TESTING PERFORMANCE-BASED TESTING PERFORMANCE-BASED REMUNERATION FOR PRIMARY CAREREMUNERATION FOR PRIMARY CARE

PPROVIDERS IN ARMENIAROVIDERS IN ARMENIA

Tatyana MakarovaTatyana MakarovaMark McEuenMark McEuen

Abt Associates Inc.Abt Associates Inc.

GHC Conference, May 30 - June 2, 2005

CURRENT PHC PAYMENT SYSTEMCURRENT PHC PAYMENT SYSTEM

1. PHC Benefits Package source of funding: general taxes

2. Contract based budget funds allocations

3. Payment model: prospective

4. Basic payment method: capitation

5. Differentiated per capita rates: children and adults

6. Fees for selected services

7. Fees for selected diseases treatment

CURRENT PHC REMUNERATION CURRENT PHC REMUNERATION SYSTEMSYSTEM

• Ministry of Health regulated salary rates• Rate estimates defined on per capita basis for

physicians and nurses • Total base salary per provider assumes assigned

population rather than actually enrolled• Salaries are fixed and do not differ across providers

in regard to service volume and quality, even in cases when they provide paid services

GOALS OF INCENTIVE REMUNERATION SYSTEM

• Introduce differentiated remuneration system to:

• Bring incentives and reward for improved quality and increased utilization of PHC services

• Reward additional work as participation in reform related activities and assignments

• Increase PHC personnel’s earnings and motivation

IMPLEMENTATION APPROACH

• Define PHC financing and remuneration indicators (volume and quality type) for rewarding performance

• Introduce performance based PHC financing in combination with capitation payments

• Collect performance data from new PHC information system and generate required reports

• Provide feedback on performance to individual providers in comparison with minimal, average and maximum indicators’ values achieved by the PHC staff

• Introduce a simple electronic tool for remuneration estimates to be easily used by facility accountants

• Quality indicators for remuneration were offered only to 3 pilots out of 13 as they already had functional CQI programs

PERFORMANCE INDICATORS

• Year 2004– for PHC financing – enrolment performance only – for remuneration – 28 volume and quality indicators were

offered for facility choice with the possibility to change them from month to month. Different pilots chose from 2 to 11 indicators.

• Year 2005: – seven PHC incentive financing indicators directly linked with

13 PHC remuneration indicators– all 13 remuneration indicators are to be used universally by

pilots

COMPARISON OF 2004 AND 2005 INCENTIVE REMUNERATION SYSTEMS

1. 4 months in 2004 vs. whole year in 2005

2. 28 indicators in 2004 vs. 13 indicators in 2005

3. Elective indicators in 2004 vs. fixed list in 2005

4. Relation of incentive remuneration indicators to facility financing indicators

INCENTIVE REMUNERATION SYSTEM

Base fund Variable fund

Remuneration Fund

PHC FACILITIES PERFORMANCE PHC FACILITIES PERFORMANCE INDICATORSINDICATORS

1. Indicator of population open enrollment

2. Indicator of all types of visits to PHC physicians (separately for children and adults)

3. Indicator of early detection of hypertension

4. Indicator of early detection of diseases in 0-1 year old children

5. Indicator of immunization

6. Indicator of participation of PHC physicians in Peer Chart Review process

REMUNERATION BASE FUND

• Source – state budget per capita financing

• Fixed salary

• Based on the optimal number of served population

REMUNERATION VARIABLE FUND

• Source – state budget incentive financing - established performance pool at the purchaser organization - State Health Agency

• Variable remuneration• Based on reform related additional work and

performance results

ASSESSMENT OF PHC PERSONNEL’S PERFORMANCE

PHC personnel’s performance

indicators

Automated calculation of incentive

remuneration

PHC facilities’ performance indicators

CORRELATION BETWEEN BASE FUND AND INCENTIVE REMUNERATION IN 2004

1.4%

61.1%

17.6%

0.0%

72.7%

14.3%

0.7%

73.3%

11.9%

0%

20%

40%

60%

80%

FP Therapevt Pediatrician

Physicians

Minimum

Maximum

Average

1.4%

52.8%

16.5%

0.0%

79.5%

20.0%

0.3%

79.6%

18.2%

0%

20%

40%

60%

80%

FN Therapevt's nurse Pediatrician'snurse

Nurses

Minimum

Maximum

Average

CORRELATION BETWEEN BASE FUND AND INCENTIVE REMUNERATION IN 2004

PILOT PHYSICIANS’ TOTAL SALARY VS. AVERAGE ARMENIA WAGE IN 2004

34000

35000

36000

37000

38000

39000

40000

41000

42000

September October November December

Av. Salary inArmenia in 2004

Pilot physicianssalary

PILOT NURSES’ TOTAL SALARY VS. AVERAGE ARMENIA WAGE IN 2004

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

September October November December

Av. Salary inArmenia in 2004

Pilot nurses salary

CONCLUSIONS1. Performance based PHC remuneration system has

proved to be working

2. Sufficient time (not less than a year) is needed to assess measurable impact and draw sound conclusions on performance improvement

3. Continuous monitoring and improvement of the methodology of the system is required

4. Positive impact of incentives payment system is increased when combined with regular feedback to providers on their individual performance