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1 6th Annual Symposium International Network Health Policy & Reform Impact of the Competition Strengthening Act upon Care Coordination Reinhard Busse, Prof. Dr. med. MPH FFPH FG Management im Gesundheitswesen, Technische Universität Berlin (WHO Collaborating Centre for Health Systems Research and Management) & European Observatory on Health Systems and Policies

2 Risk-structure compensation since 1994/95 Contribution tion Third-party payer collector Ca. 250 sickness funds Wage-related contribution ca. 13.4% (50/50) +0.9% insured since 2005 Strong delegation Choice of fund & limited since 1996 governmental control Population SHI insures 87% (75% mandatorily, 12% voluntarily) Free access with self-government, organised in 7 associations Cost-sharing Contracts, mostly collective Providers Public-private mix, organised in associations ambulatory care/ hospitals The German system at a glance...

3 Federal Ministry of Health Proposals for health reform acts Federal Assembly (Bundestag) Federal Parliament Insuree/ Patient Federal Council (Bundesrat) Representation State Ministries responsible for health Legislative frame Delegation = State only defines legal framework Obligation to secure hospital care Ambulatory Physician 17 (Regional) Physicians Associations Federal Association of SHI Physicians of country-wide funds (via Federal Insurance Office) Valuation Committee & Institute: Setting of relative point values Framework contract Fina ancial negotiation Commissioning Freedom to ch hoose Obligation to co ontract Sectorisation Sickness fund Sickness funds in one region Federal associations of sickness funds Federal Joint Committee on Financial negotiati Hospital Federal Hospital Organization Inpatient t 16 Regional Hospital Organizations of regional funds Committee & Institute for Hospital Reimbursment: DRGs Federal Office for Quality Assurance Institute for Quality and Efficiency (IQWiG) Statutory health insurance early 2007

4 Proposals Federal Ministry Federal Parliament Even of Health though for health reform certain acts regulatory institutions Federal Assembly Federal Council (Bundestag) (Bundesrat) and programmes have become trans-sectoral Legislative frame Representation State Ministries responsible for health Physician 17 (Regional) Physicians Associations Federal Association of SHI Physicians of country-wide funds (via Federal Insurance Office) Valuation Committee & Institute: Setting of relative point values Framework contract Fina ancial negotiation Insuree/ Patient Freedom to ch hoose Obligation to secure hospital care Commissioning Obligation to co ontract Sickness fund Sickness funds in one region Federal associations of sickness funds Federal Joint Committee Institute for Quality and Efficiency (IQWiG) Joint self-government on Financial negotiati Hospital 16 Regional Hospital Organizations Federal Hospital Organization Members: 9 sickness funds 9 providers 3 for neutral Hospital + 9 patients (no Federal voting Office for rights) of regional funds Committee & Institute Reimbursment: DRGs Evaluation of drugs etc. Quality Assurance Statutory health insurance early 2007

5 coordination, quality and cost-effectiveness are problematic Germany always knew that its health care system was expensive, but was sure it was worth hi it ( the best system ) Quality assurance was introduced early but concentrated on structure Increasing doubts since late 1990s: Health Technology Assessment introduced since 1997 World Health Report 2000: Germany only # 25 in terms of performance (efficiency) International comparative studies demonstrate only average quality (especially low for chronically ill)

6 Legal attempts to improve care coordination (selection): Pre- and post- inpatient care in hospitals (1997) Integrated [i.e. transsectoral] care contracts (2000, funded with 1% of expenditure since 2004) Disease Management Programmes (2002) -> next slide Polyclinics (potentially with hospital owners, 2004) GP contracts (insured choose GP as gatekeeper; 2004, have to be offered since 2007) Ambulatory care in hospitals for patients with selected rare/ difficult diseases (2004)

7 Disease Management Programmes (since 2002) Compensate sickness funds for chronically ill better (make them attractive) = reduce faulty incentives to attract young & healthy h Address quality problems by guidelines/ pathways Tackle trans-sectoral problems by integrated contracts = introduce Disease Management Programs meeting certain minimum criteria and compensate sickness funds for average expenditure of those enrolling (new RSC categories) double incentive for sickness funds: potentially lower costs + extra compensation! By early 2007: 3.5 mn enrolled (5% of SHI insured)

8 What has or will be changed by the Competition Strengthening Act and what is the (likely) impact on care coordination? Population Contribution collector Third-party payer Good for the up to 1.5% uninsured, both voluntarily (e.g. selfemployed) and involuntarily (e.g. divorced women, >55 yr-olds with chronic illnesses) Providers PHI remains but: universal coverage + obligation to contract (for a capped premium)

9 Health fund Redesigning the risk-adjusted allocation formula to include supplements for 50 to 80 diseases Uniform contribution rate (determined by government) Population Contribution collector Third-party payer PHI remains but: universal coverage + obligation to contract (for a capped premium) Providers

10 Euro/T Tag 35 Standardised (= avg.) expenditure used for the Standardisierte Leistungsausgaben in Euro pro Tag -Rechtskreis WEST- Risk Structure Compensation Jahresausgleich 2005mechanism (2006) 30 m - kein DMP w - kein DMP 25 m - Diabetes II 20 w - Diabetes II w - Brustkrebs 15 m - KHK 10 w - KHK m - Diabetes I 5 0 Avg / day Alter w - Diabetes I

11 Euro/T Tag 35 Effect of illness by age differs greatly (2006) Standardisierte Leistungsausgaben in Euro pro Tag -Rechtskreis WEST- Jahresausgleich m - kein DMP w - kein DMP m - Diabetes II w - Diabetes II w - Brustkrebs m - KHK 10 w - KHK Alter m - Diabetes I w - Diabetes I

12 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% The well-known 20/80 distribution actually the 5/50 or 10/70 problem , ,6 8,8 5,6 6,9 4 2,5 3,4 % of population % of expenditure

13 % meet threshold h of > 1.5fold avg. expenditure % <

14 55 persons in last year of life; expensive acute diseases without lasting ill-health; extremely rare but expensive diseases Participation in a DMP will not qualify anymore: will reduced incentives lead sickness funds to stop offering them? 16 Or: normal the acute opportunity inpatient stays to concentrate on (cost-)effective programmes with risk-strata, strata for patients 9 with multiple conditions etc.? % <1 We need to identify 50 to 80 diseases explaining these costs!

15 Redesigning the risk-adjusted allocation formula to include supplements for 50 to 80di Problematic diseases as chronically ill will not Health Contribution Third-party benefit (= loose) but fund according to a survey collector payer they don t realise that Uniform contribution rate (determined by government) Extra, community-rated premium (positive or negative) Population No-claim bonuses, individual deductibles es to lower contribution o PHI remains but: universal coverage + obligation to contract (for a capped premium) Providers

16 Redesigning the risk-adjusted allocation formula to include supplements for 50 to 80di diseases Sickness funds, Health fund Uniform contribution rate (determined by government) Population Contribution collector Third-party payer PHI remains but: universal coverage + obligation to contract (for a capped premium) organized in ONE association Still mostly collective contracts, but more selective integrated Probably overrated for care contracts chronic care coordination; mostly used dfor acute carerehab. packages Providers

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