Healthcare purchasing
Lecture 1
4 key actors in the Dutch system:
• Insurers
• Government
• Patients
• Care providers
3 markets:
• Health insurance
• Health purchasing
• Health provision (patients
go to different care
providers).
England – similar to Dutch one
NHS: regionally responsible for dividing the
healthcare budgets and contracting healthcare
providers.
• Government based system
Purchasing and SCM
Healthcare purchasers have the responsibility
for defining the healthcare budgets and need to
contract different care providers based on:
• Quality, costs, treatment types.
Purchasers define the care provided in the
chain.
2 different types of purchasing
1. Purchasing of care (course focus)
Purchasing care from different providers based
on volumes, quality. (focus mainly on hospitals)
2. Purchasing for care
A hospital purchasing medicine/equipment from medical suppliers.
,Why separating purchasing from care provision?
1. Stimulates shift to more cost-effective care solutions;
2. Population health needs are better met;
3. Providers’ performance improved through purchasers’ incentives and monitoring tools;
4. Providers can focus on efficiently providing health services (instead of administrative burden
in a command-and-control system);
5. Competition among providers should increase efficiency in terms of health outcomes / costs.
Healthcare quality
To what extent can purchasing improve healthcare quality?
• The way how healthcare is purchased influence its organization
Introduction health systems
Base model – paying out of pocket
Disadvantages? No risk sharing
• Meaning if you never get sick you never pay but
someone who is always sick might get into problems
Health risk sharing model – as a response to the problem above
Contribution: in forms of tax or health insurance.
Disadvantages?
It might not stimulate healthy behavior, why do healthy people have
to pay for the ill?
• Right incentives? Providers are paid based on care delivery -> overtreating people for more
money
• Regulations? How much contribution people need to pay,
how much they get from the government and what type
of treatments can they provide (general model).
Role of the purchaser
Goals for the purchaser:
• Universal access for all citizens
• Effective care for better health outcomes
• Efficient use of resources
• High-quality services
• Responsiveness to patient concerns (expectations)
WHO says that Purchasers need to move from passive purchasing to strategic forms of purchasing.
Use purchasing mechanisms as key to making health services deliver better care
• Highly involvement from purchasers which implies more than just an administrative role
,Triple Aim- Berwick
When organizing healthcare systems you should aim for 3 goals
that are interrelated:
1. Patient experience (better care- quality)
2. Health of populations (better health)
3. Reducing per capita cost (Better value)
a. Best care outcome for the least costs
• Interdependent goals, what is done on one can affect the other 2 + or -
• Many systems still struggle to achieve aims in practice
Barriers to the triple aim
• Supply-driven demand
o Why? It could Incentivize providers to give more care than necessary due to increased
revenues (removing tonsils using surgery even if it is not necessary)
• Physician-centric care
• New technologies with limited impact on outcomes
• Little or no foreign competition to spur domestic change
Preconditions for triple aim goals
Recognition of a population
› e.g. for measurement purposes
Policy constraints- having the right policies
• e.g. universal coverage, budget limit, equity
• Effective payment models
Existence of an Integrator- key point of Berwick- Role to the purchaser and his functions are:
• Redesign of primary care services and structures: innovation is key
• Involving individuals & families
• Population health management: increase prevention & encourage cooperation
• Financial management system: payment & resource allocation should support triple aim
• System integration at macro level: standardized definition of quality & costs, transparency
Classifying health systems- 3 important aspects when organizing healthcare
• 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.
, System dimensions- Bohm 2013-
Countries used a combination of the 3 dimensions to define their healthcare system.
The service delivery dimension
• Public, private non-profit and private for-profit
• NL: private non-profit hospital with self-employed physicians
The financing dimension
• State financing: general and/or earmarked tax revenues
• Societal: social insurance contributions (sickness fonds)
• Private sector: contributions to private insurance and out-of-pocket payments
The regulation dimension (or processes)
1. Coverage: what populations?
2. Financing system (tax, private)
3. Remunerations of providers
4. Provider market access
5. Patient access to providers- in NL first GP then to hospital
6. Benefit package: what treatments, medicine (basic or more advanced)
Who is in charge of regulating and controlling these relationships?
• State, society (private non-profit) or market (for-profit)?
Plausible health systems (5 most common)
National Health Service system (all done by the government)
› public provision through state-owned hospitals and salaried physicians in public facilities is
the prevailing modality
› reflects social democratic values of universal coverage, equal access to services and beliefs in
the efficiency of public services
National Health Insurance systems
› combine NHS regulatory structures and tax financing with dominantly private service
provision
› the fundamental health reforms were implemented by centrist or conservative parties which
generally adhere to the idea that public services are prone to inefficiency.
Social Health Insurance systems (non-profit societal bodies responsible for financing- sickness funds)
› dominant role of societal actors in healthcare regulation and financing, whereas services are
mainly delivered by private for-profit providers
› they are initiated by the government and have their own boards but are non-profit – in
between
Lecture 1
4 key actors in the Dutch system:
• Insurers
• Government
• Patients
• Care providers
3 markets:
• Health insurance
• Health purchasing
• Health provision (patients
go to different care
providers).
England – similar to Dutch one
NHS: regionally responsible for dividing the
healthcare budgets and contracting healthcare
providers.
• Government based system
Purchasing and SCM
Healthcare purchasers have the responsibility
for defining the healthcare budgets and need to
contract different care providers based on:
• Quality, costs, treatment types.
Purchasers define the care provided in the
chain.
2 different types of purchasing
1. Purchasing of care (course focus)
Purchasing care from different providers based
on volumes, quality. (focus mainly on hospitals)
2. Purchasing for care
A hospital purchasing medicine/equipment from medical suppliers.
,Why separating purchasing from care provision?
1. Stimulates shift to more cost-effective care solutions;
2. Population health needs are better met;
3. Providers’ performance improved through purchasers’ incentives and monitoring tools;
4. Providers can focus on efficiently providing health services (instead of administrative burden
in a command-and-control system);
5. Competition among providers should increase efficiency in terms of health outcomes / costs.
Healthcare quality
To what extent can purchasing improve healthcare quality?
• The way how healthcare is purchased influence its organization
Introduction health systems
Base model – paying out of pocket
Disadvantages? No risk sharing
• Meaning if you never get sick you never pay but
someone who is always sick might get into problems
Health risk sharing model – as a response to the problem above
Contribution: in forms of tax or health insurance.
Disadvantages?
It might not stimulate healthy behavior, why do healthy people have
to pay for the ill?
• Right incentives? Providers are paid based on care delivery -> overtreating people for more
money
• Regulations? How much contribution people need to pay,
how much they get from the government and what type
of treatments can they provide (general model).
Role of the purchaser
Goals for the purchaser:
• Universal access for all citizens
• Effective care for better health outcomes
• Efficient use of resources
• High-quality services
• Responsiveness to patient concerns (expectations)
WHO says that Purchasers need to move from passive purchasing to strategic forms of purchasing.
Use purchasing mechanisms as key to making health services deliver better care
• Highly involvement from purchasers which implies more than just an administrative role
,Triple Aim- Berwick
When organizing healthcare systems you should aim for 3 goals
that are interrelated:
1. Patient experience (better care- quality)
2. Health of populations (better health)
3. Reducing per capita cost (Better value)
a. Best care outcome for the least costs
• Interdependent goals, what is done on one can affect the other 2 + or -
• Many systems still struggle to achieve aims in practice
Barriers to the triple aim
• Supply-driven demand
o Why? It could Incentivize providers to give more care than necessary due to increased
revenues (removing tonsils using surgery even if it is not necessary)
• Physician-centric care
• New technologies with limited impact on outcomes
• Little or no foreign competition to spur domestic change
Preconditions for triple aim goals
Recognition of a population
› e.g. for measurement purposes
Policy constraints- having the right policies
• e.g. universal coverage, budget limit, equity
• Effective payment models
Existence of an Integrator- key point of Berwick- Role to the purchaser and his functions are:
• Redesign of primary care services and structures: innovation is key
• Involving individuals & families
• Population health management: increase prevention & encourage cooperation
• Financial management system: payment & resource allocation should support triple aim
• System integration at macro level: standardized definition of quality & costs, transparency
Classifying health systems- 3 important aspects when organizing healthcare
• 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.
, System dimensions- Bohm 2013-
Countries used a combination of the 3 dimensions to define their healthcare system.
The service delivery dimension
• Public, private non-profit and private for-profit
• NL: private non-profit hospital with self-employed physicians
The financing dimension
• State financing: general and/or earmarked tax revenues
• Societal: social insurance contributions (sickness fonds)
• Private sector: contributions to private insurance and out-of-pocket payments
The regulation dimension (or processes)
1. Coverage: what populations?
2. Financing system (tax, private)
3. Remunerations of providers
4. Provider market access
5. Patient access to providers- in NL first GP then to hospital
6. Benefit package: what treatments, medicine (basic or more advanced)
Who is in charge of regulating and controlling these relationships?
• State, society (private non-profit) or market (for-profit)?
Plausible health systems (5 most common)
National Health Service system (all done by the government)
› public provision through state-owned hospitals and salaried physicians in public facilities is
the prevailing modality
› reflects social democratic values of universal coverage, equal access to services and beliefs in
the efficiency of public services
National Health Insurance systems
› combine NHS regulatory structures and tax financing with dominantly private service
provision
› the fundamental health reforms were implemented by centrist or conservative parties which
generally adhere to the idea that public services are prone to inefficiency.
Social Health Insurance systems (non-profit societal bodies responsible for financing- sickness funds)
› dominant role of societal actors in healthcare regulation and financing, whereas services are
mainly delivered by private for-profit providers
› they are initiated by the government and have their own boards but are non-profit – in
between
