Transcript Toomas Palu
Health Financing Challenges in the Baltic States Toomas Palu Sr. Health Specialist, World Bank Member of Management Board Estonian Health Insurance Fund Health financing reforms include to a various degree social insurance elements Estonia • Health Insurance Act – 1991, 2002 • Earmarked 13% payroll tax • Estonian Health Insurance Fund (EHIF Act 2000) Latvia • Government decrees 1993, 1997, 1999 • Earmarked 28.4% of income tax • Latvian State Compulsory Health Insurance Agency (Gov agency) Lithuania • Health Insurance Act 1995 • Earmarked 30% of income tax, 3% payroll tax • Administered by State Patient Fund (Government Agency) The main objective of introducing health insurance in the Baltics was … … to ensure increased and sustainable level of health financing powered by physician lobby. Health expenditures: appropriate level? how sustainable? * 14 US Health expenditures % GDP 12 10 Estonia 8 UK 6 4 Lithuania 2 Latvia 0 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 GDP per capita, USD in PPP * OECD and EU candidate countries, data from 1998-1999, OECD, WHO 45,000 Explanation of different health financing reform outcomes Estonia has higher level of health financing because health insurance is the main source of public health funding • • • Formalisation of economy, gradual decline of “grey” economy Productivity improvements Average salary growths higher than economy in general In Latvia and Lithuania large part of health financing is determined through political budget negotiations, but … • • Health sector neither EU nor NATO priority Health issues only now becoming part of political (election) debates Health financing information is not comparable and comprehensive • • Standard (OECD, WHO) health accounts are assembled only in Estonia Latvia accounts only for public sources, Lithuania assembles its own national health accounts HI share of overall health financing. Pooling of funds. Financing agents Sources of funds 100% 100% 80% Other 80% 60% Households 60% 40% 20% Social Insurance 40% 20% Government 0% 0% Estonia Latvia Lithuania Estonia Latvia Lithuania Is Estonian narrow tax base sustainable in long term? Solidarity in Estonian health insurance no contributions 52% of insured 13 % tax 45% of insured state 3% Cost pressures Aging population • average life expectancy is increasing • birth rates below population replacement rate Ever-emerging new high-cost effective medical technologies • high cost of pharmaceuticals • situation worse for economies of transition because they lag behind in introduction as well as penetration rates of already existing medical technologies Pressure from health care provides to increase reimbursement rates • low salaries of medical personnel • unfunded capital costs Increased expectations of citizens Costs of various benefits to EHIF 900 0.2% 24% 11% 19% 500 400 300 200 100 2% 2500 17% -8% 42% 20% 63% 13% 3500 5.8%3000 13% 22% 5% 2000 1500 21% Million EEK Million EEK 800 700 600 5.3% 1000 74% 500 0 0 1996 1997 Pharmaceuticals 1998 1999 2000 2001 2002 Sickness benefits Health services Examples of cost pressures in Estonia Queues Joint replacement surgery - 3821 persons Cataract surgery - 4670 persons New high tech, not included in the benefit list yet inner ear prosthesis Inplanted cardiac defibrillator PCR test for donor blood safety Reimbursement rate rise demanded by health providers New drugs not include in the reimbursement list Fabry disease – Fabrazyme® - 4 persons Leucemia – Gleevec ® 30 persons Regular intake of ordinary high blood pressure drugs Cost million EEK % of EHIFsecondary care budget 134 30 6.4% 1.4% 5 30 5 250 0.2% 1.4% 0.2% 11.9% % of pharmaceuticals budget 12 15 200 1.6% 1.9% 25.9% Solutions to cost pressures More money for health care!? • Limited by overall strength of economy • Attract private financing - investments, cost sharing, private insurance; PPP - public-private-partnerships Effective and efficient use of scarce resources • Keywords: cost-effectiveness, appropriateness, needs, incentives, evidence base, transparency Make choices • What benefits are covered by social health insurance Cost-sharing: regulating user charges Estonia • Co-payment of Euro 3.2 for outpatient specialist consultation • Co-payment of Euro 1.6 per hospital day up to 10 days (Euro 16) per admission, adjusted annually according to inflation • Few exemptions • Reasonable user charges for above standard accommodation • Patients are charged full cost if the want to by-pass queues Latvia • Euro 0.8 for outpatient specialist consultation • Euro 8.4 at hospital admission, Euro 2.5 per hospital day up to Euro 25 per admission • Extensive exemptions Lithuania • Government approves a list of services that are paid out of pocket Making choices about HI benefits None of the countries has been successful • obvious choices have been done – cosmetic surgery, etc. have been excluded from the public benefits packages • politically very difficult decisions, not popular among electorate • clear criteria are not defined Technical solutions for better use of scarce resources International evidence base Reference pricing for reimbursable pharmaceuticals Pharmaceutical reimbursement budgets for physicians Rational prescribing Global budgets and case-based reimbursement (DRGs) for hospital care Competitive contracting +/Use of health economics in decision making Optimisation of hospital infrastructure Analysis of needs and needs based planning Implementation in Baltics +/ +/+/ +/- Needs assessment and contract planning in Estonian health insurance fund • Untying contract planning from historical hospital services production, planning according to patients’ needs • Analyze service utilisation variation among 7 population pools as a proxy for need • utilisation of data warehouse concept • Separate supply induced demand from medical need as much as possible • consult with GPs • Analyze queues – integrate results • Budget planning and scost-and-volume contracts according to needs assessment results Outpatient Inpatient 250 5 200 4 150 3 100 2 50 1 0 0 Inpatient cases per 1000 population Eesti keskmine Kagu Lääne Pärnu Rakvere Tartu Harju Ida-Viru Outpatient cases per 1000 population Small area variation in the utilisation of dermatology services, Estonia 2001 Põhieriala Orthopedics Therapy Rehabilitation Gynecology Pulmonology Psychiatrics Otorhinolaryngology Oncology Ophthalmology Neurology Arv (All) Surgery HK (All) Dermatovenereology Monitoring waiting times Nimi (All) 120 Sum of Ülearv 100 000 kindl kohta 100 80 60 Rtüüp2 Outpatient Inpatient 40 20 - Prioritizing queues in Estonia Application of prioritization protocols • joint replacement and cataract surgery queues • evaluate need, e.g. - physical impairment (visual aquity, functional mobility) - pain - ability to work, give care to dependents, live independently • protocols based on New Zealand experience People with higher needs needs wait less Optimisation of hospital capacity in Estonia Implemented through • • • Rational “Hospital Masterplan 2015” Legal hospital reform: incorpororation under private law as foundations (trusts) or joint stock companies under public ownership Hospital mergers – internalise efficiency problem to hospital management In 2001 EHIF had 17 hospital contracts in Tallinn In 2002 EHIF has 4 hospital contracts in Tallinn • • • Supported by EHIF contracting Development of conceptual solution for long term care Solving health sector investment financing problem Number of hospitals Number of hospital beds ALOS 1993 1999 2001 2015 115 78 67 13 14 377 10 358 9160 3500 15.4 9.9 8.7 4 Hospital capital investment financing reform Key reform features • capital cost will be included in the EHIF price in 2003 • hospitals will pay capital charge on assets they have received free of charge from the State • hospitals will make their own investment decisions • for expensive investments “certificate of need” is required, issued by the State Health Board This policy will be additional incentive for divesting excess hospital buildings and equipment