Healthcare Purchasing and Supply Chains
Lecture 1: Healthcare systems and purchasing
Part I: Introduction Healthcare systems
Healthcare systems:
Base model:
Potential disadvantages:
-No risk sharing. No solidarity.
Health risk sharing model:
Potential disadvantages:
-Right incentives? How to avoid overtreatment?
-Regulations? Who regulates amount of payments made by
patient to fund? How to make sure that providers receive
payments and that right care is delivered to patients?
General model:
Relationships are regulated. General model in healthcare
systems over the world.
Regulation of relationships:
Conclusions:
- Healthcare systems are all about the delivery of health services for which someone has to
raise the money
- This establishes relationships between providers of services, the beneficiaries, and financing
institutions which have to be regulated.
- Hence, the healthcare system is defined by three functional processes: service provision,
financing and regulation.
Part II: Healthcare system types
System dimensions:
- The regulation dimension:
o Three parties that can be responsible for regulation: state, society (private non-
profit) or market (for-profit).
- The financing dimension:
o State financing: general and/or earmarked tax revenues
, o Societal financing: social insurance contributions
o Private sector: contributions to private insurance and out-of-pocket payments.
- The service delivery dimension:
o Public, private non-profit and private for-profit
o Trichotomous service provision index (Bohm, et al., 2013):
No country has ideal type. Always mix of three. Index shows what is dominant in
health system.
For example: private non-profit hospital with self-employed physicians.
Plausible health systems based on three dimensions:
Bohm et al, 2013
National Health service system:
1. National health service system:
o Public provision through state-owned hospitals and salaried physicians in public
facilities is the prevailing modality
o Reflects social democratic values of universal coverage, equal access to services and
beliefs in the efficiency of public services.
2. National health insurance system:
o Combine NHS regulatory structures and tax financing with dominantly private service
provision
o The fundamental health reforms were implemented by centrist or conservative
parties which generally adhere to the idea that public services are prone to
inefficiency.
o Competition between providers. Market forces.
3. Social health insurance system:
o Dominant role of societal actors in healthcare regulation and financing, whereas
services are mainly delivered by private for-profit providers.
o Some involvement of the government, but that is not dominant.
4. Private health systems:
o Coordination by market actors private financing sources, and for-profit providers
o System-specific deficiency to provide affordable access to healthcare for the elderly,
chronically ill, and the poor.
5. Etatist social health insurance systems:
o The state is responsible for regulating the system, financing is organized by societal
actors, and provision has been delegated to private hands.
, The Netherlands:
- State responsible for most regulation.
- Financing is organized by insuring companies that are non-for-profit.
- Provision of care dominantly by for-profit providers.
Actors and markets in the Dutch healthcare system since 2006:
Three different markets:
- Health insurance market
- Healthcare purchasing market
- Healthcare provision market
Markets are highly regulated:
- Selective contracting for
insurers is only possible to small
degree.
- Competition between insurance
companies, but not many
people switch from insurance
company
- Some competition, but limited.
Dutch healthcare system:
Health insurance act: GP care, specialized medical
care, medicines, medical aids, mental health care,
dental care for people below 18.
Long-term care act: 24/7 care. Tax funding.
Social support act: disabilities. Role for
municipalities. Tax funding.
Part III: Intro Healthcare Purchasing
To share risks there should be some kind of fund available to
make the system work. Fund can be health care insurer,
government that received taxes, etc.
Anyhow related to fund there always is a healthcare purchaser:
- Make agreements with providers.
- Make agreements on what contributions patients
should pay.
Different types of health purchasers: private insurer, non-for-
profit insurer, government, municipality
This course is about the role of the healthcare purchaser in the context of health systems: How to
achieve better care at lower cost?
Focus in this course on improving healthcare:
- Triple aim
- Role of payment models
Lecture 1: Healthcare systems and purchasing
Part I: Introduction Healthcare systems
Healthcare systems:
Base model:
Potential disadvantages:
-No risk sharing. No solidarity.
Health risk sharing model:
Potential disadvantages:
-Right incentives? How to avoid overtreatment?
-Regulations? Who regulates amount of payments made by
patient to fund? How to make sure that providers receive
payments and that right care is delivered to patients?
General model:
Relationships are regulated. General model in healthcare
systems over the world.
Regulation of relationships:
Conclusions:
- Healthcare systems are all about the delivery of health services for which someone has to
raise the money
- This establishes relationships between providers of services, the beneficiaries, and financing
institutions which have to be regulated.
- Hence, the healthcare system is defined by three functional processes: service provision,
financing and regulation.
Part II: Healthcare system types
System dimensions:
- The regulation dimension:
o Three parties that can be responsible for regulation: state, society (private non-
profit) or market (for-profit).
- The financing dimension:
o State financing: general and/or earmarked tax revenues
, o Societal financing: social insurance contributions
o Private sector: contributions to private insurance and out-of-pocket payments.
- The service delivery dimension:
o Public, private non-profit and private for-profit
o Trichotomous service provision index (Bohm, et al., 2013):
No country has ideal type. Always mix of three. Index shows what is dominant in
health system.
For example: private non-profit hospital with self-employed physicians.
Plausible health systems based on three dimensions:
Bohm et al, 2013
National Health service system:
1. National health service system:
o Public provision through state-owned hospitals and salaried physicians in public
facilities is the prevailing modality
o Reflects social democratic values of universal coverage, equal access to services and
beliefs in the efficiency of public services.
2. National health insurance system:
o Combine NHS regulatory structures and tax financing with dominantly private service
provision
o The fundamental health reforms were implemented by centrist or conservative
parties which generally adhere to the idea that public services are prone to
inefficiency.
o Competition between providers. Market forces.
3. Social health insurance system:
o Dominant role of societal actors in healthcare regulation and financing, whereas
services are mainly delivered by private for-profit providers.
o Some involvement of the government, but that is not dominant.
4. Private health systems:
o Coordination by market actors private financing sources, and for-profit providers
o System-specific deficiency to provide affordable access to healthcare for the elderly,
chronically ill, and the poor.
5. Etatist social health insurance systems:
o The state is responsible for regulating the system, financing is organized by societal
actors, and provision has been delegated to private hands.
, The Netherlands:
- State responsible for most regulation.
- Financing is organized by insuring companies that are non-for-profit.
- Provision of care dominantly by for-profit providers.
Actors and markets in the Dutch healthcare system since 2006:
Three different markets:
- Health insurance market
- Healthcare purchasing market
- Healthcare provision market
Markets are highly regulated:
- Selective contracting for
insurers is only possible to small
degree.
- Competition between insurance
companies, but not many
people switch from insurance
company
- Some competition, but limited.
Dutch healthcare system:
Health insurance act: GP care, specialized medical
care, medicines, medical aids, mental health care,
dental care for people below 18.
Long-term care act: 24/7 care. Tax funding.
Social support act: disabilities. Role for
municipalities. Tax funding.
Part III: Intro Healthcare Purchasing
To share risks there should be some kind of fund available to
make the system work. Fund can be health care insurer,
government that received taxes, etc.
Anyhow related to fund there always is a healthcare purchaser:
- Make agreements with providers.
- Make agreements on what contributions patients
should pay.
Different types of health purchasers: private insurer, non-for-
profit insurer, government, municipality
This course is about the role of the healthcare purchaser in the context of health systems: How to
achieve better care at lower cost?
Focus in this course on improving healthcare:
- Triple aim
- Role of payment models
