Health System Response to Global Economic Crisis

Transcription

1 Division of Country Health Systems Health System Response to Global Economic Crisis Tamás Evetovits Senior Health Financing Specialist WHO Regional Office for Europe Barcelona Office for Health Systems Strengthening Vilnius, 11 December, 2009.

2 Main messsages up front Time to revisit values, priorities and posteriorities Protect public spending Improve targeting the poor and the vulnerable targeting health spending targeting social safety net Improve efficiency of resource use cut the volume of least cost-effective services eliminate ineffective and inappropriate services allocate more to primary care and outpatient specialist care at the expense of hospitals improve rational drug use (including volume control) Introduce long due restructuring of hospital sector, but careful with disruptive implementation Protect what works well, because it will be more costly to rebuild it Avoid losing human resources for health 2

3 Increased relevance of the Tallinn Charter Health systems Performance Social well-being Impact on the economy Health Economic growth Health outcomes Wealth 3

4 Tallinn Charter: guiding the response to the crisis Invest in health systems as part of economic stimulus packages, for growth and social stability Strengthen solidarity, enforce collection of contributions and utilization according to need Ensure pro-poor redistributive policies Promote accountability for performance Use health system intelligence to curtail unhealthy behaviour induced by the crisis, e.g.: align tax policy with health policy on tobacco and alcohol, promoting healthy food choices, etc. ensure access to mental health services Protect health budgets by increasing government transfers to health insurance fund 4

5 Sustainability and the financial crisis The real challenge is balancing the budget in a way that protects policy objectives as much as possible, especially: Financial protection Health of the population Sustainability is not just about finance, but also about what level of attainment of the health policy objectives you can sustain, given your fiscal constraints you cannot have it all, but you can set priorities Fiscal, political and social sustainability 5

6 Stewardship Health financing within overall system How health financing can influence goals Health system goals (WHR2000) Resource generation Health financing system Equity in access: utilization according to need Quality Health gain Equity in health Revenue collection Efficiency Financial protection Pooling Purchasing Benefits Transparency and accountability Equity in finance Service delivery Choice Responsiveness 6

7 Source: Võrk et al 2009 Measuring the objective of financial protection: illustration from Estonia % of households % + above 20-40% 10-20% Year 7

8 Protect public spending for health 8

9 The more that governments spend on health, the lower the burden of out-of-pocket spending on their population (2007) Cyprus Out-of-pocket as % total health spending Latvia Bulgaria Lithuania Poland Romania Slovakia Estonia Greece Hungary Spain Malta Finland Czech Slovenia Republic Ireland Belgium Portugal Italy Sweden Austria Germany United Kingdom Denmark 5 Luxembourg Netherlands France R 2 = Government health spending as % GDP 9

10 Public-private mix in financing in the EU Percent distribution of health system funding sources, % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Cyprus Bulgaria Latvia Greece Poland Lithuania Portugal Slovakia Hungary Spain Romania Belgium Slovenia Finland Austria Germany Italy Malta Estonia France Ireland Netherlands Sweden Denmark United Kingdom Czech Republic Luxembourg Public VHI OOP Other 10

11 What determines level of public spending on health? Context Size of the economy Size of the government Fiscal space: limited opportunity for us to influence Priorities Government decision on allocation to health 11

12 Size of the economy (2007 GDP/capita) Moldova Georgia Armenia Albania Ukraine Bosnia Herz. Azerbaijan Macedonia FYR Montenegro Bulgaria Serbia Kazakhstan Belarus Romania Turkey Russia Croatia Poland Lithuania Latvia Hungary Slovakia Estonia Portugal Czech Republic Slovenia Israel Greece Italy Spain France Germany Finland Iceland United Kingdom Denmark Sweden Austria Netherlands Switzerland Ireland Cyprus Malta Norway 12

13 Fiscal context: relative size of the government (2007) total gov't spending as % GDP Turkmenistan Armenia Kazakhstan Azerbaijan Uzbekistan Albania Kyrgyzstan Russian Federation Tajikistan Switzerland Turkey Slovakia TFYR Macedonia Estonia Latvia Lithuania Georgia Ireland Romania Luxembourg Spain Cyprus Norway Bulgaria Bosnia and Herzegovina Republic of Moldova Poland Malta Croatia Iceland Ukraine Slovenia Serbia United Kingdom Germany Israel Czech Republic Netherlands Portugal Montenegro Finland Italy Austria Belgium Belarus Hungary Denmark France Sweden Greece Source: WHO,

14 The real measure of priority : government spending on health as a % of total government spending (2007) 20 Health as % of total government spending Tajikistan Georgia Azerbaijan Cyprus Uzbekistan Kyrgyzstan Ukraine Belarus Albania Latvia Poland Bulgaria Israel Turkey Greece Kazakhstan Russian Federation Romania Armenia Hungary Estonia Lithuania Republic of Moldova Finland Montenegro Czech Republic Slovenia Bosnia and Herzegovina Malta Italy Sweden Serbia Belgium Slovakia Turkmenistan TFYR Macedonia Portugal Spain Austria United Kingdom France Netherlands Luxembourg Ireland Iceland Croatia Germany Norway Switzerland Denmark Source: WHO,

15 Public sector expenditure on health as a % of GDP (2007) 12.0 Differences in fiscal context and priorities translate into large differences in spending Azerbaijan Tajikistan Georgia Uzbekistan Armenia Kazakhstan Kyrgyzstan Albania Turkey Russia Latvia Ukraine Estonia Bulgaria Poland Romania Lithuania Israel Belarus Slovakia Moldova TFYR Macedonia Bosnia & Herzeg. Greece Malta Hungary Slovenia Spain Czech Republic Finland Switzerland Serbia Montenegro Ireland Italy Portugal United Kingdom Sweden Norway Iceland Netherlands Croatia Austria Germany France Denmark Source: WHO,

16 Try to protect your spending through giving high priority to health during the crisis! Lithuania gave high priority to health in 2004! 20 Health as % of total government spending Azerbaijan Tajikistan Georgia Armenia Cyprus Uzbekistan Russia Latvia Albania Kyrgyzstan Poland Ukraine Greece Austria Belarus Kazakhstan Bulgaria Romania Israel Finland Moldova Estonia Bosnia-Herz Hungary Netherlands Slovakia Turkmenistan Belgium Denmark Italy Luxembourg Spain Serbia Slovenia Portugal Malta France Sweden Turkey Croatia Czech Rep Lithuania UK Ireland FYR Macedonia Germany Norway Iceland Switzerland Source: WHO estimates for

17 Protect the poor Exempt the poor from paying user charges/co-payments Target health spending better Target social assistance better 17

18 Source: Võrk et al 2009 Catastrophic spending is highest among poorer people (Estonia, 2007) % of households Average Income quintiles (poor-rich) 18

19 Source: Võrk et al 2009 Drugs are the main cause of spending for poorer people (2007) 100% 90% 80% 70% % households 60% 50% 40% 30% 20% 10% Inpatient Outpatient Supplies Medicines 0% Average Income quintiles (poor rich) 19

20 Equity in financing and benefits in Canada: one of the few good examples Benefits and tax contributions in mn C$ Benefits Tax contributions 1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th Family income decile Source: Mustard et al (1998); Evans (2002) 20

21 International Comparison of Social Assistance Programs by Fiscal Impact and Coverage of Poor Targeting social assistance for the poor could be improved in Lithuania Source: Abdo Yazbeck, World Bank,

22 Improving efficiency by reducing waste in the system helps reduce adverse effects of the crisis 22

23 An unusual funding source : increasing provider efficiency and/or reducing profits $$$ by reducing waste H O U S E H O L D S General taxation Payroll & other earmarked taxes private insurance user charges/ Co-payments HEALTHCARE BUDGET capitation payments FFS, DRGs, budgets salaries P R O V I D E R S Modified after Reinhardt

24 There is a huge potential for efficiency gains by cutting red tape and also a buffer during the time of crisis Fortune 500 pharma companies data (2001) Expenditure on R&D and marketing&admin as a % of the income Mossialos, 2003 R&D Profit Marketing & administration 24

25 One reason for rising pharmaceutical costs is increase in volume of drug use Change in Price and Volume of Pharmaceuticals, UK Spain Netherlands Germany France % Change in price of existing drug % Change in new products entering the market % Increase in volume of prescribed drugs Total Growth in Drug Expenditures (%) 25

26 Doctor are key decision makers in spending scarce resources How much should we spend on health care? Typical answer by providers : MORE! How would you spend it? Just give us more, we know how to spend it! In God we trust all others bring data 26

27 Huge variation in medical practice: mostly not justified, but costly Tonsillectomy rate in different counties of Hungary (age group of 0-14) Győr-Moson-Sopron Békés Borsod-Abaúj-Zemplén Zala Heves Bács-Kiskun Jász-Nagykun-Szolnok Komárom-Esztergom Nógrád Szabolcs-Szatmár-Bereg Hajdú-Bihar Somogy Vas Veszprém Fejér Tolna Budapest Csongrád Pest Baranya Source: MOH/ESKI 27

28 M20 M3 M9 M6 M5 M8 M13 M10 M15 M17 M7 M16 M1 M14 M11 M2 M19 M4 M12 M18 együtt száz élveszülésre jutó császármetszés Variations in the rate of Caesarian section in Hungarian county hospitals ( ) Source: Belicza,

29 Variations in medical practice in USA US Medicare per capita spending in 2000 was $10,550 per enrollee in Manhattan and $4,823 in Portland, Oregon. Differences are due to volume effects rather than illness differences, socio-economic status or price of services. Residents in high spending regions received 60% more care but did not have lower mortality rates, better functional status or higher satisfaction Potential savings of 30% if high spenders reduce expenditure and provide the safe practices of conservative treatment Fisher in NEJM, October, 2003 Source of slide: Alan Maynard 29

30 Uncertainty of clinical effectiveness Beneficial, 13% Unknown effectiveness, 48% Likely to be beneficial, 22% Likely to be ineffective or harmful, 2% Unlikely to be beneficial, 6% Trade off between benefits and harms, 8% Source: BMJ

31 The central role of physicians in health systems They have the most information about what works and what does not work in health care We need to provide them with incentives to eliminate waste and reward cost-effective use of resources rational utilization of prescription drugs shifting care from hospitals to outpatient settings reduction in unnecessary duplications and unjustifiable variation provider based fundholding experiemnet in HUN produced up to 10% savings which was used to improve patient care If doctors are not on board, reforms are likely to fail 31

32 It may not be necessary to reduce the benefit package if you improve efficiency of the health system Cost-sharing Uncovered services Depth: How much of the costs are covered? Total health expenditure uninsured Publicly financed health care Scope: Which services are covered? Breadth: Who is insured? 32

33 Economic crisis as an opportunity to improve efficiency of health system Pharmaceutical policy: pricing, co-payments and incentives for prescribing lower cost drugs Strengthen primary and outpatient specialist care provide incentives for treating cases at lower levels of care and generic prescribing Restructure hospital sector reduce capacity and use incentives for efficiency gains But careful with implementation: lessons from abroad 33

34 Hungary: Intention was to protect patients from increased private expenditure, but doctors were not on board and incentivized Prescription drugs (public expenditure) in billion HUF, Hungary /2006: Total value: 89% 389 Public: 83% 348 Private: 115% Source: Health Insurance Fund, Hungary 34

35 Estonia: More day cases, less inpatient care! But do we need that volume of service at all? Recall variation! Number of adenoidectomies in day care and inpatient settings, Estonia 3,500 3,000 2,500 2,000 1,500 1, Day care Inpatient 35

36 Hospital restructuring: lessons from Hungary Hospital beds in Hungary Total number of beds Restructuring the hospital sector is necessary, but patient pathways need to be carefully managed during the transition! Restructuring and reducing hospital beds (April, 2007) beds chronic acute

37 There is a limit to how far (and how fast) efficiency gains can take us? Savings may not be immediate: see hospital restructuring How far can we push the system to exhaust efficiency reserves without adverse effects on quality? Unsustainable efficiency gains: delaying capital investments/ maintenance of infrastructure may offer short-term savings, but not sustainable on the long run Lowering salaries carry the risk of loosing qualified staff who will be more costly to replace Cuts in expenditure may result in service dilution (reduced quality) Separate one off short term savings from sustainable efficiency gains Economic crisis offers an opportunity to improve efficiency of health system, but successful reforms usually require additional up-front investment 37

38 Defining sustainable health financing What level of attainment of the health policy objectives are you willing to -collectively- pay for? How much do we value what the health system can produce (as opposed to other -publicly funded- goods and services)? What level of attainment of the health policy objectives can you sustain, given your fiscal constraints? Financial sustainability should not be seen as a policy objective worth pursuing for its own sake, but as a constraint that needs to be respected. If it was an objective, then a simple cost cutting execise will do the job! 38

39 Sustainability trade-offs The need to give up something in order to meet the fiscal sustainability requirement......and as a result settle for lower financial protection, solidarity, access to services or quality But these trade-offs can be less severe if efficiency gains are utilized instead of shifting cost to patients expenditure cuts are selective and focus on least cost-effective services 39

40 Summary messages Protect public spending Improve targeting the poor and the vulnerable Improve efficiency of resource use cut the volume of least cost-effective services eliminate ineffective and inappropriate services allocate more to primary care and outpatient specialist care at the expense of hospitals improve rational drug use (including volume control) Avoid losing human resources for health Time to agree on long due reforms that were politically not feasible before the crisis, but careful with disruptive implementation Cost of recovery in health system may be higher than what you save now by cutting the budget 40