October 2004MOH
Addressing the demand side problemsby Intelligent Co-payment Scheme
Contribution to the Roundtable discussion
Paying for the Health Systems of the Future
7th European Health Forum Gastein
Ing. Peter Pažitný, MSc.Analyst of M.E.S.A. 10
Advisor to the Minister of Health
October 2004
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... ??? ...We're lucky that the hole is not on our side
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Content
I. Introduction – Slovakia at the Glance
II. The design of The Intelligent Co-payment Scheme
III. Evidence from introduction of marginal costs in Slovakia
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I. Introduction - Slovakia
Population:5,4 million people
Living Standard: 51% of EU average
Middle income country
EUR 1 = SKK 40
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Slovakia at the Glance
Economic indicator 2002 2003 2004f 2005f
GDP growth 4,4 4,2 4,3 4,7
Unemployment rate 18,5 17,4 16,5 15,9
Inflation (CPI) 3,3 8,5 6,5 4,8
General Government Balance/GDP
- 7,5 -3,6 - 3,6 -3,4
Current Account/GDP
-8,0 -1,0 -2,6 -3,5
Source: M.E.S.A. 10
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Deficit of Public Finances (% of GDP)
-3,6 -3,4
-0,5-0,9 -0,9 -0,8
-0,6-0,3
-0,1
-5,3
-4,1
-2,0
-3,6 -3,6
-6,6-6,1
-7,5
-6,4
-8,0
-7,0
-6,0
-5,0
-4,0
-3,0
-2,0
-1,0
0,0
1999 2000 2001 2002 2003 2004 2005
GFS 86ESA 95Health care
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Slovakia the leader in Reforms
I. Tax Reform (2003) – Corporate and Personal Income Tax – 19 %
II. Pension Reform (2003) – Two pillars - public (50%) and private (50%)
III. Public Administration Reform (2004) – Fiscal Decentralization
IV. Labour Market Reform (2003) – Modern Labour Code
V. Health Care Reform - Stabilization (2003) - Reform Acts (2004)
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Health System in SlovakiaFinancing Competitive Social Insurance
Payroll tax (contributions) - 60 %Taxes – 30 %Out of pocket – 10 %
Payment mechanisms
Primary care – Capitation + Fee for serviceSecondary care – Capped fee for serviceTertiary care – Broad band DRG per CaseLong term care – BeddaysEmergency – Capitation and fee for service1-day Surgery – Per Case
Organization Primary care – 97 % privateSecondary care – 83 % privateTertiary care – 10 % privatePharmacies – 99 % private
Regulation Price regulation and Network regulation
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Generally, you have 4 types of problems
I. Demand side
II. Supply side
III. Financing
IV. Regulation (Role of the MOH)
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II. The design of Intelligent Co-payment Scheme
Act on Basic Benefit Package
Basic Principle:
Equal treatment to equal need.
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A European health politician (old type) speaks:
„I oppose higher co-payments because this instrument is not likely to reduce the demand for health care.
But in case that demand is effectively reduced by higher co-payments, I am also against this instrument because demand is effectively reduced.“
Source: Osterkamp, R., 2004
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Intelligent Co-payment Scheme (ICo-PS)
1. Separation of non-health care services (setting small, flat co-payments)
2. Define the national priority list (diagnosis with no co-payment) – The Basic Benefit Package
3. Establish catalogization committees (defines the catalogue of procedures)
4. Establish categorization committees (defines the financial co-payment)
5. Increase patient’s responsibility and involvement
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1. Application of marginal co-payments
Patient Health Insurance Fund
Provider (pharmacy)
Primary care 20 Sk 0 Sk 20 Sk
Secondary care 20 Sk 0 Sk 20 Sk
Accomodation and food in inpatient care
50 Sk 0 Sk 50 Sk
Transport 2 Sk/km
Prescription fee 20 Sk 15 Sk 5 Sk
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2. List of Citizens’ PrioritiesDisease %
Cardiovascular diseases 74.2
Cancer 68.8
Diabetes, metabolic disorders 26.2
Orthopaedic diseases 16.6
Mental, psychiatric, nerve disorders and stress 16.1
Influenza 12.1
Allergies 10.9
Respiratory diseases 8.6
Infection diseases, hepatitis, TBC and AIDS 6.3
Incorrect diet, obesity 6.2
Alcoholism, smoking, drug addictions 4.6
Dental problem 1.4
Skin diseases 0.9
Gynaecological diseases 0.8
Source: FOCUS,
January 2004
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123
...
cca 9 000
DISEASES
2. ICo-PS model in practice
Optimálna výška spoluúčasti
PARLIAMENT
- HIC coverage -patient’s participation
Critical Risks:
financial protection of patients against the risk of excessive costs
urgent care
chronic diseases
HIC
ExpertsMinistry
Vysoká miera spoluúčasti
Low participation
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5. Patient’s responsibility (§ 41)
HEALTH IS AN INDIVIDUAL GOOD (NOT A PUBLIC GOOD)
Materialized responsibility of the patient for prevention and treatment regime (compliance)
The Health Insurance Company is entitled to Increase the co-payment if the care had to be provided
due to a violation of the treatment regime or in result of a habit-forming substance abuse (no compliance),
Decrease the co-payment, if the insured regularly undertakes preventive examinations, preventive vaccination and leads a healthy way of life.
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Analyzer Tool
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Summary: Elements of an intelligent design of co-payments
Dr. Osterkamp, ifo Institute Munich, 2004:
1. High co-payments (may be 100%) for small, frequent, cheap and every day diseases
2. Low (or non) co-payments for rare, severe and costly diseases
3. Lower co-payments for the poor than for the wealthy.
4. Upper limit of health-care costs as a % of individual annual income
5. Disburdening the employer: once-and-for-all increase of wages by former employer contribution
MOH Draft
Yes
Yes
Yes
Partially
Not yet
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A European health politician (new type) speaks:
„On one hand I still oppose higher co-payments. But on the other:
our co-payment rates are rather low, not each health treatment is equally important,
Therefore, I shall try to convince the electorate that a moderate increase combined with a fair design of co-payments is in the interest of all.“
Source: Osterkamp, R., 2004
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III. Evidence: Impact of marginal co-payments
(Index 2003/2002)
0,8
0,9
1
1,1
1,2
Primary Care Dentists First aid Secondary Care Hospitals
1q
2q
3q
4q
Zdroj: VšZP, 2004Source: General HIC
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Dynamics of Drug Expenditures
-13
48
1611
15
9
19
-15
-10
-5
0
5
10
15
20
25
2000 2001 2002 2003 2004
HIC
Patients
Zdroj: MZ SR
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The access to care was not hurt
Did not visit doctor22,0%
Stopped1,5%
Less then before18,0%
The same behaviour as
before58,5%
Source: FOCUS January 2004
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The prescription of drugs was not hurt
Did not need doctor23,2%
Stopped2,1%
Less then before20,5%
The same behaviour as
before54,2%
Source: FOCUS January 2004
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Access to care was not decreased
The initial hypothesis came true, that
1. Only excessive demand felt down
2. The access to care was not decreased
3. The perception of corruption decreased (from 32 to 10%)
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Lessons learned
Reform requires many clear decisions on day-to-day basis
... but ....
you always have only imperfect data and information to support your decision
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Lessons learned
Whatever you do, according to the media and public
… you are always WRONG!
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Thank you for your kind attention
www.reformazdravotnictva.sk
www.health.gov.sk