International Health Care
Management
Part 3b
Steffen Fleßa
Institute of Health Care Management
University of Greifswald
1
Supply of Health Services: Structure
1 International Public Health
2 Demand for Health Services
3 Supply of Health Services
3.1 Factors of Production
3.1.1 Buildings and Plants
3.1.2 Staff
3.1.3 Problems of Donations
3.2 Spatial Structure of Supply
3.3 Levels of Care
3.4 Provider Portfolio
4 Health Reforms
2
3.2 Spatial Structure of Supply
Spatial Disparity: uneven distribution of
resources in developing countries
Example: Kenya
3
Health Expenditure per capita
(1,000 p.a., at 2010 prices)
Source: Simon 2014
Health Expenditure per capita
(1,000 p.a., at 2010 prices)
GDP per capita
(1,000 p.a., at 2010 prices)
4
Health Facilities
(1959=308; 2002=2052)
5
6
7
8
9
10
11
12
13
14
15
Development of Catchment Areas
16
Formation of Hexagons
17
Hierarchical Structures
18
Accessibility
A: Distance 2003
B: Distance 2008
C: Improvement
D: Share of population > 5 km
19
Why are they not coming from there?
Itete
Ziwa
Nyassa
20
Why are they not coming from there?
Ziwa
Nyassa
21
Why are they not coming from there?
Ziwa
Nyassa
22
Where should we start investing and where stop?
10 km
D6
D5
D3
D4
D7
D2
D9
D13
D14
D1
D8
D15
D12
Lake
D16 D17
D19
D11
D18
D10
23
Example: Health Facilities in Three Kenyan Districts
24
25
26
27
Quality in Structure
% of Health Facilities Complying with National
Minimum Standard (e.g. regular supply of water
and electricity)
60
Proportion [%]
50
48
40
35
32
30
23
20
15
7
10
9
3
0
Nairobi
Central
Coast
Eastern
North
Eastern
Nyanza Rift Valley Western
28
3.3 Levels of Care
Health Pyramid
TertiärTertiary
Hospitals
Krankenhäuser
Regional Hospitals
Regionalkrankenhäuser
District Hospitals
Distriktkrankenhäuser
Health Care Centers
Gesundheitszentren
Dispensaries
Dispensarien
Village Health Workers,Traditionelle
Traditional Midwives
Dorfgesundheitshelfer,
Hebammen
29
Quality in Structure and Level of Care
Kenya Service Provision Assessment Survey (2004)
% of Health Facilities Complying with National Minimum
Standard
(e.g. regular supply of water and electricity)
40
35
Proportion [%]
30
25
20
15
10
5
0
Hopitals
Health Centers
Dispensaries
30
Quality in Structure
(Cost per visit in the ambulance of a private hospital, Kenya 2005)
Cost per Ambulance Visit [Ksh]
4,500
4,218
4,011
4,000
3,427
3,500
3,230
3,000
2,587
2,600
2,500
2,171
2,173
1,941
2,000
1,750
1,607
1,376
1,500
1,384
1,432
1,170
982
1,000
784
525
835
1,016
1,024
864
578
500
-
Hospital Code
Hospital Code
31
Quality in Structure
(Cost per visit in the ambulance of a private hospital, Kenya 2005)
There are also private hospitals
of high quality for the rich!
Cost per Ambulance Visit [Ksh]
4,500
There are private hospitals of
low quality for the poorer!
4,218
4,011
4,000
3,427
3,500
3,230
3,000
2,587
2,600
2,500
2,171
2,173
1,941
2,000
1,750
1,607
1,376
1,500
1,384
1,432
1,170
982
1,000
784
525
835
1,016
1,024
864
578
500
-
Hospital Code
Hospital Code
32
Cost per Admission 2007
(Kenya Costing Model)
Priv. Distr.
Hospital
Publ. Distr.
Hospital
Publ. Prov.
Hospital
NGO. Distr.
Hospital
33
Competitive Situation in Relation to
Traditional Medicine
Spiritual Background of Medicine
– i.e. disabilities and taboos
– Child mortality and fontanel
– Evil eye, protecting small children
– Cycle and reincarnation, „living dead“
Forms of Traditional Healers
– Traditional midwives
– Herbalists
– Traditional surgeons
– Spiritual healers
34
3.4 Provider Portfolio
• Trustee:
– Public
• federal
• provincial
• districts
– Nonprofit
– Commercial
• Who should supply what on what level?
• How should collaboration look like?
35
Provider Portfolio
Organizations
For-Profit Org.
Non-Profit Org.
Private
Organizations
Church Social
Work
Charitable
NPO
…
…
…
….
Political
NPO
…
…
…
….
Sociocultural
NPO
Economic
NPO
Governmental
NPOs
CSO
i.n.s.
Civil Society Organisations i.b.s.
36
NPOs
• NPO: limitations to allocations of profits
• CSO in a broader sense: collective term for
charitable, political as well as socio-cultural
NPOs.
• CSO in a narrower sense: civil society’s
participation in political decision making
(Advocacy). Political NPO
37
Collaboration of Providers
Mbulu
Serengeti
Lutheran Hospital
Government Hospital
Haydom
Dongobesh
Lutheran Dispensary
Government Dispensary
Iambi
Singida
38
Supervision?
Mbulu
Serengeti
Lutheran Hospital
Government Hospital
Haydom
Dongobesh
Lutheran Dispensary
Government Dispensary
Iambi
Singida
39
Public-Private Partnership (PPP)
• Assumption: there are public goods the state has to
provide
– Not pareto optimal
– Insufficient provision of certain (poverty) groups
• But: This does not imply the state operating as
financer
• The state can collaborate with the private economy
regarding the provision of public goods
40
PPP: Deviating Criteria
• Exclusive partnership of state with commercial
businesses vs. additionally partnering with NPOs
• Partnership via market regulation (through prices) vs.
partnerships based on long-term contracts and
agreements
• Partnering with non-governmental organizations
performing public tasks vs. participation of the
private economy in public production (i.e. financing
public hospitals via private leasing companies)
41
PPP - Versions
Government of Kenya
Government of Germany
4
3
Other sectors
Health sector
1a
1b
2
NPO
FPO
secto
sector
r
Health sector
Other sectors
5
Private
42
4 Health Care Systems and Health Care Reforms
4.1 Costs
4.2 Options of Funding
4.3 Health Care Systems by International Comparison
4.4 Health Care Reforms
4.4.1 Objectives
4.4.2 Reform Alternatives
43
4.1 Costs
• Cost-of-Illness
– Content: all economically feasible negative results of
disease and death
– Concept: Rice (1966); today standard
– Examples: Cost-of-Illness studies
• Xie (1996): Alcohol and drugs in Ontario
• Henke (1997): Disease in Germany
• Welte, König, Leidl (2000): Consumption of cigarettes in Germany
44
Cost-of-Illness
Intangible Costs
Tangible Costs
Health Services Costs
Non-Core Costs
Core Costs
Household Costs
Direct HH Costs
Indirect HH Costs
Administration
Prevention
Transport for patient
and relatives
Loss of harvest
Training
Curative Care
Accomodation for
relatives
Loss of labour
Buildings, i.e. for
disabled
Loss of salary
Diet, i.e. special
food
Loss of education
Research
User Fees, drug bills
etc.
Direct Costs
District Production Function:
Y=Y(K,L)
45
Cost-of-Illness
Cost-of-Illness
Intangible Costs
Intangible Costs
Tangible Costs
Tangible Costs
Health Services Costs
Non-Core Costs
Core Costs
Personal suffering.
i.e. caused by grief,
pain, longing, …
Administration
Training
Prevention
Curative Care
Measurable only
indirectly in assessing
quality of life
Research
Direct Costs
Household Costs
Direct HH Costs
Indirect HH Costs
Transport for patient
and relatives
Loss of harvest
Accomodation for
relatives
Loss of labour
Buildings, i.e. for
disabled
Loss of salary
Directly or
indirectly resulting
in consumption of
resources
Usually
quantitatively
measurable
Diet, i.e. special
food
Loss of education
User Fees, drug bills
etc.
District Production Function:
Y=Y(K,L)
46
Cost-of-Illness
Intangible Costs
Health Services Costs
Health Services Costs
Non-Core Costs
Core Costs
Tangible
Tangible
Costs Costs
Household Costs
Household Costs
Direct HH Costs
Indirect HH Costs
Administration
Prevention
Transport for patient
and relatives
Loss of harvest
Training
Curative Care
Accomodation for
relatives
Loss of labour
Buildings, i.e. for
disabled
Loss of salary
Diet, i.e. special
food
Loss of education
Costs of
performing
institutions,
usually well
documented
Research
Costs of
household
consuming
health services,
usually bad
documentation
User Fees, drug bills
etc.
Direct Costs
District Production Function:
Y=Y(K,L)
47
Cost-of-Illness
Intangible Costs
Tangible Costs
Health Services Costs
Household Costs
Health Services Costs
Non-Core Costs
Core Costs
Administration
Prevention
Training
Curative Care
Non-Core Costs
Administration,
Teaching,
Research
Research
Direct Costs
Direct HH Costs
Indirect HH Costs
Transport for patient
and relatives
Loss of harvest
Accomodation for
relatives
Loss of labour
Buildings, i.e. for
disabled
Loss of salary
Diet, i.e. special
food
Loss of education
Core Costs
All Costs of
Prevention and
Treatment
User Fees, drug bills
etc.
(programs,
dispensaries, hospitals
District Production Function:
etc.)
Y=Y(K,L)
48
Cost-of-Illness
Intangible Costs
Tangible Costs
Household Costs
Health Services Costs
Non-Core Costs
Core Costs
Administration
Prevention
Training
Curative Care
Direct HH Costs
Transport,
Fees, Diet,
Construction
Research
Direct Costs
Household Costs
Direct HH Costs
Indirect HH Costs
Transport for patient
and relatives
Loss of harvest
Accomodation for
relatives
Loss of labour
Buildings, i.e. for
disabled
Loss of salary
Diet, i.e. special
food
Loss of education
Indirect HH Costs
Loss in Labor,
Crops, Income,
Education,
Domestic Product
User Fees, drug bills
etc.
District Production Function:
Y=Y(K,L)
49
Determining Household Costs
 Direct Costs
 Indirect Costs
- Human Capital Approach
- Friction Costs Method
- Willingness-to-pay ≠ ability to pay
50
Cost-of-Illness
Intangible Costs
Tangible Costs
Health Services Costs
Non-Core Costs
Core Costs
Household Costs
Direct HH Costs
Indirect HH Costs
Administration
Prevention
Transport for patient
and relatives
Loss of harvest
Training
Curative Care
Accomodation for
relatives
Loss of labour
Buildings, i.e. for
disabled
Loss of salary
Diet, i.e. special
food
Loss of education
Research
User Fees, drug bills
etc.
Direct Costs
District Production Function:
Y=Y(K,L)
51
4.2 Options of Funding
DONORS
GOVERNMENT
Direct Input
HEALTH SERVICES
POPULATION
SOCIAL
HEALTH
INSURANCE
PRIVATE
HEALTH
INSURANCE
HEALTH CARE FACILITIES
52
Concepts of Remuneration
HEALTH
FUNDING
• Input-basierte
Finanzierung
Output-based
Input-based
• Output-basierte
funding
funding
Finanzierung
based on
based on
• Output-based AidAdmissions
Needs
Population
Patient Days
Beds
Lump Sums
Services
Combined
funding
Lump Sum
Funding
Buildings
Plants
Materials
Nursing Rates
/ DRGs
Staff
Other
53
Input-Based Funding
Client
Service
Provider
Fixed Budget
Funding Entity (Health Insurer,
Government)
54
Input-Based Funding: Ways
MINISTRY of
HEALTH
(MoH)
FINANCIAL
SERVICE PROVIDER
HEALTH
INSURANCE
REGION
DISTRICT
ASSOCIATIONS
SERVICE PROVIDER
55
Output-Based Funding
Proof of
Authorization
Provider
Client
Service
Proof of
Authorization
Bill
Reimbursement
Funding Entity (Health Insurance, Government)
56
Source: Obermann 2014
57
58
Output-Based Aid
Voucher
Client
Voucher
Service
Provider
service
pays
Voucher
Claim
Reimbursement
Distributor
Voucher
Voucher Management Agency
59
Example: Kenya
• As of June 2006 for
– Family planning
– Delivery
– Gender Violence Recovery (GVR)
• Cost (here: delivery)
– Voucher: 200 Ksh
– Reimbursement
• Normal delivery: (incl. 4 ante-natal): 5000 Ksh
• C-Section: 20.000 Ksh
60
600.000
40.000.000
35.000.000
400.000
25.000.000
300.000
20.000.000
15.000.000
200.000
10.000.000
100.000
5.000.000
0
0
0
10
20
30
40
Poverty [% of population]
Amount of Vouchers p.a.
Subsidy p.a. [US$]
61
Subsidy p.a. [US$]
30.000.000
Amount of Vouchers p.a.
Subsidies (Births)
500.000
4.3 Health Care Systems by International
Comparison
• Overview
– Criteria for Classification
• Organization of funding (predominantly)
– Social insurance
– Private insurance
– Insurance-free health care system (developing countries)
• Organization of service providing
– Private service providers
– Public organizations provide services
– Non-governmental, non-profit organizations provide services
• Market Interventions
– Free negotiations on prices
– Market interventions of the state
62
Examples
Country
Predominating
Organization of
Funding
Predominating Provision of
Services
USA
Private Insurance
Private Service Providers,
Managed Care Organizations
Switzerland
Private Insurance
Accompanied by
Subsidies
Outpatient: private
Inpatient: partly public
Managed Care Organizations
Germany
Social Insurance
Outpatient: private
Inpatient: partly public
Netherlands
Social Insurance with
Basic Insurance
Predominantly private
Austria
Social Insurance
Outpatient: private
Inpatient: predominantly public
63
Country
Predominating
Organization of
Funding
Predominating Provision of
Services
France
Social Insurance
Outpatient: private
Inpatient: predominantly public
Greece
National Health
Service with Funding
via Premiums
Predominantly public
Canada
National Health
Service
Outpatient: private
Inpatient: public
Italy
National Health
Service with Funding
via Premiums
Predominantly public
United
Kingdom
National Health
Service
Predominantly public
Sweden
National Health
Service
Predominantly public
64
National Health Service in the United
Kingdom
• Overview
– Founded: 1948
– Dimension: almost 1.000.000 employees
– Funding: predominantly tax funded
• History (until the end of WW II)
–
–
–
–
–
Social insurance for workers
Registered general practitioners
Capitation fee for general practitioners
Hospitals: not covered
Beveridge-Report (1944): public health care planning,
health is considered a basic right
65
National Health Service (cont.)
• Organization
– National Health Services Executive (top management
directly supervised by ministry of health)
– Health Authorities responsible for 500.000 inhabitants
each
– Primary Physician System: general practitioner acts as
gatekeeper (local level)
• Remuneration
– Lump Sum per capita, part of remuneration is
performance-related, resident registers with one physician
– Target payments, special payment for successes, i.e.
vaccination quota or participation in trainings
– Few fee-for-service remunerations especially for patients
with chronic diseases
66
National Health Service (cont.)
• Funding
– Basics: 90 % via tax return, low co-payment (i.e.
drugs)
– Allocation of budget to Health Authorities via a
specific complex system based on demographic and
epidemiologic data
– Allocation leads to down scaling, investment backlog,
low income for physicians
– Internal Markets: Local Health Authorities can sign
contracts with service providers (i.e. hospitals) that
are not part of NHS. This leads to some extend of
competition.
67
The US Health Care System
• Funding
– Predominantly private health insurance premiums
– Predominantly employment based
• Public Sector
– Medicare, tax funded, > 65 years of age
– Medicaid, support for the (very) poor
– Veterans Health Administration (primarily veterans
suffering from long-term effects)
• Underlying Issue: up to 50 million without
(sufficient) health coverage
68
Number of US-Americans Covered Under
Various Forms of Health Insurance [absolute]
Employment Based
Insurance
Maximum
Premiums!
Private Insurance
No Insurance
69
http://de.wikipedia.org/wiki/Gesundheitssystem_der_Vereinigten_Staaten#Gesundheitsreform_2010
Proportion of Population that does not have Health
Insurance nor is entitled to Public Health Coverage [%]
70
http://de.wikipedia.org/wiki/Gesundheitssystem_der_Vereinigten_Staaten#Gesundheitsreform_2010
Medicare
• Health Insurance for older people that are not
covered otherwise (problem: since insurance is
predominantly employment based they stop at
pension age)
• Funding: via taxes
• Dimension: 39 million Americans (largest program in
the US!)
• Insurance for Americans > 65 years, disabled people
and patients suffering from renal failure
71
Medicare
• Part A: compulsory, hospitals services and outpatient
care
• Part B: optional additional coverage, part of
outpatient physician and hospital services,
expenses for additional hospital care (Medigap)
as well as medical remedies and
• Co-payment
• Limitations to services
• Remuneration of service providers
– Strict budgeting
– DRG-System
72
Medicaid
• Goal: Health Coverage for People with Low
Income
• Funding: via taxes
• Assessment Ceiling: variations within the
states
• „Basic Package“
73
Private Insurance
• Normally Employment Based
• Employer bears (part of) premium payment which is
tax deductible as non-wage labor costs
• Problems:
– Employee looses coverage in unemployment
– Employee looses coverage when entering retirement
– Employee is tied to the insurance the employer has a
contract with
74
Critical View on the System
• United States National Health Care Act (US
Congressional Bill, House of Representatives: HR 676)
• Content: Expanded and Improved Medicare “for
Everybody”
• Consignor: John Conyers
– 24.1.2007
– 26.1.2009
• Goal: "To provide for comprehensive health insurance
coverage for all United States residents, and for other
purposes… "to ensure that every American, regardless
of income, employment status, or race, has access to
quality, affordable health care services."
75
Health Care Reform 2010 (Obamacare)
• Patient Protection and Affordable Care Act (PPACA)
– 23.3.2010
• Content
– Obligatory health insurance (partly subsidies/vouchers))
– Health Insurance companies have to accept people despite their
medical background
– Special conditions for children (i.e. co-insurance for family
members up to age 26)
– Tax reliefs for businesses that insure their employees
– Limitation of premiums (i.e. older people)
– Broader access to Medicare (133% of poverty line, i.e. 14.856
US$ for a single living person in 2012)
– Subsidies for poorer people
– Tax deductibility for premiums
76
Criticism
• Criticism
– State intervention in functioning system of market
economy
– Accusation of socialism (“state takes over the
health care industry“)
– Cost increase
– Public indebtedness
– Increasing unemployment
– Intervention in federal system
77
Evaluation
• No change in system
• Financial contribution to poorer people so
they can afford private health insurance
• Expenses: 1 Trillion US$ over 10 years
• Success: has to be devalued
78
4.4 Health Care Reforms
4.4.1 Objectives
System of Values and Objectives in Health Care
Values
Objectives
79
Examples for Values
•
•
•
•
•
•
•
Freedom
Equality
Justice
Fraternity
Unity
Charity
…
A question of
the view on
human beings
80
Examples for Objectives
•
•
•
•
•
•
•
Minimizing Mortality
Minimizing Prevalence
Maximizing Quality of Life
Sustainability
Affordability
Efficiency
Participation
81
Objectives and Side Conditions
Objectives
- Optimization (Max. / Min.)
- possibly not positive (i.e. Maximizing Profits  Minimizing Losses)
Side Conditions
- Satisfaction
- Strict Compliance
Ethical Demands
- Humanity as goal
- Justice as side condition
Target Groups
- Population groups that are effected by the objectives
82
Task
Develop a system of values and objectives for a
health district in a country of your choice.
83
LEVEL of VALUES
Values
Target Groups
LEVEL of OBJECTIVES
Objectives
Side Conditions
84
4.4.2 Reform Alternatives
• Making use of existing potential for improvement
• Funding Reforms
–
–
–
–
Public Health Care Budgets
Foreign Funding
Patient Fees
Health Insurances
• Reforms in Health Care Structure
–
–
–
–
Secondary and Tertiary Hospitals
District Hospitals
Dispensaries/Health Care Centers
Programs for Prevention
85
Task
• Brain Storming: Develop a list of measures for
health care reform in the country of your
choice.
• Evaluate various measures according to your
system of objectives.
86
Measure
Objective
Implementation
Cost
Willigness
++ positive effect
+ indirect positive effect
- indirect negative effect
-- negative effect
o
?
no effect
no prediction possible
87