Download 2. Health systems

2. Health systems
Literature (to be found in the compendium):
Cutler, D.,2002. Equality, efficiency and market fundamentals: The dynamics of
international medical-care reform. Journal of Economic Literature 40,
881-906.
Kornai, J. and Eggleston, K., 2001. Welfare, choice and solidarity in transition
(Cambridge University Press, Cambridge) 47-99.
1.
2.
3.
Classification of health systems
The Norwegian system
Examples: Do systems matter for the provision of health care?
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1.
Classification of health systems
Characteristics of Health Care (according to Kornai and Eggleston):
• The value attached to health
• The norm of equal access
• Uncertainty and the demand for insurance
• Asymmetric information
• Selection
– Adverse selection
– Risk selection (cream skimming)
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Moral hazard
Supply-side power and monopoly
The defenselessness of the patient
Mounting costs
Many sectors have some of these characteristics – no other sector has them all
Many classification schemes
For instance: OECD (1994): The reform of health care system: A review
of seventeen OECD countries (Also in NOU 1996:5: Hvem skal eie
sykehusene. Appendix)
This classification inspired by:
Kornai, J. and Eggleston, K., 2001. pp 47-99.
Four dimensions:
I Providers of health services
II Financing health services
III The sponsor of health services provision
IV Payment system / revenue system for providers
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The health care triangle
Consumer/Patient
Health Care Insurer
Health care provider
The Sponsor: Regulation and redistribution
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I Providers of health services
1.
Organizations
1.1 Publicly owned
1.2 Non profit private
Charitable foundation
1.3 Private for profit
2. Self-employed professionals
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II Financing
A.
B.
C.
D.
State financing (from general taxation)
Compulsory insurance
Voluntary insurance
Direct payment by individual (out of pocket payment)
An actual country may have several of the components above.
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III The sponsor of health services provision
• Requires authority to set the rules of the game
• Regulation – for instance to prevent cream-skimming by insurers
• Contribute the financing of health care (insurance)
Redistribution
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IV Payment system / revenue system for providers
• Retrospective systems
• Revenues equal actual costs
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Fee for service
Fee per treatment
Capitation
Global/fixed budgets
No cure no pay
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From Kornai & Eggleston p 72
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Degree of integration
I Integration
(i)
II Separation
(ii)
(iii)
Sponsor
Insurer
Provider
Sponsor
Sponsor
Insurer
Insurer
Provider
Provider
I NHS – England
II i Health Maintenance Organization (HMO)
II ii Canada
II iii Health plan/managed care (USA)
Insurer
Again, one country may have several subsystems
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Sponsor
Provider
The Norwegian system
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Three levels of government
– State
– County
– Municipality
Primary care
• Responsibility of the municipalities
• Consists of preventive services (child and school clinics, immunization etc),
nursing homes, and general practice.
• Capitation/list patient system introduced from 1 June 2001
• 90 per cent of general practitioners are privately practicing with a contract
with a municipality
• Payment system: 1/3 patient co-payment, 1/3 capitation fee and 1/3 fee for
service.
Specialist care
• Run by 5 state owned regional health enterprises from 1 January 2002
• Somatic Hospitals financed 2005 by 40% fixed budgets and 60% activity
dependent revenue on average
• Private specialists contract with a regional health enterprise and paid by
practice allowance, fee for service and patient co-payments
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The development of health systems
Cutler:
1.
The First Wave of reform: Universal coverage and equal access
2.
The second wave: Controls, Rationing and expenditure gaps
3.
The third wave: Incentives and competition
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Does the system matter?
Example 1: Level of co-payment (from Kornai and Eggleston Figure 3.2)
The optimal level of co-payment balances two types of inefficiencies
Inefficiency
Loss of risk spreading
Increase in uninsured
Moral hazard - overuse
Too little useAccess barriers
0
1
Rate of co-payment (co-insurance rate, demand-side costsharing)
Example 2: Provider cost-sharing (from Kornai and Eggleston Figure 3.3)
The optimal level of provider cost-sharing balances two types of inefficiencies
Inefficiency
Risk selection
inefficiency
Production inefficiency
0
Cost
reimbursement
Rate of supply-side cost-sharing)
1
Pure
Capitation
Example 3: The effect of payment system on General Practitioners
referral decisions (From: Iversen, T. and Lurås, H., 2000, The effect of
capitation on GPs’ referral decisions, Health Economics 9, 199-210).
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The referral rate among general practitioners (GPs) varies
Is the payment system for GPs likely to have an influence on the proportion
of patients who is referred to second-level providers.
Question asked: Does a switch from a practice allowance/fee for service
system in general practice to a capitation/fee for service system have an
impact on GP's referral rates?
Two alternative payment systems for GPs are considered:
1. A fee-per-item of health services according to a fixed fee schedule
combined with a practice allowance
2. A fee-per-item of health services according to a fixed fee schedule
combined with a capitation payment depending on the number of
patients on the physician’s list
We expect the referral rate to be higher in system 2 than in system 1. Why?
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Empirical analysis supports the hypothesis
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Example 4: The impact of accessibility on the use of specialist health
care in Norway
To what extent is the policy goal of allocating health care according to medical need
fulfilled in Norway?
Studying the impact of a person’s health relative to the impact of geographical access to
specialist care.
Distinguish between public hospitals and private specialist financed by the public
insurance
Data from Statistics Norway: Survey of level of living
Distribution of contracts with private specialists 2002 and distribution
of population according to regional health enterprise.
Health
East
Health
South
Health
West
Health
Middle
Health
North
Sum
Distribution of private specialists
48 %
18 %
17 %
10 %
6%
100 %
Distribution of population
36 %
20 %
20 %
14 %
10 %
100 %
Empirical analysis shows that:
The use of private specialists depend on patients
education
income
geographical access (distance and capacity)
No similar effect regarding the use of public hopsitals found
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