Financing of hospital care in Finland
Unto Häkkinen
Centre for Health and Social Economics
25.05.2010
Finland
Health care system in Finland
• Universal and equal
availability
• Public financing
– 8.2% of GDP (2007)
– 75% public funding
– also some 40% of private
services are reimbursed
Government
– soft regulation /
information guidance
Finland
25.05.2010
•
Municipalities
– responsible for providing
health services, social
services and basic
education
– 342 with population range
from 580 000 to just 150
– 20 + 1 Central Hospital
Districts (owned
federations of
municipalities)
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Finland
State
Tax
Subsidy
Municipality
Tax
Hospital District
NHI
Copayment
Population/
Employer
Patient
4
Hospital districts (HD)
•
•
•
•
•
•
Responsible for most of hospital care
Managed and funded by municipalities
Each municipality obligated to be a member of a HD
Different contractual or negations mechanism between
municipalities and HDs.
The budget of each HD is based on the negotiations and is formally
decided by a Council, whose members are appointed by each
municipality
The HD council approves the financial statements (such as payment
methods and levels of payments (prices)) and makes decisions
about major investments
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Finland
Financing of hospital districts
• The payments for municipalities are based on the
total budget and the predicted use of services
• If the budget is exceeded, the municipalities must
cover the deficit from their own revenues, usually by
paying higher prices for services. In the case of
budgetary surplus, the prices paid by municipalities
can be lowered.
 Major purpose of hospital pricing systems has been
to cover the costs of production and to allocate
hospital costs fairly between the municipalities
financing the provision of services within a HD.
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Finland
Payment methods
• Each HD determines activity based payment
methods used to reimburse its hospitals and they
vary from district to district.
• The trend been consistently moving away from the
bed-per-day price towards case-based prices.
• Presently 13 out of 21 HDs use DRG-based pricing.
The principles and rules for DRG usage vary greatly
between hospital districts because there are no
national guidelines how to use it.
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Finland
International comparison
• Finnish hospitals are more efficient than hospitals in
other Nordic countries.
• One possible explanation: the cost control by
municipalities (financed by mainly by local taxes) is
more effective that that of counties or governments
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Finland
Confidence limits for efficiency scores for non university hospitals in
Nordic countries. Based on pooled DEA (CRS) 1999-2004
1
0,9
0,8
0,7
0,6
0,5
0,4
0,3
Danish
hospitals
2002
2000
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2002
2003
2004
Swedish hospitals
1999 2000 2001 2002
Finland
Finnish hospitals
2003
2004
1999
2000
2001
2002
Norwegian hospitals
2003
2004
Current Issues: A somewhat greater
state involvement and monitoring
Earlier
Softer regulation/information guidance, which relies on the
assumption that the provision of information to municipalities,
producers and professionals (doctors) will drive constructive
behavioural or system change.
Since 2005
• Introduction of clinical guidelines for a wide range of treatments,
aimed partly at bringing some convergence across Finland in rates
of elective surgical procedures and in the setting of thresholds for
admission to waiting lists for procedures.
• Introduction of a set of maximum waiting-time targets for non-urgent
examinations and treatments at hospitals. Defined hospital
treatments, including elective surgery, should be offered within 3-6
months
• Collection a fine if a hospital district does not meet the waiting-time
targets
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Finland
Vertical integration
Since mid 1990s several local reforms have been
conducted to ingrate the service production into
single organization in 2008 about 10 % of
population lived in areas where most of the
primary and secondary care is provided by the
same organisation.
Current initiative from the Ministry: greater
integration of care between health centers and
non university hospital districts (government bill
2010, implementation 2011).
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Finland
Scope and scale
Clear trend towards increasing size both producers
(hospitals) and purchasers municipalities on
voluntary basis:
–
–
Three hospitals into a one in capital area in 2007
In 2009: number of municipalities from 415 to 348
and now 342
Current initiative from the Ministry: The care of
diseases requiring highly demanding treatment will
be centralized more to 5 special responsibility
hospital districts (government bill 2010,
implementation 2011).
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Finland
Patient choice
• Current situation: patients do not have a freedom to
choose between hospitals
• Current initiative from the Ministry: patient can choose
(public) hospital from his own special responsibility
hospital district, pop about 1 million (government bill
2010, implementation 2011).
• Not decided (or even thought) how the municipalities will
pay hospitals
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Finland
Measuring productivity of hospital care:
benchmarking project
• Joint venture - STAKES & hospital districts 19982006, 2007- part of routine statistical system (THL)
• Provides versatile data on
–
–
–
–
Finland
25.05.2010
Utilisation
Costs
Productivity
From provider and regional perspective
The hospital benchmarking system
• A data warehouse containing all patient
contacts in hospital and inpatient primary care
since 1998
• Output data is grouped using NordDRG, to
cover the whole episode of care
• Combines cost data with output data (allowing
for productivity comparisons)
• Gives a process view both from a regional and
producer perspective
Finland
25.05.2010
Available indicators reported in the
benchmarking system
•
•
Cost efficiency
(productivity, unit costs, use of intermediate services)
•
Use of services (age- and sex standardized)
•
Rates for various types of services
•
•
Process indicators
(% of bed-days in specialized care/primary care)
Finland
25.05.2010
Calculating the total episode of care
A) Total
episode of care
District 1
District 2
Patient's use of services in 3 different hospitals
visit1
visit2
DRG1
DRG3
DRG2
visit3
Patients
use of
services
in one hospital
hospital x
hospital y
hospital z
B) Producer
episode of care
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Finland
Measurement levels - Hospital
care:
Producer perspective
• Hospital district
• Hospital
• Speciality
• Patient group
Finland
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Hospital level productivity in 2008 - central
hospitals
1.40
1.20
1.00
0.80
0.60
Episodes
DRGs
0.40
0.20
0.00
Finland
New developments in hospital
bencmarking at disease level
• PERFECT = PERFormance, Effectiveness and
Cost of Treatment episodes (since 2006)
comparative database that allows the treatments and their costs and
• Aoutcomes
to be compared between hospitals , hospital districts and
years
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Finland
Description of PERFECT-Project
BASIC REPORTS
RESEARCH
F
E
E
D
B
A
C
K
PERFECT DATA BASE
THL
Hospital discharge register,
Hospital productivity
(Benchmarking)
database
Finland
25.05.2010
SOCIAL INSURANCE
INSTITUTION
Register on Health and
Social Benefits
STATISTICS OF FINLAND
Cause-of-Death Register
OTHER
REGISTERS
Implant Register on
Orthopaedic Endoprostheses,
Hospitals patient registers
Content of basic reports
http://www.thl.fi/fi_FI/web/fi/tutkimus/hankkeet/perfect
Levels
 Hospital Districts (responsible for providing specialist care
in Finland) based on the municipality of the patient)
 Hospitals (over 50 patients), based on patients treated in a
hospital
Indicators
 Basic information on patients such as number of patients,
age structure, co-morbidity (about 40 indicators)
 Process indicators describing length of stay, outpatient
visits, use of procedures, drugs, cost of care (about 140
indicators) .
 Indicators describing outcomes of patients (about 60
indicators)
Finland
25.05.2010
Current status of Perfect
 Acute myocardial infarction (regional level and hospital data available
from the years 1998-2007)
 Bypass surgery and PTCA (regional and hospital level data under
development from years 1998-2007)
 Hip Fracture (regional and hospital level data available from years 19992007)
 Hip and knee replacements (regional and hospital level data available
from years 1998-2007)
 Very low birth weight infants (regional and hospital level data available
from years 2000-2007)
 Schizophrenia (regional and hospital level data available from years
1995-2001 cohorts)
 Stroke (regional and hospital level data available from years 1999-2007)
Finland
25.05.2010
One year hospital cost of AMI patients (€/patient) by hospital
disrircts in 2007 . Risk adjusted figures.
18000
16000
14000
12000
10000
8000
6000
4000
2000
0
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Finland
One year hospital mortality among AMI patients (%) by hospital
districts 2007 (risk adjusted figures, 95 % confidence intervals)
30
28
26
24
22
20
18
16
14
12
10
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Finland
One year cost (€/patient) ja one year mortality (%) by hospital
districts of AMI patients (risk adjusted figures)
18000
One year cost, €/patient
17000
16000
15000
R² = 0,0574
14000
13000
12000
11000
10000
15
16
17
18
19
20
21
One year mortality %
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Finland
22
23
24
25
Conclusions
• Internationally: Finnish decentralised hospital system
rather effective producing services, but not yet
information on its performance in outcomes
• Great regional and hospital level differences in
efficiency, cost and outcomes.
• New initiatives from government (patient choice) without
considering how financing
will be arranged
Finland
• Benchmarking of hospital efficiency and outcomes well
developed. Originally initiated by researchers and
afterward implemented together with producers
(hospitals districts) using financial support from research
funds. The information has been increasingly used in
local and national decision making
•
25.05.2010