The High Performance Health
System
Dov Chernichovsky, Ph.D.
Ben-Gurion University of the Negev,
Israel
Objectives of Presentation
 Articulate goals and objectives of
the health care system
 Examine (some) performance
indicators
 Identify structural features of health
systems associated with actual and
potentially good performance
June 21, 2006
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Background
“The Emerging Paradigm in Health Systems”
 Study -- Funded by the Commonwealth
Fund -- of the health systems of eight
developed nations: Australia, Canada,
Germany, France, Israel, The Netherlands,
the U.K. and the U.S.
 Audience: U.S. policy makers
 Approach: technocratic, to the extent
possible
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Goals & Objectives of Society Regarding
the Healthcare System
 Invest in health, balancing between
spending on medical care and on other
means to enhance health
 Objectives:





(Health)
Equity
Cost containment
Efficient production of quality medical care
Client satisfaction
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Health – Life Expectancy
(data sources in full paper)
Life Expectancy at birth in 2003 (years)
Country
Female
Male
Total Population
Difference Between Genders
82.8
77.8
80.3
5.0
Canada
82.1´¹
77.2´¹
79.7´¹
4.9
France
82.9
75.8
79.4
7.1
Germany
81.3
75.5
78.4
5.8
Israel
81.8
77.6
79.7
4.2
Netherlands
80.9
76.2
78.6
4.7
United Kingdom
80.7
76.2
78.5
4.5
79.9´¹
74.5´¹
77.2´¹
4.4
Australia
United States
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Equity – Instrumental Rationale
 Equitable distribution of medical
resources can improve average health
 Protection of household non-medical
consumption from ‘catastrophic’
medical spending
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Equity - Equitability of Funding
Resources
Source of Funding
Country
General
Revenues
Social security
% of Total
Health
Spending
% of Total
Health
Spending
Private
expenditure
Score
% of Total Health
Spending
(higher,
more
equitable)
Australia
65.0
0.0
35.0
65.00
Canada
68.4
1.5
30.1
69.45
France
2.5
73.8
23.7
54.16
Germany
9.8
68.4
21.8
57.68
Israel
43.0
27.0
30.0
61.90
Netherlands
4.4
58.0
37.6
45.00
United Kingdom
83.5
0.0
16.5
83.50
United States
31.5
13.0
55.5
40.60
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Cost Containment – (Instr.) Rationale
 Helps protect household income and
spending
 Contributes to lower production costs,
competitiveness, and employment
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Cost Containment (a) -Relative
Price Increases in Medical Care
160
150
140
Australia
130
Canada
France
120
Israel
110
US
100
90
1985
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1990
1995
2000
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2002
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Cost Containment (b) – Real (General Price
Index) Per Capita Growth in Health Spending
275
250
Australia
225
Canada
France
200
Germany
Israel
175
Netherlands
UK
150
US
125
100
1980
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1985
1990
1995
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2001
10
Production Efficiency - Rationale
 More resources for quality care and
other uses
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Production Efficiency – Spending
Expenditure as a % of
GDP
Spending Per Capita
(US$)
Australia
9.3´¹
2699´¹
Canada
9.9 e
3001 e
France
10.1 e
2903 e
Germany
11.1
2996
Israel
8.5
1953
Netherlands
9.8
2976
United Kingdom
7.7´¹
2231´¹
United States
15.0
5635
Country
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Client Satisfaction – Client Desire
for Reform
% Responding about Required Reform
Minimal Reform
Substantial
Reform
Total Reform
Australia
19
49
30
Canada
20
56
23
France
..
..
..
Germany
..
..
..
Israel
37
49
13
The Netherlands
..
..
..
United Kingdom
25
58
14
United States
17
46
33
Country
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Preliminary Conclusions
 Systems in-between the U.K. and
U.S.A do better in balancing health
system goals
 They are more relevant to the U.S.A.,
anyhow
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Principles for Success
 Universal entitlement
 Centralized funding of care -- not
necessarily by the state budget -- for
 Equity
 Cost containment
 Competition and choice– not necessarily in
private markets -- for
 Efficient production of quality care
 Client satisfaction
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Apparently Successful Dual Internal
Market Structure
State
Regulation
Funding Pool,
Real or Virtual
Non-state Fund holding,
OMCC Institutions:
Sickness Funds, HMOs, etc.
Contracting
First Market
Purchasing
Second Market
Providers
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Reform Directions
Fully
Centralized
K
↑
OMCC
&
Provision
↓
Z
Transitional
poor nations
Transitional
Economies
Europe
A
The U.S & poor
nations
P
Competitive
Out of
Pocket,
Private
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→ Funding ←
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General
Revenues,
Fully
Public
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Basic Features of Dual Internal
Market
 Enables multiple Lines of
accountability
 Enables pluralism and choice in
 Form of entitlement
 Content of entitlement
 Enables client empowerment vis a vis
state, on the one hand, and providers,
on the other
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Multiple Lines of Accountability
Fundraising
&
Allocation
OMCC
Institution
OMCC
Institutions2
Providers
Finance
Accountability
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Multiple Forms of Care
Model A
Model B
OMCC
OMCC
Primary Care
Primary Care
Primary care
Professional care
and hospitalization
Model C
Model D
OMCC
OMCC
Primary care
Professional care and
hospitalization
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Professional care and hospitalization
Primary care
Professional care and
hospitalization
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Multiple Content of Entitlement
Expansion of
Entitlement
Private
entitlement and
finance
Discretionary public
entitlement, financed by
a pre-set portion of
public-based finance
Core public entitlement –
common to all groups
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Key Function & Institution
Organization and Management of
Care Consumption (OMCC) /
Competing Budget Holder
Basic References
 Chernichovsky, D. 1995. “Health System Reforms in
Industrialized Economies; An Emerging Paradigm”. The
Milbank Quarterly Vol. 73, no. 3: 339-372.
 Chernichovsky, D. 2002. “Pluralism, Choice, and the Sate
in the Emerging Paradigm in Health Systems.” The
Milbank Quarterly. Vol. 80, No.1:5-40.
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Thanks
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