Centre for Health Systems Research and Management)&
European Observatory on Health Systems and Policies
Ageing and the Challenge to Finance Health Care in Europe:
An Overview and Innovations
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$1,227 – savings calculated to Czech government each time a smoker dies
Report from Philip Morris
An ageing crisis?
• Compression of morbidity– Longer and healthier life expectancy– "Living longer and dying faster“
• Reduced cost of dying at older ages• Lower life time health costs by the healthier • Drawing less from health services • Contributing for longer: late retirement
The ageing of the population: an exampleThe price of success?
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The good news: We get older, because we are healthier (even though some still have doubts)
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Separating the (high) costs of dying from overall health-care costs shows a more modest picture
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Public health spending: exp. growth rates/ year 1971-2002 [* from 1981]
Age effect Income effect Other factors Total spending
Australia (to 2001 only) 0.5 1.7 1.7 (1.4)* 4.0 (3.6)*
Austria 0.2 2.5 1.5 (0.0)* 4.2 (2.2)*
Belgium (from 1995 only) 0.4 2.2 0.6 2.9
Canada 0.6 2.1 0.4 (0.6)* 3.1 (2.6)*
Denmark 0.2 1.6 0.1 (-0.5)* 1.9 (1.3)*
Finland 0.6 2.4 0.5 (0.2)* 3.4 (2.6)*
France 0.3 1.9 1.6 (1.0)* 3.9 (2.8)*
Germany 0.3 1.6 1.9 (1.0)* 3.7 (2.2)*
Greece (from 1987 only) 0.4 2.1 0.8 3.4
Ireland 0.0 4.4 0.9 (-1.0)* 5.3 (3.9)*
Italy (from 1988 only) 0.7 2.2 -0.1 2.1
Japan (to 2001 only) 0.6 2.6 1.8 (1.1)* 4.9 (3.8)*
Luxembourg (from1975 only) 0.0 3.3 0.7 (-0.1)* 4.2 (3.8)*
Netherlands (from 1972 only) 0.4 2.0 0.9 (0.3)* 3.3 (2.6)*
New Zealand 0.2 1.2 1.4 (1.0)* 2.9 (2.7)*
Norway 0.1 3.0 2.2 (1.5)* 5.4 (4.0)*
Portugal 0.5 2.9 4.4 (2.8)* 8.0 (5.9)*
Spain 0.4 2.4 2.5 (0.8)* 5.4 (3.4)*
Sweden 0.3 1.6 0.7 (-0.4)* 2.5 (1.5)*
Switzerland (from 1985 only) 0.2 0.9 2.9 3.8
United Kingdom 0.1 2.1 1.5 (1.0)* 3.8 (3.4)*
United States 0.3 2.1 2.7 (2.6)* 5.1 (4.7)*
Average 0.4 (0.3)* 2.5 (2.3)* 1.5 (1.0)* 4.3 (3.6)*
Only 1/10th
1/3rd and modifiable
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Third-party Payer
Population Providers: hospitals,
primary care etc.
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Third-party payer: Local Health Authorities; Health insurance funds
Population Providers: hospitals,
primary care etc.
Collector of resources
Steward/regulator
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Third-party payer
Population Providers
Collector of resources
Steward/regulator
Functions
Regulation
Coverage:Who? What?How much?
Mobilizingfinancial
resources
Resource pooling & allocation
Purchasing(via contracts)/
payment
Access toand provision of services
Creating human & technical resources
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Third-party Payer
Population Providers
Taxes
Social HealthInsurance
contributions
Voluntary insurance
Out-of-pocket
prepaid
sickness fundshealth
authorities
private insurers
Issue 1: Finding the “right“ funding mix …
public
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Third-party Payer
Population Providers
Taxes
Social HealthInsurance
contributions
Voluntary insurance
Out-of-pocket
India 2006
24%
1%
1%
69%
25% public
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Third-party Payer
Population Providers
Taxes
Social HealthInsurance
contributions
Voluntary insurance
Out-of-pocket
USA 2006
33%
13%
36%
13%
46% public
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Third-party Payer
Population Providers
Taxes
Social HealthInsurance
contributions
Voluntary insurance
Out-of-pocket
High income (excl. US) 2006
39%
38%
5%
14%
77% public
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The more public (less private) – the better? Yes, for equity
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
10 20 30 40 50 60
Private expenditure on health as % of total expenditure on health (2002)
% o
f hou
seho
lds
with
cat
astr
ophi
c (>
40%
of i
ncom
e)
tota
l hea
lth e
xpen
ditu
re
SHI
TAX
MIXED
USAGR
ROK
CH
CDN
P
ED
B
FIN
FDK
UK
NIS
S
inequitable
% private
% households bankrupt due to health expenditure
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58.7
20.1
35.7
11.4
16.5 16 15.3 14.4
10.6
14.6
5.5
16.614.9
11.1
14.5
18.7
15.513.4
15.4
9
35.9
12.8
30.3
6.7
12.414.3
7.8
15.1 14.4
11
15.6
6.5
18.216.5
13
17.2
21.5
18.717.5
20.4
15
-22.8
-7.3-5.4 -4.7 -4.1 -1.7 -0.6
0 0.4 1.6 2.8 3.2 4.1 5
8.4
-0.2
1 1 1.6
1.9 2.7
6
-30
-20
-10
0
10
20
30
40
50
60
70
Korea UnitedStates
Switzerlandb)
France Ireland Denmark Netherlandsb),c)
Japan Canada d) UnitedKingdom e)
Norway Luxembourgb)
Australia Austria f) Germany New Zealandc)
Spain Finland Iceland d) Italy d) Sweden g)
% of total expenditure on health in 1990
% of total expenditure on health, lates tavailable year (2006, unless otherwise noted)
Difference between 1990 and 2002
Out-of-pocket 1990-2006: a mixed picture
decreasing
increasing
Italy
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Third-party payer
Population Providers
Collector of resources
Steward/regulator
Issue 2: Making payers and providersaccountable for need, costs, quality …
Purchasing(via contracts)/
payment
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Reform trends purchasers
• NHS: development of purchasers through purchaser/provider split
purchasers = regions, health authorities, primary care trusts …providers = autonomous institutions (responsible for their own staff)
• SHI: transformation of sickness funds from payers to active purchasers
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Reform trends changing the way hospitals (and other providers) are paidFee-for-service
* Ill patientsusually attractive* Over-provisionof Services* Under-referral* No incentivefor high quality
Budget
* (ill) Patientsnot attractive* Under-provisionof services* Over-referral* Quality: bad results-> more work
DRGs (per case)
* Very ill patients(within DRG) notattractive* Tendency toaverage provision* Contradictoryweak incentives
USA Europe
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Reform trends changing the way hospitals (and other providers) are paidFee-for-service
* Ill patientsusually attractive* Over-provisionof Services* Under-referral* No incentivefor high quality
Budget
* (ill) Patientsnot attractive* Under-provisionof services* Over-referral* Quality: bad re-sults -> more work
DRGs (per case)
* Very ill patients(within DRG) notattractive* Tendency toaverage provision* Contradictoryweak incentives
No incentives for appropriate continuity of care across providers
Quality indicators, transparency & pay-for-performanceManaged care
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So then, why DRGs?
To get a common “currency” of hospital activity for
• transparency performance measurement efficiency benchmarking,
• budget allocation (or division among purchasers),• planning of capacities,• payment ( efficiency)
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For what types of activities?Scope of DRGs – the “DRG house”
DRGs for acute Inpatient care
Patients excluded from DRG system
Other activities
“Unbundled” activities for DRG patients
e.g. teaching, research
e.g. psychiatric or foreign patients
e.g. high-cost services or innovations
Possibly mixed with global budget or FFS Day cases
Outpatient clinics
Excluded costs, e.g. investments
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Being aware of strategic behaviour of hospitals in times of DRGs
Options to avoid deficits under DRGs
LOS
RevenuesCosts/
Total costs
DRG-type payment
Reduce LOS
Increase revenues(right-/ up-coding;
negotiateextra payments)
Reduce costs(personnel,
cheaper technologies)
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How DRG systems try to counter-act such behaviour:1. long- and short-stay adjustments
LOS
Revenues
Deductions(per day)
Surcharges(per day)
Short-stay outliers
Long-stay outliers
Inliers
Lower LOSthreshold
Upper LOSthreshold
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How DRG systems try to counter-act such behaviour:2. Fee-for-service-type additional payments
England France Germany Nether-lands
Payments per hospital stay
One One One Several possible
Payments for specific high-cost services
Unbundled HRGs for e.g.:• Chemotherapy•Radiotherapy•Renal dialysis•Diagnostic imaging•High-cost drugs
Séances GHM for e.g.:• Chemotherapy•Radiotherapy•Renal dialysis
Additional payments:• ICU• Emergency care• High-cost drugs
Supplementary payments for e.g.:• Chemotherapy•Radiotherapy•Renal dialysis•Diagnostic imaging•High-cost drugs
No
Innovation-related add’lpayments
Yes Yes Yes Yes (for drugs)
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How DRG systems try to counter-act such behaviour:
3. adjustments for quality
• England & Germany: no extra payment if patient readmitted within 30 days
• Germany: deduction for not submitting quality data
• England: up 1.5% reduction if quality standards are not met
• France: extra payments for quality improvement (e.g. regarding MRSA)
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SHI: Capitation
Paying family doctors … the old wayTraditional forms of paying GPs (until early 2000s)
FFS
France Germany EnglandNetherlands Sweden
FFS (regionally
capped)Capitation Salary
PHI: FFS
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Capitation
Payment components in GP care
Objective:appropriateness
& outcomes
Objective: productivity
& patient needs
Objective: admin. simplicity
& cost-containment
(& geogr. equity)
Basic
serv
ice
paym
ent
Extr
a se
rvic
epa
ymen
tQ
ualit
y pa
ymen
t
FFS
ADL payment
CAPIbonus
France Germany EnglandNetherlands Sweden
“RLV“ (capped
FFS)
FFS with capsper service type
FFSDMP payment
FFS (per visit & out-of-hours)
Capitation
Bonus and/orMalus
QOF bonus
Capitation
FFS (per visit)
FFS (“enhanced services“)
Paying family doctors … the new way
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For GP payment, countries are moving toward a “European model” consisting of: (1) Capitation (inscription)/ capped FFS (visit-
triggered) to pay for providing basic services; (2) special lump sums for specific patient groups
(if capitation is not sufficiently risk-adjusted) + FFS for (potentially) underprovided services and/or requiring special expertise or technology;
(3) quality-related bonus (or malus) for (not) reaching certain targets.
Conclusions
60%
20-30%
10-20%
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Examples of new payment measures• ‘year of care’ payment for the complete service
package required by individuals with chronic conditions (DK)
• Per patient bonus for physicians for acting as gatekeepers for chronic patients and for setting care protocols (F)
• bonus for DMP recruitment and documentation (D)• 1% of overall health budget available for integrated
care (D)• bonuses for reaching structural, process and outcome
targets (UK)• ‘pay-for-performance‘ bonuses (US)
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Population ageing Strengthen the health systems response
• Improved management of chronic conditions• Coordination / integration of care• Focus on primary prevention (tobacco, alcohol,..)• Support healthy ageing, e.g. fall prevention
programmes
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www.healthobservatory.eu
www.mig.tu-berlin.dePresentation available at: