Global perspectives on methods of healthcare funding - ACCA

48 Pages·2014·0.58 MB·English

Global perspectives on methods of
healthcare funding
About ACCA
ACCA (the Association of Chartered Certified
Accountants) is the global body for professional This paper brings together the
accountants. We aim to offer business-relevant, first-
views of senior ACCA members
choice qualifications to people of application, ability
and ambition around the world who seek a rewarding around the world on how different
career in accountancy, finance and management.
healthcare systems are funded.
Founded in 1904, ACCA has consistently held unique
core values: opportunity, diversity, innovation, integrity
and accountability. We believe that accountants bring The discussions provide an insight
value to economies in all stages of development. We
into the advantages and
aim to develop capacity in the profession and
encourage the adoption of consistent global standards. disadvantages of each system as
Our values are aligned to the needs of employers in all
sectors and we ensure that, through our qualifications, well as identifying opportunities
we prepare accountants for business. We work to open
for shared learning.
up the profession to people of all backgrounds and
remove artificial barriers to entry, ensuring that our
qualifications and their delivery meet the diverse needs
of trainee professionals and their employers.
We support our 162,000 members and 428,000
students in 173 countries, helping them to develop
successful careers in accounting and business, with the
skills needed by employers. We work through a network
of over 89 offices and centres and more than 8,500
Approved Employers worldwide, who provide high
standards of employee learning and development.
FOR FURTHER INFORMATION
Sharon Cannaby
Head of health sector policy, ACCA
[email protected]
www.accaglobal.com
© The Association of Chartered Certified Accountants
February 2014
Contents
Foreword .................................................................................5 New Zealand
Bulgaria Gordon Ngai, FCCA ............................................................27
Mario Iliev ...............................................................................6 Northern Ireland
Canada Lesley Mitchell, FCCA ..........................................................29
Henry Kalule Lukenge, FCCA ................................................8 Pakistan
Canada Ayaz Ahmed, FCCA ..............................................................31
Jayshri (Jay) Makwana, FCCA .............................................10 Scotland
China Claire Wilkinson, FCCA .......................................................35
Duke Chen, FCCA ................................................................14 Singapore
England Sito Hup Ying, FCCA ...........................................................37
Michael Schofield, FCCA .....................................................16 Slovakia
Ethiopia Martin Hrežo, FCCA .............................................................39
Hruy Abebayehu, ACCA .....................................................18 United Arab Emirates
Ghana Jawad Jamil, FCCA ..............................................................42
Alex Odoi Nartey, FCCA .....................................................20 Zimbabwe
India Maurice Dube .......................................................................45
Ravindran Balakrishnan, FCCA ............................................23
Mauritius
Ramkumarsing Emrith, FCCA ..............................................25
GLOBAL PERSPECTIVES ON METHODS OF HEALTHCARE FUNDING 3
ACKNOWLEDGEMENTS
ACCA are grateful for all the help and support received from the members who contributed to this booklet.
4
Foreword
As an ACCA council member and an experienced finance professional working in
the UK health sector it is my pleasure to write the foreword for this publication
which brings together the views of senior ACCA members on how different
healthcare systems are funded globally.
ACCA is already recognised as an international thought leader in healthcare finance
and works with the European Commission and other organisations around the
world to publish works that promote the economic benefits of providing better
quality health care. This piece of work, produced in conjunction with senior ACCA
members employed in health systems around the world, aims to build on that
reputation by discussing some of the key payment systems in use and the
advantages and disadvantages of each.
I would like to thank each of the contributors. They more than ably demonstrate the
role ACCA members play in supporting delivery of high quality, cost effective
healthcare across the world.
Globally, the health service is facing funding pressures from the:
Mark Millar FCCA
ACCA Council member and chairman of the
• shortage of doctors and nurses
ACCA Health Network Panel 2003–6
• increasing demand and expectation from patients
• technological advances that push up costs
• an ageing population
• increase in chronic diseases.
This report demonstrates that there is no easy solution to meeting these
challenges. It does, however, provide a valuable starting point for discussion.
Accountants have an important part to play in ensuring the efficient use of health
care resources and ACCA, working with its members, will continue to contribute to
the debate.
GLOBAL PERSPECTIVES ON METHODS OF HEALTHCARE FUNDING FOREWORD 5
Bulgaria
WHAT PAYMENT SYSTEMS ARE USED FOR MEETING
THE DIRECT PROVISION OF HEALTH CARE IN BULGARIA?
Mario Iliev
Bulgaria employs the following payment systems:
• capitation
• fee for service
• co-payment
• payment for outcomes.
PLEASE PROVIDE A QUALITATIVE COMMENTARY ON
Organisation THE PAYMENT SYSTEM USED FOR MEETING THE
AstraZeneca, Bulgaria DIRECT PROVISION OF HEALTH CARE IN BULGARIA.
Position In the Republic of Bulgaria, public health insurance is
Chief financial officer mandatory. The insurance scheme is administered by the
National Health Insurance Fund (NHIF) or one of its 28
Specialist interest in the workplace regional offices: Regional Health Insurance Fund (RHIF).
Finance and sales excellence. Founded in March 1999, the NHIF is an independent public
institution that operates independently of the healthcare
system.
The amount each person is required to contribute depends
on such factors as employment status and income level. If the
total contributions were insufficient then the scheme would
RELEVANT NATIONAL GUIDANCE be underfunded and this would reduce access to care and
introduce financial risks to hospitals and pharmacies.
http://www.mh.government.bg/
The health insurance programme does not cover the cost of
http://www.en.nhif.bg/web/guest/legal-framework many innovative therapies and medicines that are known to
be of benefit to patients; medical devices and dietary foods,
for example, are not covered by the scheme.
There are frequent changes to regulations, and this leaves
little time to evaluate and reflect on initiatives related to
health care provision; such changes also have a negative
impact on the contractual process.
Reimbursement rates vary. Therapeutic areas that are
classified as priorities –including oncology, respiratory
diseases and diabetes – are reimbursed at 100% by the NHIF.
Rates for other disease groups vary; cardiovascular services,
for example, are reimbursed at 25%.
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WHAT DO YOU CONSIDER TO BE THE ADVANTAGES
AND DISADVANTAGES OF THE PAYMENT SYSTEM IN
BULGARIA?
Advantages
The price of reimbursed medicines must be set at the lowest
of 12 reference countries. This guarantees that Bulgaria has
some of the lowest drug prices in the European Union (EU).
Pharmaceutical prices are revised every six months.
The positive drug list (the list of drugs that may be prescribed
through the health insurance scheme) is opened half yearly.
Disadvantages
Out-of-pocket payments, at 64%, are the highest in the EU.
As a result, patients often delay seeking care until the later
stages of disease, at which point treatment costs are
frequently much greater than would otherwise be the case.
In comparison with other EU countries, Bulgaria is slow to
introduce new products and technologies.
Insufficient administrative capacity allows no time for health
technology assessment (HTA), healthcare economics or for
the introduction of quality measures.
The healthcare infrastructure is not set up to track resource
consumption or to measure outcomes at a patient level.
The funding allocated to health care in Bulgaria is half that of
Western Europe – only 4% of GDP.
There is 20% VAT on medicines and this rate is expected to
remain in place for the foreseeable future.
The low pricing of pharmaceutical products introduces the
risk of parallel exports. (Where a trading firm purchases
quantities of drugs and then exports them to another country
where they can be sold for higher prices.) This introduces the
risk that thousands of patients will be without medication.
GLOBAL PERSPECTIVES ON METHODS OF HEALTHCARE FUNDING BULGARIA 7
Canada
WHAT PAYMENT SYSTEMS ARE USED FOR MEETING
THE DIRECT PROVISION OF HEALTH CARE IN CANADA?
Henry Kalule Lukenge, FCCA
Canada has a publicly funded healthcare system. The federal
government raises funds through payroll deductions (a health
care tax). These funds are then used to pay private
institutions for providing care to all Canadians, irrespective of
their income.
PLEASE PROVIDE A QUALITATIVE COMMENTARY ON
THE PAYMENT SYSTEM USED FOR MEETING THE
DIRECT PROVISION OF HEALTH CARE IN CANADA.
The Canadian healthcare system, both the services provided
Organisation and how they are paid for, has evolved over time. The
Nexim Healthcare Consultants underlying philosophy, however, is that people should have
access to services regardless of ability to pay. This was
Position enshrined in law by the Canada Healthcare Act of 1984 and
President and CEO expanded by the Medicare Act signed by the Lester Pearson’s
Liberal government.
Specialist interest in the workplace
Entrepreneurship, business development, project The provincial ministry of health issues a health card to each
funding, project planning, financial analysis, innovation individual who enrols in the programme and this entitles each
and product planning, project evaluation and social person to a standard level of care. There is no need for a
enterprise. selection of different plans as virtually all essential basic care,
including maternity and infertility treatments, is covered.
The extent of coverage does, however, vary slightly between
provinces. Dental and vision care, for example, are not
RELEVANT NATIONAL GUIDANCE
covered by all provinces, though they are often covered by
employers through private insurance companies, and in some
http://www.policy.ca/policy-directory/Detailed/
provinces private supplementary plans are available for those
Health-Care-Reforms_-Just-How-Far-Can-We-
who prefer to stay in private rooms when in hospital.
Go_-1860.html
Cosmetic surgery and some non-essential surgical
procedures are not covered; these can be paid for by the
patient or through private insurers.
Healthcare coverage is not affected by loss or change of job,
care cannot be denied because of unpaid premiums (in
British Columbia) and there are no lifetime limits or exclusions
for pre-existing conditions.
Canadians strongly support the public health system; they are
not in favour of the for-profit private health system. A 2009
poll by Nanos Research, for example, found that 86% of
Canadians surveyed supported or strongly supported ‘public
solutions to make our public health care stronger’. Another
survey, undertaken by the Strategic Counsel in 2008, found
that 91% of Canadians preferred their healthcare system to a
US-style system.
8
WHAT DO YOU CONSIDER TO BE THE ADVANTAGES WHAT DO YOU THINK OTHER COUNTRIES COULD
AND DISADVANTAGES OF THE PAYMENT SYSTEM IN LEARN ABOUT HEALTH CARE PROVISION FROM
CANADA? CANADA?
The Canadian healthcare system places the emphasis on end There are many great elements of the Canadian healthcare
users and service provision. The focus is very much on system but the following are particularly noteworthy.
reducing or minimising administrative costs. The government
relies on employers to collect healthcare premiums and then Eligibility: free health care is available only to Canadian
to pass these to the federal government to fund health care permanent residents or resident aliens; it is not available to
for enrolled members. Claims for services provided by anyone who turns up at a medical establishment.
general practitioners and hospitals are paid without the need
for intermediary organisations. Low litigation culture: Canadians, unlike Europeans and
people in the US, tend not to sue for medical malpractice.
Another noteworthy feature is that because primary care While working in Europe and the US I saw growing numbers
providers have no direct profit motive, they are inclined to go of doctors and hospitals sued for what were often trivial
above and beyond the call of duty to ensure that their matters. The legal charges and pay-outs related to these
patients get well. They encourage attendance for check-ups, claims inflate hospital and primary care running costs,
for example, the use of alternative therapies and innovative increasing the cost of providing care. If the litigation culture
treatments. could be minimised in Europe and the US then doctors could
focus on service provision. I have seen fewer cases of clinical
As with healthcare systems in other countries, Canada faces litigation in Canada than anywhere else I have worked or lived.
the threat posed by an ageing population and low birth rates,
though immigration policies have helped to address this. Minimisation of non-medical costs: this enables the
maximisation of each dollar spent on health care.
The disadvantages of the Canadian healthcare system mainly
relate to long waiting times and difficulties in evaluating the
performance level of hospitals and other service providers.
The government assesses hospital and primary care provider
performance through surveys but there is no effective way of
quantifying value for money.
GLOBAL PERSPECTIVES ON METHODS OF HEALTHCARE FUNDING CANADA 9
Canada
WHAT PAYMENT SYSTEMS ARE USED FOR MEETING
THE DIRECT PROVISION OF HEALTH CARE IN CANADA?
Jayshri (Jay) Makwana, FCCA
Canada employs the following payment systems:
• capitation (funding based on population needs)
• fee for service (physician funding and activity-based funding)
• co-payment (global budgets)
• payment for quality
• payment for outcomes
Organisation
Vancouver Coastal Health (VCH), British Columbia • bundled funding (funding per episode of care).
Position PLEASE PROVIDE A QUALITATIVE COMMENTARY ON
Director, strategy and evaluation, Regional Mental THE PAYMENT SYSTEM USED FOR MEETING THE
Health and Addiction Program DIRECT PROVISION OF HEALTH CARE IN CANADA
Specialist interests in the workplace The Canada Health Act is federal legislation that puts in place
Strategic planning and the evaluation of systemic conditions by which individual provinces and territories in
transformational efforts. This includes innovation and Canada receive funding for healthcare services. There are five
performance management of an integrated approach main principles in the Act: public administration,
to care that is patient-centred, equitable, accessible, comprehensiveness, universality, portability and accessibility.
appropriate, cost effective and sustainable.
Population-based funding refers to historical methods and
rules for allocating funds from central government to regions
in order to fund the healthcare services for the residents of
the regions. This method uses physician, hospital and post-
acute care data plus demographic, socio-economic, and
RELEVANT NATIONAL GUIDANCE other health-related characteristics to project a geographic
region’s healthcare expenditure over a fixed period of time.
http://www.parl.gc.ca/Content/SEN/Committee/372/
soci/rep/repoct02vol6-e.htm Under global budgets, a fixed amount of funding is
distributed to a health care provider, who is then responsible
for healthcare services for the region’s residents for a fixed
period of time. The health care providers include most
Canadian hospitals, long-term care facilities, publicly funded
rehabilitation facilities, and mental and public health
programmes. Few developed countries use only global
budgets for funding health care services. The Canadian
funding model is based on historical spending, inflation,
negotiations and politics in many provinces, rather than on
the type and volume of services provided.
Physicians in Canada are primarily paid through a fee-for-
service (FFS) system. FFS is a retrospective payment system
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