Analytical guide to assess a mixed provider payment system

ANALYTICAL GUIDE TO ASSESS A MIXED PROVIDER PAYMENT SYSTEM HEALTH FINANCING GUIDANCE NO. 5 Inke Mathauer Fahdi Dkhimi © Copyright World Health OrganizaƟ on 2019 Some rights reserved. This work is available under the CreaƟ ve Commons AƩ ribuƟ on-NonCommercial- ShareAlike 3.0 IGO licence (CC BY-NC-SA 3.0 IGO; hƩ ps://creaƟ vecommons.org/licenses/by-nc-sa/ 3.0/ igo). Under the terms of this licence, you may copy, redistribute and adapt the work for non-commercial purposes, provided the work is appropriately cited, as indicated below. In any use of this work, there should be no suggesƟ on that WHO endorses any specifi c organizaƟ on, products or services. The use of the WHO logo is not permiƩ ed. If you adapt the work, then you must license your work under the same or equivalent CreaƟ ve Commons licence. 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AnalyƟ cal Guide to Assess a Mixed Provider Payment System / Inke Mathauer and Fahdi Dkhimi (WHO/UHC/HGF/Guidance/19.5) ISBN 978-92-4-151533-7 Acknowledgements List of abbreviations PURPOSE AND OVERVIEW PART 1. ANALYTICAL GUIDANCE Strategic purchasing Mixed provider payment system and incentives on provider behaviour Linkage between a mixed payment system and UHC objectives Methodology to assess a mixed provider payment system PART 2. GUIDING QUESTIONS Step 1. Mapping: overall context, purchasers, providers and payment methods A. Overall context B. Overview of health service providers C. Overview of the purchaser market D. Overview of payment methods Step 2. Assessing incentives created by the mixed payment system and their infl uence on provider behaviour and UHC objectives A. Assessing the extent of provider autonomy to use payments fl exibly B. Assessing the incentives created by the mix of payment methods in combination with the extent of provider autonomy C. Coherence between provider payment methods and cost-sharing mechanisms D. Assessing the effects of incentives on provider behaviour E. Assessing impacts of provider behaviours on UHC objectives Step 3. Assessing other effects on the health system Step 4. Assessing governance arrangements and their effects on the mixed provider payment system Step 5. Developing policy options REFERENCES ANNEX 1: MAIN PAYMENT METHODS USED IN HEALTH SYSTEMS AND EXPECTED INCENTIVES 4 4 5 7 7 8 12 17 19 19 19 19 20 21 23 23 25 25 27 29 30 32 33 35 TABLE OF CONTENTS CBHI Community-based health insurance DRG Diagnosis-related groups GHED Global Health Expenditure Database GoB Government of Burkina Faso GoM Government of Morocco JLN Joint Learning Network MPPS Mixed provider payment system NGO Nongovernmental organizaƟ on OECD OrganisaƟ on of Economic CooperaƟ on and Development OOP Out-of-pocket spending on health RESYST Resilient and Responsive Health Systems internaƟ onal research consorƟ um SHA System of Health Accounts methodology UHC Universal health coverage VHI Voluntary health insurance WHO/HGF Department of Health System’s Governance and Financing, World Health OrganizaƟ on LIST OF ABBREVIATIONS ACKNOWLEDGEMENTS 4 The authors are grateful for the valuable peer review, comments and suggesƟ ons from Susan Sparkes, MaƩ hew JoweƩ , Lluis Vinals, Ann-Lise Guisset, Aurelie Klein, Julius Murke and Jong Hye Rha. We also thank colleagues from the Department of Health Systems Financing at WHO Geneva for their comments and suggesƟ ons during a departmental peer review meeƟ ng. Finally, we thank Winnie Yip who provided guidance at the iniƟ al stage of this project. David Bramley assisted with valuable editorial support. We like parƟ cularly to acknowledge the comments on this document from Kara Hanson, Edwine Barasa and Ayako Honda of the RESYST ConsorƟ um. Last but not the least, we thank Joe Kutzin for overall inspiraƟ on, guidance and comments. HEALTH FINANCING GUIDANCE NO. 5 The present document presents an analyƟ cal guide with quesƟ ons to assess a country’s provider payment system in greater detail in order to idenƟ fy opƟ ons for beƩ er aligning the payment system with the objecƟ ves of UHC. The purpose of the analysis is to inform and improve the naƟ onal policy dialogue on purchasing. It assists in making the case for and drawing aƩ enƟ on to the need of aligning payment methods within and across purchasers as an important step towards strategic purchasing. 5PURPOSE AND OVERVIEW WHO’s Health fi nancing country diagnosƟ c (McIntyre & Kutzin, 2016) provides guidance on undertaking a situaƟ on analysis of a country’s health fi nancing system and on assessing the exisƟ ng system in relaƟ on to the goal of universal health coverage (UHC). As one of the core funcƟ ons of a health fi nancing system, purchasing – including the provider payment system – is gaining increasing aƩ enƟ on in country policy analysis and reform development. Consequently, a more in-depth assessment of purchasing and payment methods, beyond the overall diagnosƟ c, may be demanded. The key audience comprises health fi nancing and purchasing specialists who work in teams with country experts to improve or reform the provider payment system. There exist various provider payment assessment guides and manuals (JLN, 2016; Langenbrunner, Cashin & O’Dougherty, 2009; WHO OASIS approach/modules on purchasing and provider payment methods, 2011). For a detailed assessment and revision or seƫ ng of payment rates of a specifi c provider payment method, countries may choose to apply these materials. While building upon these publicaƟ ons, this guide adopts an explicit systemic perspecƟ ve and focuses on the combinaƟ on of all provider payment methods which, seen together, consƟ tute a mixed provider payment system (MPPS). The document is also informed through recent studies and evidence on purposively aligned payment systems (e.g. OECD, 2016) as well as through country case studies that revealed the challenges resulƟ ng from nonaligned payment systems (WHO/GoM, 2017; WHO/GoB, 2017; WHO/GoT, Nguyen et al., 2015). This document consists of two parts. Part 1 provides definitions of the key concepts and outlines the analytical approach underpinning the guide. It briefly explains what strategic purchasing is and what is meant by an MPPS. The core conceptual components are then PURPOSE AND OVERVIEW presented in more detail. The final section of Part 1 gives methodological guidance on how to undertake such an assessment. Part 2 of this document contains a detailed set of guiding quesƟ ons to direct the assessment of a country’s MPPS with regards to the fi ve key steps outlined below. – Step 1: Mapping the MPPS, i.e. the health fi nancing reform context, the purchasers, the diff erent providers (by level of care and sectors) as well as a detailed descripƟ on of the diff erent payment methods in place; – Step 2: Assessing the incenƟ ves created by the mixed payment system and their infl uence on provider behaviour and UHC objecƟ ves; – Step 3: Assessing other eff ects of the mixed provider payment system on the overall health system; – Step 4 (to be undertaken in parallel to Steps 2-3): Assessing governance arrangements and their eff ects on the mixed provider payment system; – Step 5: Developing policy opƟ ons to beƩ er align a mixed provider payment system. Step 1 is already very comprehensive and important and could consƟ tute a short assessment in itself. Steps 2 and 3 contain the core elements of such an assessment. Step 4 should be undertaken in parallel to Steps 2-3, but could also be undertaken separately at a later stage depending on the needs and the refl ecƟ ons. The output of this assessment would be a report which should serve as a basis for feeding into and informing the policy dialogue on strategic purchasing and aligned payment systems. While this guide aƩ empts to be comprehensive, it cannot capture all details relaƟ ng to strategic purchasing and payment methods since the aim is to stay focused and concise. Various other (WHO) frameworks are available to assess or give guidance on other purchasing-related issues such as disease- or intervenƟ on specifi c tailored payment methods, informaƟ on management, governance arrangements for strategic purchasing, cross-programmaƟ c effi ciency and budgeƟ ng. These will link to each other, and each of them will allow for a close examinaƟ on of a specifi c component of strategic purchasing. (See also www.who.int/health_fi nancing/ tools/en) 6 HEALTH FINANCING GUIDANCE NO. 5 Purchasing (Box 1.1) is one of the three core health-fi nancing funcƟ ons. It refers to the allocaƟ on of resources to public and/ or private health-care providers for the provision of services from one or several purchasing agents (WHO, 2010). There is a growing consensus that a move towards more acƟ ve or strategic purchasing of health services is a necessary condiƟ on for countries to make and sustain signifi cant progress towards UHC. Strategic purchasing means linking the allocaƟ on of funds to providers with informaƟ on on aspects of their performance and/or on the health needs of the populaƟ on that they serve (WHO, 2010). Strategic purchasing aims to contribute to improving intermediate and fi nal UHC objecƟ ves (Kutzin, 2013), namely: – increased effi ciency in the use of funds, including expenditure growth management; – equity in the distribuƟ on of resources; – improved accountability; – equitable access to health services (uƟ lizaƟ on in line with need); – fi nancial protecƟ on; – improved quality of care (including conƟ nuity of care). PART 1. ANALYTICAL GUIDANCE STRATEGIC PURCHASING Box 1.1: Who is a purchaser? A purchasing agent is the organizaƟ on or organizaƟ onal unit which transfers funds to providers to pay them for their service provision and which takes explicit or implicit decisions on resource allocaƟ on and related condiƟ ons. Examples of purchasers include the Ministry of Health, the Ministry of Finance, a subnaƟ onal health authority (e.g. at provincial or district level), a social health insurance scheme, a voluntary health insurance (VHI) scheme (e.g. commercial or not-for-profi t insurance company, community-based health insurance scheme), or an agency operaƟ ng a results-based fi nancing scheme. Within the Ministry of Health, there may be several purchasing units or departments with assigned responsibility for allocaƟ ng resources to providers. It will be important to clarify the disƟ ncƟ on between the purchasing agency/unit (responsible for allocaƟ ng to providers) and the funding agency (the revenue source for the purchasing unit), or to note where these are the same. For example, in the case of a pooled donor fund channelled through the district, the purchasing agency is the district health authority, while the funding agency is the donor (which may have taken some purchasing decisions). 7PART 1. ANALYTICAL GUIDANCE 1 Governance can be defi ned as “ensuring strategic policy frameworks exist and are combined with eff ecƟ ve oversight, coaliƟ on-building, regulaƟ on, aƩ enƟ on to system-design and accountability” (WHO, 2007). It is an overarching health system funcƟ on, which is of parƟ cular relevance to strategic purchasing. Strategic purchasing involves the following core elements: 1. Specifi caƟ on of benefi ts: Which services are covered, by which providers and how are enƟ tlements and obligaƟ ons specifi ed? What is the process through which the specifi caƟ on of benefi ts is revised and updated? 2. Provider payment methods and contracƟ ng: How are providers paid for these covered services and how are the payment methods aligned with each other and with health-sector objecƟ ves? What type of contractual and other (non-)fi nancial incenƟ ves are available to purchaser to increase provider performance? 3. Data generaƟ on and informaƟ on management: How is relevant informaƟ on generated, managed and analysed to inform purchasing decisions (e.g. on resource allocaƟ on, payment system design, monitoring and accountability purposes)? 4. Governance arrangements:1 How is oversight of individual purchasing agencies exerted and how is coordinaƟ on and harmonizaƟ on across diff erent purchasing agencies ensured? How is alignment with other support mechanisms achieved to strengthen system performance? The focus of this guide document is on provider payment methods and parƟ cularly on the MPPS, as outlined in the next secƟ on, with the primary emphasis of the analysis given to providers and provider behaviour. A provider payment method is defi ned by the features that determine when, how and under what condiƟ ons an amount/quanƟ ty of resources is transferred from a purchaser to a provider, and how that amount/ quanƟ ty is determined or calculated to pay or remunerate the laƩ er for the defi ned services provided to a defi ned populaƟ on. The main payment methods in place are line- item budget allocaƟ ons, salaries (which can be part of budget allocaƟ ons), global budget allocaƟ ons, fee for service, capitaƟ on, case payment (including by diagnosis-related groups (DRG)), and bed-day (per diem) payments. In-kind provisions to providers (e.g. supplies, drugs) – whether as part of budget allocaƟ ons or originaƟ ng from donor funding – can also be considered as provider payments. The table in Annex 1 gives a brief overview of these main payment methods and the incenƟ ves they off er. A payment method consists of several parameters (Langenbrunner, Cashin & O’Dougherty, 2009), namely: – the unit of payment (per budget line, service or acƟ on, per Ɵ me, per case (or episode), per capita (paƟ ents or served populaƟ on); – the amount of payment for this unit – i.e. the payment rate; – the underlying principle of payment MIXED PROVIDER PAYMENT SYSTEM AND INCENTIVES ON PROVIDER BEHAVIOUR 8 HEALTH FINANCING GUIDANCE NO. 5 2 A related terminology used by RESYST is “mulƟ ple funding fl ows”. This puts the primary focus on the provider’s perspecƟ ve, whereas the term “mixed provider payment system” emphasizes the system perspecƟ ve (including all purchasers and all providers) (Hanson, 2018). (input-based, output-based, performance- based) ”, i.e. based on the achievement of certain pre-defi ned targets); – the Ɵ ming of payment (retrospecƟ ve or prospecƟ ve payment); – the mode of payment (e.g. in-kind, cash). The fi rst two parameters defi ne the level of expenditure risk that the provider bears and, together with the other parameters, sets the direcƟ on and the degree of intensity of the incenƟ ve that this payment method creates. IncenƟ ves can be defi ned as “economic signals that direct individuals and organizaƟ ons toward self-interested behaviour” – i.e. they take acƟ ons in line with and in order to opƟ mize their interests, namely their income and other features which they see as benefi cial (Langenbrunner et al., 2009). As such, each payment method creates specifi c incenƟ ves for providers, with over-provision and under-provision being the most important. When assessing payment methods, it is important not only to understand their design (what they are supposed to be and how they are supposed to operate) but addiƟ onally to understand how they operate in pracƟ ce, as this is where treatment choices materialize. The behaviour of providers is moƟ vated and infl uenced by mulƟ ple factors, parƟ cularly professional ethics, workplace atmosphere and organizaƟ on, support from supervisors and colleagues, training and career opportuniƟ es, and availability of supplies and other resources to deliver good health services. Providers also respond to incenƟ ves embedded in the provider payment methods through which purchasers pay them. There are also many other factors beyond the immediate health facility context that have an infl uence. While acknowledging the mulƟ plicity of factors aff ecƟ ng the behaviour of staff , this guide focuses specifi cally on how provider payment incenƟ ves infl uence the behaviour of providers (i.e. health faciliƟ es as a starƟ ng point). In nearly all countries, several payment methods co-exist and consƟ tute a mixed provider payment system (MPPS)2 which is the main focus of this guide. Providers are paid by several payment methods and are faced with several incenƟ ves that are created through these payment methods and/or rates. Box 1.2 provides common examples of mixed provider payment systems (see also a schemaƟ c illustraƟ on in Figure 1.1). Box 1.2: Examples of mixed provider payment systems – Multiple insurance funds pay the same provider with different payment methods and/or rates. – The Ministry of Finance paying salaries directly, other line items are paid by the Ministry of Health, a separate agency provides add-on performance related payments (performance- based financing), all to the same provider. – The Ministry of Finance pays salaries, whereas a health insurance fund pays for services, all payments going to the same provider. 9PART 1. ANALYTICAL GUIDANCE The payment methods are ideally complementary and in alignment, and send a coherent overall signal to providers through a set of coherent incenƟ ves (WHO, 2017). An ideal and fully aligned mixed payment system would provide incenƟ ves to providers in order to: – deliver the right treatment, following clinical guidelines and good pracƟ ces, including the right level of provision (no under- or over-provision); – provide equal treatment to paƟ ents according to need; – deliver the services in a Ɵ mely manner at the right level of care to ensure a conƟ nuum of care with appropriate referral and counter-referral; – allocate and shiŌ resources within the facility according to evidence-based health prioriƟ es and needs; – abide by payment and billing rules, as set by the purchaser. Nevertheless, a frequent challenge in numerous countries is that mulƟ ple payment methods and/or diff erent payment rates are in place and are not aligned with each other. In such an uncoordinated mix of payment methods (and/or rates), providers receive several funding fl ows from one or several purchasers and manage several programmes with separate funding fl ows and separate data management systems. Such non-aligned payment systems oŌ en exist in fragmented health-fi nancing systems with many diff erent pools (Mathauer et al., 2017). This misalignment in payment methods might also exist within health faciliƟ es as well as across diff erent provider types. In general in an MPPS, mulƟ ple funding fl ows generate an overall set of incenƟ ves for providers which does not equate to the sum of each individual incenƟ ve associated with each individual payment method (as it operates in pracƟ ce). The various incenƟ ves may indeed be complementary (or one may off -set the disadvantage of the other3), but they may also be incoherent or even contradictory. This mix will shape, at least partly, the behaviour of providers – especially with regard to what services they will produce and how they will produce them. Mixed provider payment systems are beƩ er understood when applying a system perspecƟ ve: it is not about one instrument or one payment method – what maƩ ers is how all these individual payment methods come together and whether they generate a coherent set of incenƟ ves at the level of providers that works towards the UHC goals. This system perspecƟ ve puts strong emphasis on the provider perspecƟ ve and combines it with a purchaser perspecƟ ve so as to look at the combined eff ects on the overall UHC objecƟ ves (WHO, 2017). Here, we focus on effi ciency, equity in access, quality and fi nancial protecƟ on, as defi ned in Box 1.3. 3 E.g., i.e. when combining a budget cap with fee-for-service (FFS), this helps to maintain producƟ vity incenƟ ve FFS while managing overall spending growth. 10 HEALTH FINANCING GUIDANCE NO. 5 Box 1.3: Definitions of efficiency, equity and quality of care Effi ciency Effi ciency refers to using resources in a way that maximizes the producƟ on of the right outputs from a given set of inputs. For purchasing of health services this can mean: focusing on cost-eff ecƟ ve health services, providing the right level of care (no over-provision and no under-provision) at the right level (primary care delivered at the primary care level rather than at hospital level), creaƟ ng incenƟ ves for providers to adjust their input mix/ cost structure, decreasing administraƟ ve costs in a reasonable way, and shiŌ ing resources within the health facility in line with health needs and prioriƟ es (WHO, 2010). Equity in access to health services This UHC objecƟ ve is that all people have access to health services in line with their needs, independently of their ability to pay. People with higher health-care needs would thus have higher uƟ lizaƟ on rates. Equity in access to health services can be measured through indicators on service use (outpaƟ ent and inpaƟ ent care), disaggregated by income quinƟ les, urban versus rural residence, age, ethnicity, vulnerability and coverage schemes (WHO/WB, 2015). If data that allow for an assessment of service coverage are available, comparing use of specifi c services to underlying populaƟ on need, these should be used as well, with similar disaggregaƟ on. Quality Quality of care can be defi ned as “the degree to which health services for individuals and populaƟ ons increase the likelihood of desired health outcomes and are consistent with current professional knowledge” (InsƟ tute of Medicine, 2001 in WHO/World Bank/OECD 2018). It is acknowledged that “… quality health services […] should be eff ecƟ ve, safe, and people-centred. In addiƟ on, in order to realize the benefi ts of quality health care, health services should be Ɵ mely, equitable, integrated and effi cient” (WHO 2018). Quality can be measured along three dimensions (Donabedian, 1988), namely: 1) structure, defi ned as material and human resources as well as the organizaƟ onal structure of the facility; 2) process, defi ned as acƟ ons taken by the provider in making a diagnosis or treaƟ ng the paƟ ent; and 3) outcome, refl ecƟ ng the eff ects of care on health status, behaviour and saƟ sfacƟ on of the paƟ ents and the populaƟ on. In this guide and the proposed assessment, the parƟ cular focus is on the process dimension. Quality indicaƟ ons that are commonly infl uenced by provider payment incenƟ ves include for example: absence of under-provision or over-provision (such as the provision of adequate aƩ enƟ on/Ɵ me, needed diagnosƟ cs/tests and medicines), responsiveness/ friendliness, the existence of a care conƟ nuum, the equal treatment of paƟ ents, and compliance with clinical guidelines. NaƟ onal regulatory frameworks for providers might also include quality indicators. 11PART 1. ANALYTICAL GUIDANCE An understanding of how the mixed payment system and its set of incentives operate and influence provider behaviours is critical for developing a vision of an aligned payment system with the aim of improving UHC objectives. Figure 1.1 provides a visualisation of an MPPS by mapping purchasers, providers and payment methods, including cost- sharing mechanisms. It also outlines how such an MPPS creates a set of incentives that influence provider behaviour and how the sum of provider behaviour affects the achievement of UHC objectives. In the ideal case, the set of incentives results in behaviours that contribute to UHC objectives. However, an MPPS as it exists in practice may also translate into contradictory and even sometimes conflicting incentives for providers, who may also engage in behaviour that is non- conducive as to UHC objectives. Table 1.1 outlines in more detail these provider behaviours and their positive and negative effects on UHC objectives. Other potential and broader impacts of a MPPS on the health system are presented in Table 1.2. LINKAGE BETWEEN A MIXED PAYMENT SYSTEM AND UHC OBJECTIVES Box 1.3. (cont.) Financial protection Financial protection is achieved when direct payments made to obtain health services do not expose people to financial hardship. Monitoring of out-of-pocket spending by households is important to ensure that official cost-sharing (co-payments, user fees) as well as balance billing4 by providers or informal payments do not put at risk progress towards UHC achieved through expansion of coverage by various schemes. Household surveys or income statements of providers include information on direct payments to providers at the point of service (at least the official payments). 4 Balance billing is the pracƟ ce of a healthcare provider billing a paƟ ent for the diff erence between what the paƟ ent’s health coverage scheme (usually a health insurance) pays to the provider and what the provider chooses to charge overall. 12 HEALTH FINANCING GUIDANCE NO. 5 Figure 1.1. Purchasers and mulƟ ple provider payment methods Provider behaviour and eff ects on UHC objecƟ ves5 Source: Authors 5 Effi ciency is not a fi nal UHC objecƟ ve, but an important intermediate objecƟ ve, and payment methods are decisive in determining the level of effi ciency. 13PART 1. ANALYTICAL GUIDANCE Table 1.1. Possible provider behaviour and eff ects on UHC objecƟ ves Source: Authors. 6 However, there are more effi cient ways to cross-subsidize via the pooling funcƟ on. Possible provider behaviour Defi niƟ on Possible eff ects on UHC objecƟ ves … … with a specifi c focus on possible eff ects on out-of-pocket expenditures Cream-skimming of paƟ ents Providers give priority to paƟ ents with fi nancially more aƩ racƟ ve remuneraƟ on rates (paƟ ents with higher remuneraƟ on rates or paƟ ents who are less costly to treat) Inequity in access, ineffi ciency, lower quality (possibly over-provision to preferenƟ ally treated paƟ ents and under- provision to discriminated paƟ ents), reduced access (and possibly fi nancial protecƟ on) for less profi table paƟ ents Increased OOPs for excluded paƟ ents Service-shiŌ ing (or avoiding service provision) Refers to a situaƟ on where a provider prefers to shiŌ (refer) a paƟ ent to another provider in order to avoid the costs of his/her treatment Ineffi ciency, reduced quality, reduced fi nancial protecƟ on OR BeƩ er quality at the facility to which the paƟ ent is shiŌ ed Increased OOPs through mulƟ ple contacts and unjusƟ fi ed referrals Resource-shiŌ ing (towards wards/ units/ services which are fi nancially more profi table) Resources (staff Ɵ me and aƩ enƟ on, beds, material) are shiŌ ed to certain services or hospital wards/units/ departments/technologies/ equipment which providers consider fi nancially more aƩ racƟ ve Variable eff ects: Non-conducive: inequity in access, ineffi ciency, quality deterioraƟ on, reduced fi nancial protecƟ on, certain services (e.g. prevenƟ ve and promoƟ ve care) are less or not available OR Conducive: (if there are incenƟ ves to produce higher volumes of services): improved effi ciency and quality Increased OOPs for paƟ ents who need services or treatment in departments from which resources are shiŌ ed PotenƟ ally increased OOPs as a result of over-provision in departments to which resources are shiŌ ed, especially for diagnosƟ c tests using equipment with higher technology Cost-shiŌ ing to a purchaser with a more aƩ racƟ ve payment method Providers charge more to purchasers with higher payment rates or with other aƩ racƟ ve payment features, such that one purchaser overpays whereas another relaƟ vely underpays (shiŌ ing compared to expected burden) This may occur in the form of over-billing (charging above the offi cial rate) or extra- billing (for services that are not medically jusƟ fi ed) to purchasers and to self-paying paƟ ents Variable eff ects Non-conducive: unequal /inequitable fi nancing, reduced fi nancial protecƟ on, reduced quality OR Conducive: when the provider decides to cost-shiŌ for internal cross-subsidizaƟ on as a way to allow treatment of insolvent paƟ ents or fi nancially less “aƩ racƟ ve” paƟ ents6 Increased OOPs (through over- and balance billing OR Decreased OOPs for the « less » wealthy populaƟ on (through cross-subsidizaƟ on) 14 HEALTH FINANCING GUIDANCE NO. 5 Figure 1.1 also points to the importance of governance arrangements that infl uence the funcƟ oning of the MPPS. These entail, for instance, eff ecƟ ve oversight and supervision of purchasers and providers, clear accountability and reporƟ ng lines, appropriate levels of purchaser and provider autonomy (commensurate with capacity), and data generaƟ on and analysis through eff ecƟ ve informaƟ on management systems. However, the ways in which governance arrangements operate may contribute to a divergence between the intended design of a payment method and how it is operated in pracƟ ce. For example, lack of control and oversight may create opportuniƟ es for balance billing or for charging informal fees and thus can infl uence provider behaviour and the level of over-provision that a provider engages in. The systemaƟ c assessment of governance arrangements is consolidated in Step IV; however, it is suggested to undertake step IV in parallel with the previous steps (Box 1.4). Table 1.2. Other potenƟ al impacts of a mixed provider payment system on the health system Source: Authors. Possible eff ects Defi niƟ on PotenƟ al impacts on the health system PotenƟ al eff ects on out-of-pocket expenditures Service/care fragmentaƟ on Occurs when mulƟ ple providers work in an uncoordinated manner Ineffi ciency, quality gaps (lack of conƟ nuum of care) Excessive OOPs through mulƟ plicaƟ on/ duplicaƟ on of services High administraƟ ve costs MulƟ ple payment modaliƟ es and mulƟ ple claims management processes create an administraƟ ve burden for health providers Ineffi ciency, overall increase in health expenditure Staff migraƟ on to the private sector or to higher levels of care Occurs when doctors and nurses are aƩ racted by higher income opportuniƟ es in the private sector or at higher care levels Inequitable access and poorer quality of care for those seeking care in the public sector (staff shortages) Ineffi cient resource allocaƟ on Higher OOPs (through informal payments) to pay for service gaps by those seeking care in the public sector Skewed public spending When higher remuneraƟ on rates are paid to private-sector providers or to higher levels of care, relaƟ vely more fi nancial resources fl ow to the private sector or to higher levels of care Resource shortages in the public sector, resulƟ ng in inequitable access and quality gaps for those seeking care in the public sector; reduced fi nancial protecƟ on Higher OOPs (through informal payments) to pay for service gaps by those seeking care in the public sector Price increases across the system Higher remuneraƟ on rates to private-sector providers may put pressure on the prices for medical supplies and goods across the whole system Increases in health expenditure; ineffi ciencies Higher OOPs 15PART 1. ANALYTICAL GUIDANCE Box 1.4: Overview of the five steps to analysise a mixed provider payment system Step 1 Mapping: overall context, purchasers, providers and payment methods – Map and assess how recent key reforms of the health system and health financing may have an impact on the payment system in the short or medium term. – Map the different purchasers and providers. – Map the different payment methods in place, including cost-sharing mechanisms, considering how they operate in practice. Step 2 Assessing incentives created by the mixed payment system and their influence on provider behaviour and UHC objectives – Explore the level of provider autonomy and managerial flexibility in using the different revenue sources. – Identify the incentives that each payment method, as it operates in practice, would create for each type of provider. – Assess the effects of mixed payment methods by each key purchaser on the behaviour of each type of provider. – Assess the effects of the mixed payment system across purchasers on the behaviour of each type of provider. – Combine the effects on each provider type and identify the overall effects of the mixed payment system on UHC objectives across all provider types and for the whole population. Step 3 Assessing other effects of the mixed payment system on the health system – Explore other impacts on the health system. Step 4 Assessing governance arrangements and their effects on the mixed provider payment system – Throughout this analysis: explore how the governance arrangements in place enhance or hinder the functioning of the payment system, as well as the alignment of payment methods, and: – Explore how governance-related factors lead to a divergence between the design of the payment method and how it is operated in practice. Step 5 Developing policy options – Explore what should be changed in the mixed provider payment system in order to contribute to achieving UHC objectives or reducing negative effects on the health system. – Identify possible entry points: • alignment of payment methods within a purchaser (i.e. modifying or adjusting payment methods to make incentives coherent); • alignment of the mix of payment methods across purchasers (i.e. harmonization of payment methods and rates, and harmonization in claims management, reporting and other administrative procedures); • concurrent measures addressing governance-related factors that affect the functioning of the mixed provider payment system. 16 HEALTH FINANCING GUIDANCE NO. 5 It is difficult to assess and measure providers’ behavioural responses to the incentives created by payment methods. Most often, data to quantify their behaviours are not easily available. A starting point is to identify signals pointing to the existence of a particular provider behaviour or indicating that there is a risk that non-conducive provider behaviour could exist. The guiding questions presented in Part 2 will help to undertake a systematic and comprehensive analysis. However, this process is not about answering each and every question. Instead, the guiding questions give an idea of the issues and directions to be explored during the analysis. Such an MPPS study requires a mixed method approach. It is initially of qualitative nature but should be combined with the analysis of quantitative data where possible (see further below). The proposed methodology consists of the following activities: – document review (of published and grey literature related to purchasing in the country); – interviews with the main purchasing agencies and governance actors, as well as other resource persons and stakeholders; – interviews with a (purposive or representative) sample of providers from the public and private sectors, and from various levels of care (primary, secondary, tertiary); – discussions with patients or representatives of patients’ associations; – collection and analysis of secondary data (e.g. from claims data, health accounts reports, household surveys, Demographic Health Survey [DHS], Service Availability and Readiness Assessment [SARA]); – if possible and where needed, collection and analysis of primary data, including observation. The scope of the study, the mix of methods applied, the number of faciliƟ es visited and of people interviewed, the amount of data collected and the analysis of secondary data will vary greatly according to the chosen focus of the study based on the country’s prioriƟ es, as well as on the Ɵ me and resources available. The study team must therefore adjust the guiding quesƟ ons to its purpose by fully applying them or choosing a leaner approach. Moreover, the MPPS assessment could focus on a specific region of the country (e.g. a state, region, or district) to provide a zoom-in focus on a specific purchasing situation. Alternatively, the study could compare the situations of various subnational territories that have undertaken different payment reforms, or compare interventions and controls in sub-territories. Table 1.3 provides examples of the possible interview partners. A purposive sample of providers can be chosen across urban/rural, wealthier/poorer contexts. Examples of quantitative data/metrics are presented in Table 1.4 as well as in Boxes 2.2 and 2.3 in Part 2. METHODOLOGY TO ASSESS A MIXED PROVIDER PAYMENT SYSTEM 17PART 1. ANALYTICAL GUIDANCE Table 1.3. Examples of interview partners Table 1.4. Examples of quanƟ taƟ ve data for collecƟ on Governance actors Purchasers Providers PaƟ ents, benefi ciaries Other resource persons and stakeholders – Ministry of Health – Ministry of Finance – Ministry in charge of oversight of the naƟ onal health insurance – Ministry in charge of CBHIa – Provincial and local government health authoriƟ es – Ministry of Health (this may involve various departments that are in charge of specifi c coverage schemes) – NaƟ onal health insurance scheme – CBHIa/mutuelle – Voluntary health insurance scheme Purposive sample: – Health centres (at primary health care level) – District hospitals – Regional and university hospital – Private clinics – Private hospitals – PaƟ ents – PaƟ ents’ groups/ associaƟ ons – Users’ associaƟ ons – Development agencies – Researchers working on purchasing – Civil society organizaƟ ons Expenditure data from health accounts reports disaggregated by purchasers, provider types and funcƟ ons. UƟ lizaƟ on rates, disaggregated along populaƟ on groups or diff erent coverage schemes. PaƟ ent record data Claims, such as: – number and type of diagnosƟ c tests undertaken for similar episodes – number of services provided for similar episodes – number and type of drugs prescribed for similar episodes – claim amounts for similar individual episodes – most common diagnoses claimed compared to burden of disease: mismatch? ObservaƟ ons, such as : – waiƟ ng Ɵ mes of diff erent populaƟ on groups – number of physical examinaƟ ons per visit – amount of Ɵ me (in minutes) spent in consultaƟ on per visit – simulaƟ ng paƟ ents (with a standardized presentaƟ on of symptoms). Tracer condiƟ ons, such as: – C-secƟ on rate for diff erent income groups and diff erent coverage scheme benefi ciaries. 18 HEALTH FINANCING GUIDANCE NO. 5 IdenƟ fy key health system and health fi nancing reforms that may have impacts on the payment system and its eff ects on service provision in the short or medium term (e.g. public fi nance management reforms, hospital reform). Core key quesƟ ons are in bold. 1. Which types of providers are there in your country? (Specify whether they are public, private-for-profi t or private-not- for-profi t, and the levels of care – i.e. primary health care, secondary care and terƟ ary care). If they are public, what is the extent to which they have autonomy over their internal resource allocaƟ on and can they adjust their expenditure structure? 2. What is the total number of faciliƟ es of each type of provider? 3. On the basis of available uƟ lizaƟ on data: What is the share of diff erent types of services provided by each type of provider? What are the trends over the past 5 years in terms of service provision? 4. On the basis of health accounts data7: What is the share of spending on each type of provider? What are the shares of diff erent revenue streams to each type of provider? 5. Overall expenditure growth? Which types of providers have an expenditure growth above the overall average? 6. What is the number of health staff (by categories) in the public and private sectors, and across urban and rural areas? PART 2. GUIDING QUESTIONS STEP 1. MAPPING: OVERALL CONTEXT, PURCHASERS, PROVIDERS AND PAYMENT METHODS A. Overall context B. Overview of health service providers 7 The Global health expenditure database provides health accounts data for each country. hƩ p://www.who.int/health- accounts/en/ CORE OBJECTIVES – Map and assess how recent key health system and health fi nancing reforms may have an impact on the payment system in the short or medium term. – Map the diff erent purchasers and providers. – Map the diff erent payment methods in place, including cost-sharing mechanisms, considering how they operate in pracƟ ce. – IdenƟ fy the incenƟ ves that each payment method off ers, as it operates in pracƟ ce, to each type of provider 19PART 2. GUIDING QUESTIONS 1. Describe the key features of the public fi nancial management rules related to budget formaƟ on and budget execuƟ on for government purchasers and government providers, and what are the issues? 2. Which purchasers (e.g. Ministry of Health, Ministry of Finance, public insurance scheme, voluntary health insurance, community-based health insurance, NGOs) are there in your country? Outline the key features of each purchaser: 3. What is each purchaser’s share in total health expenditure? (This informaƟ on can be calculated on the basis of GHED data.) 4. What is each purchaser’s share in terms of total service volume by provider type? Diff erenƟ ate for diff erent levels of care/types of providers (e.g. primary, secondary, terƟ ary). For example, of all primary health care in the country, what is each purchaser’s share of total health expenditure on primary health care and what is the share in terms of the volume of primary health care service (either in terms of expenditure or outpaƟ ent cases)? Then apply the same quesƟ ons to the secondary and terƟ ary care levels. 5. Which populaƟ on groups does the purchaser target? What are the eligibility criteria for coverage? What share is this target populaƟ on out of the total populaƟ on? 6. What services does the purchaser cover and at which levels? (primary health care, secondary, terƟ ary hospital care, etc.)? 7. Which types of providers does the purchaser pay (public and private; primary, secondary, terƟ ary care levels)? 8. How does each purchaser negoƟ ate with providers? 9. Is there selecƟ ve contracƟ ng8? If yes, what are the selecƟ on criteria? Is there a funcƟ oning accreditaƟ on system in place? 10. Does the purchaser undertake uƟ lizaƟ on reviews and administraƟ ve checks to compensate for anƟ cipated negaƟ ve eff ects of payment incenƟ ves? C. Overview of the purchaser market Note: If there are mulƟ ple purchasing agencies of the same type (such as several voluntary health insurance companies or several community-based health insurance schemes), and these use the same payment mechanisms and rates, it may be more manageable to group them together as a single type of purchaser (e.g. “VHI” or “CBHI” in this example). When there are signifi cant diff erences between such health insurance agencies in terms of payment mechanisms, rates, or populaƟ on groups served (e.g. a social health insurance for private- sector employees and another social health insurance scheme for civil servants), keep them apart. Also note that within one purchaser there may be several purchasing units with diff erent purchasing approaches, using diff erent payment methods, such as within a Ministry of Health. 7. When a sample of providers is selected for visits and interviews, collect data on the following: • number of staff (by categories and by units/departments/wards); • number of beds (when applicable); • number of services provided (e.g. for primary health care centres: consultaƟ on delivery, immunizaƟ on; for secondary and terƟ ary care providers: outpaƟ ent departments, inpaƟ ent departments, delivery, surgical procedures); • size of the populaƟ on catchment area. 8 SelecƟ ve contracƟ ng means that a purchaser can select the providers which it wishes to contract with, i.e. the purchaser has the right not to contract with all providers. 20 HEALTH FINANCING GUIDANCE NO. 5 1. Describe in detail how each purchaser pays each type of provider from which it purchases services: explore the provider payment method in place as it is operated in pracƟ ce and consider public fi nancial management regulaƟ ons (diff erenƟ ate in terms of ownership, services and levels, where needed): a. Are payments made in the form of fi nancial (bank) transfers, as credit lines or in-kind (e.g. provision of equipment, staff , medicines etc.)? b. Are payments based on input, output/volume, or according to other performance metrics? c. Are payments prospecƟ ve (i.e. payments are made at the beginning of a period before any services are provided) or retrospecƟ ve (i.e. “reimbursements” made aŌ er the use of services)? d. Does the purchaser pay providers directly or does it reimburse the paƟ ents for their expenses? Does it channel its payments through an intermediary insƟ tuƟ on (e.g. district governments)? e. For each revenue source, to what extent are providers paid on Ɵ me with the full amount in accordance with the contract, agreement, or budget process? How long are any delays, or how irregular is the release of funds? f. Is there a clear basis for calculaƟ ng payment rates; are providers aware of the methodology and do they understand it? 2. Who bears most of the fi nancial risk associated with health service uƟ lizaƟ on by benefi ciaries? Is the biggest risk on the provider side, the purchaser side, or the paƟ ents? 3. Which payment and claims management modaliƟ es operate in pracƟ ce? a. What are the concerns from the perspecƟ ve of providers? b. What are the concerns from the perspecƟ ve of purchasers? 4. Is there an integrated naƟ onal informaƟ on management system in place or are there links between interoperable databases of the various purchasers? 5. Describe the reporƟ ng and informaƟ on management requirements and actual pracƟ ces in relaƟ on to each payment method in place: a. What are the concerns from the perspecƟ ve of providers? b. What are the concerns from the perspecƟ ve of purchasers? c. Are there sancƟ ons for false reporƟ ng or false claims management? 6. What is the share of funds from each type of payment method? 7. What is the share of funds received by each type of provider from each purchaser? 8. When there are performance-based fi nancing methods: a. What are the performance metrics, and how are they measured/ assessed? b. How are rewards paid and how can they be used? 9. What are the main concerns from the purchaser’s perspecƟ ve? 10. Over the past 5 years: Which new provider payment method(s) have been introduced or modifi ed, how and when? D. Overview of payment methods 21PART 2. GUIDING QUESTIONS 19. In your country, who are the main providers of your tracer condiƟ on for prevenƟ on, case-fi nding, management, treatment and rehabilitaƟ on? 20. For the services related to the tracer condiƟ on, which provider payment method is used for each type of provider? 21. Is there any built-in incenƟ ve (through provider payments) to coordinate/ integrate care along the whole spectrum of providers for the tracer condiƟ on? 22. Are there any other coordinaƟ on mechanisms in place to incenƟ vize conƟ nuity of care across levels and sectors? For each type of provider: 11. List the payment methods in place. How many payment methods does each provider have to deal with from the various purchasers? (Please also consider the fee schedule/tariff s for paƟ ents paying fully out of pocket with no other coverage.) 12. From how many diff erent purchasers does the facility receive payments? 13. Are there diff erent payment rates by the same purchaser for the same services for diff erent populaƟ on groups? 14. Are there diff erent payment rates by diff erent purchasers for the same services for the same or diff erent populaƟ on groups? (This informaƟ on may be compiled from tariff agreements/ fee schedules.) 15. What is the share of income from each payment method in the total revenue (or income) of the facility? How has this evolved over the past 5 years? 16. What is the share of income from each purchaser out of the total revenue (or income) of the facility? How has this evolved over the past 5 years? 17. What types of cost-sharing mechanisms or exempƟ on arrangements for defi ned populaƟ on groups are associated with each payment method (e.g. fi xed amount, percentage of total bill, gate- keeping)? a. What share of the total revenue of the facility do the offi cial cost-sharing arrangements represent? b. Are cost-sharing arrangements respected by providers as well as paƟ ents in accordance with the regulaƟ ons? If not, what are the problems? (e.g. informal payments) c. Are there any signs of extra-billing – i.e. amounts charged to paƟ ents for services that are charged above the offi cial rate or are not medically jusƟ fi ed (also called balance-billing)? 18. Overall, what are the main concerns from the provider’s perspecƟ ve? Where do providers feel that there are disincenƟ ves? Note: The following quesƟ ons are focused on integrated/coordinated care in relaƟ on to noncommunicable diseases. You may select a tracer condiƟ on (e.g. a cardiovascular disease). 22 HEALTH FINANCING GUIDANCE NO. 5 STEP 2. ASSESSING INCENTIVES CREATED BY THE MIXED PAYMENT SYSTEM AND THEIR INFLUENCE ON PROVIDER BEHAVIOUR AND UHC OBJECTIVES 1. Explore the diff erent degrees of provider autonomy for diff erent payment methods: do providers have managerial fl exibility over the management of diff erent revenue sources? 2. Is this provider autonomy coupled with appropriate oversight to ensure that resources are used in an opƟ mal way and commensurate with managerial capacity of providers? 3. Do they have to keep these diff erent revenue sources separate (in separate bank accounts) or can they “pool” at the provider level? 4. Is the provider autonomy and managerial fl exibility appropriate for providers? Do providers have the capacity to respond to incenƟ ves? 5. Are reporƟ ng requirements appropriate and providing the necessary informaƟ on on provider acƟ viƟ es and performance? 6. Is there a funcƟ oning informaƟ on management system in place? 7. Is there a funcƟ onal claims management system in place? Are provider payments paid on Ɵ me? 8. Do purchasers monitor provider performance eff ecƟ vely and do they have the technical experƟ se and resources to do so? 9. How is eff ecƟ ve gate-keeping assured, and how are providers made to comply with referral rules? 10. How is illicit billing controlled and addressed? A. Assessing the extent of provider autonomy to use payments fl exibly Do the following analyƟ cal steps for each type of provider: CORE OBJECTIVES – Assess the levels of provider autonomy and managerial fl exibility on how to use payments – Analyse the incenƟ ves created by the mixed payment system (in combinaƟ on with the respecƟ ve levels of provider autonomy over payments in place), and how these infl uence the behaviour of providers and UHC objecƟ ves – Assess the eff ects of mixed provider payment methods by each key purchaser on the behaviour of each type of provider. – Assess the eff ects of the mixed payment system across purchasers on the behaviour of each type of provider. – Combine the eff ects on each provider type and idenƟ fy the overall eff ects of the mixed payment system on UHC objecƟ ves across all provider types and for the whole populaƟ on. 23PART 2. GUIDING QUESTIONS Assessment of all payment methods from all purchasers combined 1. Assess the mulƟ ple purchasers’ provider payment mix a. Does the mulƟ ple purchasers’ payment mix lead to a coherent set of incenƟ ves for conducive provider behaviour? b. To what extent is the mix of payment methods aligned across the diff erent purchasers? 2. Are the payment methods and rates considered by the provider to be adequate and acceptable? 3. When payment methods and/or rates are considered inadequate and unacceptable, how does the provider compensate for this? 4. Which incenƟ ve(s) (created by which payment method) seem most dominant 1. What incenƟ ves would each of the payment methods (in combinaƟ on with the respecƟ ve extent of provider autonomy in using the funds fl exibly) separately create (without considering the other payment methods that are in place)? (The table in Annex 1 gives a fi rst indicaƟ on of the direcƟ on of the incenƟ ve.) 2. Does the respecƟ ve payment method cover the costs of what it is supposed to cover and pay for? 3. Which payment method is most aƩ racƟ ve for the provider? 4. If key purchasers pay a provider through several payment methods, assess the payment mix for each of the key purchasers: a. Does this payment mix (in combinaƟ on with the provider autonomy of these diff erent payments) generate incenƟ ves for conducive provider behaviour? b. Is a coherent set of incenƟ ves signalled to the provider? c. Does the payment mix cover the costs of the services that it is supposed to pay for (i.e. all parts of the services necessary for providing care for a case or episode – such as a consultaƟ on, diagnosƟ c test, medicaƟ on, treatment)? 5. Which incenƟ ve(s) (created by which payment method) would be most dominant in infl uencing provider behaviour? (Providers may resist some incenƟ ves but respond to others) Note: The incenƟ ves created by the payment method that represents the most important income source could be found to be the most dominant one. AlternaƟ vely, the incenƟ ves related to the payment method that enhances staff bonuses or extra payments may be the dominant one. 6. What would be the dominant provider behaviours? B. Assessing the incentives created by the mix of payment methods in combination with the extent of provider autonomy Interim analyƟ cal step This step allows for refl ecƟ ng on the incenƟ ves that would be created if a payment method were to exist and operate in isolaƟ on. It is an interim analyƟ cal step because the actual analysis (next secƟ on) will focus on the incenƟ ves created by mulƟ ple payment methods that operate in pracƟ ce. 24 HEALTH FINANCING GUIDANCE NO. 5 Boxes 2.1 and 2.2 off er more detailed quesƟ ons for assessing provider behaviour. 1. Can providers set their own fee schedule/ tariff for paƟ ents who pay fully out of pocket? 2. What kinds of incenƟ ves do the cost- sharing methods create for paƟ ents as well as for providers? 3. Are some intended payment method incenƟ ves distorted by their respecƟ ve cost-sharing mechanism? 4. Are the incenƟ ves created by the cost- sharing mechanisms coherent with the incenƟ ves created by payment methods? 1. Assess how the dominant incenƟ ves created by the provider payment mix and the respecƟ ve levels of provider autonomy over payments aff ect provider behaviour. 2. To what extent are the resulƟ ng provider behaviours conducive or non-conducive with respect to the objecƟ ves of UHC? C. Coherence between provider payment methods and cost-sharing mechanisms D. Assessing the effects of incentives on provider behaviour Box 2.1: Key questions for assessing whether provider behaviours are conducive Does the set of incenƟ ves created by the mix of payment methods in combinaƟ on with the respecƟ ve levels of provider autonomy over payments maximize conducive provider behaviour? And how does it do so? For example: – Does the set of incenƟ ves encourage the provision of the right level of care for a paƟ ent? – Does it ensure cost-containment? Does it help manage expenditure growth? (e.g., through close-ended payment methods, which create a volume or budget ceiling) – Does it allow for managing the payment administraƟ on effi ciently (i.e. administraƟ ve effi ciency)? (IndicaƟ ons are: workload considered appropriate, unifi ed data collecƟ on with diff erent payment and claims management modaliƟ es, coherent reporƟ ng procedures, etc.) – Does it encourage the right treatment and enhance the provision of quality services? – Does it enhance equal treatment of all paƟ ents according to their needs? – Does it promote a conƟ nuum of care with appropriate referral and counter-referral? – Does it allow for and encourage resource allocaƟ on and shiŌ ing in terms of prioriƟ es/ needs within the facility? – Does it ensure compliance with payment and billing rules? in infl uencing provider behaviour? (Providers may resist some incenƟ ves.) Note: The incenƟ ves created by the payment method(s) that represent(s) the most important income source could be found to be the most dominant one. AlternaƟ vely, the incenƟ ve related to the payment method that enhances staff bonuses or extra payments may be the dominant one, provided that the providers have some autonomy and fl exibility in use over this one. 25PART 2. GUIDING QUESTIONS Does cream-skimming lead to higher out-of-pocket expenditure (OOPs) for less preferenƟ al paƟ ent groups (through formal cost-sharing or informal payments)? 2. Resource-shiŌ ing Are there indicaƟ ons of resource-shiŌ ing? For example, are there peculiar diff erences across service units/wards (that are not explained by other external factors such as epidemiological paƩ erns and profi le) in respect of: – staffi ng availability and levels; – available medicines and supplies; – waiƟ ng Ɵ mes, especially to consult specialists; – number of services produced; – relaƟ vely higher OOPs in the units/wards/for services from which resources are shiŌ ed? 3. Cost-shiŌ ing Are there indicaƟ ons of providers shiŌ ing costs from one purchaser to another? For example: – Do providers charge higher rates or more items to one purchaser (over-billing) compared to what they charge to another purchaser? – Do providers use resources from one group of paƟ ents (e.g. paƟ ents with health insurance) to lower the price/cost-sharing to be paid by other paƟ ent groups (e.g. paƟ ents without health insurance, or the very poor)? Box 2.2: Key questions for identifying whether provider behaviours are non-conducive Does the set of incenƟ ves created by the mix of payment methods lead to non-conducive provider behaviour? 1. Cream-skimming Are there indicaƟ ons of preferenƟ al treatment of certain paƟ ents? For example, are there systemaƟ c diff erences between diff erent populaƟ on groups or paƟ ent groups treated in a given facility in respect of: – waiƟ ng Ɵ mes; – Ɵ me to receive an appointment with a specialist; – consultaƟ on Ɵ me (for comparable paƟ ents and episodes); – number and type of diagnosƟ c tests undertaken for a similar episode; – number of services provided for a similar episode; – number and type of medicines prescribed for a similar episode; – claim amount for comparable episodes? Note: This could reveal under-provision for fi nancially less aƩ racƟ ve paƟ ents. Yet, there could be over-provision for fi nancially more aƩ racƟ ve paƟ ents, although this may not always imply beƩ er quality. This informaƟ on could also be retrieved from claims data by comparing diff erent populaƟ on groups. 26 HEALTH FINANCING GUIDANCE NO. 5 1. How do the behaviours of each provider aff ect progress towards UHC objecƟ ves? 2. What are the combined eff ects of provider behaviours on progress towards UHC objecƟ ves? 3. Across all providers, what seem to be the most dominant incenƟ ves and resulƟ ng provider behaviours and hence the main eff ects on UHC objecƟ ves? E. Assessing impacts of provider behaviours on the UHC objectives Note: The eff ects on UHC objecƟ ves should, whenever possible and useful, be disaggregated for diff erent populaƟ ons, incomes and/or paƟ ent groups. Where needed, the analysis can also be diff erenƟ ated between naƟ onal and subnaƟ onal levels or can focus on a selected subnaƟ onal territory (i.e. a specifi c district). Box 2.3 off ers more detailed quesƟ ons for assessing the impacts of provider behaviour on UHC objecƟ ves. Box 2.2 (cont.) Are there indicaƟ ons that costs are “shiŌ ed” to paƟ ents? For example: – Are there any indicaƟ ons of addiƟ onal cost-sharing payments by increasing charges for direct payment, balance billing or informal payments? – Does this aff ect all paƟ ents or does it aff ect specifi c paƟ ents or services? 4. Service-shiŌ ing Are there indicaƟ ons of service-shiŌ ing for fi nancial interests? For example: – Are there high rates of cases being referred unnecessarily to higher levels of care or to other providers although the iniƟ al provider had the capacity and ability to treat them (especially expensive cases)? – Does service-shiŌ ing lead to higher OOPs (through formal cost-sharing or informal payments) for paƟ ents whose service provision/treatment is shiŌ ed? Box 2.3: Potential impacts of provider behaviour on the objectives of universal health coverage Efficiency – How do cream-skimming, resource-shifting, cost-shifting or service-shifting lead to suboptimal use of resources? Expenditure growth management – How does one judge the expenditure growth trend of each type of provider, when compared to the overall expenditure growth rate of the whole health system? – Can this be considered as appropriate expenditure growth? 27PART 2. GUIDING QUESTIONS Box 2.3 (cont.) Quality – What is the effect of cream-skimming, resource-shifting, cost-shifting or service- shifting on the quality of care of patients and of specific population groups? – Are there indications that the continuum of care is interrupted? (i.e. patients are not followed across provider levels) Equitable use of resources according to need – Are there indications that specific populations and/or patient groups are disadvantaged/ discriminated against or lose out, with inequitable access to services for them, because of patient cream-skimming, resource-shifting, cost- shifting or service-shifting? – When there is cost-shifting from one purchaser to another, ask: Which purchaser benefits? How do these shifts in cost burden affect the level of equitable financing? Is it a pro-poor or a pro-rich shift? Financial protection – What effects do cream-skimming, resource-shifting, cost-shifting or service- shifting have on financial protection? Indicators to look for include: – utilization rates, which are disaggregated along different population groups, income groups or patient groups. 28 HEALTH FINANCING GUIDANCE NO. 5 Box 2.4: System effects Service fragmentaƟ on – Are there indicaƟ ons of service fragmentaƟ on between diff erent providers or provider levels, or between diff erent health intervenƟ ons/programmes (i.e. paƟ ents do not receive conƟ nuous/integrated care)? – Are there indicaƟ ons of service fragmentaƟ on in that some parts of the treatment of an episode are covered but others are not (e.g. certain diagnosƟ c tests, medicines, supplies such as soap and linen)? – What are the observed consequences of this service fragmentaƟ on for the paƟ ents (e.g. lack of coordinaƟ on of care, issues of quality/safety)? – Does service fragmentaƟ on cause higher OOPs? High administraƟ on costs – To what extent do mulƟ ple payment modaliƟ es and mulƟ ple claims management processes create administraƟ on burdens and increase administraƟ ve costs for the diff erent provider types, thus increasing overall health expenditure at system level? Staff migraƟ on to the private sector – Does the MPPS encourage migraƟ on of health workers to the private sector or to higher care levels for fi nancial reasons? What is the extent of this? Skewed public spending – Does the MPPS lead to skewed public spending (i.e. a disproporƟ onate share of spending going to terƟ ary care and/or to the private sector)? What is the extent of this? What does this mean for equity and effi ciency? – Does the MPPS lead to pro-rich public spending whereby large shares of public funds are spent on health coverage schemes for beƩ er-off populaƟ on groups via payment methods and related remuneraƟ on rates that draw a lot of public funding? Price increases – Do higher payment rates paid to the private sector lead to spill-over eff ects in the public sector (i.e. pressure on prices – for staff , supplies, etc.)? 1. When aggregaƟ ng the eff ects occurring at each type of provider, what are the system impacts across all provider types and for all populaƟ on groups? 2. How do these eff ects contribute to or cause other spill-over and health system challenges? Box 4 below provides more detailed quesƟ ons to guide this analysis. STEP 3. ASSESSING OTHER EFFECTS ON THE HEALTH SYSTEM CORE OBJECTIVES – Explore other impacts on the health system 29PART 2. GUIDING QUESTIONS Box 2.5: Governance arrangements at various levels Governance of the whole purchasing market 1. Is there a policy which includes clear, specifi c and operaƟ onal objecƟ ves for strategic purchasing? Is there a process which allows the achievement of these objecƟ ves to be monitored and which can propose or enforce adjustments to payment mechanisms if they do not contribute to these objecƟ ves or in response to new data and analysis? 2. Who are the actors in charge of and involved in the coordinaƟ on, harmonizaƟ on/ alignment and regulaƟ on of the purchaser market – e.g. with respect to the benefi t package, payment methods and rates, contracƟ ng procedures, reporƟ ng, market entry, compeƟ Ɵ ve pracƟ ces, safety and quality standards? 3. What mechanisms are in place to coordinate, regulate and harmonize the diff erent purchasers? 4. Do these actors have the operaƟ onal capacity to undertake the governance tasks? What gaps exist? 1. Assess the general governance arrangements for the whole purchasing market, including policy objecƟ ves, regulatory frameworks for the health sector, public fi nancial management rules, and regulaƟ ons that apply to private providers. There should be a specifi c focus on informaƟ on management and the capaciƟ es of key actors. 2. Assess the governance arrangements for each purchaser, including their ability to act as a strategic purchaser. 3. Assess the governance arrangements that address providers and see how these arrangements allow providers to react to incenƟ ves. 4. Explore how the combinaƟ on of these governance-related factors lead to a divergence between the design of payment method and how it is operated in pracƟ ce. Box 2.5 provides more specifi c quesƟ ons for undertaking this analysis. STEP 4. ASSESSING GOVERNANCE ARRANGEMENTS AND THEIR EFFECTS ON THE MIXED PROVIDER PAYMENT SYSTEM CORE OBJECTIVES – Throughout the analysis, explore how the governance arrangements in place enhance or hinder the funcƟ oning of the payment system and the alignment of payment methods, and – Explore how governance-related factors lead to a divergence between how the payment method is designed and how it is operated in pracƟ ce. 30 HEALTH FINANCING GUIDANCE NO. 5 Box 2.5 (cont.) 5. What works well with respect to coordinaƟ ng, regulaƟ ng and harmonizing the purchaser market? Which areas are well coordinated/regulated/harmonized? Where are the gaps? 6. What are the challenges in coordinaƟ on, regulaƟ on and harmonizaƟ on? 7. Do the actors in charge of coordinaƟ on and regulaƟ on of the purchaser market have access to a full range of informaƟ on? 8. What capaciƟ es would be needed to improve coordinaƟ on, regulaƟ on and harmonizaƟ on of the purchaser market? 9. Are there rules in place (or ongoing policy processes that aim) to guarantee uniform or inter-operable data bases and uniform or harmonised claims forms across all purchasers and health coverage schemes across diff erent populaƟ on groups? 10. What other policy instruments would be needed to strengthen the coordinaƟ on, regulaƟ on and harmonizaƟ on of the purchaser market? Governance arrangements related to a purchasing agency 11. Does the purchaser organizaƟ on enjoy an adequate level of autonomy to apply and adjust the payment system in an eff ecƟ ve way to increase effi ciency, manage expenditure growth and ensure quality of care by providers? 12. Who determines which provider payment methods are used? Who determines the provider payment rates? What process is in place to set provider payment methods? 13. Are there mechanisms to hold the purchasing organizaƟ on accountable for using the funds effi ciently, for ensuring that those in need are able to access the health services they require, and for providing services of high quality? 14. What do the purchasers see as enabling factors, as well as challenges, in performing their strategic purchasing funcƟ ons? 31PART 2. GUIDING QUESTIONS 1. What are the most important fi ndings on the MPPS? Where are the core challenges? 2. What is most worrying in terms of equity of access to care and fi nancial protecƟ on? 3. What should be changed in the MPPS in order to contribute to achieving UHC objecƟ ves and specifi c public health objecƟ ves (e.g. increasing facility-based delivery, use of primary health care faciliƟ es, uƟ lizaƟ on of noncommunicable disease prevenƟ on measures) or reducing negaƟ ve eff ects on the health system? IdenƟ fy possible entry points, such as: • alignment of payment methods within a purchaser; • alignment of the mix of payment methods across purchasers; • concurrent measures addressing governance-related factors that aff ect the funcƟ oning of the MPPS. 4. Which short-term measures are possible within the exisƟ ng legal framework? 5. Which medium-to-long-term measures require changes to the exisƟ ng legal framework or are likely to create resistance from stakeholders? 6. Which issues relaƟ ng to governance arrangements could be, or should be, addressed? 7. Who are likely supporters and opponents of the proposed changes? STEP 5. DEVELOPING POLICY OPTIONS CORE OBJECTIVES – Explore what should be changed in the MPPS in order to contribute to achieving UHC objecƟ ves or to reducing negaƟ ve eff ects on the health system. – IdenƟ fy possible entry points in order to increase: • alignment of payment methods within a purchaser (i.e. modifying or adjusƟ ng payment methods to make incenƟ ves coherent); • alignment of the mix of payment methods across purchasers (i.e. harmonizaƟ on of payment methods and rates, and harmonizaƟ on in claims management, reporƟ ng and other administraƟ ve processes); • concurrent measures addressing governance-related factors that aff ect the funcƟ oning of the MPPS. 32 HEALTH FINANCING GUIDANCE NO. 5 REFERENCES Cashin C, editor (2015). Assessing health provider payment systems: a practical guide for countries working toward universal health coverage. Washington (DC): Joint Learning Network for Universal Health Coverage. Donabedian A (1988). The quality of care. How can it be assessed? JAMA;260:1743–8. Hanson K (2018). RESYST research on strategic purchasing. London: RESYST (http://resyst.lshtm.ac.uk/sites/resyst.lshtm.ac.uk/files/docs/reseources/RESYST%20 research%20on%20Strategic%20Purchasing%20.pdf, accessed on 11 September 2018). Institute of Medicine. Medicare (1990). A strategy for quality assurance. Washington, DC: National Academy Press. Kutzin J (2013). Health financing for universal coverage and health system performance: concepts and implications for policy. Bull World Health Organ. 91:602–11. Langenbrunner J, Cashin C, O’Dougherty S, editors (2009). Designing and implementing health care provider payment systems: how-to manuals. Washington (DC): The World Bank. Mathauer I, Dale E, Meessen B (2017). Strategic purchasing for universal health coverage: key policy issues and questions. A summary from expert and practitioners’ discussions. Geneva: World Health Organization (http://www.who.int/health_financing/documents/strategic- purchasing-discussion-summary/en/, accessed 11 September 2018). McIntyre D, Kutzin J (2016). Health financing country diagnostic: a foundation for national strategy development. (Health Financing Guidance, No. 1). Geneva: World Health Organization (http://www.who.int/health_financing/documents/country-diagnostic/en/, accessed 11 September 2018). Nguyen PNK, Oanh TTM, Phuong HT, Tien TV, Cashin C (2015). Assessment of systems for paying health care providers in Vietnam: implications for equity, efficiency and expanding effective health coverage. Glob Public Health. 10(Suppl 1):S80–94. OECD (2016). Better ways to pay for health care. Paris: Organisation for Economic Co-operation and Development. RESYST (2014). What is strategic purchasing for health? Financing research theme, Topic overview 4. London: Resilient and Responsive Health Systems. WHO (2007). Everybody’s business - Strengthening Health Systems to Improve Health Outcomes. WHO’s framework for action. Geneva: World Health Organization. WHO (2010). Health systems financing: the path to universal coverage. World Health Report 2010. Geneva: World Health Organization (http://www.who.int/whr/2010/en/, accessed 11 September 2018). 33REFERENCES WHO (2011). OASIS (Organizational ASsessment for Improving and Strengthening Health Financing) Approach: Health financing review, performance assessment, options for improvement. Geneva: World Health Organization (http://www.who.int/health_financing/tools/systems_review/en/, accessed 11 September 2018). WHO (2017). Strategic purchasing for universal health coverage: unlocking the potential (Global meeting, Geneva, 25–27 April 2017). Meeting report. Geneva: World Health Organization. WHO (2018): Maternal, newborn, child and adolescent health: what is quality of care and why is it important? Geneva: World Health Organization, http://www.who.int/maternal_child_ adolescent/topics/quality-of-care/definition/en/ , accessed 5 November 2018. WHO/Government of Morocco (GoM) (2017). An analysis of the mixed provider payment system of Morocco: impacts, implications and options to move towards more strategic purchasing. Rabat: WHO and the Ministry of Health of the Kingdom of Morocco (in French). WHO/Government of Burkina Faso (GoB) (2017). Analysis of the mixed provider payment system in Burkina Faso. Ouagadougou: WHO and the Ministry of Health of Burkina Faso. WHO/Government of Tunisia (GoT) (2018). Analysis of strategic purchasing governance and payment methods. How to make purchasing more strategic for UHC in Tunisia. Tunis: WHO and Ministry of Health Tunisia (in French) (draft). WHO/World Bank/OECD (2018): Delivering quality health services: A global imperative for universal health coverage. Geneva: World Health Organization, OECD and World Bank. 34 HEALTH FINANCING GUIDANCE NO. 5 ANNEX 1: MAIN PAYMENT METHODS USED IN HEALTH SYSTEMS AND EXPECTED INCENTIVES Payment method Defi niƟ on IncenƟ ves ProspecƟ ve: Line-item budget Providers receive a fi xed amount to cover specifi c input expenses (e.g. staff , medicines), with limited fl exibility to move funds across these budget lines Under-provision, no focus on quality or outputs unless specifi ed and held accountable Global budget Providers receive a fi xed amount of funds for a certain period to cover aggregate expenditures. The budget is fl exible and is not Ɵ ed to line items. Under-provision, also in terms of quality or outputs unless specifi ed and held accountable; more potenƟ al for effi ciency due to budget fl exibility CapitaƟ on Providers are paid a fi xed amount in advance to provide a defi ned set of services for each person enrolled for a fi xed period of Ɵ me. Under-provision, over-referral (if unit of payment does not include some referral services) RetrospecƟ ve: Fee-for-service Providers are paid for each individual service provided. Fees are fi xed in advance for each service or group of services. Over-provision Case-based (“DRG”) Hospitals are paid a fi xed amount per admission depending on paƟ ent and clinical characterisƟ cs. Increase of volume, reducƟ on of costs per case, avoidance of severe cases Per diem Hospitals are paid a fi xed amount per day so that an admiƩ ed paƟ ent is treated in the hospital. Extended length of stay, reduced cost per day; cream-skimming Source: Adapted from Cashin (2015). 35ANNEX 1