Performance Payment for Family Physicians
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- Melvin Waters
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1 Performance Payment for Family Physicians Country: Estonia Partner Institute: PRAXIS Center for Policy Studies, Tallinn Survey no: (6)2005 Author(s): Ain Aaviksoo Health Policy Issues: Remuneration / Payment Current Process Stages Idea Pilot Policy Paper Legislation Implementation Evaluation Change 1. Abstract In May 2005 Estonian Health Insurance Fund (EHIF) and the Ministry of Social Affairs in partnership with the Family Doctors? Association announced a new additional payment policy for family physicians based on performance indicators. This policy is the first real step towards EHIF promoted outcome-based payment. Implementation (monitoring of performance) starts in 2006 and first results (bonus payments) are due in Purpose of health policy or idea Main purpose of the idea is to promote individual family physicians to achieve preset service targets by rewarding bonus payments. It is the joint initiative of Estonian National Health Insurance Fund (EHIF) and Estonian Family Physicians' Association, the direct result of 3 years of discussions over opportunities and principles to increase family doctors' revenues. Implementation is carried out through government approved regulation on payment principles for primary healthcare (so called "price-list"); funding and technical administering is the responsibility of EHIF using its routine payment procedures. According to current policy the priority areas are vaccination coverage, screening procedures and chronic disease monitoring. Main target groups are children (0-18 years, for vaccination and regular check-ups), and year old population. Priority areas are vaccination, measurement of blood lipid and glucose levels, mammography (45-59 year old women), II type diabetes and high blood pressure patients; family doctors also have to perform certain simple surgical procedures and monitor normal pregnancy. Family physicians are expected to receive up to 4000 EEK (255 EUR) monthly on top of their usual per capita payment for meeting the performance indicators. Expected outcomes of the policy are improved quality and effectiveness of preventive services, as well as better monitoring of chronic diseases. Specific outcome indicators havenot yet been defined, but the aim is to reduce morbidity and hospitalisation rates. For family doctors the goal is to improve motivation of better performing physicians. Main objectives Improve the performance and quality of health care service outcomes - 1 -
2 Improved quality and efficiency of preventive services in primary health care Improved chronic disease management in primary health care Reduced morbidity from vaccine-preventable diseases and reduced hospitalisation from chronic diseases. Type of incentives Bonus payments to family doctors for reaching preset performance targets. 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 policy is innovative to the extent that it has not been implemented in too many countries so far, but even more due to its universal application to all family physicians. All stakeholders are so far supportive towards the idea. It would be the first real step towards outcome based payment in Estonia, which makes its potential impact to the system remarkable. Public visibility is low or neutral; it depends on individual family physicians. The policy can be implemented in the health systems with well developed primary health care network using independent physicians with defined patient lists. 4. Political and economic background Each year different stakeholders negotiate with EHIF to increase allocations for their respective services or goods. Family medicine was relatively favoured against hospital care during early primary health care reform in Estonia. During a few years there has been increasing pressure to increase the salaries of physicians, which in the case of Estonia can be effectively done by raising prices of health care services reimbursed by EHIF to hospitals. Independent professionals, such as family doctors, for whom the main source of revenue is the capitation fee, it is not possible to use fee-for-service (although some consider this more motivating) EHIF has openly declared and it is accepted by the Ministry of Social Affairs and most of the stakeholders that the goal of further developing payment procedures should consider quality and performance. Paradoxically EHIF has no legal mandate to differentiating payment by quality, which is defined only through certification process of providers and professionals by the Health Care Board. Practically the Fund can only decide upon reimbursing or not for a service in the "price-list", but not apply differentiated price, bonus payments or penalties for better or worse performance. Indeed, the contracts with providers include some general provisions for service quality, such as - 2 -
3 maximum time for patients in waiting list. In one hand these do not acknowledge the performance and also can be implemented only through penalties if the provider is not complying with the contract. Paying for performance to family physicians is the practical result of this approach. Also the professional society of family doctors has historically been pro-actively improving the performance of their profession. 5. Purpose and process analysis Idea Pilot Policy Paper Legislation Implementation Evaluation Change Origins of health policy idea The policy idea has not been used in Estonia before. However, it is similar to UK approach started in It is the logical result of the combination of professionals' strives to recognise good work and payer's goal to use payment as a tool for improved care and reduced morbidity. The Estonian Family Doctors' Association (FDA) started the accreditation process of its members in The main goal was to recognise good professionals and create basis for differentiation of payment for better performance. FDA defined criteria and procedures for the accreditation and first 100 (out of approximately 800) family doctors passed the accreditation when it appeared that EHIF cannot accept the accreditation result as a criteria for differentiated payment. The solution was to define "new service" - bonus payment - that is then introduced into the governmentapproved "price-list". Then all certified family doctors would be entitled to be paid the bonus payment for meeting certain performance indicators defined by the EHIF. The bonus payment is decided upon the performance results of previous year and will be paid for the following year on monthly basis as a lump sum. Key to successful implementation lays in reliable and functional health information systems on both sides. So far EHIF has acknowledged difficulties in routine monitoring of the performance and giving feedback to providers on it. Family doctors have provided all reimbursement claims including individual procedures electronically since The difference from UK model is the universal application of the policy to all family doctors without specific precommitment to certain services. It is assumed that professional motivation for improved provision of care together with financial incentives will lead to better performance and increased quality of primary health care. Initiators of idea/main actors Government Providers: Initiators of the idea Payers: Initiators of the policy Approach of idea The approach of the idea is described as: amended: In UK model the commitment to work towards certain performance targets is a voluntary commitment agreed with additional contract. In Estonia the policy is applied universally and the payment is made according to the results from previous year. Stakeholder positions Family doctors have been the initiators of the idea from the very beginning. However, the current plan is far from sufficient in the opinion of leaders of the professional society, as the financial reward for improved performance barely covers the costs that it imposes on doctors. Yet, as the principle is supported by family physicians, the official policy is - 3 -
4 to get the new policy running and then develop it further after first results are available. The Ministry of Social Affairs (MoSA) has prepared the draft amendment to the Government Regulation showing also its relative commitment to the policy. The regulation is to be passed any time soon, as the first period of monitoring the performance is scheduled to start in January 2006, and first bonus payments in 2007 will be based on the results from previous year. Still, implementation has been postponed already about a year due to reshuffled financial priorities toward hospital doctors' salaries in This shows that the policy is important but not the highest priority for the government if other stakeholders will make their case stronger than family physicians. The Health Insurance Fund (EHIF) supervisory board officially approved the policy in May 2005, but can only implement it after the Government Regulation is passed. As the policy is planned theoretically, but not with clear quantitative benchmarks, one can read some hesitation of EHIF from the financial impact that the policy will have - this has been acknowledged by all members. It seems that the payer (EHIF) relies more on professionalism than on financial motivation of family doctors in successful implementation of the policy. The first year is clearly seen as a pilot (though implemented throughout the country). There is no formal policy paper regarding the bonus payment to family doctors. Main documents to refer to are the decision of EHIF supervisory board and draft Government Regulation. Actors and positions Description of actors and their positions Government Ministry of Social Affairs very supportive strongly opposed Providers Family doctors very supportive strongly opposed Payers Health Insurance Fund very supportive strongly opposed Influences in policy making and legislation The policy can be implemented through the Government Regulation that will introduce new "health service" - bonus payment for succesful provision of preventive and chronic care monitoring tasks. The need for the Regulation arises from the fact that EHIF has no legal mandate to differentiating payment by quality, which is defined only through a certification process of providers and professionals by Health Care Board. Practically EHIF can only decide upon reimbursing or not for a service in the "price-list", but can not apply a differentiated price, bonus payments or penalties for better or worse performance. Draft amendment to the regulation is ready since February Legislative outcome Actors and influence Description of actors and their influence Government Ministry of Social Affairs very strong none Providers Family doctors very strong none Payers Health Insurance Fund very strong none Positions and Influences at a glance - 4 -
5 Adoption and implementation Main actors for the implementation are government, EHIF and family doctors. Indirectly the patients also have a role in the success or failure of the policy, but the assumption is that they are nevertheless eager to visit their doctor, be it for free vaccination, screening or chronic disease monitoring. Family physicians have to provide electronic reports about the achievement of performance indicators to EHIF once per year. It basically includes information on the subset of target group patients in the list and services provided to them. EHIF will then check the reports against its database of reimbursement claims that is generated dynamically on a monthly basis. Thus, both family physicians and EHIF must have appropriate IT-systems in place to monitor the performance. EHIF has openly stated that it needs to upgrade the information system to be able to implement policy accordingly. All the family doctors are using individual health information systems and forward reimbursement claims electronically since All upgrades, though, are on their responsibility and cost. Monitoring and evaluation There are no set criteria or evaluation process, yet. EHIF would like to monitor the process, so it is likely that the process wit appropriate indicators will be initiated. 6. Expected outcome - 5 -
6 The policy is expected to promote individual family physicians to achieve preset service targets by rewarding bonus payments. Overall goal is to improve coverage of preventive services to general population and monitoring of chronic diseases and reduce respective morbidity and hospitalisation rates. The policy has principal support of all stakeholders (doctors, government and insurance fund), but the final outcome is somewhat vague - no clear indicators for success or failure except the performance indicators per se. Family doctors expressed their scepticism towards the low financial input - both because of low reward and the lack of fee-for-service approach, which they would prefer. There is no baseline information regarding the current level of objectives of the policy under discussion. Hopefully there will be developed some measurable outcome targets, as EHIF has expressed its practical interest in it. It is unlikely that the policy will achieve major impact through its current implementation plan. Both the ability of family physicians to reach the benchmarks and their motivation to do so might be the obstacle, at least for the first year. An important outcome could be the first summary of the situation, i.e. a baseline description, and a better targeted and rewarded policy amendment after the first year pilot. Quality of Health Care Services marginal fundamental Level of Equity system less equitable system more equitable Cost Efficiency very low very high At the current phase it is difficult to judge upon the real impact of the policy. The implementation has not started yet, and the outcome indicators haven't been defined as of today. Author/s and/or contributors to this survey Ain Aaviksoo Suggested citation for this online article Ain Aaviksoo. "Performance Payment for Family Physicians". Health Policy Monitor, October Available at -
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