Luxembourg Reform of the Health System

1. Luxembourg Reform of the Health System Paul SchmitIGSS AIM workshop – March 29th, 2011

3. Outline • Introduction • Structural measures • Financial aspects • Future challenges • Conclusion

4. Introduction

5. Historical evolution • Introduced in 1901 following the Bismarck-model • Different health care insurance institutions for different classes of workers • Progressive extension to all classes of the population • Particular mechanisms and financing • Harmonization and simplification since 1974 • Reform of 1991: UCM-Union des caisses de maladie • Reform of 2009: CNS-Caisse nationale de santé • Management and financing through a social partnership between state, employers and employees Réforme - soins de santé

6. Health insurance coverage • Health care benefits in kind  Reform 2010 • Cash benefits as income-replacement measure in the case of invalidity  not concerned (reform 2009) • Not included • Birth and maternity benefits (paid by the state)  Reform 2010 • Long term care (assurance dépendance – since 1999) and invalidity (assurance accident – reform in 2009) are independent social security pillars Réforme - soins de santé

7. General principles (since reform 1991) • Compulsory collective contracting of all health care providers (Conventionnement obligatoire) • All providers are mandatory contracting partners of the CNS • All persons insured have a fair access to health care • Motivation: social justice, prevention of a « 2-tier-medicine » • Budgeting of hospitals and clinics • Infrastructure policy is fixed by the department of health • Hospitals are paid by budgets (no DRG) • Health care providers are primarily self employed • Employment of physicians by hospitals remains an exemption Réforme - soins de santé

8. Co-payments and its supplementary coverage • Prices are fixed between CNS and providers • Doubts about the billing practice • Incomplete, sometimes unbalanced benefits • Transparency, fraud, lack of control and maintenance,… • CNS covers about 90% of the health care expenses • Co-payments can partly by covered by supplementary insurance products offered by CMCM and private insurance companies • Supplementary benefits are restricted • System leaves little space for price autonomy (dentists) • “1st class” rate for hospitals and doctors • Demand for “new” products Réforme - soins de santé

9. Timeline • 1992: Last major reform of the health care system • 1994: Hospital law (reviewed 1998) • 1998: Long term care insurance (reviewed 2005) • 200x: Different financial adaptations • 2004: Program « Soigner mieux en dépensant mieux » • 2009: Uniform social security status (Statut unique) – Creation of the CNS • 2009: New government / Economic and financial crisis •  Health care reform by end of 2010 Réforme - soins de santé

10. Preservation of the national health care system • The Government wants to preserve a health care system based on national solidarity, equal and fair access as well as quality of healthcare services. • Le Gouvernement s’engage à préserver un système de santé basé sur la solidarité nationale, l’équité et l’accessibilité ainsi que sur la qualité de l’offre. • The Government does not put the system of compulsory collective contracting into question, which guarantees universal access to benefits at the same level of quality. • Le Gouvernement n’entend pas remettre en cause le conventionnement obligatoire, qui garantit l’accès de tous à des soins de même qualité. • (Extract from the government program) Réforme - soins de santé

11. Strategic orientation • Preserve a public health care system based on solidarity and enhance quality through complement coordinated care pathways. • Manage the evolution of the global health care expenditure and guarantee the viability of our health care system • Develop a medical documentation system responding to criteria of exhaustiveness, exactness, transparency, standardization, comparability and exchangeability Réforme - soins de santé

12. Critical situation in 2009 Impact of the economic crisis • Substantial decrease of employment rate and social security contributions • Critical financial status (as in the last decade of 2009) • Estimated deficit for 2010 of 5% of total budget (estimation of September 09) • Structural deficit of the health care system (planning was based on the assumption of an annual economic growth of +/- 4%) • The approach taken for 2010 • Agreement of a “stability pact” for 2010 with the providers • Temporary down-sizing of the legal minimal reserve • Shared responsibility among all actors (working groups, discussions, …) • Health-care reform to be completed within 2010  Social insurance and hospital legislation  New political/strategic orientations of the health system Réforme - soins de santé

13. Mission statement of the reform • Maintain the health system but proceed to a partial reengineering • Compulsory collective contracting / Medicine as liberal profession/ Hospital budgeting  very thin margin for structural reforms • Short-term objective: • Financial equilibrium 2011 • Reform the cost-driving mechanisms/automatisms • Reduce spending • Mid- and long-term view: • Sustainability of the financing system • Optimize quality and efficiency of the health system • Improve interregional and cross-border competitiveness • (Being financially neutral with regard to the public budget) Réforme - soins de santé

14. Revision of the 1991/92 reform • Taking into account the structural development of the hospital infrastructure • Coordinating (liberal) medicine in (budgeted) hospital • Acknowledging extramural developments (ambulatory surgery, laboratory, long-term care, …) • Medical progress and technical/organizational complexity • Lack of transparency and comparability (national and European/ OECD level) • Preparing the switch from a purely national-focused system and considering an increasing cross-border mobility of patients and providers Réforme - soins de santé

15. Reform preparation • < 2009: « Soigner mieux en dépensant mieux » • 07/09 Programme gouvernemental • 10/09 Quadripartite : Presentation of reform objectives • 10-12/09 7 « internal » working groups (WG) • 01-03/10 Integration of other stakeholders in the WGs • (providers, social partners) • 03/10 Quadripartite : Presentation of WG conclusions and of the main measures planed to be included in the reform • 03-07/10 Elaboration of the bill (avant-projet de loi) Réforme - soins de santé

16. Large consensus on the objectives • Strengthening of primary care • Making the organization of the hospital sector more efficient • Developing synergies, collaborations and specializations • Improving global governance of the system • Improving the transparency of provided services • Improving and standardizing medical documentation • Take the ambulatory turnaround … but … • « not in my backyard » • « stupid, it is … the money » Réforme - soins de santé

17. Legislative process • 07/10 Discussion of the reform in the Council of Government • Validation of the general concept • Re-examination of the financial part (with the concerned parties) • 07-09/10 Presentations, explications and discussions • Public, social partners, providers, political parties, … • 09-10/10 Deposal of the revised reform project • Validation of the final version of the project by the Government • 10-12/10 Legislative process • Political, public discussions of the concept • 2 sets of amendments • Physicians went on strike for one month • Agreement of the CNS-Board on 2011 budget • … • 14/12/10 The law passed through the Chamber of Deputies • As of 01/11 It became effective. Réforme - soins de santé

18. Structural measures of the reform

19. Priority for primary health care • General Practitioner (GP) model (Médecin de référence) • Voluntary basis • Reinforcement of the missions of the GP • Missions: • Primary point of contact for the patient  • Health prevention and promotion • Supervision of the patient’s global health file • Supervision of the health system pathways • Prevent multiple treatment, over-consumption and unintended side effects • Information, guidance and consultancy • … • As well as: • Specification of mission and functions of the hospital-based policliniques • Evaluation and valorization of medical centres (maisons médicales) • New forms of collaboration among GPs Réforme - soins de santé

20. Medical documentation • Close ranks to international standards by introducing • CCAM, ICD-10 with minimum 4 digits, ICPC-2 • Introduction of a shared electronic health file • Enables access to data processed by CNS and health providers • Very strict access control • Compliance with data protection rules • Patient decides about scope of content and access (consent) • Reference doctor is supposed to have large access (if agreed by patient) • Creation of a regulation and management agency (Agence nationale des informations partagées dans le domaine de la Santé ) • Management of the shared health file system (eHealth platform) • Access management and control • Normative mission focused on a coherent IT strategy • Governing structure that includes main stakeholders (CNS, providers,..) Réforme - soins de santé

21. Reform of the hospital law • Inspired by concepts of the 70s • Focused on the equilibrium of state, municipalities and private clinics • Regions, buildings, units and beds • Few conceptual and procedural interactions between hospitals • Reform hospital planning • One national/interregional strategy • Competence centers • Regulated medical accreditation • … Réforme - soins de santé

22. Hospital strategy • Focus on efficiency, synergies, specialization and cooperation in administrative, logistic and medical matters • Restructure offer: creation of competence centers, focus on ambulatory surgery, clinical pathways, … • Adapt physicians’ fee schedule (Nomenclature)!! • Strengthen hospital financing • Introduction of a global budget fixed by the government • New budgeting mechanism • Analytical accounting aiming at « full cost model » (and later DRGs?) • Better link physician and hospitals • Define the status of a hospital physician • Medical council (Conseil médical) • Medical coordinator (médecin coordinateur) Réforme - soins de santé

23. CNS benefit package and its prices • Reform of the Commission de nomenclature  • Creation of a Unit for medical evidence(Cellule d’expertise médicale) • Provide technical support to the nomenclature commission • Standard procedures for medical documentation • Reference classification for medical procedures (French CCAM) • Additional reporting of duration, location, specialization and competence • Evaluate billing practices … • Prepare for medical activities remunerated by salaries, flat-rates, etc. • Complementary benefits: “1st class”-rates • Promotion of a benefits-in-kind-scheme(direct reimbursement practice) • Introduction of the Tiers payant social as a first step Réforme - soins de santé

24. Integration of maternity benefits into the CNS package • Prior to the reform, they were directly paid out of public budget • Integration into the normal health care regime • Prevent further abnormal evolutions for cash benefits • Perverse sick leave practices • Simplify administrative procedures • Keep it financially neutral for public and CNS budget • Replace it by a global public budget participation rate for health care (40%) • Stabilize the accelerating increase of maternity costs Réforme - soins de santé

25. Other items • Medication • Introduction of a substitution model: CNS reimburses the lowest price for equivalent drugs (reference pricing) • Maintaining Belgium as reference system Laboratories • Harmonization of regulation and financing for private and hospital labs for extramural activities • Review the service items and reimbursement rate • Introduce standards for Interoperability and data exchange Governance reform • Commission de surveillance, Commission de médiation, Conseil scientifique, … Réforme - soins de santé

26. Financial aspects

27. Economic situation Réforme - soins de santé

28. Cost evolution Réforme - soins de santé

29. Annual variations Réforme - soins de santé

30. Mix of financial measures • > 04/10: Positive economic evolution • Increase revenues: • Step-by-step reconstitution of the minimal reserve starting in 2012 • Increase of the contribution rate from 5.4% to 5.6% (CNS board decision) • to be paid in equal terms by employers and employees • compensated for the employers in the accident insurance reform • Reduce expenses: • Higher patient participations (expected annual savings: 20 mio €) • Cut in the providers revenues (expected annual savings: 20 mio €) • Freezing of the provider tariffs • Global budget envelope for hospitals • Reduction of certain tariffs for physicians and labs • Objective:Having the structural reforms done within the next three years !! Réforme - soins de santé

31. Impact on the public budget • Guideline of the Government Cost-neutrality for the public budget • Integration of the maternity(covered by the public budget)  Before :Public part: 37% in kind benefits / 29,5% in cash / 100% maternity Contribution rate: 5,4% in kind / 0,5% in cash / 0% maternity  After: Public part: 40% global (effective in 2010: 41,x%) Contribution rate : 5,6 % with fix bonus of 0,5% for PE • Compensation for contribution rate increase • Incentive to reform the cash benefits in case of birth (dispense de travail) • Administrative simplification • Better cost control Réforme - soins de santé

32. Financial projection • Positive economic evolution  will the trend continue? • Will we be able to maintain the pressure for reform? • Will the structural measures show the expected results? Réforme - soins de santé

33. Future challenges

34. CNS governance Ministry of Social Security Ministry of health Ministry of family affairs (LTC) General Inspectorate for Social Security Medical Control of Social Security European legislation CNS Trade unions Sickness fund for civil servants and State employees Employers Sickness fund for civil servants and employees of local authorities Hospitals Railway mutual medical aid Doctors Social Security Centre (CISS/CASS) 1. Manages the membership for all social security authorities 2. In charge of receipt of contributions for all branches of social security. 3 Provides centralised data processing, software engineering and hardware Other providers Réforme - soins de santé

35. We could talk much longer about … • Residents – non-residents • Medical progress • Ageing and long-term care • Cash benefits • Patients’ rights directive (Cross-border directive) • Providers (liberal profession vs. contracts) • Hospitals (national organization, offensive vs. defensive strategy) • Will we be able to preserve our “extraordinary” system?? Réforme - soins de santé

36. Mid- and long-term perspective • 2010 reform is in line with 1991 reform; it is not a revolution • Financial pressure on health care will continue • Economic growth uncertainties • Population ageing and demographic changes • Medical progress • Will we be able to preserve in the long run our system? • 2-tier medicine – private insurance/responsibility • Other challenges: • Patients’ rights directive and its impact on cross-border care • Linkages with long-term care • DRGs? • Cash benefits • … Réforme - soins de santé

37. Compulsory collective contracting • Historically • Health was purely national matter and not considered as market • Guarantees for providers and patients • Advantages • Social justice aspects linked to access and quality • Problems • Health coverage is an open system • Pressure on an attractive system by excessive offer and demand • Difficulty to make choices on benefits and providers • Mission of social security to guarantee good coverage and fair prices • Trend to spend more for health matters but not in the solidarity system • Interest of private insurance companies to expand offer Réforme - soins de santé

38. Conclusion

39. Was the reform the effort worth? • YES • Major structural and financial measures • It concerns topics that we talked about for years … • First major reform in 20 years • First major cut in provider revenues in 30 years • Preservation of the system! • Reforms not only on the back of patients and workers (D, F) • Would there have been other ways? • Get in, get out – strategy • You have to get respected • Necessity of a dead-line Réforme - soins de santé

40. What has still to be done? • Application of the law on regulation, conventional and statutory levels • Finalization of some conceptual aspects • Create a new relationship with the providers • Reform the providers/doctors revenue scheme • Voluntarism policy on offer regulation • Intensify the restructuring process of the hospital infrastructures  New hospital plan • Maintain the pressure (acting is better than reacting) • But: After the reform is before the reform Réforme - soins de santé

41. Thank you for your attention! • Paul Schmit • paul.schmit@igss.etat.lu • Tel +352-247-86309 Réforme - soins de santé