SESSION 3 The market forces framework in Primary Care Services Markets
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1 The World Bank Group in collaboration with O Hanlon Health Consulting, Tropical Health LLP, University of California at San Francisco, University of Edinburgh FEB 4-6, 2015
2 SESSION 3 The market forces framework in Primary Care Services Markets Mirja Sjobolm The World Bank Group in collaboration with O Hanlon Health Consulting, Tropical Health LLP, and University of California at San Francisco and University of Edinburgh
3 INTRODUCTION THE SWEDISH STORY THE CHOICE REFORM SUMMING UP GROUP EXERCISE/DISCUSSION
4 What is primary care? that level of a health service system that provides entry into the system for all new needs and provides person-focused care over time Starfield B. Primary Care: Balancing Health Needs, Services, and Technology. New York: Oxford University Press; 1998.
5 Characteristics of primary care markets Patient better able to judge the product than e.g. hospital care (e.g. Das et al. find clear correlation between quality of care and prices in primary care markets in India) Less information asymmetry Low barriers to entry and therefore less potential for monopoly..the primary care markets is amenable to capture the benefits of market forces and less susceptible to the harm
6 Evidence from 15 OECD countries (2010) Countries Inpatient Outpatient/PHC Dental Pharma Finland Public Public Public Private Iceland Public Mixed Private Private Denmark Public Private Private Private Norway Public Mixed Private Private Austria Public Private Private Private Italy Private Private France Public Private Private Australia Mixed Private Private Germany Mixed (NFP) Private Private Japan Private Private Netherlands Mixed Private Private USA Private (NFP) Private Private Private England Public Mixed Mixed Private Switzerland Private (NFP) Private Private Private NZ Mixed Private Private Source: Rothgang et al. 2010, State and Healthcare: comparing OECD countries.
7 Ownership of primary health clinics in OECD Private Austria Belgium Canada France Germany Hungary Ireland Korea Luxembourg Norway Sweden (approx 50%) Switzerland Australia Czech Republic Denmark Netherlands Slovak Republic UK Japan Poland Public Finland Iceland Italy Mexico Portugal Spain Sweden (approx 50%) Turkey Source: OECD survey on health system characteristics
8 Balance of market vs structuring forces across health sub-sectors: OECD Mixed Health Systems MORE STRUCTURE Acute Inpatient (Hospital) Diagnostics, Elective Surgery, Specialist Services Primary Care; Pharmacy Production & Distribution Retail, OTC Pharmacy MORE MARKET
9 INTRODUCTION THE SWEDISH STORY THE CHOICE REFORM SUMMING UP GROUP EXERCISE/DISCUSSION
10
11
12 Pre-1600 Spontaneous Market OPERATIONAL 0% AUTONOMY 100% CUSTOMER COMPETITION 0% 100% Administered PRICE INFLUENCE Market ENTRY BARRIERS Very High 0 SOCIAL FUNDING 100% 0 CONTRACT CONDITITIONALITY No Conditionality No Conditionality
13 Social Regulation OPERATIONAL AUTONOMY 0% 100% CUSTOMER COMPETITION 0% 100% Administered PRICE INFLUENCE Market 1663 Medical Faculties ENTRY BARRIERS Very High 0 SOCIAL FUNDING 1797 National Board of Health 100% 0 No conditionality CONTRACT CONDITIONALITY No conditionality
14 Voluntary Health Insurance 0% 0% OPERATIONAL AUTONOMY CUSTOMER COMPETITION 100% 100% Administered PRICE INFLUENCE Market Very High ENTRY BARRIERS SOCIAL FUNDING 100% 0 0 Subsidy for VHIs 1891, 1919, 1931 CONTRACT CONDITIONALITY No conditionality No conditionality
15 s Contracts/Market authorization National Health Insurance 0% OPERATIONAL AUTONOMY 100% CUSTOMER COMPETITION 0% 100% PRICE INFLUENCE Administered Market ENTRY BARRIERS Very High 0 SOCIAL FUNDING 100% 0 CONTRACT CONDITIONALITY 1947 NHS law enacted 1955 NHS law into effect No conditionality No conditionality
16 1960s From steward to implementer: Step-wise elimination of private sector OPERATIONAL 0% AUTONOMY 100% CUSTOMER COMPETITION 0% 100% Administered PRICE INFLUENCE Market 1959 Hospital law 1969 Seven Crown reform Very High ENTRY BARRIERS SOCIAL FUNDING 100% 0 CONTRACT CONDITIONALITY 0 # of doctors + accreditation No conditionality No conditionality
17 Post s more restrictions on private practice OPERATIONAL 0% AUTONOMY 100% CUSTOMER COMPETITION 0% 100% 1982 Dagmar reform PRICE INFLUENCE Administered Very High ENTRY BARRIERS Market 0 Restrictions on private providers go back and forth SOCIAL FUNDING 100% 0 CONTRACT CONDITIONALITY No conditionality No conditionality
18 Trends in governance of OECD primary care systems 1800 to 1990s 0% 0% OPERATIONAL AUTONOMY CUSTOMER COMPETITION 100 % 100 % Administere d Very High 100 % PRICE INFLUENCE Semashko & Nordic & Southern NHS ENTRY countries BARRIERS SOCIAL FUNDING CONTRACT CONDITIONALITY Most other Market European countries No conditionality No conditionality
19 So where did this take us. Publicly owned health centers employing a multidisciplinary workforce Providers responsible for population health within a geographical area Money did not follow the choice of patient Providers had no financial incentives to attract new patients
20 Limited access
21 Gate-keeping role of PC limited Primary care physicians /capita PHC physicians/ all physicians Visits to primary care/capita Visits to specialist care/capita Denmark Finland Norway Sweden
22 But at least it was equitable...no!?! Source: van Doorslaer et al. 2006
23 INTRODUCTION THE SWEDISH STORY THE CHOICE REFORM SUMMING UP GROUP EXERCISE/DISCUSSION
24 Reform goals Improve access Improve responsiveness Improve quality of care Strengthen the role of primary care
25 Reform process Started as a local initiative in Holland (2007) and replicated by other county councils e.g. Sthlm (2008) Mandatory national regulation in 2010 Money should follow the choice of patient Freedom of establishment for private providers that fulfill local requirement The 21 county councils defined the rest of the reform Responsibilities, requirements & payments of providers were defined locally
26 From implementer to steward Examples of new functions that were created: The Swedish Competition Authority evaluates the competitive conditions of the choice system Kammarkollegiet provides procurement support to the counties and a national website for tender docs National Board of Health and Welfare supervises and monitor the quality of care and operations SKL (employer interest organization) offers legal advice, process support and organize conferences for local authorities that are implementing the reforms
27 Two models developed. Stockholm model Holland model Role of primary care Divided between five services to increase multiplicity of providers and choice for patients Comprehensive model, 80% of outpatients visits by primary care services Choice and registration for population Active registration Active or passive registration Payment About 40% fixed, payment/ visit for all patients, P4P - 3% of total fixed payment +80% fixed, payment/visit (different price lists for registered and not registered), P4P sanctions Source: Adapted from Anell (2010)
28 Sweden after the Choice Reform 0% 0% OPERATIONAL AUTONOMY CUSTOMER COMPETITION 100 % 100 % Administered PRICE INFLUENCE Market ENTRY BARRIERS Very High 0 SOCIAL FUNDING 100% 0 CONTRACT CONDITIONALITY No conditionality No conditionality
29 Results of the reforms More access and choice for the patient # of primary care providers rose with 20% (more private in urban areas and more public in rural areas) # contacts with primary care and GPs per capita increaesd Phone and visiting availability has increased Quality and efficiency do not seem to differ systematically between public or private providers There are no indications of cost reductions
30 Challenges Visits appear mostly to have benefited patient with minor care needs and in higher socioeconomic status -> can compensation systems fully adhere to the ethical principles of the health act? Continuity of care does not seem to have improved Definition of primary care, tasks and compensation requirement vary greatly between counties, which limites nationwide compairson Limited innovation due to very detailed contracts Limisted incentives for quality of care in reimbursement mechansisms Insufficinet monitoring of the consequences of the reforms (e.g. How different social groups utilize health care)
31 A constant tinkering process How can the coordination function of primary care become stronger? Which reimbursement mechanisms yield best resulsts and why? How can we make exit from primary care easier? Is there a level playing field for public and private providers? Unclear monitoring responsiblity of government agencies...or SHALL WE REVERSE THE REFORM?...
32 INTRODUCTION THE SWEDISH STORY THE CHOICE REFORM SUMMING UP GROUP EXERCISE/DISCUSSION
33 A movement back to the middle 0% 0% Administere EST, POL, d CZ, SLO, Sweden, Finland Very High present 100 % OPERATIONAL AUTONOMY CUSTOMER COMPETITION Semashko PRICE & Nordic INFLUENCE & Southern NHS Semashko & Nordic countries & Southern NHS ENTRY 1800 countries BARRIERS SOCIAL FUNDING 100 % 100 % Most other European countries Most Market 1800 other European 1990 countries No conditionality CONTRACT CONDITIONALITY No conditi onality
34 What s special about the middle way? It seems to work for primary care markets 0% 0% OPERATIONAL AUTONOMY CUSTOMER COMPETITION 100 % 100 % Administere d Very High 100 % Marketizing reforms PRICE INFLUENCE ENTRY BARRIERS SOCIAL FUNDING Structuring reforms Market 0 0 No conditionality CONTRACT CONDITIONALITY No Conditionality
35 More market vs. more structure MORE STRUCTURE Cost Containment Equitable Distribution Financial protection Structuring & Market Forces Have Opposite Potential Strengths and Weaknesses MORE MARKET Access Responsiveness Productivity/Efficiency Growth/ Investment
36 Summary Primary care markets benefit from market forces The middle way seems to work in primary care markets Structuring and marketizing reforms are used to get there Political economy matters Reform processes are long, require constant tinkering and monitoring to achieve desired results This is not easy to get right, even in OECD countries
37 INTRODUCTION THE SWEDISH STORY THE CHOICE REFORM SUMMING UP GROUP EXERCISE/DISCUSSION
38 What about developing countries? 0% 0% OPERATIONAL AUTONOMY CUSTOMER COMPETITION 100 % 100 % Administere d Very High 100 % Marketizing reforms PRICE INFLUENCE ENTRY BARRIERS SOCIAL FUNDING Structuring reforms Market 0 0 No conditionality CONTRACT CONDITIONALITY No Conditionality
39 Group exercise/discussion Name one typical primary care reform that your organization would support? Is it a marketizing or a structuring reform? Show how it moves the market forces?
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