New payment model for rural health services in Mongolia.

This article describes experiences in Mongolia in designing and implementing a new method of payment for rural health services. The new method involves using a formula that allocates 65% of available funding on the basis of risk-adjusted capitation, 20% on the basis of asset costs, 10% on the basis of variations in distance-related costs, and 5% on the basis of satisfactory attainment of quality of care targets. Rural populations have inferior health services in most countries, whether rich or poor. Their situation has deteriorated in most transition economies, including Mongolia since 1990. One factor has been the use of inappropriate methods of payment of care providers. Changes in payment methods have therefore been made in most transition economies with mixed success. One factor has been a tendency to over-simplify, for example, to introduce capitation without risk adjustment or to make per case payments that ignored casemix. In 2002, the Mongolian government decided that its crude funding formula for rural health services should be replaced. It had two main components. The first was payment of an annual grant by the local government from its general revenue on the basis of estimated service population, number of inpatient beds, and number of clinical staff. The second was an output-based payment per inpatient day from the National Health Insurance Fund. The model was administratively complicated, and widely believed to be unfair. The two funding agencies were giving conflicting types of financial incentives. Most important, the funding methods gave few incentives or rewards for service improvement. In some respects, the incentives were perverse (such as the encouragement of hospital admission by the National Health Insurance Fund). A new funding model was developed through statistical analysis of data from routine service reports and opinions questionnaires. As noted above, there are components relating to per capita needs for care, capital assets, distance, and quality of care. The risk-adjusted capitation component determines needs classes by use of age, gender, and family income. The model was accepted by all concerned parties, and steps are now being taken to implement it under transitional arrangements. Many of the data used to parameterize the model are inaccurate and will need to be updated in the near future. However, the model is inherently valid, and procedures have been set in place that will ensure accuracy is improved on a continuing basis. An important reason why the government strongly supported implementation was its commitment to implement output-based budgeting across all government sectors. The new model provided a convenient way of applying output-based budgeting to one major component of the health sector.

Clinical pathways in 17 European Union countries: a purposive survey.

We undertook a survey of clinical pathways across the 25 European Union countries, Australia. Fifty-one questionnaires were completed by largely self-selected experts from 17 countries. Respondents reported that pathways were important and were becoming increasingly widely used (although the rate of progress was highly variable). One important constraint was reported to be a cultural aversion among doctors that arises at least in part from the implication that pathways require multidisciplinary teamwork which will prejudice medical autonomy. In other words, pathways challenge clinical professional sub-cultures. Other constraints included lack of encouragement by external parties, such as purchasers, with limited financial support for pathway development and implementation and service purchasing that did not reward care providers who use pathways. The obvious implication of the survey is that more needs to be done to achieve a common understanding of pathways. In spite of the large quantity of published papers, survey respondents reported that there are many health professionals who have only a superficial understanding at best.

Effects of increased private health insurance on hospital utilisation in Victoria.

The proportion of Victorians and Australians generally with private health insurance (PHI) increased from 31% in 1998 to 45% in 2001. We analysed a dataset containing all hospital separations throughout Victoria to determine whether changes in the level of private health insurance have had any impact on patterns of public and private hospital utilisation in Victoria. Total utilisation of private hospitals grew by 31% from 1998-99 to 2002-03, whereas utilisation of public hospitals increased by 18%. Total bed-days have increased in both private hospitals and public hospitals by 12%. The proportion of all separations at private hospitals has remained relatively stable between these 2 years, with 33% of all separations being private patients in private hospitals in 1998-99, increasing slightly to 35% by 2002-03. Analysis of a number of specific DRGs shows that patients with more severe disease are more likely to be seen at public hospitals; notably this trend has strengthened between 1998-99 and 2002-03. The number of patients treated in Victorian public hospitals has continued to grow, despite a rapid increase in the utilisation of private hospitals. Given the limited extent of the shift in caseload share between the two sectors, the effectiveness of the Commonwealth's subsidy of private health insurance as a mechanism to reduce pressure on the public sector needs to be carefully examined.

The effects of increased private health insurance: a review of the evidence.

Private health insurance membership declined steadily between 1984 and 1997, after which major government interventions caused it to increase. We review some of the literature and conclude that the increases in membership were probably associated with a loss of equity and cost-effectiveness for the health care system as a whole. We attempt to explain why the government made the changes and conclude that the main factors were vested interests of those who have benefited and a confusion of objectives. The changes may have resulted in a more balanced use of available resources (such as the balance between government and private hospital utilisation) but these and other desirable objectives might have been better achieved in other ways. We advocate that a more serious effort be made in future to ensure that policy takes more account of evidence, logic, and system-wide design and coherence.

New general practitioner payment formula in Croatia: is it consistent with worldwide trends?

We describe the history of general practitioner payment in Croatia, and assess the extent to which recent trends are consistent with developments in other countries. We provide a definition of a classification of payment methods, and summarization of the evidence about their merits as described in international literature and an outline of the history of payment methods in Croatia, with emphasis on the changes proposed for 2004. We conclude that the introduction of performance-based payment, as an adjunct to the capitation payments, is consistent with trends in well-managed health systems in other countries. However, we argue that the changes need to be incorporated into a long-term strategy, and we suggest some elements including refinement of the capitation payment risk adjustment.

Implementing DRGs in Slovenia: why the Australian variant was selected.

Slovenia is embarking on an ambitious health sector reform program, a small part of which involves implementing the categorization of acute inpatients by DRG for payment purposes. I summarise the leading DRG variants, and describe the process of selecting one of them. I argue that the Slovenian decision to use the Australian DRG variant as a starting point was sensible in terms of cost, speed of implementation, and usefulness of the resultant information. More time and effort could have been spent on the appraisal process, but I suspect it would not have led to a different outcome.

Building capacity in the Mongolian health sector: a training methodology based on identified needs assessments.

Mongolian health care is moving from a centrally planned hierarchical basis towards greater decentralisation as part of overall sector wide reform. To identify key needs of health personnel to help to build capacity, we undertook research aimed at assessing priority training areas. The research results indicated gaps and weaknesses in many technical areas, but also significant problems in terms of how Mongolian health organizations function, including rigid structures, isolated management, and little internal communication. These features militate against optimal agency effectiveness. This paper discusses how specific training programs were developed based on quantitative research and an overarching organisation improvement theme emphasizing openness; communication; and participation to maximize the benefits of skills transfer and capacity development.

A comparison of health insurance in Slovenia and Croatia.

Before Croatia and Slovenia became independent in 1991, they had similar health systems. They have generally taken the same reform path since then, but have also travelled in opposite directions on occasions. Of particular relevance here, both countries established quasi-government agencies to administer a new national scheme of compulsory health insurance in 1993. However, Slovenia's compulsory scheme involved much larger copayments, and a parallel voluntary insurance scheme was created mainly to cover them. In 2002, Croatia increased copayments and introduced a voluntary insurance scheme almost identical to that of Slovenia's. To complete the circle, Slovenia has announced it intends to abandon the use of voluntary insurance for copayments, and reduce the level of copayments for its compulsory scheme. This paper describes and compares the two insurance systems, and I argue that there has been considerable success in difficult circumstances. However, the experiences reinforce aspects of design that seem to be generally relevant: the need to make use of consumers' informed opinions, to recognise and then redress a lack of experience of optional approaches among many of those making decisions about health insurance, to define and apply a rigorous evaluation framework that includes estimating peoples total costs for health care, to emphasise the long term, to identify and ensure there is transparency of vested interests, and to use the financial power of the dominant government insurer to encourage and reward improvements in clinical practice.

Community involvement in health in Mongolia: hospital boards and other participatory structures.

Under the Soviet central planning model that operated until 1990, the Mongolian population had little or no involvement in decision-making about health care. As part of overall health sector reform in Mongolia, hospital boards have been established, with significant community representation, to guide strategic and financial management and to assist in developing services according to community needs and expectations. We discuss experiences, and steps taken to resolve initial problems. We also describe other more recent participatory models including the family group practice initiative which involves the community choosing their doctor, community management of revolving drug finds, establishment of community health volunteer networks, and the governments information campaign strategy on the reforms. The community participation models in Mongolia are part of an ongoing process of openness and emphasise the commitment to change in that country. We argue that these experiences have the potential to guide and inform similar measures in other transitional countries.

Privatised family group practices in Mongolia: an initial assessment of service access.

Mongolia is changing the way that primary care is delivered, by replacing salaried government staff with private family group practices (FGPs) paid by risk-adjusted capitation. As part of a mid-project evaluation, we surveyed a sample of FGPs in order to assess the patterns of access to care. We found that generally satisfactory services are being provided in an equitable way, and therefore that the main goals of the new model are being achieved. However, there are some concerns. Inter alia, we argue that more should be done to establish better standards of clinical practice through the distribution of protocols and illustrative pathways, and to increase the extent to which services are organised in a manner that is sensitive to informed consumers' needs. A design limitation meant that few baseline data were available, and the survey will need to be repeated if valid conclusions are to be drawn.

Maternal and infant health prepayment schemes in Shandong, China: a survey of demand and supply.

Maternal and infant prepayment schemes (MIPSs) appeared in China in the early 1980s, as a way of helping women to set aside adequate funds for childbirth. The responsibility for design was devolved to the county level, and many different approaches have been applied. For this and other reasons, there has been no consensus on important matters such as the level of prepayment, the range of covered services, and whether township health centres or family planning stations should operate the schemes. We aimed to clarify some of the uncertainty by conducting combined analyses of cost, willingness to pay, and willingness to supply. We used structured survey instruments to interview 4271 households with children aged under one year, and 18 township health institutions. Our analyses suggest that the ideal prepayment should be higher and the range of covered services should be wider than the current average, and that health centres rather family planning stations should operate the schemes.

Mongolian experiences with health insurance: are success factors unique?

We describe the health insurance model implemented in Mongolia after the Soviet Bloc collapsed in 1990, and note some of its good features. We then discuss the structural weaknesses that became evident over the first ten years of use, and some current proposals for reform. Finally, we consider the factors that appear to have affected success. We argue that the main constraints are much the same as in other countries including Australia--and relate more to confusion and disagreement over broad policy issues than to detailed knowledge of technical aspects or the research evidence.

Introducing soft systems methodology plus (SSM+): why we need it and what it can contribute.

There are many complicated and seemingly intractable problems in the health care sector. Past ways to address them have involved political responses, economic restructuring, biomedical and scientific studies, and managerialist or business-oriented tools. Few methods have enabled us to develop a systematic response to problems. Our version of soft systems methodology, SSM+, seems to improve problem solving processes by providing an iterative, staged framework that emphasises collaborative learning and systems redesign involving both technical and cultural fixes.

The effects of increased market competition on hospital services in Shandong and Henan Provinces.

The Chinese government began a major reform of the hospital sector in the early 1980s. The main aim was to increase productivity by phasing out prospective global budgets from the government, and encouraging between-hospital competition for the business of user-pay and insured patients. This goal was to be achieved without unreasonable prejudice to the financial sustainability of hospitals or to the fairness of access and service provision. We explored the effects of these changes by analysing data for four levels of hospital in two of the most populous provinces between 1985 and 1999. We used data envelope analysis, and found that the majority of hospitals experienced a decline in productivity. Social efficiency (measured by the level of provision of unnecessary services) also declined, especially in the largest hospitals that could easily increase the use of expensive technologies. Most hospitals increased their economic sustainability, measured as the ratio between revenue and expenditures. However, the lowest-level hospitals experienced stable or reduced sustainability due to their inability to compete with marketing by higher-level hospitals. We conclude that, although there were many benefits, the overall impact of the introduction of market forces may have been negative. An important factor was that not all aspects (such as supplier-induced demand) were adequately controlled by government agencies. We suggest ways of alleviating the most problematic elements of current arrangements.

Health care funding in the Australian Capital Territory: from hospital to community.

This paper presents an outline of the socio-demographic features of the Australian Capital Territory (the ACT) and of its health care system. I describe how health care resources are allocated in the government sector, present a more detailed description of the way that hospital services are purchased, and summarise the government's policy directions for health. I argue that the main directions are sensible, and particularly those that support more integrated care that is largely based in the community. There appear to be no major weaknesses in the budget-share output-based funding model used in the purchase of hospital services, although the rationale for some of the components might be clarified. In total, the ACT government appears to be on the right track. However, I argue that more rapid progress might be possible if there were greater collaboration between the Territory health authority and the relatively powerful private medical profession.

Health care funding in New South Wales: from health care needs to hospital outputs.

This paper summarises the structure of the State's health care system, and then focuses on the main processes of resource allocation: needs-based funding of 17 Area Health Services, and output-based funding of specific service providers. The general model is widely accepted by informed observers to be fundamentally sound. In particular, the resource distribution formula whereby needs-based allocations are made is a largely valid model that has been progressively refined over fifteen years and is probably as good as any in the world. I conclude that the recent decision to require Area Health Services to use a common framework for out-put-based funding was long overdue, and that many of its features represent best practice. However, I argue that more should be done to refine some of the details and that NSW Health might need to give more consideration to ideas that have been tested and evaluated in other health care systems.

Treating organisational illness: a practical approach to facilitating improvements in health care.

The health sector contains many problems that are widely recognised and ought to be easily resolved, and yet some organisations seem to be powerless to act. We argue that this mainly reflects weaknesses in the organisational culture, and present an approach that we have been using to address them. We describe some simple analytical tools, and report our experiences in using them in organisations in several countries. We conclude that most people believe organisational weaknesses are important, are willing and eager to try to address them, and do in fact find ways of making some useful changes--at least, in the short-term.

Health care systems in transition: Slovenia

The Health Systems in Transition (HiT) series provide detailed descriptions of health systems in the countries of the WHO European Region as well as some additional OECD countries. An individual health system review (HiT) examines the specific approach to the organization, financing and delivery of health services in a particular country and the role of the main actors in the health system. It describes the institutional framework, process, content, and implementation of health and health care policies. HiTs also look at reforms in progress or under development and make an assessment of the health system based on stated objectives and outcomes with respect to various dimensions (health status, equity, quality, efficiency, accountability).