The 2005-2006 reform intended to boost productivity in an
inefficient health care system
System pre-2006: Macro effective
but micro inefficient
 Effective macro instrument
– Cost containment on macro
(national) level
– Policy implementation through
intervening in the system
Growing pressure on the
system to change
 Cost growth
 Demographics (ageing &
labour market)
 Technology developments
 But problematic on the micro level
– Micro inefficiency
– Lack of spirit of enterprise &
innovative climate
– Rationing → waiting lists
3/15/2013
The 2005-06 reform : more
efficiency to accommodate volume
Q
(Volume)
P (Price)
 Law suits
Time
• Volume growth is a fact of life:
ageing, innovation
• More efficiency is needed to
deal with volume growth
• Competition will lead to more
efficiency and lower prices
0
Lower prices were driven by price negotiations
in the free DBC segment
Price development Hospital DBCs 2006-2010 (%, nominal)
1.5
2006
Main Additions to
B- segment
Knee arthritis
Cataract
Hip arthritis
Slipped disc
Diabetes
2007
2008
Pregnancy Birth
Cataract
Pacemaker
Meniscus
Breast cancer
2009
Cardio
Stroke
Follow-up
Cardio
Skin Cancer
2010
A-segment
A-segment corrected for budget reductions
B-segment 2005
Share % B-segment
10%
19%
34%
B-segment 2008
B-segment 2009
Source: Marktscan Medisch Specialistische Zorg 2011, Nza. Onderhandelen over ziekenhuiszorg, Vektis 2009
3/15/2013
Free prices – to be
negotiated between
insurers and providers
Health care reform succeeded in lowering prices, but it did not
curb volume growth
Total Growth in
Hospital Expenditures (%)1)
Strict
budgeting
Wait list
reduction
Price Increase (%)
Health care reform:
competitions
Generic
Inflation2)
2.1
0.1
1.0 1.3
0.3
4
 Health care reform (competition)
has indeed led to lower prices
(driven by B-segment)
99 00 01 02 03 04 05 06 07 08 09 10
Volume Growth (%)
99
00
01
02
03
04
05
06
07
08
09
10
The 2005-2006 reform paradigm
• Volume growth is a fact of life: ageing,
innovation
• More efficiency is needed to deal with
volume growth
• Competition will lead to more efficiency
and lower prices
 But since the health care reform
volume growth accelerated
 Today’s challenge: volume
growth reduction without the
waiting lists of the nineties
99 00 01 02 03 04 05 06 07 08 09 10
1)
Hospital expenditure include day and/or night cost and include specialist health care (4)Estimate based on “Marktscan Medisch specialistische zorg 2011”
2)
Consumer Price Index CBS
Source: CBS Statline (Zorgrekeningen; expenditures at current and constant cost); RIVM Performance Of Dutch Health Care 2010; Stijging Zorgkosten ontrafeld, VGE, Marktscan Medisch specialistische
zorg 2011, Booz & Company analysis
3/15/2013
2
In de context van hoger verwachtingen hebben ook andere
beleidsinstrumenten het moeilijk
Voorbeelden
Beleidsrichting
Zorgvraag bij de patiënt
remmen
Zorgaanbod budgetteren
Toelichting
 Eigen risico
 Eigen bijdrage
 Pakketverkleining
 Regio budgetten
 Vaste budgetten per instelling
Mogelijke risico’s
 Maar zorgmijding is reëel risico
 Opvuleffecten dreigen
- Instellingen finetunen omzet en
behandelingen
 Wachtlijsten
 Slechte bereikbaarheid
 Bevriezen innovatie
 Prijsplafonds
 ‘Gaming the system’
 Meer behandelingen
 Minder regulering van competitie
 Meer zorg die niet strikt noodzakelijk is
 Selectie samenwerking van verzekeraars
en ziekenhuizen
 Onthouden van benodigde zorg
Tarieven maximaliseren
Meer vrije concurrentie
HMO netwerken met
voorkeursaanbieders
Booz & Company 06-122011
3
Ageing is often blamed for volume growth. Wrong!
Population Growth (%)
0.5%
Ageing³ (%)
Growth in Number of Patients
per 10,000 Inhabitants (%)
Volume Growth in
Hospital Expenditure (%)¹
0.2%
2.6%
Other (%)
2.4%
4-5%
Ageing³ (%)
0.6%
Growth in Number of Admissions
per Patient per Year (%)
0.2%
99 00 01 02 03 04 05 06 07 08 09 10
1.5%
x%
Other (%)
1.3%
Impact of ageing
Ageing³ (%)
Impact Treatment Mix on growth (%)
0.2%
Other (%)
-0.9%
-1.0%
99 00 01 02 03 04 05 06 07 08 09 10
1)
2)
3)
Source:
3/15/2013
Volume growth is based on CBS total hospital and specialist expenditure figures at constant cost
99 00 01 02 03 04 05 06 07 08 09 10
Defined as total hospital and specialist expenditure figures at constant cost divided by the total number of admissions
Isolated effect of population ageing on driver
CBS Statline (Gezondheid en Welzijn); RIVM Performance of Dutch Health Care 2010; Kosten van Ziekten 2005, Booz & Company analysis
There is a lot of room to respond to volume incentives, because
medicine is such a grey area
Acceptable Medical Practice
Underuse
Everything that is generally
accepted as necessary
Many sources of medical uncertainty
 Vague boundaries between wellness and disease (e.g.
elevated PSA levels)
 Iterations between diagnosis and treatment
 Clarity about the desired outcome of care (e.g., life
expectancy versus quality of life)
 Multiple interventions to chose from with different risks
and benefits
 Skewedness of clinical trials to healthy, young single
condition patients
 Information loss caused by handovers
Overuse
Nothing that is generally
accepted as inappropriate
‘The human body is a nearly endless source of
revenues’ – A medical specialst
Booz & Company 06-12-2011
5
There is upward pressure on volume throughout the system
Insurer
Primary
Objective
Constraint
 Price and volume
control
 Quality
Specialist
 Cost coverage
 Cure the patient
 Growth in a
 Maximising
competitive market
income / meet
hospital budget
GP
Patient
Municipality
 Help the patient
 Get the workload
done
 Get cured
 Social impact
 High expectations  Budget (with high
on effectiveness
sensitivity to the
of medical care
economic cycle)
 Belief that care
cannot do harm
 Doctor and patient  Price agreed with
decide on
insurer
treatment
 Fixed cost base
 Lack of transparent quality info
 Inflow of referrals
 Patient
expectations that
the doctor solves
the problem
 Lack of specialist
knowledge
 Expectations that
the doctor takes
action
 Price
 Production
planning
 Advanced
diagnostic tools
 Specialist tools
 Referrals
 Access to care
 Quick diagnostics
 Shifting burden to
care
 Negotiations on
price
 Limited ability to
negotiate for
quality and
volume
 Fill up available
resources as
much as possible
 Inclined to
uncertain
treatment above
uncertain waiting
 Bias to own
specialism
 May take riskaverse approach
referral approach
 Potentially
overincludes
patients in new
fees
 Reluctant to invest
in social care
when benefits
materialize in
health care
Tools
Behaviour
Hospital
 Pushes for
something to get
done
 Follows doctor’s
treatment
recommendation
6
We may be inclined to overestimate the effectiveness of medical
care
Attitude of an average patient
1
Ever increasing (early)
diagnostic capabilities
2
Evidence for every day
care
3
 It is better to know
 The earlier you know the better
 If the doctor offers it, it will be effective
 No harm in trying
 The doctor will know what is best for me
Alignment doctor and
patient preferences
Booz & Company 06-122011
7
1 Diagnostic effectiveness
Overdiagnosis for kidney cancer?
New Kidney Cancer Diagnoses and Deaths
Per 100,000 People
New Diagnoses
Deaths
Source: "Overdiagnosed", Welch; Booz & Company analysis
3/15/2013
1 Diagnostic effectiveness
What about other cancers?
Cancer and diagnoses US
Skin cancer
Schildklierkanker
Per 100,000
Per 100,000 mensen
New
diagnoses
New
diagnoses
Mortality
Mortality
Prostate cancer
Breast cancer
Per 100,000
Per 100,000
New
diagnoses
New
diagnoses
Mortality
3/15/2013
Mortality
2 Evidence
Practice variation for common elective surgeries
Indexed between hospitals in 20091)
Practice Variation2)
Spinal disc herniation
220%
Constricted carotid artery
82%
Peripheral arterial occlusive disease
71%
Varices
70%
Carpal tunnel syndrome
64%
Benign prostate hypertrophy
48%
Disease of adenoids and tonsils
46%
Knee replacement
45%
Cataract
28%
Hip replacement due to osteoarthritis
25%
Inguinal hernia
20%
Gallstones and cholecystitis
20%
10
Note
1)
2)
Source:
Low
25p
Mean
100
75p
High
Hospitals with 10 or less operative DBC’s are not taken into account
Corrected for Sex, Age and SES
Difference between p25 and p75 >50% are regarded high practice variation, differences >25% and <50% are regarded mediocre variations
Rapport indicator indication setting Plexus, Booz & Company analysis
X%
X%
X%
1,000
High Practice Variation
Above Average Practice
Variation
Low Practice Variation
10
3 Patient preferences
Patients usually chose differently (and more conservatively)than
their doctors
Change in number of treatments after shared decision making with simple Decision Aids
Ø-30%
Breast cancer surgery: Surgery or wait
PSA screening: Screening or not
PSA surgery: Surgery or wait
Ischemic heart disease treatment: Surgery or wait
Benign prostate disease treatment: Uptake or not
Hormone replacement therapy: Uptake or not
Atrial fibrillation treatment: Uptake of Warfarin or not
Breast cancer genetic testing: Screening or not
Insignificant
results
Birthing options after previous caesarean: Vaginal
birth or caesarean
Insignificant
results
Colon cancer screening: Screening or not
Hepatitis B vaccine: Uptake or nothing
64%
76%
Source: The Cochrane Collaboration(Wolf, 1996; Volk, 1999; Man-Son-Hing, 1999; Morgan, 2000; Dodin, 2001; Auvinen,2002; Frosch, 2003; Whelan, 2004), Booz & Company analysis
3 Patient preferences
Decision aid also have substantial impact in practice
Geïnformeerde patiënt zijn vaak conservatiever
(implementatie bij 9500 patiënten in Washington State)
-26%
-38%
Nijmegen: IVF Patiënten kiezen vaker voor de
doelmatige optie
Keuze tussen dubbele embryo transfer (hogere
zwangerschap kans, ook hogere kans op medische
complicaties van meerling) en single embryo
transfer
Cyclus 1: 43% van de patiënten voor een single
transfer versus 32% in de controle groep.
Heup vervanging
Zonder gebruik video keuzehulp
Met gebruik video keuzehulp
Knievervanging
Cyclus 2: 26% van de patiënten voor een single
transfer versus 16% in de controle groep.
12-22% lagere kosten
Booz & Company 06-12-2011
12
In the context of high expectations, a focus on efficiency can well
turn out to be counterproductive
The doom circle of efficiency
Quality as flywheel for better health care
More time for
quality
Higher costs
Improve
Efficiency
More treatments
Booz & Company 06-12-2011
Less time per patient
Less time for quality
Improve
Quality of
Decision making
Lower costs
Less treatments
13
Working on programs that connect quality and financing
• Translate quality initiatives into new
revenues
• Identify quality initiatives per
hospital and per region
New performance
definitions
• Contract quality hospitals
• Referrals to quality hospitals by GP’s
• Cap other hospitals
Quality
initiatives
Selective
Care
contracting
Reward quality
initiatives
• Evaluate revenue potential of
quality initiatives
• Determine gain sharing
mechanism
1Source: Booz & Company analysis
DATE
14
Paying for quality can result in higher prices but lower costs: the
need for sophisticated ‘products’
Objective to Control Volume with Quality Initiatives
(Not Care Rationing)
Incentivized by productdefinitions
Need to counter the volume incentive in the
system
 Income compensation
 Compensation for extra cost (e.g. admin, IT)
Volume
Need for hard – inescapable – volume agreements
 To eliminate leak-away effects at the level of the
participating and non-participating hospitals
Benefits can be used by the hospital for more
quality improvement investments
Price
Every 1% decline in hospital volume frees up EUR
200 M
Time
Time
3/15/2013
15
We need to define product definitions that encompass quality
Performance Definitions NZa
1
 Provide education in group format on
self-management to optimize
medication utilization (medication
adherence/utilization)
Self
Management
Counselling
 Provide counselling per individual
patient’s request on potential drugdrug interactions in medication therapy
(e.g. combination prescription/OTC)
Medication
Related Travel
Counselling
 Provide counselling per individual
patient’s request on medication
utilization and storage during travelling
Medication
Instructions
 Provide usage instructions in case of first
time issuance or non-compliance with user
instructions
Medication
Review
 Periodically review individual (elderly)
medication therapy of patients with chronic
medication use
Continuity of
Care
Hospitalization
 Conduct one-on-one interview with patient
 Ensure correct transition of medication
details to other providers of care
Continuity of
Care Discharge
 Conduct one-on-one interview with patient 10
 Provide clear guidance on medication
Mutual Services
therapy, incl. changes due to
hospitalization
3
5
16
Self
Management
Education
 Distribute prescription medication in
standard/weekly form
 Check correctness/safety of prescription
2
4
6
Medication
Dispensing
(receptregel)
7
8
9 Disease
Prevention
Travel
Counselling
 Provide information per individual
patient’s request on risk of diseases
for certain travel destinations
 Support other healthcare providers in
execution of activities as defined
under performance definitions
Fragmentation needs to be solved in order to capture the benefits
of investing in quality
INDICATIVE
The theoretical business case versus the fragmented business case
Illustrative money flows
750
The business case on paper:
Invest in medication review and
therapy adherence and reap
rewards by lowering hospital
admissions
750
The business case in reality
Hospitals typically fill up freed up
capacity in the grey zone of
medication
375
Budget
pharmacists
3/15/2013
Investments
New budget
pharmacists
Hospital
budget
Theoretic freed
up capacity
Refilled
capacity
Budget after
quality
improvement
Guidelines for improving the health care system
 Define health care performance definitions that reward high quality care
 Reward quality (not only outcomes, also the decision making process)
 Define shared decision making as the standard of care delivery
 Build a strong gatekeeping system of general practitioners
 Define networks for chronic care
 Separate diagnosis and treatment where appropriate (between GP and hospital and within
hospitals)
 Encourage self management
3/15/2013
Alternatieve bezuiniging zouden gehaald kunnen worden door te
investeren in voorportalen
VVT kosten € 11 Mrd
Extramuralisatie ZZP 1- 4
5.0
ZZP 6 -10
11.5
2.5
5.0
Intramuraal
ZZP 5
2.5
Verschuiving van ZZP 1 tot en
met 4 van intramurale zorg naar
extramurale zorg
1.0
0.7
3.8
0.7
0.3
6.6
Huidig Extramuraal
Noot:
Bron:
ZZP 1
ZZP 2
VVT= Verpleging, Verzorging en Thuiszorg
PWC Rapport; Booz & Company analysis
19
ZZP 3
ZZP 4
Intramurale zorg
Totale VVT kosten
Extramuraal