Municipal co-payment for health care services

Transcription

1 Municipal co-payment for health care services Country: Denmark Partner Institute: University of Southern Denmark, Odense Survey no: (10)2007 Author(s): Ankjær-Jensen, Anni and Terkel Christiansen Health Policy Issues: Funding / Pooling, Remuneration / Payment Current Process Stages Idea Pilot Policy Paper Legislation Implementation Evaluation Change 1. Abstract Municipal co-payment for hospital services is a part of the new stuctural reform in Denmark. Besides a reduction in the number of municipalities and a replacement of the 14 counties with 5 regions, the reform includes a major change in the financing of the health care sector. County financing of health care has been substituted by a government financing of regional health care plus a more modest municipal contribution, based on a fixed amount per inhabitant and an activity based payment. 2. Purpose of health policy or idea With the structural reform municipalities will have a more important role in the health care sector, in particular with respect to prevention, rehabilitation and health promotion. The main purpose of introducing municipal financing of health care services is to support this new role. Main objectives The reform consists of a change of structure, tasks and financing. Like the former counties the regions are responsible for providing hospital services and services from the practice sector (National Health Insurance). However, while the former counties was responsible for the financing (through tax collection) the regions will not be responsible for the financing of the health care services: instead the financing will be based partly on a contribution from the state (80%) and partly on a contribution from the municipalities (20%). One objective of introducing municipal financing is to encourage the municipalities to prevent hospitalization by improving the care of the elderly, or by establishing preventive treatment and health promotion integrated in other local tasks. Another objective is to encourage the municipalities to establish alternatives to hospital services, such as health care services for patients with chronic illness or special acute care beds for the elderly in nursing homes. Type of incentives The contribution from the municipalities consists of a block grant and an activity based payment depending on the citizen's use of hospital services. The block grant is based on an amount per citizen (150 EUR per citizen)

2 The activity based payment for hospital services is based on the Danish DRG-system (30% af national tariff with a maximum of 670 EUR per admission). The payment for services in the practice sector is based on the negotiated tariffs between the regions and the practice sector (10% of tariff). Thus the financial incentives for the municipalities are very modest, as potential savings from prevention of hospital admissions are very small. However, as will appear from section "Origins of health policy", municipal financing of health care services may be seen as a supplement to the new role for the municipalities within the health care sector. The expectations thus imposed on the municipalities may act as an non-financial incentive for the municipalities. Groups affected Patients, regions, municipalities 3. Characteristics of this policy Degree of Innovation traditional innovative Degree of Controversy consensual highly controversial Structural or Systemic Impact marginal fundamental Public Visibility very low very high Transferability strongly system-dependent system-neutral The purpose of the reform is very much in line with other reform trends in the western countries. Thus substitution from secondary to primary care, by improving primary care, is a major reform trend in many western countries. Also improved attention on the need for prevention is a major reform theme. Other European countries (such as Finland and England), have implemented reforms of the financing of primary and secondary health care sector in order to achieve the goals of an improved primary care sector and an improved coordination of care across primary and secondary health care sector. In a Danish context the structural reform is rather radical. Concerning the financial reform it is a rather fundamental change that the counties are no longer a tax collecting authortiy. Also it is a rather fundamental change to introduce municipal co-payment of health care service. 4. Political and economic background The reform, implying a municipal cintribution to regional health care budgets is a part of a structural reform of the Danish health care sector. It was initiated and implemented by the same government (consisting of the Liberal Party and the Conservative Party) without a previous national health plan

3 5. Purpose and process analysis Idea Pilot Policy Paper Legislation Implementation Evaluation Change Origins of health policy idea On the basis of an increasing debate on the structure of the public sector, the government established a Commission of Administrative Structure in October In the report the commission pointed at different problems partly due to the size of the municipalities and counties, partly due to the distribution of tasks between state, counties and municipalities: A major part of the administrative units were too small In a number of areas it was difficult to ensure a consistent and coordinated effort. The main problem was based on the fact that responsibility for some tasks was divided between several decentralized administrative units. The result was a risk of "grey zones". In April 2004, the government (the Liberal Party and the Conservative Party) presented its proposal for a reform based on the analyses of the commission. In June 2004 the Structural Reform was agreed between the government and the Danish Peoples Party. The main content of the reform was a reduction in the number of municipalities, where the previous 271 municipalities were replaced by 98, and the 14 counties were replaced by 5 regions. Further the reform resulted in a comprehensive reorganisation of the tasks in the public sector, including a major change in the financing of the health care sector. Within the health care sector the municipalities have been assigned a more important role. Thus the municipalities have taken over the main responsibility for rehabilitation, for preventive treatment, and health promotion. The purpose is to integrate preventive treatment and health promotion with the other local tasks i.e. day care, schools, centers for the elderly etc. In addition the municipalities participate in the financing of health care services. Thus municipal contribution to the financing of health care services should be seen as way to support this new role the municipalities. Initiators of idea/main actors Government Parliament Providers Payers Approach of idea The approach of the idea is described as: new: Stakeholder positions The main stakeholders of this reform are: State government Region (former county) councils Municipality councils - 3 -

4 Providers (doctors) Political parties Stakeholder positions The reform was proposed by the government which was very supportive of the reform. One of the member parties of the government (Conservatives) have for a long time wanted the counties closed down to save on administration. Some newspaper chronicles by politicians during the summer of 2002 started the process. The politicians of former counties (now replaced by the regions) were not very supportive of the reform. In a comment to the government proposal they expressed fear that municipal financing would discourage coordination of treatment episodes and create new grey zone areas. In contrast, the politicians of the municipalities in general were in favour of the financing reform, as they expected that municipal co-payment will create an incentive for municipalities to expand local health care services. The physician organisation feared that the municipalities might establish parallel health care services in competition with the hospitals. Further they feared that the quality in municipal health care services would deteriorate. The biggest opposition party, the Social Democrats, did not vote for the structural reform. The structural reform complex was transformed into 50 bills submitted to the parliament in the spring of About half of the bills were approved by the government, The People's Party and several other parties in the parliament. The Social Democrats voted against the bills containing the financing reform (municipal co-payment and no regional tax collection), in particular because they did not find the associated rules concerning transfer of government funds to municipalities to equalise their financial abilities to be settled yet. Actors and positions Description of actors and their positions Government Government parties very supportive strongly opposed Parliament Opposition very supportive strongly opposed Providers Physician organisations very supportive strongly opposed Payers Regional politicians very supportive strongly opposed Municipal politicians very supportive strongly opposed Influences in policy making and legislation On the basis of the political agreement on a structural reform, 50 bills were prepared during the autumn of The bills were submitted to the Parliament (Folketing) in winter At the final voting about half the bills were approved by the government and The Danish Peoples Party and by several of the other parties in the Folketing. Legislative outcome major changes - 4 -

5 Actors and influence Description of actors and their influence Government Government parties very strong none Parliament Opposition very strong none Providers Physician organisations very strong none Payers Regional politicians very strong none Municipal politicians very strong none Positions and Influences at a glance Adoption and implementation In order to handle the payment in practice, the National Board of Health has developed a special database. Every month on the basis of hospital activity registration, the payment for each municipality is calculated, and funds are automatically transferred from the municipality to the region. Monitoring and evaluation No official evaluation is foreseen

6 6. Expected outcome If succesful, municipal financing of health care services may lead to the establishment of new municipal heath care services and an improved coordination of health care services between the municipalities and the hospital sector. It may also lead to substitution of health care services from the secondary to the primary health care and prevention of hospital admissions. However a barrier to the succes may be lack of efficient municipal alternatives to hospital admissions. Further, development of the primary health care sector very much depends on the cooperation from the general practitioners (GPs). A possible barrier for the success of the reform may be lack of interest from GPs. The payment to the regions are generally too small to give sufficient incentive to municipalities to finance any major increase in preventive measures. However, if the municipalities in spite of financial logic decision making should establish local health care services as a reaction to their new role, an unintended effect may be a net increase in the use of resources within health care services, and implementation of new services that are not cost-effective. Further, even if substitution from hospitals to primary care should be successful, there might be a danger that the expected savings in municipal payment to hospitals will not take place, as empty beds are easily filled with new patients. Consequently, the savings that should finance the new health care service will not necessarily be realised, leaving the municipalities with a financial problem. Seen from a patient point of view, however the payment reform may result in an improved service. Quality of Health Care Services marginal fundamental Level of Equity system less equitable system more equitable Cost Efficiency very low very high Municipal financing may result in the establishment of new primary health care services, improved coordination of care between the primary and secondary health care sector, removal of "grey zone" areas etc. This may be seen as an improvement in the quality of care. However it is a prerequisite that any new municipal health care services are subject to quality assessment. Here it should be noted that as part of the structural reform a new "Law of Health Services" (Sundhedsloven) was approved. According to this law the regions as well as the municipalities are obligated to secure continuously quality improvement of health care services. This has to be carried out within the framework of the Danish Health care Quality Assessment Programme. The development of this programme has been going on for a number of years and is supposed to gradually include health care services in the primary sector. The establishment of local health care services may improve the level of equity in access to health care. The reform may, however, put pressure on the cost-effectivenes of the health care sector because of the risk that the municipalities will react to their new role and implement new services even though they cannot be financed by their savings in payment to the regions. 7. References Sources of Information The Ministry of the Interior and Health. The local government reform - in brief. Copenhagen, December

7 Ankjær-Jensen A and J. Kilsmark. Kommunal medfinansiering af sundhedsydelser; Udfordringer og muligheder for kommuner og regioner. København: DSI; Reform formerly reported in Public sector reform - a bill has been proposed Author/s and/or contributors to this survey Ankjær-Jensen, Anni and Terkel Christiansen Suggested citation for this online article Ankjær-Jensen, Anni and Terkel Christiansen. "Municipal co-payment for health care services". Health Policy Monitor, October Available at -