Healthcare Reform Checklist

Health systems often require tweaking, fine-tuning, and even reconstruction.

GENERAL

Healthcare legislation in countries in transition,Guest Posting emerging economies, and developing countries should permit – and use economic incentives to encourage – a structural reform of the sector, including its partial privatization.

KEY ISSUES

· Universal healthcare vs. selective provision, coverage, and delivery (for instance, means-tested, or demographically-adjusted)

· Health Insurance Fund: Internal, streamlined market vs. external market competition

· Centralized system – or devolved? The role of local government in healthcare.

· Ministry of Health: Stewardship or Micromanagement?

· Customer (Patient) as Stakeholder

· Imbalances: overstaffing (MDs), understaffing (nurses), geographical distribution (rural vs. urban), service type (overuse of secondary and tertiary healthcare vs. primary healthcare)

AIMS

· To amend existing laws and introduce new legislation to allow for changes to take place.

· To effect a transition from individualized medicine to population medicine, with an emphasis on the overall welfare and needs of the community

Hopefully, the new legal environment will:

· Foster entrepreneurship;

· Alter patterns of purchasing, provision, and contracting;

· Introduce constructive competition into the marketplace;

· Prevent market failures;

· Transform healthcare from an under-financed and under-invested public good into a thriving sector with (more) satisfied customers and (more) profitable providers.

· Transition to Patient-centred care: respect for patients’ values, preferences, and expressed needs in regard to coordination and integration of care, information, communication and education, physical comfort, emotional support and alleviation of fear and anxiety, involvement of family and friends, transition and continuity.

The Law and regulatory framework should explicitly allow for the following:

I. PURCHASING and PURCHASERS

(I1) Private health insurance plans (Germany, CzechRepublic, Netherlands), including franchises of overseas insurance plans, subject to rigorous procedures of inspection and to satisfying financial and governance requirements. Insured/beneficiaries will have the right to apply contributions to chosen purchaser and to switch insurers annually.

Private healthcare plans can be established by large firms; guilds (chambers of commerce and other professional or sectoral associations); and regions (see the subchapter on devolution under VI. Stewardship).

Private insurers: must provide universal coverage; offer similar care packages; apply the same rate of premium, unrelated to the risk of the subscriber; cannot turn applicants down; must adhere to national-level rules about packages and co-payments; compete on equality and efficiency standards.

(I11) Breakup of statutory Health Insurance Fund to 2-3 competing insurance plans (possibly on a regional basis, as is the case in France) on equal footing with private entrants.

Regional funds will be responsible for purchasing health services (including from hospitals) and making payments to providers. They will be not-for-profit organizations with their own boards and managerial autonomy.

(I12) Board of directors and supervisory boards of health insurance funds to include:

- Two non-executive, lay (not from the medical professions and not politicians) members of the public. These will represent the patients and will be elected by a Council of the Insured, (as is the practice in the Netherlands)

- Municipal representatives;

- Representatives of stakeholders (doctors, nurses, employees of the funds, etc.).

(I13) The funds will be granted autonomy regarding matters of human resources (personnel hiring and firing); budgeting; financial incentives (bonuses and penalties); and contracting.

The funds will be bound by rules of public disclosure about what services were purchased from which providers and at what cost.

Citizen juries and citizen panels will be used to assist with rationing and priority-setting decisions (United Kingdom).

(I2) Procurement of medicines to be done by an autonomous central purchasing agency, supervised by a public committee (drug regulatory authority) aided by outside auditors.

All procurement of drugs and medications will be done via international tenders.

The agency will submit its reimbursement rates for drugs on the PLD to external audit in order to accurately reflect pharmacists’ overhead costs. At the same time, the profit margins on all drugs, whether on the PLD or not, will be regulated.

This agency should be separate from the Health Insurance Fund and the Ministry of Health. This agency will also maintain national drug registries. It will secure volume discounts for bulk purchasing and transparent, arm’s-length pricing.

(I21) Use of reference prices for medicines. If the actual price exceeds the reference price, the price difference has to be met by the patient.

(I3) The Approved (Positive) List of Medicines will be recomposed to include generic drugs whenever possible and to exclude expensive brands where generics exist. This should be a requirement in the law. Separately, an Essential Drug List will be drawn up.

(I31) Encourage rational drug prescribing by instituting a mixture of GP and PHC incentives and penalties, or a fundholding system: budgets will be allocated to each GP for the purchase of drugs and medications. If the GP exceeds his/her budget, s/he is penalized. The GP gets to keep a percentage of budget savings. Prescription decisions will be medically reviewed to avoid under-provision.

(I4) Payments and Contracting

Payment to providers should combine, in a mixed formula:

BLOCK CONTRACTS

Capitation – A fixed fee for a list of services to be provided to a single patient in a given period, payable even if the services were not consumed, adjusted for the patients’ demographic data and reimbursement for fee-for-service items.

Inflation-adjusted Global budgeting (hospitals) and block (lump sum) grants (municipalities)

COST and VOLUME CONTRACTS

Provide incentives and reward marketing efforts which result in an increase in
demand/referral beyond the limit set in a block contract.

COST PER CASE CONTRACTS

Apply Diagnosis Related Group (DRG)/ Resource-based Relative Value (RBRV) / Patient Management Categories (PMCs) / Disease Staging/Clinical Pathways

Levels of reimbursement, case-mix adjusted to be decided by external auditors.

Contracts with providers should include:

· Waiting Times Guarantee

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