Transcript Impact to Health System

Public Private Collaboration
in Health Care Provision
Montenegro Workshop
September 2007
Matthias Loening
Overview

Hungary Health Sector

Hospinvest
– Company Overview
– Business Model
– Efficiency Improvement
– Quality Improvement

Impact to Health System

Concluding Thoughts
Hungary Health Sector
Context



The health sector accounts for 7.8% of
GDP
Health Sector Financing: By Source (2003)
NHIF
63%
Public funding alone accounts for 75% of
health spending, of which 66% is spent in
public hospitals
In 2006 the Hungarian budget deficit was
estimated to be 10% of GDP – one of the
highest in the EU
Gov't (National
& Local)
12%
Other
Source: European Observatory, 2005 3%
PHI
1%
Out-of-Pocket
21%

The largest part of the state budget deficit
is attributable to the losses by the NHIF,
which has increased to 1.5% of GDP

These losses are a direct result of
overcapacity and a system plagued by
inefficiency

Downsizing, consolidation and even closure of some facilities are essential to
rationalize the public health system and limit the drain on scarce public resources
Hungary Health Sector
Current Health Reform Program


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The current government has launched a number of important
reforms in the health sector
Delivery : Implementation completed April 2007
–
Reduced acute care beds by approx. 15,000 (- 36%) and increase chronic beds by
approx. 7,000 (+ 26%)
–
Emphasis on provisioning will be transferred from inpatient services to outpatient &
chronic services
Purchasing: New NHIF contracts allocated April 2007
–

The method of reducing beds will be via budgetary caps put into place in inpatient,
outpatient and chronic care reimbursement
Financing - There are two options being discussed to be implemented late 2007
–
Allowing for a competitive market of health insurers providing the mandatory cover
–
Maintain the NHF, however clearly define a reduced package of benefits to allow
for the supplementary PHI market to develop
Hungary Health Sector
Health System Structure




In Hungary, reimbursement
methodology is per case via
the NHIF
Hungary: Organizational Structure of the Health System
Ministry
Of
Health
The reimbursement covers
only OPEX
Policy &
Regulation
CAPEX subsidy normally
comes from owner
Regional trend to
decentralize ownership from
MoH to Municipalities and
with it CAPEX responsibility
Municipality
Ownership &
Capital funding
NHIF*
Health Services
Reimbursement (OPEX)
Hospital
*National Health Insurance Fund
Hospinvest
Company Overview

Hospinvest is the first company in Hungary specializing in
management of public hospitals
EBRD
Hospinvest
(Holding)
Equity
Investment
IT &
Management
Support
Local Bank
Revenues
from IT & Mgt
Service Fees
Public Hospital
Under
Private Management
(subsidiary)
Municipality
Ownership
concessioned
Service
Provisioning
Consumer
(Local Community)
Debt for
CAPEX
commitment
NHIF
Funding for
Services
Hospinvest
Efficiency Improvement
Eger
Gyöngyös
Győr
Hatvan
Veszprém Székesfehérvár
Zalaegerszeg
Kalocsa
Kiskunhalas
Baja
Hospinvest
Quality Improvement

Case Management Protocols

Performance Monitoring

Peer Review

Matrix System

Medical Board

Department of Patient Care Services
Hospinvest
Quality Improvement
Patient Care Quality and Cost Effectiveness Indicators
1. Appropriateness of requesting CT scans for inpatients
2. All cases that are outliers or above norm days (related to DRG)
3. Pre-operative cases > 24 hours
4. One day surgery cases that have ALOS > 24 hours
5. Transfer of patients from one day surgery to any other unit due to
complication
6. Transfer of patients from short stay surgery due to complication
7. Readmission to hospital within 72 hours after discharge (quality emphasis)
8. Transfer to ICU
9. Post-operative wound and systemic infection (e.g. infection rate)
10. Cases of dehydration during hospital stay
11. Elective C-Section Rate per total deliveries
12. ALOS > 2 nights after vaginal delivery
13. ALOS > 4 nights after C-Section
14. 3rd degree laceration during delivery where rectal ring must be repaired
15. Non-reimbursable DRG patient due to readmission (financial emphasis)
Impact to Health System
Input
Effect
Competition
Performance
Ownership
Public Hospital
Organizational
Culture
Regulation*
*Refers to opening up of the market to new providers
Performance
Question of new market entrants
leads directly to output but also
possibly change in organizational
culture of existing providers
Concluding Thoughts
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We see several global trends that will define the market strategy as
well as creating opportunities for investing in health
Rising demand (spending) for health care services and pressures on health sector
funding, resulting in increased Government interest in:
-
Private sector participation in the provisioning of care to improve service quality,
access and cost efficiency
-
Promoting private insurance to increase financing (funding) within the health sector
-
Likely greater emphasis on OP facilities/care, or integrated networks, not hospitals
These pressures will only increase in transition economies with economic growth as the
OECD estimates that for every 1% increase in GDP/capita there is a 1.8% increase in
per capita health spending
Concluding Thoughts
EBRDs role as a development organization can play an important role in the
health sector to supporting the economic transition of countries in the Region


The World Bank has found that a nation’s health and the quality of its health system
is a key determinant to continued economic growth within a country

From the market assessment it is clear that there is:

–
A significant pent-up demand for quality health care services
–
A need for access to capital (debt and equity)
–
A potential role for International Financial Institutions such as the EBRD
–
Direct linkages for making an economic impact within transition economies by
investing in the health sector
However, there is specific challenges unique to the Sector
Contact:
Matthias Loening
Senior Health Advisor
European Bank for Reconstruction and Development
Email: [email protected]