Pay for performance in the
Russian Federation health sector
Igor Sheiman
Academy Health Annual Research
Meeting June 26-28, 2005, Boston
Basic information
-Mandatory health insurance as a starting
point of the reform in 1993
-Each of 90 regions builds its own MHI
system under federal regulation
-Administered by 400 private insurers
-Contracts with state-owned providers
-Performance-related methods of payment:
FFS for outpatient care
“finished case” for inpatient care
2
Context of payment reform
1. Great underfunding (less than 3% GDP)
limits the use of incentives. Hard to:
- withhold incentives pool
- make incentives substantial
2. Financial barriers are growing. Increased
out-of-pocket payments distort incentives
structure in MHI
3
Context of payment reform
3. Inherited and emerging structural
distortions:
• Dominance of hospital sector (3,5 bed-days per capita)
• Dominance of specialists in outpatient care sector (3 to one 1
catchment area physician).
• Dominance of state-owned big urban policlinics with no
separation of PHC and specialist care
• Western-type GP practically does not exist
• Referral system destroyed
4
Context of payment reform
Presidential project of health reform in late
2003:
-specify explicitly guarantees of the Government
-change MHI scheme to ensure additional
revenue and better allocation of resources
-change legal forms of providers
5
Provider payment reform priorities
1. Optimize structure of service delivery
-ensure PHC priority
- downsize the excessive capacity of secondary care
2. Enhance process and outcomes indicators of service
delivery
Peter Drucker: to do right things and to do right.
Both, but priority - how to do right things.
6
Provider payment reform priorities
• Come closer to the universal system of
provider payment methods for all regions
• Allow options for regions based on:
- clearly substantiated specific needs and
priorities
- the level of technical capacity of regions.
7
Two major methodological
principles
1. Systematic approach to building incentives for
each health sector:
methods of payment for PHC, outpatient and inpatient
specialist care, day care centers should complement
each other to avoid conflicting motivation
2. Prospective methods dominate over retrospective
• purchaser plans and negotiates volumes of inpatient
care
• purchaser shares risks with providers
• cost and volume rather than cost per case contracts
8
Basic system of payment methods
(currently used in some regions and proposed nationwide)
1. PHC alternatives: a) capitation plus performance-based
incentives, b) fundholding options plus performance-based
incentives
2. Outpatient specialists – FFS point system with global budget
3. Each policlinic negotiates the limit of inpatient care for
referrals.
4. Inpatient care is paid for planned volumes with allowed
deviations (risk corridors)
5. Day care in policlinics is paid for actual cases, provided that
the limit of inpatient care is not exceeded
9
Basic system of payment methods
Risk –fund (Territorial bonus fund) for:
• performance-based payment to PHC
providers
• day care actual cases
• excessive inpatient care (above allowed
deviations) – only variable cost
10
PHC performance-based indicators
1. Input in restructuring
2. Current activity (process) indicators
3. Outcome indicators
11
Input in restructuring
indicators
•
•
volumes and cost of inpatient care
number of ambulance calls
Assessed across:
-policlinics
- catchment areas within policlinics (individual
physicians)
Assessed quarterly
12
Current activity indicators
No distinction between clinical and
organizational activity
Not very detailed (not more than 10)
Selected by regions themselves
Assessed quarterly
Mostly used:
• immunization rate
• coverage by “schools” of diabetes or asthma
• women seen in the first trimester of pregnancy
13
Outcome indicators
Kemerovo region example for urban policlinics:
• New permanent disability rate ( No per 1000 working -age
population)
• Rehabilitation of invalids (incl. partial): % to number of
invalids
• Infant mortality rate
• Monitoring risk population (% of those at risk)
• Newly revealed TB, cancer and other cases “at obvious
progress stage”
Assessed annually
14
“Instrument: “model of performance evaluation”
•
•
•
•
“Normative” (target value)
Weight of indicator
Vector of deviation from the target (plus-minus)
Weight of the unit of deviation
“Coefficient of reaching the target” (CRT): actual and
target values compared with the account of weights of
indicator and its unit of deviation
15
Reimbursement pattern
Bonus fund is allocated proportionally to
the size of catchment area and CRT when
it is higher than 0,8
Why units system is not used?
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Fundholding options
PHC group may have the budget for:
• total outpatient care
• portion of inpatient care
• portion of ambulance calls cost
• outpatient drugs
• combination
17
Pre-conditions for polyclinicfundholder scheme:
• Big policlinics or group practices
• Insurers can administer financial flows
between providers
• Insurers can re-distribute funds from one
sector to another
• Insurers shares risks with policlinics
• Good recording system of patients flows
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Results of basic PPS implementation in
regions
1. Major results for PCH:
• higher responsibility for health gains
• increased income of PCH physicians
• increased attractiveness of their job due to higher involvement
in planning and control
2. Regions with basic PPS have higher structural and
outcome indicators than average in Russia
19
Samara
region
Average RF
Admission rate
per 100
18,8
21,0
ALOS
13,6
15,8
Ambulance calls
rate per 1000
264
346
Bed capacity per
10000
81
110
20
Infant mortality
rate per 1000
newly born
Maternal
mortality rate
per 100 000
newly born
Abortion rate per
1000
Samara region
Average RF
10,1
16,9
16
44
42
53
21
Kemerovo region:
• totally different trends of inpatient care
utilization with and without policlinicfundholder scheme
• totally different trends of outcome
indicators with and without performance
indicators for PCH settings
22
Kaluga region case
• World bank performance based incentive
fund for GPs
• When finished all structural and outcome
indicators went down
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Lessons learnt
1. Too detailed indicators system: big administrative costs with
dubious outcomes. Why?
- some important areas are impossible to reflect. e.g. the role of
GPs in organization and coordination of care at other stages
- general responsibility for health gains gives way to fragmented
tasks
- inevitable duplication of process and outcome indicators (hard
to manage the use)
- at the end of the day physicians tend to think about points
rather than pain
- Gaming by physicians
24
Message of the veteran of the
Communist planning system
Only a few people invent indicators
while millions of people think very
creatively how to game with them
25
Lessons learnt
2. More integrated incentives are preferable:
• Fundholding scheme provides more integrated and
therefore stronger incentives for better performance
than a system of indicators
• Potential adverse incentives under FH should be
neutralized by careful selection of process and
outcome indicators
E.g. indicator of deaths at home with high weight
26
Lessons learnt
3. Combination of national, regional and local
responsibilities:
•
National regulation on the scope of
indicators (options) and their use
• Regions select their own indicators and their
weights reflecting local priorities
• Local areas (rayons) use region-wide system
but can negotiate indicators ex ante and ex post
.
27
The case of over-centralization
Maloyroslavets rayon Kaluga region:
hospital wing has burnt down but the
indicator of decreasing its workload has
survived
28
Lessons learnt
4. Annual performance indicators should be
coupled with quarterly indicators
• Instrument of reflecting current needs and
management
• Physicians should feel the pressure of
indicators (at least, not to forget what they are
paid for)
29
Lessons learnt
5. Physicians at the local level should be involved in:
- selecting indicators system
- planning the values
- assessment
6. Bonus fund should be big enough
Option of its forming by estimating expected savings
from the shift to more cost-effective medical
interventions and structural changes in service
delivery
30
Conclusion
Pay for performance should be:
focused on priorities
clear
sustainable
Pay for performance should not :
make physician an accountant
31