Transcript Akiko Maeda - European Health Forum Gastein

Health Finance Reforms in Southern
Europe: Lessons from Croatia
European Health Forum
September 27, 2002
Akiko Maeda, Lead Health Specialist
The World Bank
[email protected]
Health Finance Reform in Southern
Europe – Unfinished Agenda
Evolution of Croatian Health Financing
System examined for effectiveness in:
– Revenue mobilization
– Risk pooling and redistribution
– Expenditure management
Effectiveness of the new reform
initiatives
Measuring Health System Performance
Revenues
/Inputs
Health Services
Throughputs
Health
Outcomes
• Redistributive
(prog./reg.)
• Allocative
Efficiency
• Aggregate
• Administrative
Efficiency
• Microecon.
efficiency
• Risk-pooling/
management
• Efficacy/
Effectiveness
• Disease
specific
• Socioeconomic
factors
Croatian Health Financing System – Last
decade
Croatia: 1993 Health Reforms
established the foundations of the current
health financing system:
– Consolidation of fragmented public financing under
a single fund (Croatian Institute of Health Insurance
- HZZO)
– Establishment of revenue source from high payroll
tax rate
– Broad categories of exemptions, generous benefits
including sick /maternity leave
Health Finance Reform in Croatia –
Unfinished Agenda
Croatia: 1993 Health Reforms on
provider system
– Legislation establishes private providers
and private insurance market
– New provider payment systems:
• capitation for primary care practices
• point system for specialists/ combined per
diem / fee for service for hospital
Croatian Health Finance Reform –
Unfinished Agenda
A decade after the first round of
reforms,Croatia continues to face high
cost of care
– Health expenditures (accrual basis) estimated
at 9% of GDP, US$400 per capita
– Persistent recurrent deficits and growing
arrears of the Croatian Institute of Health
Insurance (19% of revenues in 2002)
– High payroll tax rate adds to labor costs
Health Expenditure Trends in Central Eastern
Europe and Newly Independent States, 1998
Total Health Expenditure, 1998
Health Expenditure Per Capita (US$)
log scale
1000
Croatia
CEE
NIS
Linear (NIS)
Linear (CEE)
100
10
100
1000
GDP Per Capita (US$, Official Exchange Rate), log scale
10,000
Total Health Expenditure (% of
GDP)
Global Health Expenditure as % GDP, ca. 1998
14
12
Croatia
10
8
6
4
2
0
100
1,000
10,000
100,000
GDP Per Capita (US$, Official Exchange Rate), log scale
Croatia Social Health Insurance Beneficiaries
100%
% Total Beneficiaries
80%
60%
Others including dependents
Unemployed
Pensioners
40%
Actively Employed and Active
Farmers
20%
0%
1994
1995
1996
1997
1998
Year
1999
2000
2001
Croatia Health Finance – Managing
Risk Pooling and Redistribution
 Managing risk pooling and redistribution:
– Broad exemptions on copayments and premiums
results in untargeted subsidies
– Central budget transfers made retroactively to
cover deficits
– Actuarial analysis needed to estimate impact of
the projected changes in the beneficiary
composition, contribution levels and expected
health service utilization rates
Croatia Health Finance – Managing
expenditure
Provider payment systems do not
encourage efficiency or quality:
– GP capitation system does not provide
incentives to rationalize referrals or drug
prescriptions
– Point system for physician reimbursement
encourages cost escalation among specialists
– Point-based hospital payment system does not
encourage efficiency
Croatia Health Finance – Managing
Expenditure
Cost Containment Measures 1999 –
2002
– Global capping of hospital budget and reduction
in hospital bed capacity
– Introduction of partial case-based payment
systems
– Restriction on number of prescriptions per
beneficiary, introduction of drug reference price
– Restriction on number of referrals per
beneficiary
Croatia Health Finance – Managing
Expenditure
Initial Results of Cost Containment
Measures
– Hospital expenditures contained, but with
growing waiting lists
– Restrictions on referrals and prescriptions
• not effective in controlling volume and cost of
services
• raises quality and equity concerns
Croatia Health Insurance Expenditures (constant 1997 price), 1994-2001
HRK, in millions, constant 1997 price
10000
8000
6000
4000
2000
0
1994
1995
1996
1997
1998
1999
Year
Other health service-related expenditures
Hospitalization
Prescription drugs
Polyclinics, specialist consultations
Primary care
2000
2001
Croatia Health Finance Reform
Initiatives 2002
Croatia Health Finance Reform Initiatives
2002
Revenue base
– Consolidation of budget under Treasury:
improve collection compliance and debt
management
– Payroll tax rate reduced from 18 to 16%
– Increase in copayment rates
– Introduction of “Supplementary Health
Insurance”
Croatia Health Finance Reform Initiatives
2002
Improved targeting and risk pooling?
– Central and local government contributions
are more clearly linked to benefits and
target population
– But exemptions remain broad
– Estimation of costs not based on actuarial
analysis
Health Insurance Act 2002
“Supplementary Health Insurance”
– Provides complementary financing to cover
copayments for services covered under the
statutory health insurance
– Primarily viewed as an instrument for raising
revenues
– Tax exemptions and discounts on premiums
given to pensioners as inducements
– Private health insurers are kept out of the
SHI market until 2003
Health Insurance Act 2002
Issues with the new “Supplementary
Health Insurance”
– Moral hazard - undermines the demand
moderating effects of copayments
– Selection bias – high risk groups likely
to purchase SHI, encouraged by
discounts given to the high risk groups
(pensioners)
Health Insurance Act 2002
Net effect of “Supplementary Health
Insurance”:
– Increased spending may not be compensated
by additional SHI subscriptions
– Negative equity impact: only those who can
afford to pay SHI will receive extra coverage
– Private insurers will likely cherry-pick
beneficiaries when the market is opened in
2003
Next Steps in Health Finance Reform
Focus on improving macro and
microeconomic efficiency on the provider
side by aligning incentives to improve
productivity and quality of care
Target subsidies better and provide better
protection for vulnerable groups
Revenues – reduce burden on payroll tax,
improve allocation of general revenues
from central and local governments