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Financing Health Services: Balancing Sources and Uses from Public and Private Sectors James A. Rice, Ph.D. [email protected] Kuwait Healthcare

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Page 1: Financing Health Services: Balancing Sources and Uses from Public and Private Sectors James A. Rice, Ph.D. Jim.rice@ihstrategies.com James A. Rice, Ph.D

Financing Health Services:Balancing Sources and Uses from Public and Private Sectors

Financing Health Services:Balancing Sources and Uses from Public and Private Sectors

James A. Rice, [email protected] A. Rice, [email protected]

Kuwait Healthcare

Page 2: Financing Health Services: Balancing Sources and Uses from Public and Private Sectors James A. Rice, Ph.D. Jim.rice@ihstrategies.com James A. Rice, Ph.D

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Page 3: Financing Health Services: Balancing Sources and Uses from Public and Private Sectors James A. Rice, Ph.D. Jim.rice@ihstrategies.com James A. Rice, Ph.D

3Source:

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Overview of Remarks:

• 200 Countries. All disappointed with performance of their health sectors.

• Move to balance government and non-governmental organizational participants.

• Must avoid confusion over sources and uses of funds within health sector... Health gain and health care must be balanced.

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Themes of Reforms:Cross-National Lessons?

• Move toward Universal Coverage• Strengthen government control over percent health

consumes of GDP• Decentralize the public system• More cost sharing by users• New risk-coverage/pooling programs• More reliance on market forces to induce

responsiveness and accountability by all• Government role evolving to goal setter/payer and

performance monitor/assurer• Move to rely on “contracts” to clarify accountabilities• Renewed Focus on behavioral determinants of

health status...Healthy Communities/Lifestyles

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The Economy is the Engine that Generates Funds for All Sectors...

• Healthy Economies beget strong health sector spending;

• Sectors compete for funds in a society;• Segments compete for funds within sectors;• Institutions compete for funds within a segment

Where does good leadership enter the picture?

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Segments differ on funding

Nations struggle to balance spending for Health Gain and Health Care

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Often Confusion

Among Policy Makers and Implementers

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Sources and Uses of Funds:

DonationsPhilanthropy

Bonds &Mortgages

Fees Sickness TaxInsurancePremiums

Dedicated V.A.T. or Excise Taxes

General Treasury

Capital Investments: -- facilities -- technology

Public HealthProtection &Promotion

Research &Development

HealthRestoration: -- hospitals -- doctors -- pharmacies -- alternate modes

ProfessionalEducation & Training

5%

5%2%

85%

3%

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Complex Policy Choices:The Purchaser Side

Covered Groups

Civil ServantsEmployed LocalEmployed ExpatsChildrenPensionersAll groups

Covered Benefits

Basic Public HealthPrimary careHospital CareDentalVision CareTransplantsPharmaceuticalsCatastrophic Cases

Level of Coverage

First dollarCost above limitShared Risk CorridorsDeductible AmountCo-paymentsPercent of fee schedule

Degree of Private

Insurance companiesBrokers sell publicOutsource full adminOutsource functions:•Enrollment•Contribution collection•Subscriber relations•M.I.S.•Quality assurance•Provider contracting•Claims adjudication•Accounting•Investment portfolio

Forms of Insurance National Health Insurance• Mandated Private• Voluntary Private:

• Top-up Supplemental• Opt-out Full

• Medical Savings Accounts:• Alone• With NHS• With re-insurance

• Catastrophic Re-Insurance

Combinations are possible

Form of “Premium”

• Per capita from treasury• Per capita by Employer or Association• Premium risk based• Premium community based• Percent of wage

Who Pays for Whom?

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Aging Population Drives Costs.

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Pay for Performance (P4P) is Global

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New Balance of Risk-Incentives

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Tax payers frustrated with out-of-pocket spending, with questionable value.

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“Value for Money” is Global Mantra.

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Payment for Inpatient services:

1. Billed Charges2. Bed-days;3. Type of admission: Peds, OB, Med-Surg, Psych4. Type diagnosis physician specialty5. Finished cases of DRGs;6. Global budget in exchange for negotiated and planned

utilization and structure of inpatient care.7. Per capita payment for defined population group

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DRG Common Pay Metric

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1. For technological operations and procedures performed (per detailed service).

2. Per visit.3. Per finished outpatient case.4. Per capita funding of primary care provided to enrollees.5. Per capita funding of the entire scope of outpatient

services provided to enrollees (complex outpatient service).

6. Per capita funding of the entire scope of outpatient services and part of inpatient services provided (partial fund-holding).

7. Per capita funding of the entire scope of outpatient and inpatient services provided (full fund-holding).

Payment for Outpatient services:

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New Provider Payment Systems: Mix and Match Methods Depending on Goals at Given Point in Time: Politics and Economy

•Per Finished Case or Fee-for-Service for Outpatient Care and Per Finished Case for Inpatient Care•Per Finished Case or Fee-for-Service for Outpatient Care and Per Diem for Inpatient Care•Per Capita for Outpatient Care Per Finished Case for Inpatient Care•Polyclinic Expenditure Budget Funding and Per Finished Case for Inpatient Care•Per Capita for Outpatient Care and Per Diem for Inpatient Care

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U.S. Wastes Resources. What is it in Kuwait?

Source: PriceWaterhouseCooper

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