Experiences of Pay for Performance in the
Danish Health Care Sector
Anne Frølich, MD, Senior Consultant
H:S Bispebjerg Hospital, University of Copenhagen
Pay for Performance. Perspectives Around the Globe
Annual Research Meeting 2006, Seattle
The Danish Population and Health Care Sector
Denmark
•The population is 5.4 million
people
•Equal access to healthcare is
fundamental
•Access to hospital care and GPs is
free
•Free choice of hospital
•GPs act as gatekeepers to
hospitals
•Co-payment for pharmaceuticals
•Co-payment for dentist care
Health Care Budget
Total budget for the Danish health care sector is 80
billion kr. (13 Billion US Dollars) representing
8.4% of the GDP
82% of the healthcare expenditure is covered by
state and municipal taxes and 18% is out of
pocket payment
The budget is distributed as:
Hospital
57%
Primary care sector
20%
Pharmaceuticals
6%
Administration
1%
Structural Reform and
New Health Act from 2007
From 14 Counties
275 Municipalities
To Five Regions
To 98 Municipalities
1
2
3
4
5
The New Health Act
Regions loose their taxation rights
 Municipalities pay regions per hospitalisation
(800 US$) and ambulatory care for their
citizens
 The law refer responsibility for rehabilitation
and prevention from counties to
municipalities
 The law demand health contracts between
regions and municipalities to ensure wellfunctioning corporation

Focus on Chronic conditions
Recommendations for Improvement of Care in
Chronic Conditions, National Board of Health,
Year 2005
Prevalence rates of the most
common chronic conditions
COPD
200.000
4%
Type 2 DM 200.000
4%
CHF
200.000
4%
Muscle200.000
4%
Skeletal conditions
Osteoporose 300.000
6%
“The Chronic Care Model” by Ed Wagner
“The Chronic Care Model” by Ed Wagner
Payment of Physicians
Hospital doctors (60%) work as salaried
employees
 GPs (23%) derive almost all of their income
from contracting with the County. Their
compensation is a mixture of fee for service
(per consultation, examination, vaccination,
etc.) and capitation, 2/3 fee for service, 1/3
capitation

New Covered Services in the Primary Care
Sector
One-year follow-up in diabetes patients (type
1 and 2) including regularly controls,
recording of diagnosis to IT system, ensure
patients undergo recommended screenings
Experiences from DM will be used to develop
benefit models in other chronic conditions
such a COPD, asthma, CHF, depression etc.

Continued – New Covered Services in the
Primary Care Sector
Prevention consultations related to life style
factors such as tobacco use, alcohol, Physical
activity nutrition, and Other risk factors and
integrated counselling
 Home visits to frail elderly once a year
 Screening for depression

Payment Mechanism in Hospitals
Hospitals are financed from the counties through
tax revue and from block grant from the state.
The budgets has until recently been prospective
global fixed budgets and has been effective
tools for cost containment.
Healthcare Expenditures as Percentage of
the GDP From 1970 to 2001
Schwitzerland
140
Mean for 22 OECD countries
130
UK
120
France
110
Denmark
100
90
80
70
20
00
19
98
19
96
19
94
19
92
19
90
19
88
19
86
19
84
19
82
19
80
19
78
19
76
19
74
19
72
19
70
60
Hospitals
Activity Based Financing (DRG)
DRG rates were implemented in 2000 with the
goal that during the next 5 years 20% or more
of hospitals income should be linked to activity
The aim was to increase production and
competition between hospitals.
In a survey from 2005 it was concluded that the
productivity level in hospitals increased but at
the same speed as in the earlier years
Transparency of Performance?
National Council for Quality Assurance initiated in
2005 – in the process of developing standards and
performance measures
National Clinical Databases reporting regularly from
2004 in


–
–
–
–
–


Stroke
Femur Fractures
Pneumonia
Pulmonary Cancer
Schizophrenia
National Cancer Registry
National Patient Satisfaction Surveys