HOSPITALS AND HEALTHCARE SERVICES
The following questions were asked to HOPE members:
What kind of impact has the crisis had on the budget of hospitals?
Which measures have been undertaken by your government/health insurance?
Mrs Ulrike Schermann-Richter
Federal Ministry of Health
Although there are cuts in the public sector budgets, hospitals and the healthcare system have not been directly affected, yet. However, there can be observed recent declines in public sector investment expenditure and in expenditure for
In 2012, an agreement upon the future of the Austrian healthcare system was reached, which is expected to increase the coordination among the main partners, and therefore the efficiency of healthcare delivery, while ensuring the long-term sustainability of the Austrian healthcare system through expenditure containment.
Within the agreement, a so-called expenditure containment path was defined to keep the ratio of public healthcare expenditures compared to total GDP constant at around 7%. Furthermore, it is estimated that, due to this path, the rate of healthcare expenditure will grow steadily by about 3.6 percentage points by the year 2016.
A comprehensive package of associated structural and organisational measures has been agreed on and their implementation has started. Among them, the strengthening of primary care provision is to be mentioned as a leading undertaking.
Mrs Eva M. Weinreich-Jensen
In 2010 and 2011, the regions have drastically slowed down healthcare spending growth from 3.5 – 4.5% annually in 2006 to 2009, reaching about -0.5% in both 2010 and 2011, including medicine spending. In 2011, the healthcare spending ended up being about €250million below the budget. The tendency of low growth in healthcare spending continues in the expected accounts for 2012, where the growth was 2.2%. However, the total spending on healthcare was still about €160million below the budget. In 2013, the growth expectation is estimated to 1.5%, including medicine spending. Despite the increased spending in 2012, productivity has increased as well.
At this point, the exact increase in productivity is not fully known, but is expected to be lower than in 2011, where the increase in productivity reached 5.2%. A 2.4% increase in activity is planned for 2013 for the five regions as a whole. Productivity is planned to increase by 2% in 2013. A number of initiatives have been put to work to reduce the activity levels in the healthcare sector. A certain number of procedures have been given new guidelines to reduce the amount of patients being led to surgery. The focus is on how it is possible to avoid the surgery by treatments from physiotherapy and dieticians, for example. In the 2013 economic agreement, the new government and the regions have agreed upon a new diagnosis right, which is put into effect by the 1st of September 2013.
With this, the patients have the right to get a diagnosis within one month or to receive a plan for further diagnosis if medically needed. By January 1st 2013, the one-month guarantee for patient to be treated in a private hospital with public funding will become differentiated between one or two months, depending on a medically evaluation of the single patient. This has been followed up by a similar diagnosis and treatment right in the psychiatric hospitals which must be fully implemented by September 1st 2015. Furthermore, the regions have to prioritise €27million to strengthen the treatment of patients who receives care in a hospital as well as in a municipal setting and at the GP. The municipalities are required to increase funding in this field with €40million.
Mr Urmas Sule
Hospitals have healthcare services providing contracts with the Estonian Health Insurance Fund. Estonian Governments regulation about the healthcare services price list applies to all hospitals and therefore all hospitals have been affected by the changes in Health insurance budget described in the first chapter.
Healthcare expenses were cut during the crisis and, although hard for healthcare providers, it was successful, because Estonia is on its way to recovery from the crisis. Before the crisis, benefits of temporary incapacity of work were mostly in the Health Insurance Fund budget, but to use healthcare budget more efficiently, some of these costs were detached from HIF budget and that money was distributed in the budget of HIF. This was a very good political decision, to use HIF income from social tax more purposefully. HIF-s priorities of the next four years include assuring the availability of high-quality treatment for insured persons. The focus is on the development of healthcare quality and e-services.
Mrs Aino-Liisa Oukka
Oulu University Hospital
In 2013, the hospital budget increase was modest (3.6%) compared to 2012; still, cuts have been required throughout the year. Most hospitals have closed beds and begun to cut personnel expenses by voluntary pay free leaves and temporary lay-offs. However, budget overrun is expected to be €47million on top of the previous years’ deficit of €103million. For the year 2014, the mean hospital budget increase will be 2.5% for revenue and 1.4% for expenses. To succeed, this will require diverse actions in controlling the costs. Hospitals are likely to postpone their investments, and cut personnel and equipment expenses. Also, the implementation of new medications and technologies must be assessed carefully. The Health Care Act from 2011 states that implementation of new methods must be assessed and coordinated by the five university hospital districts. The cost effectiveness will be evaluated also for methods already in use. IT technologies are promising to improve the efficiency of processes and empower patients in their own treatment.
Mr Robbert Smet
NVZ Ereniging Van Ziekenhuizen
As part of the Government’s reduction policies, several measures were implemented, also on the demand side, in order to limit the growth of collective funding. Out-of-pocket payments per capita increased from €220 to €350 during the years 2012-2013, albeit very limited compared to the European average. Furthermore, there was a reduction in the coverage of collective funding.
Mr Joe Caruana
Ministry of Health, the Elderly and Community Care
Government will continue focusing on sustainability of its present national health care service provision. Its approach is to curtail and contain costs through the introduction of various internal control mechanisms, the monitoring of operational costs, the increased efficiency of service delivery, and the containment of indirect administrative costs. Improving governance in the deployment of resources and management practices is needed to ensure better utilisation of resources and to avoid wastage. Government deems that having in place an updated and granular financial information to show that the resources being injected in the health system are being efficiently utilised, as well as having a robust mechanism for measuring health system performance that links health system inputs with outputs and outcomes, are crucial to ensure the sustainability of health budgets without minimising high-quality health services. In this respect, the Government is working on the setting up of a Health System Performance Assessment Framework in collaboration with the World Health Organization.
As an increasing proportion of the healthcare budget goes into the procurement of medical supplies and devices, the Government is currently reviewing the procurement, management and distribution processes for medicines and medical devices and has just published a White Paper for consultation. The Government is also committed to reducing the unnecessary use of specialist and hospital care through additional investment across the system and re-orientation of existing services is required to meet needs more appropriately and to achieve better value from the available capacity, particularly in primary care, rehabilitation and community services, and higher-dependency long-term care. In this regard, the measures identified by the Government to strengthen primary healthcare are based on three lines of action aimed at addressing the need for better management of patients after discharge from acute services and allowing patients with minor injuries and ailments to be treated more rapidly within the primary care sector, hence allowing the emergency and outpatient services at MDH to focus its resources on the more serious emergency and specialist tertiary services.
Capital Investment aimed at modernisation and upgrading of current primary healthcare facilities and the extension of services offered therein is currently being undertaken also through EU co-financing. Extension of Primary Health Care Services aimed at increasing the range of services offered at primary level, particularly those related to chronic disease management, while increasing cost-effectiveness through better resource utilisation, simplification of processes and empowering the private sector. Measures include: the provision of new services such as Chronic Kidney Disease Protection Clinic, Backslab application in health centres rather than hospital and the opening of the referrals system to direct referrals by private family doctors in the case of Physiotherapy services, Bone Density, and X-Rays. Capacity Building measures aimed at increasing the number and competence of nurses, doctors and other healthcare professionals through specialised training to provide appropriate services in the primary and community care sector. With the help of ESF funding, work has started on a project aimed at training healthcare professionals in discharge liaison services aimed at integrating acute and community care.
From a public health perspective, the Government is committed to increasing healthy life years, with an emphasis on disease prevention and health promotion throughout the life course. In this regard, work will continue on the implementation of a number of strategies specific to selected sectors such as NCDs, Cancer and Obesity. On 25th November 2013, the Government published an Active Ageing Strategy. The Ministry will also be investing more efforts in improving leadership and participatory governance towards health by engaging in more advocacy to emphasise the concept of health in all policies, with the aim of getting all policy sectors to understand and act on their responsibility for health while recognising how health also affects other sectors. This is also in line with the overall objectives of the Ministry for Health as set out in the draft National Health System Strategy which has been drafted and will be published for consultation in the first quarter of 2014 with a focus on increasing efficiency and health system performance monitoring.
Mr Yves-Jean Dupuis
French Federation of Non-Profit Hospitals
Mrs Pascale Flamant
UNICANCER (French Federation of Comprehensive Cancer Centers)
Mr Gérard Vincent
French Hospital Federation
In May 2010, the French President declared that all public hospitals must reduce deficit and reach a balance in their budget. This message has been heard: in 2012, public hospitals deficit represents only 1% of public hospital budget, 80% of this deficit concerns 50 hospitals. The healthcare budget reached 2.7% in 2011, 2.6% in 2012 and is the same in 2013. Even though this increase is more important than what had been announced by the previous government, this rate is not important enough to cover hospital spending increase.
The efforts that have already been done by French public hospitals in order to save money (in total, 2.9 billion EUR has been saved in the last seven years) will then been pursued. The 2014 bill funding social security plans the saving to reach 580 million EUR next year. The government is excepting to save this money by fostering public hospital efficiency, through specific programs which target some expenses (such as the rationalisation of hospital purchases or the improvements in their organisational performance – 440 million EUR) or measures such as lowering the prices of medicines (140 million EUR). If the government has repealed a particularly deleterious measure consisting to align public hospitals tariffs with those of private hospitals, health ministry still fixes tariffs which do not sufficiently take into account hospital specific activity and burdens. As a matter of fact public hospitals do not receive enough money in regards with their activity and their specific charges (emergency services, taking care of the elderly). If a patient with advanced cancer for example is treated lately in a hospital (because, for financing problems the patient postpones the visit), the less is the chance of healing and the more are the expenditures.
In France, National health insurance finances innovation by activity-based payment (T2A) or global budget (a specific fund called MERRI).
T2A is a facilitator of innovation diffusion and assures to patients equal access to care and innovative medical technologies. T2A initial objective is to finance:
Supplementary tariffs integrated in GHS (Groupe homogène de séjours): T2A makes it possible covering the use of innovations, by creating one or more GHM (Groupe homogène de malades) and therefore one or several new rates in the GHS classification;
Extra charges on GHS: due to the utilisation of some expensive drugs (including chemotherapy treatments) or medical devices.
Innovations financed by MERRI are listed in the table below.
Limits of “STIC” concern its restricted use within few institutions and the weakness of medico economic evaluation related to some innovations.
The financing system changes slowly:
The evolution of cancer treatment from here to 2020 has been analysed. Six main trends were identified. All of them will cause financing issues:
The French reimbursement process is very slow and the financing system does not fit with fast evolution of treatments. Pricing pressures make it a big issue for innovative acute care hospitals.
A substantial part of the budget should be dedicated to innovations, negotiated between payer and hospitals.
Research is well funded but there is a financing gap between research and cares covered by national health system. This gap is bridged only for two areas – genetic and molecular laboratories and drugs (ATU). It is increased by crisis because the leeway reduction. This lack of financing innovation is a detriment of the equity of care and treatments for the patients.
Mrs Sara Pupato Ferrari
Institute for Health Care Management
The main measures adopted concerning hospitals address human resources and pharmaceuticals. In 2009, drug expenditure per medical prescription was reduced by 2.36%.
In 2010 and 2011, new measures including reduction of staff salaries, enhancement of retirements and cuts of new hiring have been adopted to cut expenditure by €1.5billion. Moreover, in 2010, reductions of general expenses by 15% and investments by 25% were established. In 2011, administrators and managers had to ensure the effective, efficient and equitable sharing of public resources allocated to them to save €1.2billion in the autonomous regions and municipalities, which was not possible to achieve. It had been agreed that a common strategy for the care of chronic patients in the NHS had to be developed. The Strategy for the Care of Chronic Patients in the National Health System was finally adopted in 2012. In 2012, some Autonomous Communities announced a shift of the management of public hospitals from the public to the private sector.
In some cases, private management will be focused only on hospitals’ auxiliary services but, in other cases, will assume the whole management of public hospitals, including clinical management. These measures, planned to be adopted widely in Madrid, were refused by public workers and affected citizens, who showed their opposition through strikes and public demonstrations. As legal demands had paralysed the process, in January 2013 the Government of the Community of Madrid gave up the initial plan of privatising six new hospitals. In 2013, Spain launched a new centralised purchasing platform and the e-Salud (e-Health), which extends the system of digital clinical history across the whole country and ensures its full interoperability, limiting the need to repeat diagnostic tests and procedures and leading to more extensive use of electronic prescriptions accessible from any pharmacies. It was expected to save about €300million in 2013.
The National Health System’s Centralized Procurement Platform allows for the unification of technical criteria, greater transparency in contracts and to establish a single drug and product price, the same for all Autonomous Regions. According to the Government, it will be a ‘guarantee for the providing companies, because it fosters market stability through a common contracting scenario, especially in paying times’.
It also reinforced the control over prescriptions and introduced a new tax on marketing of drugs. Hospitals were imposed limits on their pharmaceutical expenditure. The reform of the pharmaceuticals in Spain introduced a financial contribution to drugs according to a patient’s income, age and disease. This measure generated savings of €1.97billion from July 2012 to July 2013 and a reduction in the number of prescriptions of 14.7%. Overall, these measures are estimated to reduce pharmaceutical expenditure to around €1.4billion in 2013. In addition, Spain introduced new measures in 2013, such as the new Benchmark Price Order to restrict pharmaceutical spending, with expected savings of €409million in 2013.
Mr Erik Svanfeldt
International Coordinator Health and Social Care Division Swedish Association of Local Authorities and Regions (SALAR)
In 2009, and even more in 2010, 2011 and 2012, most county councils/regions showed a surplus, thanks to temporary increases of government grants, other income enhancements and efforts to save costs. In this way, county councils/regions, which are responsible for the provision of most healthcare services, have been able to ensure their inhabitants adequate healthcare.
Mr Mike Farrar
CBE Chief Executive
Providers in England will face a net price reduction of 1.9% across all services this coming year, with efficiency savings in the tariff, as well as new rules restricting payment for emergency activity and the increasing prevalence of penalty clauses and fines for underperformance.
As was the case last year, hospitals are continuing to deliver cost improvement plans of on average 5%, with some organisations facing much higher efficiency savings of up to 7.5%. A number of local payers are examining the options for restricting some services where there are doubts about clinical effectiveness.
Several individual provider organisations are starting to show signs of financial distress, with 25 NHS providers collectively reporting a total deficit of around€360million last year. The most common factors leading to acute trusts’ financial challenges appear to be a rise in non-elective admissions (for which they are paid at reduced tariff, 30%) and a fall in more profitable elective work (often because beds were filled by extra emergency cases), which could also lead to fines for missing waiting time targets.
The government announced recently that a further €180million will be distributed around England to help hospitals maintain their A&E services over winter. This is in addition to €300million targeted to the most at-risk areas. The distribution of the extra €180million will include those communities that are not deemed the most at-risk, to bolster and enhance their existing plans to maintain services and reduce the pressure on A&Es caused by cold weather.