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HEALTH SYSTEM REFORM – LESSONS AND EXAMPLES Dr. Nicolaus Henke

HEALTH SYSTEM REFORM – LESSONS AND EXAMPLES Dr. Nicolaus Henke. Americas. Europe. Asia/ Australasia. Middle East and Africa. Canada U.S. Mexico. Germany U.K. Norway Portugal Ireland Spain Belgium Sweden. Mauritania Bahrain Egypt Abu Dhabi KSA Libya. Singapore India

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HEALTH SYSTEM REFORM – LESSONS AND EXAMPLES Dr. Nicolaus Henke

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  1. HEALTH SYSTEM REFORM – LESSONS AND EXAMPLESDr. Nicolaus Henke

  2. Americas • Europe • Asia/Australasia • Middle Eastand Africa • Canada • U.S. • Mexico • Germany • U.K. • Norway • Portugal • Ireland • Spain • Belgium • Sweden • Mauritania • Bahrain • Egypt • Abu Dhabi • KSA • Libya • Singapore • India • South Korea • China • Japan • System level and payer/ provider • Payer/ provider 050913 GCC conference Systems reform breakout OUR 2005/2006 EXPOSURE TO HEALTH REFORM

  3. 1 2 3 4 050913 GCC conference Systems reform breakout CHALLENGES • Government led systems generally unresponsive • Need to be specific about… • which policy / mechanisms that can unleash change • - what good looks like in 5 years • Large quality variations in spite of growing amount of money inflows Patients starting to act as consumers and demanding better services – but are unwilling to accept resulting tax burden • Main elements of reform agreed at policy level – challenges in execution and engagement

  4. 011706 Team Update V7 MANY REFORM PROGRAMS ARE BASED ON SEVEN UNDERLYING IDEAS • Improve public health status 1

  5. 011706 Team Update V7 MANY REFORM PROGRAMS ARE BASED ON SEVEN UNDERLYING IDEAS • Improve public health status 1 • Ensure financing access to care 2

  6. 011706 Team Update V7 MANY REFORM PROGRAMS ARE BASED ON SEVEN UNDERLYING IDEAS • Improve public health status 1 • Ensure financing access to care 2 • Foster quality 3

  7. 011706 Team Update V7 MANY REFORM PROGRAMS ARE BASED ON SEVEN UNDERLYING IDEAS • Improve public health status 1 • Ensure financing access to care 2 • Foster quality 3 • Adjust capacity 4

  8. 011706 Team Update V7 MANY REFORM PROGRAMS ARE BASED ON SEVEN UNDERLYING IDEAS • Improve public health status 1 • Ensure financing access to care 2 • Foster quality 3 • Adjust capacity 4 • Involve consumer 5

  9. 011706 Team Update V7 MANY REFORM PROGRAMS ARE BASED ON SEVEN UNDERLYING IDEAS • Improve public health status 1 • Ensure financing access to care 2 • Foster quality 3 • Adjust capacity 4 • Involve consumer 5 • Introduce competition 6

  10. 011706 Team Update V7 MANY REFORM PROGRAMS ARE BASED ON SEVEN UNDERLYING IDEAS • Improve public health status 1 • Ensure financing access to care 2 • Foster quality 3 • Adjust capacity 4 • Involve consumer 5 • Introduce competition 6 • Adjust regulation and institutions / MOH 7

  11. 011706 Team Update V7 MANY REFORM PROGRAMS ARE BASED ON SEVEN UNDERLYING IDEAS • Improve public health status 1 • Ensure financingaccess to care 2 • Foster quality 3 • Adjust capacity 4 • Involve consumer 5 • Introduce competition 6 • Adjust regulation and ministry 7

  12. 011706 Team Update V7 … AND THREE WAYS TO DRIVE THROUGH EACH BUILD AWARENESS • Improve public health status 1 • Ensure financingaccess to care 2 • Foster quality 3 • Adjust capacity 4 • Involve consumer 5 • Introduce competition 6 • Adjust regulation and ministry 7

  13. 011706 Team Update V7 … AND THREE WAYS TO DRIVE THROUGH EACH SET INCENTIVES BUILD AWARENESS • Improve public health status 1 • Ensure financingaccess to care 2 • Foster quality 3 • Adjust capacity 4 • Involve consumer 5 • Introduce competition 6 • Adjust regulation and ministry 7

  14. 011706 Team Update V7 … AND THREE WAYS TO DRIVE THROUGH EACH MANDATED ACTIONS SET INCENTIVES BUILD AWARENESS • Improve public health status 1 • Ensure financingaccess to care 2 • Foster quality 3 • Adjust capacity 4 • Involve consumer 5 • Introduce competition 6 • Adjust regulation and ministry 7

  15. 011706 Team Update V7 • Improve public health status - Examples 1 - Educate public on diet, exercise, smoking, safe sex - Measure “Early Health” • Awareness: Differential insurance premiums based on successful lifestyle changes Incentives: - Smoking ban - Vaccination campaigns - Require the use of automotive seat restraints and motorcycle helmets Mandates:

  16. Single index • Traffic light system 050913 GCC conference Systems reform breakout WHAT THE EARLY HEALTH INDEX COULD LOOK LIKE • Description • Example Spend by disease stage (Diabetes example) • ‘Nominal’ • Index • Financial • 64% • 35% • ~1% • ~0% • Prev- • ention • Diagnosis • Comp-lication • Treat- • ment • ‘Actual’ • DALY • Expectation of life lost • Healthy life expectancy at birth • Life lost due to low investment in ‘Early Health’ • 15 years • US • 20 years • China • 5 years • Japan • UK • 15 years • … • Major indicators are scored red, yellow or green • US • China • Japan • … • Education • Vaccination • Diet • In vivo Dx • …

  17. Prevention • Screening • Diagnosis • 1 • Resp. cancer* • 2 • Hypertensive heart disease • Tuberculosis • Stomach cancer • Measles • Road traffic accident • Self inflicted • 4 • 9 • 8 • 7 • 5 • 6 • 3 • 10 050913 GCC conference Systems reform breakout ‘STRAW MAN’- A SMALL NUMBER OF INTERVENTIONS DRIVE ‘EARLY HEALTH’ PERFORMANCE FOR MAJOR DISEASES • Critical ‘Early Health’ interventions • Causes of death • HIV/AIDS • Education • In vitro diagnostics • In vitro diagnostics • Education (e.g., reduction in smoking) • Genotyping (?) • In vivo diagnostics • In vivo diagnostics • In vitro diagnostics (e.g., pathology) • COPD • Vaccination • Physician consultation • Physician consultation • Education • – • – • Education (e.g., reduction in smoking ?) • Diet • Endoscopy • Genotyping (?) • Endoscopy • Education • Diet • Physician consultation • Genotyping (?) • Physician consultation • Vaccination • In vitro diagnostics (e.g., microbiology) • In vivo diagnostic • In vitro diagnostics (e.g., microbiology) • In vivo diagnostic • Education • Physician consultation • Physician consultation • Ischemic Heart disease • Education (e.g., reduce BP, reduce obesity, reduce cholesterol) • Physician consultation • In vitro diagnostics • Physician consultation • In vivo diagnostics (e.g., angiography) * Trachea/Bronchus/Lung Cancer

  18. 011706 Team Update V7 • Ensure financing access to care 2 • - Educate about need to save • - Tax incentives and employer contribution to insurance schemes • - Mandated insurance or tax funded provision for all

  19. Pages Hencke AI v0.1 MAURITANIA TESTS A MICRO-INSURANCE SCHEME FOR FULL PREGNANCY COVERAGE FOR $ 9 PER PREGNANCY 1 Payment of all costs included in the services pack • Respect of the standardised therapeutic procedures • Regular and secured purchase of medicines and consumables • Presence of qualified personnel at all instances of care • Availability of all technical means necessary to administer the care needed and covered 2 3 4 5

  20. Pages Hencke AI v0.1 PRELIMINARY RESULTS IN NUMBERS: ENCOURAGING PARTICIPATION IN PREVENTIVE ACTIVITIES; STRONG REDUCTION OF MORTALITY • Access to care • With F-F obst. care • Without F-F obst. care • Number consultations / woman 2,6 1,7 • Laboratory visits attendance 98% 31% • Echography 81% 21% • Childbirth's file made and maintained 100% 40% • Attendance of standard pre- and postnatal consultations 83% 50% • Maternal mortality 103 747 • (par 100k/par naissance ou par femme) * CME: Consultation prénatale ** Consultations Pré-et Post-Natale)

  21. 050913 GCC conference Systems reform breakout • Foster quality 3 • Levers • 1. Set • standards • Strengthen national registration process, credentialing and accreditation mechanisms • Strengthen peer review and ongoing validation • Introduce rigorous privileging at the provider level • 2. Provide incentives • Provide financial incentives for high quality care to primary and secondary care providers • Build quality indicators into Payment by Results • 3. Monitor and provide information • Use multiple levers to increase information available to patients • Prioritise key indicators to measure outcomes and adherence to best practice • Provide real-time standardised information through clear data protocols • Make information freely available to commissioners, public and providers • Build GP capabilities to monitor provider performance and analyse data • Ensure • quality in a devolved system • 4. Assess, audit and enforce • Make investigation and enforcement for quality failures faster and more effective • Strengthen consequence management for poor performers • 5. Enable choice and competition through stronger payer function • Extend choice and patient ownership of care decisions (e.g., treatments) • Strengthen payer skills, resources and systems to improve quality • Leverage payer purchasing power through joint commissioning (e.g., consortia) • Standardise care pathways and adherence to high quality care through commissioning • Strengthen existing quality incentives in contracts • Create competitive commissioning market

  22. 050913 GCC conference Systems reform breakout DETAILED STANDARDS FOR CARE – FOR EXAMPLE JCAHO AND CMS • CMS • JCAHO • Acute MI • Aspirin at arrival • Aspirin prescribed at discharge • ACE inhibitor for left ventricular systolic dysfunction • Adult smoking cessation advice/counseling • Beta blocker prescribed at discharge • Beta blocker at arrival • Mean time to thrombolysis • Thrombolytic agent received with 30 minutes of hospital arrival • Mean time to PCI • PCI received within 120 minutes of hospital arrival • Inpatient mortality •  •  •  •  •  •  •  •  •  •  •  •  •  •  •  •  •  • * • * • * • *,** •  • “I foresee JCAHO and CMS merging toward a common standard. We need leadership from a federal entity to ensure we don’t have disparate standard.” • – JCAHO Associate Director of Oryx • Heart failure • Discharge instructions • Left ventricular function assessment • ACE inhibitor for left ventricular systolic dysfunction • Adult smoking cessation advice/counseling •  •  •  •  •  •  •  •  • “JCAHO and CMS have plans to work together to expand standards into areas like pain management, children’s asthma, and ICV care. We have no qualms about taking on metrics other organizations like Leapfrog have developed.” • – JCAHO Associate Director of Oryx • Pneumonia • Initial antibiotic received within 4 hours of hospital arrival • Initial antibiotic received within 8 hours of arrival • Antibiotic timing (Mean) • Initial antibiotic selection for community acquired pneumonia (CAP) in immunocompetent patients • Blood cultures performed with 24 hours prior to or after hospital arrival • Blood culture performed before first antibiotic received in hospital • Influenza vaccination • Pneumococcal screening and/or vaccination • Adult smoking cessation advice/counseling • Oxygenation assessment •  •  •  •  •  •  •  •  • * • * •  • * •  • * •  •  •  • Surgical infection prevention • Prophylactic antibiotic received with 1 hour prior to surgical incision • Prophylactic antibiotic selection for surgical patients • Prophylactic antibiotics discontinued within 24 hours after surgery end time •  •  •  • * • * • * * JCAHO implementation with July 2004 discharges ** CMS and JCAHO changing to 120 minutes with July 2004 discharges Source: JACHO; CMS; interviews; team analysis

  23. 050913 GCC conference Systems reform breakout METRICS USED BY CMS/Premier Demonstration Project * • Heart Attack (Acute Myocardial Infarction or AMI) • Aspirin at arrival • Aspirin at discharge • ACE Inhibitor for Left Ventricular Systolic Dysfunction • Beta Blocker at arrival • Beta Blocker at discharge • Thrombolytic received within 30 minutes of hospital arrival • PCI received within 120 minutes of hospital arrival • Smoking cessation advice/counselling • Inpatient mortality rate • Coronary Artery Bypass Graft (CABG) • Aspirin at discharge • CABG using internal mammary artery • Prophylactic antibiotic 1 h prior to surgical incision • Prophylactic antibiotic selection for surgical patients • Prophylactic antibiotics discontinued within 24 hours after surgery • Inpatient mortality rate • Post operative haemorrhage or haematoma • Post operative physiologic and metabolic derangement • Heart Failure (HF) • Assessment of Left Ventricular Function • ACE Inhibitor for Left Ventricular Systolic Dysfunction • Detailed discharge instructions • Adult smoking cessation advice/counselling • Hip and Knee replacement • Prophylactic antibiotic 1 h prior to surgical incision • Prophylactic antibiotic selection for surgical patients • Prophylactic antibiotics discontinued within 24 hours after surgery • Post operative haemorrhage or haematoma • Post operative physiologic and metabolic derangement • Readmissions 30 days post discharge • Community Acquired Pneumonia (CAP) • Oxygenation Assessment • Initial Antibiotic • Antibiotic timing • Pneumococcal screening / vaccination • Blood culture performed first antibiotic received in hospital • Smoking cessation advice/counselling • Influenza screening / vaccination • Median quality scores improvements – year 1 • 90 • 93 • 85 • 91 • 86 • 90 • 70 • 80 • 64 • 76 • AMI • CABG • HF • Hip & • Knee • CAP *3 year pilot at consortium of nonprofit health systems including 270 hospitals and treating 400,000 patients in the 5 conditions Source: CMS/Premier Demonstration Project; WSJ, 4 May 2005; CMS Press Release 3 May 2005

  24. 050913 GCC conference Systems reform breakout DIFFERENCES IN QUALITY BETWEEN PUBLICLY REPORTING AND NON-PUBLICLY REPORTING PLANS • Measure * • Public reporters, % • Non-public reporters, % • Difference, % • Adolescent immunisation status (combo 1) 19.8 • Beta-blocker treatment after heart attack 4.5 9.7 • Check-ups after delivery • Childhood immunisation status (combo 1) 7.4 • Cholesterol management – Control (LDL <130) 13.6 • Cholesterol management – Screening 7.6 • Comprehensive diabetes care – Eye exams 10.5 • Comprehensive diabetes care – HbA1c testing 3.5 • Comprehensive diabetes care – Lipid control (LDL <130) 5.5 • Comprehensive diabetes care – Lipid profile 3.1 9.0 • Timeliness of prenatal care * Selected averages for commercial (non-Medicare/Medicaid) providers Source: NCQA – The State of Health Care Quality, 2004

  25. 050913 GCC conference Systems reform breakout USE OF INFORMATION TO DRIVE QUALITY • U.K. EXAMPLE • Reduction in mortality rates since data began to be published by a private company • Individual hospital trusts • Mortality rate for open heart procedures in children under 1 % • A • B • C • D • E • F Source: Aylin et al. British Medical Journal, October 2004

  26. Peer reviews • Treatment guidelines • Quality monitoring • Practice visits 050913 GCC conference Systems reform breakout QUALITY MANAGEMENT IN PRIMARY CARE – NETHERLANDS • IMPROVE QUALITY • Measures to ensure quality • History of quality initiatives • Key facts • Physicians take part in 6–12 peer reviews per year • 1970s • Initiatives to introduce peer reviews and treatment guidelines • About 70 guidelines have been developed • 1980s/90s • Dekker reforms introduce competition and focus on quality • Statistical analysis of treatment processes and outcomes • Video recordings of physician-patient interaction • 1996 • Law passed to enforce annual quality reviews • Goal is mainly to evaluate management processes • About 40% of all general practitioners take part

  27. 90% • 45% • 25% Primary care center Diabetes GPs Respiratory GPs Frequent flyers GPs Nurse support 050913 GCC conference Systems reform breakout • EXAMPLE CHRONIC DISEASE MANAGEMENT SHOWS POTENTIAL • Approach • Region’s patients stratified by risk group, creating 4-5 pools, e.g., • Diabetes • Respiratory • Frequent hospital use • GPs merged into primary care groups of up to 10, with 2 each trained on 1 disease (e.g., diabetes), networked with local specialist (to handle escalated cases), and given 24/7 nurse support • Each patient assigned exclusively to GP/nurse, located at the primary care center • System designed to reduce complications and time spent in the hospital • Example: North Bradford PCT • Results • Emergency admissions • 38%-73% • 15%-70% • Average length of stay • 40%-50% Source: PCT interviews; North Bradford PCT Performance Report, Sept. 2004; CDM Compendium, DH, 2004

  28. 050913 GCC conference Systems reform breakout CHRONIC DISEASE MANAGEMENT AND PRO-ACTIVE CASE MANAGEMENT • Effects on existing treatment structures • Disease management interventions • Emergency Admissions • Disease • GPs • Nurse • O/P • A&E • LOS • 1 • Congestiveheart failure (CHF) • Constant weight checks • More healthy nutrition • Best practice medication • 40-90% • 30% • Daily blood sugar checks • Expert patient programme • Best practice medication • 2 • Diabetes • 25% • 45% • 3 • Best practice medication • Expert patient programme • Peak flow monitoring • Asthma • 38-73% • 90% • Best practice medication • Expert patient programme • Peak flow monitoring • 4 • COPD • 20% • 70% • 5 • Monitoring risk profile • Behaviour modification • Best practice medication • CHD/ Hypertension • ??% • ??% • Identification of patients • Allocation of case manager • Regular monitoring and review • Pro-active assessment and treatment • Best practice medication • 6 • High risk / older people / Frequent flyers • 15-70% • 40-50% Source: McKinsey analysis; Chronic disease management compendium, DH, 2004

  29. 011706 Team Update V7 • Adjust capacity - examples 4 • Specialised players in US and UK • Home monitoring to support chronic disease management • Intermediate care in U.S. • Regional emergency care planning in England

  30. 92 • 10,500 43 • - 37% 82 27 137 U.S. average THI U.S. average THI U.S. average 1 year THI 5 year 050913 GCC conference Systems reform breakout SPECIALISATION IN HEART SURGERY – USA • IMPROVE QUALITY • Increasing case load • Number of heart surgeries • Lower costs • US$000 • Higher quality – better survival rate, % Source: Texas Heart Institute

  31. 050913 GCC conference Systems reform breakout SYSTEM PATIENT FLOW (REGION WITH 3 MILLION PEOPLE) 24x7 service Blue light ambulance • Acute Care • “A&E” • ITU • CCU • Inpatient care • Key thrusts • Triage early • Avoid inappropriate hospitalisation • Provide scheduled care where possible Paramedic Elective care Outpatients Patient Social care Telephone service Emergency care Diagnostics Intermediate care Community care (incl GPs) Source: Team analysis

  32. Diagnostic Episodes 117%** 0% -44% 050913 GCC conference Systems reform breakout UTILIZATION CHANGES Inpatient spells Outpatient Episodes Activity A+E Underlying Activity Growth 16% 16% 16% Activity redistribution to self care 0% -8% -10% Activity redistribution to other Services (e.g. ECS) -84% -36% -60% Productivity ALOS reduction(partially due to transfer to Intermediate care; likely to be less than full 30% identified in initiatives, as simpler cases will have been transferred out) -20-30% * Based on 5-year projections ** Based on national targets for diagnostics Source: Team analysis

  33. 050913 GCC conference Systems reform breakout IMPACT ON SITES Interim System (2-3yrs)** Sustainable System (5yrs+) Current • Acute • care 9 7-8 5-7 6 5-6 3-4 • Elective • care 22* 22 17-22 • Intermediate care • Emergency care 3 6-18 20 390 300-350 100-200 • Community care • Diagnostics • Co-located with Acute care/Emergency care • Co-located with acute * 22 community hospitals, 12 of which are non-Trust sites. Many of these currently provide (sub)-residential care ** Highly preliminary Source: Team analysis

  34. 050913 GCC conference Systems reform breakout STEPDOWN SERVICES CAN SUBSTANTIALLY REDUCE LENGTH OF STAY IN ACUTE CENTRES • INCREASE CAPACITY Stroke Joint Replace-ment Fractured neck of femur Total • Comparison Kaiser—NHS • Kaiser comparison suggests there is much scope to reduce LOS in hospitals • NHS OBDs per 100’000 population >65 yrs, 000s • 22.3 • 8.2 • 8.4 • 38.9 • ALOS in NHS, days • 27 • 12 • 27 • ALOS in Kaiser, days • 4.26 • 4.3 • 4.9 • OBDs with Kaiser ALOS, 000s • 3.5 • 2.9 • 1.5 • 38.9 • OBDs saved per 100’000 population >65yrs,000s • 18.8 • 5.3 • 6.9 • 30.7 • Benchmarking Beds and Herts SHA (1.5m population) • Top 3 conditions account for 40% of potential shift from acute sector to intermediate • Extrapolates to 3m bed days in England • Total OBDs, 000s • 55.5 • 38.3 • 34.0 • 34.0 • Current ALOS, days • 17.7 • 13.5 • 20 • Current LOS range, days • 0–393 • 0–225 • 0–515 • Best practice ALOS, days • ~4* • ~4 • ~2 • OBDs if applied best practice, 000s • 12.5 • 11.3 • 3.4 • 12.5 • OBDs save, 000s • 33.0 • 27.0 • 31.6 • 91.6 * Stroke: 4 days acute, then rehab, Joint replacement 2 days acute then rehab, fractured neck of femur 2 days acute then rehabilitation in intermediate care Source: Hospital bed utilisation in the NHS, Kaiser Permanente and the US Medicare programme. Ham et al. BMJ 2003;327:1257-60, Bedfordshire and Hertfordshire SHA

  35. 011706 Team Update V7 • Involve consumer 5 • Urban sickness funds in China • Differentiate offering to consumer segments • Consumer information in Norway

  36. Increasing and changing health-care needs • Aging population • Increased prevalence and burden of disease • Greater focus on wellness and prevention • Broader definition of disease 050913 GCC conference Systems reform breakout FOUR MAIN DRIVERS OF CONSUMERISM • Increasing responsibilities • Rolling back of health-care systems (increased rationing and co-payment) • Requirement for active decision making • Product innovation from insurers/providers • Advanced technology and more information • Better access to health information • More treatment options • Advancing medical and information technology • Growing innovation in private sector • Increasing rights and expectations • Growing demand for efficient, convenient, and personalized services (from and beyond health care) • Greater clarity of treatment outcomes • More power to challenge health-care professionals • Larger influence of advocacy groups

  37. 22 050913 GCC conference Systems reform breakout GOVERNMENT RESPONDING TO SOCIAL PRESSURE • Government needs to improve healthcare to address foreign investors’: • Concerns about lost productivity • Concerns about having to pick up the slack • Government increasingly concerned by violent protests “Mass incidents”* in China Thousands • 58 • 50 • 45 • 40 • 32 • 25 • 15 • 12 • 11 • 10 • 9 • 1993 • 94 • 95 • 96 • 97 • 98 • 99 • 00 • 01 • 02 • 2003 • Government launched “Harmonious Society” campaign, November 2004 • Intended to “enable all people to share the social wealth created in reform and development” • Includes increased investments in healthcare and other social infrastructure • In healthcare, is seeking to increase “Basic Urban” insurance cover from 130 to ~450 MM • Is also piloting rural insurance scheme, though at very low coverage levels * Police definition Source: Ministry of Public Security statistics; People’s Daily

  38. Basis of industry • growth projections • Most insurance products have high deductibles and co-pays, leading to continued suppressed demand • Other • Coastal rural • Premium • Mass market 050913 GCC conference Systems reform breakout • ILLUSTRATIVE MULTI-TIER CONSUMER MARKET IS EMERGING • Insurance coverage • Lives 2003 • Lives 2015 • Private insurance • Urban Scheme • ~25MM • ~100MM • Urban scheme deductible 10% average salary (U.S.$700/yr in Shanghai); • Co-pay ~40% (outpatient), 10-20% (inpatient), depending on region and service • ~105MM • ~350MM • Rural scheme with U.S.$75 deductible, 80% co-pays • Private cover to reduce out-of-pocket expense • ~15MM • ~50MM • Rural scheme or out of pocket • Without private insurance • Low, very cost-sensitive demand • ~1,150MM • ~900MM * Projection assumes premium and coastal urban segments grow at private insurance premium CAGR (13% 2003-2010); all Premium have Urban Basic insurance; Government achieves goal of insuring 450 MM urban population; Chinese population grows to ~1,380 MM Source: MOH 2003 National Health Services Survey; Asian Demographics; literature survey; team analysis

  39. 386.4 050913 GCC conference Systems reform breakout MEDICAL EXPENSE EXAMPLE: BROKEN FINGERRMB (US$1 = 8.3 RMB) • 1,319.0 • 96.6 • Cost of treatment • Excluded services • Deductible • 80% Co-pay • Reimbursement

  40. 050913 GCC conference Systems reform breakout WE SEE SIX DISTINCT ATTITUDINAL SEGMENTS WHICH ARE GOOD PREDICTORS AND PROXIES FOR BEHAVIOUR • “Anxious Seeker” • 14% • “Depender” • 14% • “Receiver” • 17% • High • While distinct segments exist, patient behavior varies widely within each segment • Psychological burden of health concerns • “Avoider” • 18% • “Proactive” • 21% • “Stoic” • 16% • Low • Low • High • Desire for health-care proactivity Sources: 1,500 telephone interviews evenly distributed in Germany, U.K., Italy in March 2001; McKinsey analysis

  41. INVOLVE CONSUMER TO DRIVE HOSPITAL QUALITY • How it works • Free choice of hospital (since January 2001) • Patients free to call toll free number or visit website to find shortest waiting times and book treatment (since May 2003) • Hospital outcome ratings and rankings of service level by hospital on internet (since September 2003) • Patient is guaranteed treatment within a certain time period by law Source: www.sykehusvalg.net; McKinsey

  42. Competition between payors • Contestabilty for hospitals and doctors • Independent regulation 011706 Team Update V7 • Introduce competition 6 • Building blocks • Hypotheses based on experiences so far • Leads to new ideas and new dynamics (better services, more efficient medical cost management) • Example: Germany, U.S. • May impede chronic disease management and add overhead cost • Drives through improvements in efficiency and quality of care as well as responsiveness to patient needs • Examples: Foundation Trusts in England, regional budgets and contracting (e.g., Norway, Italy, Germany) • Need to make the choosing process meaningful and data transparent to avoid competition on meaningless parameters – in reality choice does not mean patients choosing hospitals, but doctors choosing doctors with very limited factual information • Regulatory framework critical for overall success, two key roles • Consumer protection / quality watchdog • Financial, governance and market rules and behaviours of players

  43. 050913 GCC conference Systems reform breakout NHS IN ENGLAND IS BUYING IN DIAGNOSTIC AND SURGERY CAPACITY FROM THE PRIVATE SECTOR • INCREASE CAPACITY

  44. 050913 GCC conference Systems reform breakout SETTING UP OF FOUNDATION TRUSTS IN ENGLAND • New freedoms bestowed on hospitals • Potential ways of improving services • Able to borrow money on capital markets • No more directives from DH (previously over one per day) • Full profit and loss accountability • Able to develop strategic partnerships • Able to develop new services • Companies with P&L, in charge of revenues and costs • Investment in new facilities • Innovating to develop patient services • Focus on efficiency and cost effectiveness – keeping the savings

  45. 050913 GCC conference Systems reform breakout • Adjust regulation and institutions / MOH 7 • Country • United • Kingdom • Singapore • Germany • Norway • Role Ministry of Health Ministry of Health Dept. of Health Ministry of Health Qatar and Abu Dhabi have already moved functions from ministries to authorities; the UAE federal government is following • Policy • Healthcare Commission; • SHAs • National Board of Health • Professional organisations • Regulation • Public and private insurers • Public and private insurers • Primary Care Trusts • Ministry of Health • Payors Private & public hospitals; private physicians Private & public hospitals; private physicians Public hospitals Public hospitals • Service provision Although hospitals can be public sector, increasing trend to operational independence of hospitals

  46. 050913 GCC conference Systems reform breakout 2 ROLES: ECONOMIC REGULATION AND CONSUMER PROTECTION TO REGULATE EX-STATE RUN INDUSTRIES (UK EXAMPLE) • Economic regulator Healthcare Commu- nication* • Gas & electricity* • Economic regulation FTs Non-FTs IS Housing Mail • Water • Rail • Government • Quality and safety • regulator(s) • Set conditions for market entry and exit • Monitor and disclose financial performance n/a • Manage financial in-stability n/a n/a n/a • Achieve sustainable profits for providers n/a n/a • Manage competition n/a n/a • Consumer protection • Ensure affordable end-user pricing n/a • Set quality standards • Monitor quality • Encourage choice and innovation • Promote safety of public • Manage externalities (e.g., environmental impact) n/a n/a n/a n/a n/a n/a * Reflects network/distribution segment of market vs. other market segments (e.g., broadcasting, gas metering) Source: Interviews with regulators

  47. 050913 GCC conference Systems reform breakout • DRAFT SHOULD MINISTRY AND HEALTH SERVICE BE SEPARATE? Minister of Health Health Service Executive Cancer Diabetes Standards and quality (CMO) SHAs … Strategy and Policy co-ord Planning and capability development Investigations & Inquiries Primary Care Provider development Secondary Care NHS Finance, Strategy & Planning Social Care & Public Health NHS IT implementation Other Care (Drugs, Mental health, Dental) NHS workforce DH Finance NHS communications DH IT policy and standards DH HR policy and standardds DH communications Source: Team analysis

  48. 6. Refocus organisations • 5. Increase levels of education • 4. Improve access for the poor/ rural • 2. Fix financing • 3. Improve service delivery • 1. Increase pooling • System appears to be accumulating debt • System unable to make most effective use of resources • Poor responsiveness of system, notably hospitals, to patient needs • Centrally driven – hospitals have little flexibility on staff & budget • Poor exposed to health shocks as a result of high level of out of pocket spend • 94% of nurses have only secondary level of education • Medical schools are expanding imperilling standards • Weakest doctors are allocated to positions with least oversight/ training • MoHP currently sprawls across all roles • Suboptimal performance • While physical access is not an issue, service, drug & quality staff availability is • Institute independent quality assessment/ accreditation • Simplify organisational structure • Fix clinic/ hospital management through increased autonomy and building capabilities • Devolve (some) resource flexibility (staff, budget) • Focus on defined basic package • Fix Patient Treatment at the Expense of the State • Fix Health Insurance Organisation • Rationalise services • Increase incentives to work in rural areas (clinicians & management) • Reform takleef (existing allocation mechanism) • Step up post-high school nurse training • Increase oversight/ training for rural doctors • Launch package • Shift OOP spending into pools • Subsidise poor/ fund for non-risk events (i.e., primary care, ?old age?) 050913 GCC conference Systems reform breakout DRAWING IT TOGETHER – EXAMPLE OF A DIAGNOSTIC • Issue • Action

  49. 050913 GCC conference Systems reform breakout EXAMPLE OF A PROGRAM – ENGLAND 1999-2008 • Steps 1) Create capacity 1999-2004 • Set targets • Abandon 4 regional HQ and health authorities, create 28 SHAs and 300 PCTs under • Triple nominal spend over 10 years to meet targets 2) Create plural market 2004-2008 • Aggressive new access targets • Choice • Plurality of supply (FT, ISTC) • Incentives – PBR, Consultant contract, GP contract

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