AN INVESTMENT RATHER THAN A COST: A NEW APPROACH
• Focusing on investing in prevention and early intervention: preventing disease is far more effective for improving patient well-being and provides better value than treatment
• Exploring new ways to improve patient outcomes while lowering costs such as measuring and tracking outcomes and rethinking how healthcare is supplied and paid for
Innovation is needed when it comes to creating and evaluating funding mechanisms for healthcare expenditures. Healthcare systems around the world are testing new ways of thinking about healthcare delivery and payment.
THE HIDDEN COSTS OF FEE-FOR-SERVICE HEALTHCARE
Currently most healthcare systems practice “fee-for-service” healthcare, where healthcare providers are paid per service provided. However, this can have negative unintended consequences for patients and healthcare systems: healthcare providers are accidentally incentivised to prescribe unnecessary treatments and interventions. France consumes on average 22% more medicines than its European counterparts. One major reason is that 90% of doctor visits in France result in a prescription for the patient, compared to 43% in Holland and 72% in Germany. This pushes up healthcare costs but doesn’t necessarily improve patient well-being or outcomes.
MEASURING OUTCOMES, RETHINKING RESULTS
Particularly when it comes to providing healthcare for certain populations, such as the elderly, or chronic disease sufferers, it may make more sense to reward healthcare providers for outcomes achieved rather than services delivered. Both elderly populations and those suffering chronic diseases tend to have multiple health needs (co-morbidities) and benefit greatly from carefully coordinated care. Programmes in Singapore, the UK and the United States have shown that holding healthcare providers accountable for outcomes helps lower hospital readmission rates and improves health outcomes for patients. One such initiative in Singapore resulted in significant decreases in hospital re-admittance and unnecessary hospital visits for chronic diseases elderly populations and end-of-life patients. In fact, the savings in hospital readmissions alone was equal to 17,000 hospital days, or US $11 million. By tracking patient outcomes and coordinating care efforts, patients receive better, more personalised care at less cost to healthcare systems.
BUNDLED PAYMENTS, ACCOUNTABLE CARE
A programme in Spain is also demonstrating how innovative financing methods can improve patient outcomes while reducing costs, a concept called “accountable care”. Since 1999, a public-private partnership in Valencia has pioneered new ways to treat the question of paying for healthcare in both the primary care and hospital settings. Ribera Salud, the private healthcare company, delivers care in 40 primary care clinics and runs the 300-bed hospital in Alzira. The government pays Ribera Salud a lump sum annually for each resident of the hospital’s catchment zone: in exchange, Ribera Salud delivers free healthcare to every resident of the area. It is held to high standards and benchmarks such as vaccination rates, waiting time and patient satisfaction. Poor results would trigger sanctions. At the same time, the hospital has incentives to keep costs under control, as they can keep up to 7.5% of turnover in profits. Known as “bundled payment”, this type of system removes some of the unintended consequences of “fee-for-service” care while ensuring patients’ needs are met.
Politique publique : Médicament et maîtrise des dépenses de santé, 2014
20-pager on the pilots
Michael Porter, “The Strategy that Will Fix Healthcare,” Harvard Business Review
Accountable Care: Focusing accountability on the outcomes that matter, 2013
Spotlight on Prevention: When, Who and How?
Unhealthy lifestyles and lack of physical activity are key factors in the development of chronic diseases. Early prevention and diagnosis, better education, and above all collaboration among governments, patient organizations, and industry are crucial to prevent chronic diseases from arising.