The introduction of user-payment for health services is frequently followed by concern about the impact on equity of access for poor people. Decentralizing governments often try to remedy the created inequities by putting in place safety nets in the form of exemptions and waivers in the user-fee systems. However, where user payments merely operate as local government strategies for health financing, without national policy they are likely to be self-defeating, as local governments are frequently more interested in raising revenue to meet recurrent costs of devolved services than in promoting equity. Thus guidelines put in place by the central government to operationalize safety nets are seen by local governments as being contradictory to this goal, and are thus ignored or altered to suit the district revenue aims. This study was carried out to investigate the context and the constraints in implementing exemption schemes. Data were collected in two selected administrative districts of Uganda (Mbarara and Mukono). Qualitative approaches to data collection were adopted, namely focus group discussions and key informant interviews with policy-makers, health administrators, service providers and community members. These methods were combined with document review. We found little evidence of safety-net guidelines initiated by decentralized/local governments, since district local governments had little motivation to extend exemptions, waivers or credits. The conclusion is that safety nets such as waivers and exemptions will only be effective if they are backed by a national health financing policy, they reconcile the often competing demands of local government revenue needs, and are strictly enforced and supervised by both the local and central governments. The implications of the findings for remedying the tension between the needs for cost recovery and for attainment of equity goals through exemption policies for the poor and indigent are discussed.
Without much public notice, health care is entering a crisis. The events of 11 September and the Enron collapse have made that crisis more imminent, serious, and even more likely to come on the American public and politicians unnoticed. September 11 gave the economy another major hit, led to a military build up that will consume whatever budget surplus there might have been, and drew whatever political and public attention exists away from domestic issues. Nevertheless, we should attend to health care reform. There will soon be a major crisis, and we need to be ready with a reasonable policy for politicians who will suddenly find themselves in need of answers. Consider four descriptive and five prescriptive propositions that lead to the outlines of a politically palatable and ethically justifiable strategy. 1) No one is happy with the current health care system. Doctors and patients hate the encroachment on their choice, feel they have no control over their health plan, and trust no one. Managed care organizations and employers feel that doctors and patients have unrealistic demands, are unwilling to confront the need to cut costs, and are unwilling to be held accountable; managed care is asked to do the impossible to simultaneously improve quality and keep costs down. 2) Health care costs are going up and will continue to go up in the foreseeable future. Whatever savings there were in the 1990s from managed care, they are gone, and they will not return. With pharmaceuticals rising at 20 to 30 percent per year, and hospitals and doctors demanding more money, premiums are heading up at double digit rates with no end in sight. 3) The number of uninsured Americans is going up and the range of health benefits for those who are insured is going down. Increases in unemployment and increases in health care premiums mean more people will lose their health insurance. Decreases in corporate profits mean that those still insured will have skimpier benefit packages and bear more of the premium price with higher copayments. 4) Pressure on state budgets will also mean close looks at Medicaid budgets. As the economy declines, state coffers shrink. Coincidentally, rises in unemployment and health care costs will increase Medicaid expenditures, further squeezing state budgets and crowding out other vital state programs, including education and infrastructure improvements. This is the crisis. But we have been here before. This was almost exactly the situation in the early 1990s, except that then managed care had the potential to constrain costs. And yet, as we all know, health care reform failed. In part, it failed because Clinton spectacularly misplayed the politics of health care reform, and in part because employers embraced managed care--and abandoned Clinton's plan--on the premise that managed care was a more certain path to controlling costs. What better proof is there that everyone makes big--multibillion dollar--mistakes? But we can learn five key lessons from that stunning and tragic failure that might help develop universal health care coverage. 5) The big hurdle for health care reform is not ethics or economics but politics. Ethics supports universal coverage. Both ethics and economics urge the need for cost constraint. But even when everyone agrees that there is a problem, that is no guarantee they all--or even a majority of them--will support the same solution. The key is to provide a solution that both liberals and conservatives can endorse, making it harder for any single interest group to kill it. 6) Retain a private health care delivery system. Harry and Louise ads proved that the health care insurance industry is strong and can torpedo almost any reform package that tries to eliminate it. After all, its survival is at stake, and the industry has nothing to lose in such a life-and-death struggle. …
This paper addresses the decentralization of health services financed by the Unified Health System (SUS) in the city of Natal initiated in the mid 90s. This decentralization primarily involved the transference of health services financed by SUS, which had previously been developed by the state of Rio Grande do Norte, to the city government of Natal. Based on the data gathered mainly from SUS¿ Ambulatory Information System (SIS/SUS), the authors attempted to verify to what extent this decentralization of health services provided by SUS in the city of Natal had improved public access to health services or, on the contrary, had resulted in a privatization process, implying more difficult access to those services.
Following a conceptual analysis of the term “quasi-market”, this article will look at four national efforts to reform healthcare management in what can be regarded, in respect of the degree of solidarity and universality applied, as three different health-care models. The changes in Chile are a continuation of the country’s previous reform, which went further than any other in the region in undermining the solidarity and universality of the health-care model. The conclusion is that it would be beneficial to consolidate purely managerial aspects so that progress can be made with the use of administered prices, relevant information on the quality and cost of care can be produced, and efficiency and effectiveness criteria can be applied to clinical services. In Argentina and Colombia, while there are large differences between the two, the changes that have been made are part of a reform process aimed at encouraging competition while upholding the principles of solidarity and universality. Because change has mainly centred on the financing model, management has had a subordinate place since the outset. In the case of Colombia, the article highlights the excessive complexities of hospital financing, which have combined with regulatory shortcomings to inhibit management change. In the case of Argentina, where hospitals are excessively large, it describes the wide range of hospital management reforms that have resulted from past decentralization, the degree to which management is independent of fiscal discipline and the different ideas that exist of the part played by hospitals in referral systems. In the case of Costa Rica, where health care is primarily public and based on principles of solidarity and universality, the article looks at the creation of internal health markets that resulted from the introduction of a new performance-related organizational and financing model in the Costa Rican Social Security Fund; it notes that the management contracts used have interesting features as regards organization and information and the shaping of a health-care system, but that they are excessively complex and involve high transaction costs, and it analyses the difficulties involved in introducing real provider decentralization and creating performance incentives.
This article presents the results from an evaluative longitudinal study with before-after design. The main objective was to determine the effects of health care decentralization on changes in health financing. Taking into account feasibility, political and technical criteria, three Latin American countries were selected as study populations: Mexico, Nicaragua and Peru. The methodology had two main phases. In the first phase, the study referred to secondary sources of data and documents to obtain information about the following variables: type of decentralization implemented, source of finance, funds of financing, providers, final use of resources and mechanisms for resource allocation. In the second phase, the study referred to primary data collected in a survey of key personnel from the health sectors of each country. Taking into account the changes implemented in the three countries, as well as the strengths and weaknesses of each country in financing and decentralization, a rule for decision-making is proposed that attempts to identify the main financial changes implemented in each country and the basic indicators that can be used in future years to direct the planning, assessment, adjustment and correction of health financing and decentralization.
The Danish health care system The Danish health care system is characterized by free and equal access to health care services. This principle has the same high priority regardless of the party in office. Free and equal access to health care services and universal coverage go hand in hand with a strong determination to control costs. Within the last fifteen years, the freedom to select the hospital of one's choice has also become a very important part of the health care system. The health care system in Denmark is mainly publicly financed through taxes, and is decentralized, with three administrative levels: state, county and municipality. The state's task in health care provision is, first and foremost, to initiate, coordinate, advise, and legislate. The counties are responsible for providing health care services within the limits set by the state. The municipalities are responsible for district nursing, public health care, school health care, and child dental treatment. The provision of health care services by municipalities and counties is negotiated every year in the national budget negotiation. The budget negotiation takes place between the government on the one hand, and the Danish regions (counties) and Local Government Denmark (LGDK) on the other. Agreements are typically in the form of recommendations for local and country tax rates and agreements on injecting capital into specific health care areas or projects, such as cancer treatment or waiting times. Introduction of activity-based financing has also been agreed on in budget negotiations.
Introduction Sweden, with about nine million inhabitants, has a decentralized public health care system. Three political and administrative levels – central government, county councils and local municipalities – are involved in financing, providing and evaluating health care activities. The central government has only a legislative supervisory role, while county councils and municipalities are responsible both for financing and providing health services (Figure 4.1). The county councils are entitled to collect direct income tax revenues as their major financial source, but they are also politically accountable through their directly elected political assemblies. The vast majority of Swedish hospitals are public, owned and financed by the county councils. Primary care settings are also financed by the county councils but they are both publicly and privately owned. Swedish hospitals have traditionally been financed via global budgeting. This is due to the fact that Sweden has a tradition of publicly owned hospitals and that cost control has been an important issue. Moreover, before the introduction of DRGs, there was no accepted system in use to describe performance. The counties had poor knowledge of hospital activity and productivity. There was a great need to find ways to measure productivity. In Sweden, DRGs have been used as a prospective payment system, to describe performance and increase the transparency of hospital activities, as an analyzing tool and to measure productivity.
From an international perspective, U.S. health policymaking is quite distinctive. Other economically advanced nations face the same problems of cost, access, and quality, but none use policymaking structures that resemble ours. To a great extent, the same American “exceptionalism” is evident when analyzing the values that motivate health policymakers. The American people have never truly resolved for themselves the fundamental question that must be considered when directing the objectives of health policies: Is American healthcare a business, a public service, or something in between? Most other wealthy nations have concluded that healthcare is primarily a public function, and have established systems with objectives directly or indirectly set by government and primarily paid for with tax dollars. In contrast, the United States maintains a mixed public-private sector system with no centralized policymaking or financing organization.1 Certainly, the resulting decentralization and flexibility in American health services has its advantages. On the other hand, many important financing and service questions are never resolved, since their solution would require ultimate priority setting by policymakers and, more broadly, by the American people. Irresolution as to whether healthcare is first and foremost a business or a public service is at the heart of major contemporary public policy problems. The following are two important examples. Academic health centers (AMCs) and the public goods of health education and research. Since the beginning of the 1980s, federal policymakers have generally encouraged competition between health providers, with the reasonable expectation that such competition would limit cost increases, encourage the development of a customer (or at least payer) service orientation, and lead to innovations in service delivery. This approach has had positive results in terms of reduced cost inflation and innovative service delivery methods. However, most health industry reform and innovation relies on certain “public goods” being present in the system as a whole. Just as all of us assume that we will have clean air and water as we live and do business, healthcare providers, when engaging in marketplace competition, assume that adequate numbers of trained health professionals will be available to staff their organizations. They also assume that a steady stream of technological advances will make state-of-the-art health services possible. Finally, since society seems to feel that all of its citizens deserve at least a survival level of health services, they have further assumed that other institutions, primarily public facilities, will provide services to those who cannot pay for them. But nongovernmental healthcare providers are not willing to directly pay much for these “public goods.” By and large, they simply expect that public institutions, particularly academic medical centers (AMCs), will provide these goods while they engage in the more lucrative business of market-based health services. However, AMCs have not been provided immunity from the cost pressures resulting from treating healthcare like a “business.” They are told to shape up and compete like other health providers in the marketplace, but they are also told to provide educated health professionals and research products to their competitors, and to take nonpaying patients off their competitors' hands. The funding that they need to do this cannot come primarily from their patients (customers), since a high proportion of them are uninsured and pay little or nothing for the health services. Other traditional sources of funding, including state appropriations, a “disproportionate share” from Medicare, and cost-shifting of uninsured care services to paying patients, are rapidly drying up. Employers paying for the care of their workforce will not pay for others who have no money, nor will they pay more for services because those providing them are also doing research and educating future health professionals. Therefore, most AMCs simply cannot compete in the marketplace. Even if the centers were run at peak efficiency (which they are not), they could not provide services at the prices offered by non-AMC hospitals, clinics, and physician group practices. Are AMCs businesses? If so, they probably cannot succeed as currently structured, because they are forced to provide unprofitable products like education, research, and “free” care. Are AMCs public services, providing unreimbursed health services, education, and research for the healthcare sector as a whole? If so, they cannot properly do their job if they are forced to compete with non-AMCs for survival, because they cannot meet marketplace prices without seriously damaging their educational, research, or service outreach missions. Medicare—A public institution to guarantee health equity for seniors, or a funding mechanism to provide marketplace choice for seniors? Viewed in terms of its original objectives—to reduce medical poverty for seniors—Medicare has been a major public policy success. In some ways it has been too successful. The open-ended commitment to services, along with the “graying of America” and healthcare technological advances, have led to major financing problems for Medicare. Quite properly, the federal government has begun to tighten Medicare's financial spigots. European nations, with publicly run and financed health systems, face the same problems, and can respond quite decisively. To elderly pensioners and their health service providers, European policymakers usually claim that they are doing as well as they can, and will provide more funding in the future, but must balance current public needs with available resources. No European would argue that this is ideal, but most would agree that public policymakers do have to make difficult tradeoffs.2 In the United States, however, healthcare providers are not charged with serving the national interest in carefully providing a public good. Rather, they are called upon to meet consumer demands in an evolving marketplace. Medicare is not a national health service. It is a complex system of writing and disbursing checks to providers for specified services to defined clients. On the one hand, the program is supposed to provide healthcare equality to seniors, so it has nationally defined benefits and prohibits balance billing. On the other hand, it does not take responsibility for providing the services themselves—that would be interfering with the marketplace. In fact, in recent years, Medicare Part C has been created to enhance the role of consumer choice in the marketplace. As Medicare has developed, this conflict—fulfilling a national mandate through the “business” of healthcare—has resulted in the creation of incredibly complicated payment guidelines. Providers have to devote large portions of their resources not to health services, but to Medicare “compliance.” They are also subject to progressively expansive federal mandates (such as the adoption of computerized patient records suitable for uploading into national databases for research purposes) that force them to restructure their organizations. Their consumers now supposedly have greater flexibility and choice, but that choice cannot entail paying more for any particular service; healthcare providers must follow detailed reimbursement schedules. At least, one supposes, U.S. providers can be thankful that they are in the “private” sector, unlike their unfortunate European counterparts, who have lost their independence to “big government” and “socialized medicine.” Is Medicare supposed to be a public commitment to healthcare equality for seniors? Then, as currently designed, it cannot guarantee equal services, since it lacks the direct controls over service provision found in (say) the National Health Service in the United Kingdom. Or is Medicare supposed to be a generous subsidy to the elderly so that they can obtain their healthcare in the marketplace? Then it is extremely inefficient, for it gives the money to the providers (along with damaging and cumbersome regulatory oversight) rather than empowering the senior “customers” to buy their own services (at whatever prices they negotiate) through direct cash payments or vouchers. The United States is now muddling through the unresolved conflict of health services as a business or as a public service. If AMCs are threatened with bankruptcy because of their divided missions, national and state governments will respond with arbitrary relaxation of the equally arbitrary cuts in disproportionate share, or provide some additional health research funding and student loans, which may tide the AMCs over until the next crisis. If Medicare rules (to preserve public control) lead to numerous federal indictments for reimbursement fraud (the providers trying to eke out every possible payment dollar to keep afloat in the competitive market), the larger providers will complain, and the federal government will relax its enforcement efforts, until another highly publicized crackdown is launched, and the cycle begins again. Perhaps the United States, with its wealth, will be able to keep muddling through indefinitely. If we keep slathering money around the healthcare system, taking it away here and putting it back there, perhaps we can keep believing that our healthcare system is both a business and a public service at the same time. We can avoid making fundamental decisions about the nature of healthcare. As long as we are willing to keep our wallets wide open, that is, and are not too fussy about the resulting disorder that keeps our healthcare managers in, as the Chinese would say, “interesting times.”
D. Drache and T. Sullivan (eds) Routledge, London, 1999 Quality, Evidence and Effectiveness in Health Promotion: Striving for Certainties J. K. Davies and G. Macdonald (eds) Routledge, London, 1998 Managing for Health: Implementing the New Health Agenda D. J. Hunter Institute for Public Policy Research, London, 1999 Health sector reform has been high on the international agenda for more than a decade, driven by rising costs, globalization and a political resurgence of interest in market solutions to what were previously seen as the responsibility of the welfare state. For many it is hard to remember that less than 20 years ago, ideas now taken as part of conventional wisdom were to some extent unimaginable. The first of the three books reviewed here, Drache and Sullivan's Health Reform: Public Success, Private Failure provides a useful reminder of the relationship of current health care reform discourse to its wider political origins. Health Reform: Public Success, Private Failure began as a seminar on reforming Canada's health care system, held in 1996. The book contains papers presented at that meeting, and many commissioned expressly for publication. Contributors include leading international commentators on health and social policy, e.g. Yale University's Ted Marmor, Columbia's Mary Ruggie and Canadian economist, Robert Evans. Throughout, the major theme is that of the tensions between publicly funded health care and the increasing enthusiasm of decision-makers for health systems driven by market dynamics. While consideration of the Canadian system forms the core of the content, papers from US and Australian authors, and the way the topics are approached, ensure that the book has an international perspective and relevance. The 18 chapters are organized into five parts. Their titles give something of a sense of the flavour and organization of the book. They are as follows. Public–private conflicts in health policy. Restructuring Anglo-Saxon health systems: shifting state/market boundaries. Decentralization and devolution: new state forms and practices. The political economy of health care reform in Canada. On the frontier of reform. In their introductory chapter, Drache and Sullivan identify three major objectives for health reform, which provide the conceptual organizing framework for much of the book's content. The first, and they argue, most important consideration, is ‘how to sustain a public commitment to a comprehensive range of health services for all citizens’. The second is how to improve the efficiency of health care services in times of fiscal constraint. The focus on these objectives, particularly the first, reflects the fact that this publication is clearly more sympathetic to a Beverage-style model of publicly financed health service provision than much of the literature on health care reform. In fact, the views of many of the contributors appear well encapsulated in a comment (attributed to Robert Evans in Ted Marmor's chapter), which refers to the influence of market-oriented US ideas on health system reform as ‘intellectual acid rain’, which falls on their Canadian neighbour. Many in the health promotion field may see the book's title and think that this is a publication purely concerned with health ‘care’, and hence perhaps focused too ‘downstream’ to be of great interest. If so, they would be mistaken on two counts. Firstly, the third objective proposed by the editors indicates why this is one of the more relevant publications on health reform for a health promotion audience. According to Drache and Sullivan, the third objective of health reform should be how to ‘devise social arrangements which engender healthy populations’. This perspective is canvassed most fully in the book's final chapters, which deal with the social determinants of health. For example, in their chapter ‘Governing Health’, Lavis and Sullivan examine the important contribution of working life and labour market arrangements to health as well as considering the type of governmental structures required to take a broader, more holistic view of health determinants. The book's final chapter, titled ‘Health, Health Care and Social Cohesion’ by Canadian J. Fraser Mustard, sets out a persuasive argument for social investment in the early years of life, and for the significance of trust and social capital as the basis for a healthy society. There is a second reason why this book should be of more than passing interest for readers of Health Promotion International. This is that the book's contributors make a persuasive case that how a health care system is organized and funded can itself be health promoting, in ways perhaps not widely recognized. This capacity of a publicly funded health system to foster a sense of a caring society, in which people see themselves as citizens rather than consumers, is a theme running throughout the book. As the editors comment in their introduction ‘markets may be back with a vengeance but health care remains a stabilizing instrument of citizenship at a time of global instability’. Publicly financed health care systems which provide universal coverage and access to care do appear to offer equity benefits and better health outcomes than alternative models. However, even in these circumstances there remain non-financial barriers to health care usage, and disparities still exist, e.g. in uptake of preventive care by lower income groups. Nevertheless, there appear to be broader, if diffuse, benefits to health from a publicly financed system. As Mustard states: A society that decides to make health care available to all of its citizens through a universal insurance system, makes provision of health care a potential institutional structure to help sustain social cohesion and trust (p. 334). While much of the book therefore is concerned with social and health care arrangements that are ‘health promoting’ in the broadest sense, health promotion tends to be treated as a strategy targeted at individual lifestyle. For example, Gail Donner's challenging chapter on the ‘fallacy of demand reduction’, i.e. demand reduction as increasingly embraced as part of managed care in the US, equates health promotion with health education efforts to, e.g. stop people smoking. Donner argues that demand reduction strategies in isolation from broader system reforms and ‘upstream’ public policy change, can themselves become both victim blaming and ineffective. In their chapter, ‘The Virus of Consumerism’, Feldberg and Vipond argue that health promotion itself represents one of the instances in which market-oriented health care systems treat people as ‘consumers’ rather than citizens. The answer to why health promotion is viewed in this way, in a book explicitly concerned with the social determinants of health, may perhaps in part be explained by the relationship of several contributors to the Canadian Institute for Advanced Research (CIAR), an organization closely associated with the development of the ‘population health’ perspective on health improvement in Canada. For example, Fraser Mustard was the founder of CIAR, and another contributor, economist Robert Evans, is a CIAR fellow. Perhaps not surprisingly then, to the extent that Health Reform deals with the health care system's role in the broad domain of prevention, the perspective is strongly ‘population health’ rather than ‘health promotion’.1 For those who have not been engaged with this peculiary Canadian debate see Frank, J. W. (1995) why “population health?” and Labonate, R. (1995) Population health and health promotion: what do they have to say to each other? both in the Canadian Journal of Public Health.86, 162-168. In contrast to the ‘whole of system’ policy perspective of Health Reform: Public Success, Private Failure, the focus of John Davies and Gordon Macdonald's book is on the more specific elements of health promotion research and practice. The contributors are drawn from the UK, Australia, the USA, Canada and a number of European countries, and most are well known in international health promotion circles. As with the Canadian book, Quality, Evidence and Effectiveness in Health Promotion has its origins in a conference, in this case the Third European Conference on Effectiveness: Quality Assessment in Health Promotion and Health Education, held in Turin in 1996. However, while many of the contributors participated in that event, the book's 11 chapters were developed after the conference, and many include references as recent as 1998. The book is divided into three parts, broadly reflecting the themes in the title. Part 1, ‘Methods for Assessing Evidence and Effectiveness’, contains three chapters, one an overview of health promotion in the United States, and two which are concerned with measuring effectiveness and evaluating health promotion in various community settings. Part 2, ‘Methods for Assessing Quality’ consists of three chapters which each provide practical guidance on different aspects of quality assurance and assessment in health promotion. The four chapters of Part 3, ‘Approaches to Synergism’ are more of a mixed bag, with the first two chapters providing case studies intended to illustrate the synergy of linking effectiveness measures with quality assurance. Of the final two chapters, one provides an international overview from the perspective of a World Health Organization working group on quality assurance and effectiveness, and one, by the book's editors, provides a summary of the ‘state of the art’, and suggests a number of steps and principles for improving effectiveness and quality assessment in health promotion. The real strength of this book is the range of practical models, tools and techniques presented. For example, the chapter by Baum contains a useful tool for monitoring the changing expectations of key players in a community-based health promotion initiative. An approach of this type, as Baum notes, could potentially be of great value in helping make explicit changing and conflicting objectives, and in analysing progress of an initiative. What results is the construction of a ‘stakeholder-focused’ approach to outcome assessment, which recognizes that interventions in human systems are likely to have multiple impacts, and that assessments of the value of these effects are likely to differ according to where one stands. Similarly, Speller and colleagues provide useful guidance in tracking and evaluating the progress of alliances for health; Springett provides a framework for indicator development to track the effects of policy change on health and social well-being in a healthy cities initiative (and highlights the difficulties involved); Haglund and colleagues present a quality assurance instrument based on the SESAME health promotion planning model. The book contains many more examples than this brief selection can do justice to. While issues of effectiveness and quality assurance are well covered, the book is less helpful on the question of evidence in health promotion. Accepting that this is intended as a publication to improve and inform practice, nevertheless one might have expected from the title a more organized and comprehensive discussion of the challenges associated with ‘evidence-based’ health promotion, e.g. those associated with theories of knowledge, power and the nature of social systems. Some of these issues have been raised in recent issues of Health Promotion International. Another issue which the authors might have considered for inclusion, and one which often figures strongly in discussions of quality assurance elsewhere, is the role of management and leadership. This topic is well covered in David Hunter's short publication Managing for Health, prepared for the London-based Institute for Public Policy Research. Hunter is Professor of Health Policy and Management at the Nuffield Institute. This report is primarily concerned with the contribution of management to achievement of the Labour Government's objectives for Britain's National Health Service (NHS), and its main theme is the importance of effective management in moving from a focus on health care to a focus on health. Hunter argues that a new type of management is needed to move beyond the market-oriented approach of the so-called ‘new public management’ which has dominated the health system since the early 1980s. This does not mean, however, a return to the inflexible bureaucratic models of the past, but needs to consider a management approach consistent with the ‘third way’ in British politics championed by intellectuals, such as Anthony Giddens. Hunter suggests a way of thinking about ‘managing for health’, where the goal of management is health gain and health outcomes, rather than the management of inputs for health care. Hunter identifies a number of key health policy themes that managers will need to deliver on in the policy context created by the government's NHS reforms. These include: a commitment to narrowing the health gap; a commitment to quality; a greater emphasis on primary health care. The first theme Hunter suggests will require nothing less than a paradigm shift in the way health services are managed, requiring managers to develop a ‘whole systems’ way of thinking and to actively promote ‘joined up solutions to joined up problems’. For Hunter, good management is critical to closing the gap between policy and effective implementation, and this is particularly true in terms of addressing health inequalities. Hunter identifies a number of key skills health managers will need to develop. These include the following. Building alliances and networks with non-health organizations, and the capacity to work within alliances. Talking and listening to users of services. Developing information and intelligence databases to support the new public health. Having a strategic framework based on health improvement. Paying attention to the organizational forms needed to fulfil these functions; including development of vision, culture, people and skills. While Hunter's report is very much focused on the UK, the principles it espouses have international relevance, and its public health perspective makes it highly relevant to a health promotion audience. It is useful to see these three publications as a ‘package’. Together they provide a policy overview of health care reform; some specific guidance, on how, within that context, health promotion can move to more effective practice; and a consideration of the role of management as the key linkage between policy and practice. A comment contained in the editors' introduction to Quality, Evidence and Effectiveness in Health Promotion provides an example of the lessons for health promotion in the health care reform literature. Davies and Macdonald note that a key theme at the conference which inspired their book was that the development of an evidence-based approach to health promotion would help ensure that health promotion remains ‘at the forefront of local, national and international health policy development and investment ...’ However, a reading of Drache and Sullivan's book perhaps provides a more realistic perspective on where health promotion sits in the eyes of both policy commentators and health system decision-makers. While health promotion as yet is not at the top of the health reform policy agenda, the insights contained in these three publications help point the way to how health promotion might achieve this position in the future. The author would like to thank Jenny Jefferson for her assistance in the preparation of this review.
Setting risk-adjusted capitation rates in health systems with centralized financing and decentralized delivery is one of the most intriguing policy issues. The common practice to set capitation group rates is based on individual data collected from either population surveys or medical records, using a single-and in most cases arbitrary-set of relative unit costs of services. This paper presents a method for estimating group-specific mean costs and capitation rates using a panel of aggregate cost data of the competing health plans and the composition of their populations. This method is used to estimate mean costs and capitation rates for the Israeli health care system. The limited data available severely constrains the range of estimable models, however, the results evoke some questions with regards to reimbursement and rates presently used, as well as to the methodology used to estimate them.
David Collins, Grace Njoki Njeru, Julius S. Meme, William Newbrander
An increasing number of countries are exploring the introduction or expansion of autonomous hospitals as one of the numerous health reforms they are introducing to their health system. Hospital autonomy is one of the forms of decentralization that is focused on a specific institution rather than on a political unit. It has gained much interest because it is an attempt to amalgamate the best elements of the public and private sectors in how a hospital is governed, managed and financed. This paper reviews the key elements of the concept of hospital autonomy, the reasons for its expanded use in many countries and a specific example of making a major teaching hospital autonomous in Kenya. A review of the successful experience of Kenyatta National Hospital and its process of introducing autonomy, with regard to governance, operations and management, and finances, lead to several conclusions on replicability. The legal framework is a critical element for successfully structuring the autonomous hospital. Additionally, success is highly dependent on the extent to which there is adequate funding during the process of attaining autonomy due to the length of the transition period needed. Autonomy must be granted within the context of the national health system and national health objectives and be consistent with those aims and their underlying societal values. Finally, as with decentralization, success is dependent upon the preparation done with the systems and management necessary for the proper governance and operation of autonomous hospitals.
The introduction of health insurance system has been the core of the Russian health care reform. It has coincided with the decentralization of the state administration. The reform has thus been decentralized, and the transition has been fragmentary and incomplete. As a result, the existing health financing system is eclectic and contradictory. Meanwhile, the reform has had a positive stabilizing influence on financing of health care under conditions of continued economic crisis. The new priorities of the reform should be to balance the financial flows and the state's obligations, and to increase the efficiency of the use of resources through encouragement of competition, assurance of transparency of public funding, development of health care planning, and shift from inpatient to outpatient care.
Using Medical Record Reviews in Single Audits Invite doctors, nurses and other medical specialists to join you at the document review desk in the midst of an audit? The idea has caused some controversy in the nonfederal audit community-and may seem revolutionary to the traditional auditor-but the involvement of medical professionals is necessary, according to recently issued federal guidance. It is also highly desirable. In fact, erroneous Medicare payments estimated to total billions of dollars were uncovered this past year by the U.S. Department of Health and Human Services (HHS), Office of the Inspector General (OIG), thanks largely to the help of medical professionals. The need for using medical specialists to review patient records during single audits is detailed in the Office of Management and Budget (OMB) Circular A-133 Compliance Supplement, which was last updated June 30,1997. The circular requires that state and local governments, colleges and universities, and nonprofit organizations receiving federal awards have an organizationwide audit of all federal money they receive. These audits, known as single audits, are conducted by nonfederal auditors, such as public accounting firms and state auditors. To assist the auditors in planning and conducting these reviews, OMB publishes guidance in the form of the Compliance Supplement, covering most federal programs subject to single audits. This article focuses on the Medicaid portion of the supplement and on two of the supplement's new requirements-clustering and review of medical records-that have caused some concern among nonfederal auditors. Both of these requirements were based primarily on experience gained during recent HHS/OIG audits of the Medicare and Medicaid programs. The Medicaid Program The Medicaid program, which is the largest federal program covered by the single audit, provides payments for medical assistance to low-income persons who are age 65 or over, blind, disabled, members of families with dependent children, or qualified pregnant women or qualified children. The HHS Health Care Financing Administration (HCFA) administers the Medicaid program in cooperation with state governments, and the program is jointly financed by federal and state governments. Total federal expenditures for this program were $91 billion in federal fiscal year 1996. Within broad federal guidelines, each state decides eligible groups for Medicaid assistance, the types and range of services, the payment levels for services as well as administrative and operating procedures. This is a highly complex, decentralized program, as illustrated below: The program depends on large, complex automated data processing systems to process a huge volume of transactions. Payment systems do not normally include a review of original detailed documentation supporting the claim prior to payment. Medical services are provided directly to an eligible beneficiary, normally without prior state approval. Medical service providers normally determine the scope and medical necessity of the services. The program involves complex billing structures, with different payment rates for various types of medical services such as inpatient hospital care, physicians, prescription drugs and drug rebates. Obviously, any audit of such a complex program will present a challenge in terms of both audit cost and time expended. To assist auditors in planning and performing audits of the Medicaid program, the revised Compliance Supplement clusters Medicaid with two additional programs: the State Medicaid Fraud Control Units program and the State Survey and Certification of Health Care Providers and Suppliers program. Clustering is defined as treating multiple programs as a single program for the purpose of meeting Circular A-133 audit requirements. Believing that more effort will be needed to test the two additional programs, some nonfederal auditors have taken issue with the new cluster. …
Public responsibility for health care can be justified by ambitious egalitarian objectives, as it is commonly believed that the private sector generates greater disparities than the public sector. Government institutions can be designed to achieve equality in provision of health services. The article addresses the geographical distribution of primary care physicians in Norway, where primary physician services are the responsibility of local governments, primarily financed by general taxation. The authors analyze the allocation of physicians using a local government demand model, a synthesis of consumers' demand and local government resource allocation. Analyses were performed on a panel data set of all Norwegian municipalities covering the period 1986-1992. The results are encouraging. A decentralized system of primary physician services does seem to be fairly effective in securing equity in access to these services for the municipal population. In particular, local governments seem to respond well to the health care needs of their populations. Distribution of physicians is only to a very small extent dependent on the wealth of the municipality.
Since public officials in the United States may lack the courage and political will to significantly raise payroll taxes or the contain Social Security, Medicare and Medicaid benefits, Americans can anticipate that; (a) future generations increasingly will pay for these entitlements; (b) additional cutbacks to providers in Medicare, Medicaid and health maintenance organization reimbursement will hasten the current thrust of hospitals, physicians and insurers in forming huge health networks with their powerful managed care plans; and, (c) many of these new alliances will function as virtual monopolies--eventually resulting in the public proposing that state health services commissions be established. This article then suggests that future modifications in how the United States health delivery system be organized and financed preferably should be along the lines of the German multi-player, multi-tier, self-governing, decentralized, quasi-private, quasi-public model; and, also patterned after experiences of the State of Arizona's Medicaid program. It concludes that what America needs most is a hybrid of the European global budgetary targets to constrain total health expenditures, and the competitive managed care concept to curtail use patterns and to enhance quality.
Through the recent National Health Insurance Act (NHIA), the Philippines have committed themselves to introducing a social health insurance with universal coverage within 15 years. Germany was the first country to introduce a social health insurance system more than 100 years ago. Its system is based on the principles of corporatism, federalism and a mandate for equity. Based on a long-term German experience with equity, quality, cost and efficiency issues, the Philippines' NHIA is analysed concerning the entitlement to benefits and the benefit package, the organization of the health insurance programme, health insurance financing, and provider payment mechanisms. It is suggested that the Philippines could profit from including preventive and promotive services as well as pharmaceuticals in the benefits package. The organization of the health insurance system could be decentralized using the 13 regions as its principal units. To achieve financial equity between regions and health funds, a contribution compensation scheme is proposed. To prevent over-utilization in over-served areas and to promote utilization in under-served areas, a relative value scale for fee-for-service payments seem advisable.
The cutbacks in Medicare and Medicaid reimbursement, and the Republican takeover of Capitol Hill and the state legislatures as a result of recent elections, suggest that the payer-driven forces of managed care, capitated payment, and the regional networks (alliances) will serve as centerpieces to improve the organization, financing, and delivery of America's health services. These "voluntary" alliances that are now being forged as an amalgam of health providers and insurance underwriters, often foreshadow the powerful, geographically linked regional health networks that are evolving into oligopolies throughout the United States. As the Department of Justice and the Federal Trade Commission are unable to appropriately analyze the efficacy of most prospective mergers, the American health field increasingly can expect monopolistic environments. In this process, the public eventually may demand the formation of state health services commissions. Within this framework, the German decentralized, multipayer, multitier approach, which historically is self-governing and allows for negotiating reimbursement rates between insurers and providers, offers a preferred option to the traditional American public utility model.
The paper reviews the theoretical basis for the application of user fees in the public health sector in low-income countries with particular reference to the special characteristics of medical care as a commodity. The general equilibrium efficiency result of the market mechanism is shown to be the theoretical justification for the financing of health services via a system of user charges. If markets for all goods and services exist, and are perfect in a very strict sense, the welfare outcome of the price mechanism cannot be improved upon by any other resource allocation device. Furthermore, the decentralized and impersonal nature of this mechanism renders it more convenient to use in the allocation of commodities, health care included, than its alternatives such as a system of centrally administered prices or a system of administrative controls and directives. However, since many of the assumptions of the price system are rarely met in actual situations, especially in the health sector, it should be applied with caution. In particular, problems of information asymmetry and consumption externalities in health care markets necessitate a simultaneous use of fees with government interventions in order for fees to achieve their often intended aim of efficiency and equity improvement in health care provision. The most important intervention of the government here is the enactment and enforcement of institutions that reduce costs of transacting in health care markets and that in addition facilitate the emergence of new markets such as the markets for medical insurance. A striking finding of the paper is that health services in low-income countries are best financed primarily by revenue from general taxation, supplemented by a system of moderate user fees. Since medical insurance markets are generally non-existent in low-income areas, it is argued that financing health services primarily through user fees in such areas would be inefficient and inequitable. However, to mitigate the moral hazard problem as well as the problem of the commons, both of which characterize publicly financed health care, imposition of modest user fees is required. The importance of fees in this proposal increases with economic growth and with evolution of institutions that facilitate market transactions. Strategic interaction among economic agents is shown to affect the structure and implementation of user fees. A game-theoretic analysis of the general problem of health care financing shows that this problem is best tackled by harnessing the efforts of households, private health care providers, the government and civil society. These entities form what might be called a winning coalition in health care financing game of society. It is argued that the government is better placed to provide an institutional framework for coordinating the efforts of the various players to the desired end.