financial management
TRANSCRIPT
FINANCIAL MANAGEMENT
BUDGETING
COST OF HEALTH CARE
นายแพทย ชชย ศรช าน
INTRODUCTION
Health is a state of complete physical, mental and social well-being and not merely the absence of disease or infirmity.
WHO definition of Health
Health systems
Combination of resources, organization, financing, and management that culminates in the delivery of health services to the population
Roemer MI. National health systems of the world,
volume 1. New York, Oxford University Press, 1991
All activities whose primary purpose is to promote, restore and maintain health
World Health Report 2000
Health systems comprises
three highly inter-dependent elements
1.Ecosystem
socio-cultural, demographic, economic andpolitical surroundings
2.Health Care Delivery Systembased on health problems and needs, health inputs, distribution,
output, utilization and outcomes
3.Community Involvement
organization, awareness, contribution and utilization
A. A. Kielmann
Health Systems are Dynamic
All components are interacting with each other in a synergy and coherence
HS components are interacting with the political, social, economic environment
Health System Goals
Improve efficiency
To secure fairness of financial
contribution (equity
concerns)To be
responsive to user’s needs
To improve health and to
reduce health
inequalities (average & distribution)
Relations between Functions and
Objectives of a Health System
Source : WHO 2000
8
What do we MEAN by health systems
Equitable?
Ability-to-pay determines financing contributions Use of services is based on need for care
Efficient?
How well a health system achieves the desired health outcome given available resources
Responsive?
Protects one’s dignity and autonomy
Able to offer social and financial protection?
6 Building Blocks
for Strengthening Health System
Source: World Health Organization. Everybody’s Business:
Strengthening health systems to improve health outcomes—
WHO’s Framework for Action. Geneva: WHO, 2007, page 3.
Health technology support
Health information support
Why Universal Health Coverage?
Health and wellbeing become critical political issues
The integration of health promotion, disease prevention, treatment, and rehabilitation for entire population need
sufficient and well-managed money
What’s Universal Coverage got to do
with it?
Everyone should get the care they need (from a defined package) without experiencing financial hardship as a result
› Focus is on ensuring people get the health care they need, without suffering financially
› It comes close to our health system objective
› It doesn’t specify the instruments to be used, though in practice.
Three basic questions :
Financing UHC
1.How is such a health system to be financed?
2.How can they protect people from the financial consequences of ill health and service payment?
3.How can they encourage the optimum use of available resources?
UHC instruments
UHC
› Ensuring people in equal need get the same irrespective of their ability-to-pay, or
› Protecting people from catastrophic out-of-pocket spending
Need to step back and think more broadly about the health system goals
Removing Financial Risks and
Barriers to Access Health Care
Reduce direct payment or cost sharing
Risk pooling Prepayment
Basic concept of health insurance
Pooling and sharing risk
High risk
(sick)
Low risk
(not sick)
expensepremium
premium expense
Pool risk
3 Health Financial Management
1. Revenue collection:
Process by which the health system receives money
2. Pooling of resources:
Accumulation and management of revenues to share financial risk associated with health interventions
Prepayment allows pool members to pay in advance, relieves uncertainty and provides access to compensation if a loss occurs
3. Purchasing:
Mechanisms used to purchase and provide services from public and private providers
Health Financing Functions
SCHEIBER, G. "Financing Health Systems" Chapter 12, pp 225-242 in Disease Control Priorities in Developing Countries, 2nd Edition. New York: Oxford University Press 2006.
Public / private
collaboration in curative
service delivery
UHC -
public/private provision
Public Goods - Services
Private Goods - Services
Curative
Preventive
Self-
financing
Pre-pmt
Schemes
The richThe poor
Private
provision
+ service
contracts
Public provision & finance
Subsidized
pre-pmt
Schemes
Financing Policy V.S. Range of
Health Services
Payment
Health Care Services Provider
Retrospective reimbursement
Prospective payment
Mixed payment
Provider Payment Mechanisms
and Provider Behavior Provider
behaviour
Mechanisms
Prevent health
problems
Deliver
services
Respond to
legitimate
expectations
Contain
costs
Line item budget +/- - - +/- +++
Global budget ++ - - +/- +++
Capitation (with competition)
+++ - - ++ +++
Case-based i.e. Diagnostic related payment
+/- ++ ++ ++
Fee-for-service +/- +++ +++ - - -
Per diem +/- ++ ++ +
Key: +++ very positive effect; ++ some positive effect; +/- little or no variable effect; - - some negative effect; - - - very negative effect
Adverse Effects
Beneficiary
Risk people tend to apply (Adverse selection) in case of voluntary insurance
User moral hazard: overuse
Health insurance agency
In case of voluntary insurance, risk selection: healthy, not sick people
Provider
Provider moral hazard:
fee-for-service over-service
capitation under-service
Management Controls System
Adverse selection
Compulsory health insurance
If voluntary, risk adjusted premium
User Moral Hazard
Co-payment
Lessen motivation to use unnecessary services i.e. extended waiting time
Limit visits of service or benefit packages
Risk selection
Compulsory health insurance
Community rating premium
Management Controls System
Provider Moral Hazard
Payment to providers
rules for payment
Payment to hospitals
prepayment
close-ended budget (global budget, capitation)
Competition
Utilization and management review
MACRO HEALTH ECONOMIC
Universal health insurance is a common good
World Health Statistics 2014, accessed July 2014
28
Health expenditure per capita, Thailand
World Health Statistics 2014, accessed July 2014
29
Health expenditure ratio, Thailand
Total health expenditure of Thailand,
1994-2011, at constant prices
Total Health Expenditure by
financing source, 1994-2011
Real growth rates of GDP and operating
health expenditure, 1994-2011
Total Health Expenditure by
Function, 1994-2011, at current prices
Total Health Expenditure by
Function, 1994 and 2011
Before UCS
Government and Non-government
Total Health Expenditure in 2011
Current health expenditure by
provider, 2002 and 2011
UHC trajectory and GNI per capita: 1975-2002
Pragmatism: Thailand introduced and expanded financial health protection to different groups of population: the poor & vulnerable, formal and informal sectors.
Note CSMBS: civil servant medical benefit scheme; SSS: social security scheme
UNIVERSAL HEALTH CARE
COVERAGE (UHC)
UHC is a term referring to organized health care systems built around the principle of universal coverage for all members of society, combining mechanisms for health financing and service provision
1983: Civil ServiceMedical Benefit Scheme
1992: Social SecurityScheme
2001: Universal CoverageScheme 75%
15%
10%
Private
Public
Sector Facility unit bed
University hospital 15 8,792
Regional hospital 25 17,233
Provincial hospital 69 22,585
District hospital 736 28,366
Health Center 10,848 -
Private hospital 322 33,678
Private clinics 4346 -
Drug stores 17,017 -
Private
Public
Sector Facility unit bed
University hospital 15 8,792
Regional hospital 25 17,233
Provincial hospital 69 22,585
District hospital 736 28,366
Health Center 10,848 -
Private hospital 322 33,678
Private clinics 4346 -
Drug stores 17,017 -
Purchasing powers• All facilities in public sector• Some facilities in private sector
หลกประกนสขภาพถวนหนาของประเทศไทย
3 Schemes:
* มหลายประเทศทมระบบเดยว เปน National Health Insurance (Single Fund Pooling)
Financing Flows in
Thailand Health System
Consumers of health services
(patients)
Providers of care (facilities,
midwives, doctor, etc)
Payers (OOP, NHSO, SSO,
CSMBS, donors)
Direct payments
Health services
Claims
Fees, Global budget
Taxes Premiums
Insurance coverage
Source : Adapted from Schieber and Akiko (1997)
Provider-purchaser split
Health Welfare and Insurance
in Thailand Government
agenciesPopulation
Civil Servant Medical
Benefit
Scheme (CSMBS)
Ministry of
Finance
Government officers& families (5.0 mil.)
Social Security Scheme (SSS)
Social Security Office
Registered employees in the formal sectors (10 mil.)
Universal Coverage Scheme
National Health
Securing Office
The rest of
population
(49 mil.)
+ Traffic accident victim insurance Ministry of Commerce
-
+ Workmen compensation Social Security Office
Private employees(10 mil.)
+ Others (The disable, etc.) Etc. -
Civil Servant Medical Benefit
Scheme (CSMBS)
Revenue collection Fringe benefits, tax-based system
Financing model Public reimbursement model
Beneficiaries Government officers, pensioners and their dependants (5.0 million)
Benefit package Comprehensive package including OP, IP, and private
ward in public hospitals
Service providers Free choice of public facilities
Access to private hospitals only in case of emergency
Payment mechanism Retrospective fee-for-services
Social Security Scheme (SSS)
Revenue
collection
Social health insurance, compulsory contributions from employer, employee, and the government
Financing
model
Public contracted model with both public and private
hospitals
Beneficiaries Private employees (10 million)
Benefit
package
Comprehensive package including OP, IP, maternal
care, dental care
Service
providers
Contracted public and private hospitals with 100-bed or
above
Payment
mechanism
Inclusive capitation
Additional payments for utilization rate, chronic
conditions, fee schedule for high cost services, and fixed amount for AE, dental care, maternity
Universal Coverage Scheme
Revenue
collection
Entitlement, tax-based system
Financing model Public contracted model, capitation 2,402 THB in 2010
Beneficiaries Thai citizens uncovered by SSS and CSMBS (49
million)
Benefit package Comprehensive package including prevention and
promotion services (PP) and accredited alternative
medicines with an exclusion list of some services
Service providers Contracted public and private hospitals and requiring
all contracting hospitals to establish one primary care
unit (PCU) for every 10,000-15,000 registered
population
Payment
mechanisms
OP,PP - Capitation
IP - DRG weighted global budget
A/E and HC OP – point system,
ศนยทะเบยน ส ำนกบรหำรกองทน, สปสช., กนยำยน 2554
75.28%(48.12 ลาน
คน)
15.91% (10.17 ลาน
คน)
7.77%(4.96 ลานคน)
1.00%(0.64 ลานคน)
0.05% (0.03 ลานคน)
ผมสทธหลกประกนสขภาพ ป 2554
ประกนสขภำพถวนหนำประกนสงคมขำรำชกำร / รฐวสำหกจ/ขำรำชกำรกำรเมองอนๆ
43.41 ลานคน(90.27%)
2.40 ลานคน(4.99%)
2.28 ลานคน(4.74%)
ประชากร UC จ าแนกสงกด ป 2554
ในสงกดสธ. นอกสงกดสธ. เอกชน
73.40%(850 แหง)
18.36%(211 แหง) 7.17%
(83 แหง)
1.21%(14 แหง)
8.38%
หนวยบรการประจ าในระบบ UC จ าแนกสงกด ป 2554
กระทรวงสำธำรณสข (สธ.)เอกชนภำครฐนอกกระทรวงสำธำรณสของคกรปกครองสวนทองถน (อปท.)
92.47 93.01
95.47
96.25
97.82
98.75 99.16 99.47 99.36 99.95
90
92
94
96
98
100
102
ป 2545 ป 2546 ป 2547 ป 2548 ป2549 ป 2550 ป 2551 ป 2552 ป 2553 ป 2554
รอยละ
ความครอบคลมสทธ ป 2545 - 2554
Coverage
46Source: Bureau of Registration Administration, NHSO
Proportion of the government health insurance schemes, FY2013
(10.77mil.people)
(4.98mil.people)
(48.61 mil.people)
(0.49 mil.people)
(0.08 mil.)(0.10 mil.)
UHC coverage in FY2013 is 99.87%
Most of the coverage are
UCS (74.74%), SSS (16.56%), CSMBS (7.66%),
and the rest are other small government schemes and stateless group
Civil Servant Medical Benefits Scheme
Social SecurityScheme
UniversalCoverageScheme
Thai citizens
Safety Net
Dynamicity
Toward Universal Health Coverage
> 99% (3 Scheme)
?
?
WHO, Health financing for universal coverage: universal coverage-three dimensions, http://www.who.int/health_financing/strategy/dimensions/en/
49
Health Delivering Services for UHC
50
5050
Healthcare structure in public sector
Source: Sakunphanit, T. Universal Health Care Coverage Through Pluralistic Approaches: Experience from Thailand, ILO Asian decent work decade, 2006-2015, 2006
Function
Tertiary and
supra-tertiary care
District
Strengthening Primary Care in
“District Health System”
UC Financial Flow to DHS
• Contracting Unit for Primary care (CUP)– Model I : Primary Care Unit (PCU) + Hospital
(OP,PP,IP)
– Model II : Primary Care Unit (PCU)
(OP,PP)
• Referral (Tertiary) Hospital
• Specialty Hospital/ Excellence Centre
• Special Contracts
World Health Report 2008
Moving toward people-centred(in the situation of hospital-centred and specialist oriented system)
Payment Mechanisms for UCS
Fund Payment Method
Out-Patient (OP) Capitation Pre-Paid
In-Patient (IP) DRGs with Global Budget
Advanced + Post-Paid
Health Promotion and Prevention
(PP)
Capitation and
fee-for-service (add-on)
Pre-paid + Post-Paid
Accident and Emergency (AE)
DRGs with Global Budget
Advanced + Post-Paid
DRGs = Diagnostic Related Groups
Provincial committee
PatientHospitals
Adverse effects from
Treatment
NHSO committee
No fault compensation
ACHIEVEMENT
The goal of universal health coverage is to ensure that all people obtain the health services they need without suffering financial hardship when paying for them.
This requires:
• a strong, efficient, well-run health system;• a system for financing health services;• access to essential medicines and technologies;• a sufficient capacity of well-trained, motivated health workers.
Four dimensions of effective
outcomes in healthcare system
• Benefit package in a desirable universal health coverage should include health services from health promotion, disease prevention, curation, and rehabilitation.
• However, extending these health service coverage will affect coverage of the other dimensions.
• It is difficult to cover 100% of these dimensions.
• Therefore, some services may not cover or require co-payment.
• In order to balance the coverage of these dimensions, four related dimension of effectiveness outcomes may be considered.
Outcome: Improving access to health services
• Increased utilization and pro-poor outpatient and inpatient utilization
59
59
48.7% 47.7% 47.6% 48.0%
39.6% 40.1% 40.4% 40.0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2553 2554 2555 2556
In-patient service under the UCS scheme classified by hospital types, FY2010 – 2013
โรงพยาบาลเอกชน
โรงพยาบาลรฐอน
โรงพยาบาลของมหาวทยาลย
โรงพยาบาลศนย/โรงพยาบาลทวไป
โรงพยาบาลชมชน
2010 2011 2012 2013
2010 2011 2012 2013
Out-patient service under the UCS scheme classified by hospital types, FY2010-2013
In-patient service under the UCS scheme classified by hospital types, FY2010-2013
60
FY2005 FY2006 FY2007 FY2008 FY2009 FY2010
total cancer patients who were
treated 74,626 78,647 83,285 89,315 96,160 110,599
access to cancer treatment FY2005-2010
Note: data of members in UC Scheme only
Outcome: reduced incidence of catastrophic health spending (out-of-pocket > 10% total consumption)
Source: Analysis of Socio-economic Survey (SES)
5.1
7.1
3.43.8 3.7
2.8 2.8 2.9
6
7.1
55.5 5.6
4.9
3.7
4.7
6.8
6.1
0
2
4
6
8
1996 1998 2000 2002 2004 2006 2007 2008 2009
Year
Inci
den
ce c
atas
tro
ph
ic h
ealt
h s
pen
din
g %
Q1 Q5
63
2.86 2.62 2.421.94
1.42
4.795.45 5.55 5.43
3.59
0
1
2
3
4
5
6
DM
HT
Source : IP individual records Yr.2005-2009 (in Yr. 2009, received information from 10 months)
Re-admission rate in 28 days of DM, HT
2005 2006 2007 2008 2009
%
Chronic disease seems
to be controllable
Declining of catastrophic expenditures
0
1
2
3
4
5
6
% h
ou
seh
old
2000 2002 2004 2006
Quintile 1 Quintile 5 All
64Source: Socio-Economic Survey 2000 - 2006 conducted by NSO.
Ho
use
ho
lds w
ith
ca
tastr
op
hic
ill
ne
sse
sUHC for Poverty reduction (MDG 1)
109,247100,604
121,358136,622
208,338195,845
176,981
156,301
125,551
62,97579,237
97,517
50,000
100,000
150,000
200,000
2539 2541 2543 2545 2547 2549 2550 2551
ถาไมมหลกประกนสขภาพถวนหนา คาพยากรณตามสถานการณจรง
1996 1998 2000 2002 2004 2006 2007 2008
Prediction without UC Actual situation
UHC protects 40,000 hhs from catastrophic health expenditure
Outcome: Improving access to health services
• Increased utilization and pro-poor outpatient and inpatient utilization
67
FY2005 FY2006 FY2007 FY2008 FY2009 FY2010
total cancer patients who were
treated 74,626 78,647 83,285 89,315 96,160 110,599
access to cancer treatment FY2005-2010
Note: data of members in UC Scheme only
Outcome: reduced incidence of catastrophic health spending (out-of-pocket > 10% total consumption)
Source: Analysis of Socio-economic Survey (SES)
5.1
7.1
3.43.8 3.7
2.8 2.8 2.9
6
7.1
55.5 5.6
4.9
3.7
4.7
6.8
6.1
0
2
4
6
8
1996 1998 2000 2002 2004 2006 2007 2008 2009
Year
Inci
den
ce c
atas
tro
ph
ic h
ealt
h s
pen
din
g %
Q1 Q5
From: Prakonsai et al. 2009
1992
2008
Poorer Richer
Household payment for health as % of income
Overall household payment for health:The poor has better been protected.
71
7171
Source: Bureau of Registration Administration, NHSO
The UCS schemes classified by age groups, FY2013
1,470,134, 2%
9,750,818, 15%
29,937,321, 47%
14,939,648, 23%
7,304,398, 11%
1,123,273, 2%
The UCS schemes classified by age groups, FY2013
ทารก 0-1 ป
เดก 1-15 ป
ผใหญ 15 - 59 ป
หญงวยเจรญพนธ
ผสงอาย>60ป
ผพการ
Newborn 0-1 yr
1-15 yr
15-59 yr
Female, reproductive ages
Elders > 60 yr
Disables
UCS ปองกนครวเรอนยากจนจากการจายคารกษาพยาบาล
BUDGETING AND COST
Thailand achieved universal coverage with relatively low levels of spending on health but it faces significant challenges: rising costs
National Health Security Fund : categories
Basic health care•OP• IP• HC, AE, Disease management
• P&P•Rehabilitation• Capital replacement• Emergency Medical Service (EMS)
• Thai traditional •No-fault liability• ect.
Basic health Care (on capitation basis)
ARV drug
Renal replacement therapy
2002
Chronic
(2nd prevention for DM/HT)
Mental health(medicine)
20112006 2009 2010
Benefit Starting year
(Pilot project in FY2009 and extend to the whole country in FY2010)
(Pilot project in FY2010 and extend
to the whole country in FY2011)
(Pilot project in FY2007 and extend to the whole country in FY2009)
Government Budgeting for UCS in Thailand
FY2003 FY2013
UCS budget THB56,091 million THB140,609 million
% of gov. budget 5.61% 5.91%
UCS budget per capita
THB1,202.40 THB2,755.60
UCS budget per capita included other vertical programs
THB1,202.40 THB2,921.66
UCS budget to the overall government budget during FY2003 – FY2013 is quite steady at the rate from 5.26% to 6.94%.
Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
UC Beneficiaries (Million)45.0 46.0 46.8 47.0 47.8 46.1 46.5 47.0 47.2 48.0 48.3 48.5
1.Capitation(Baht/Capita) 1,202 1,202 1,308 1,396 1,659 1,899 2,100 2,202 2,401 2,546 2,755 2,755
2.ARV drug -- - - 58.56 83.70 94.29 63.45 58.66 62.46 60.83 67.64
3.Renal replacement therapy
-- - - - - - 32.54 30.81 67.22 79.82 85.06
4.2nd prevention of DM/HT -- - - - - - - 6.45 13.14 9.06 8.47
5.Mental health (medicine) -- - - - - - - - 4.24 3.87 -
Total (Baht/Capita) 1,202 1,202 1,308 1,396 1,717 1,983 2,194 2,297 2,497 2,693 2,909 2,916
Government Salary (Baht/capita)
528.80 555.50 590.35 567.94 577.88 521.06 546.18 584.08 605.08 588.02 678.52 676.95
Contingency fund 3,000 mil baht/yr (Baht/Capita)
66.67 65.22
Net Budget (Baht/Capita) 740 712 718 828 1,139 1,462 1,648 1,713 1,892 2,105 2,230 2,239
% net budget increase -3.8% 0.8% 15.4% 37.6% 28.3% 12.7% 3.9% 10.4% 11.3% 5.9% 0.4%
Table: summary budget of UC Scheme
Source: Bureau of policy and planning, National Health Security Office
The government decided to freeze capitation rate of UC Scheme for
three years (2012-2014)Net budget for UC Scheme increased by 3 times
ISSUES AND CHALLENGES
Controlling cost escalation of healthcare: making universal health coverage sustainable
Issues and concerns
Changing in population structure to aging society
Rapid demographic and epidemiologic transition
Increased burden of diseases (BOD) from chronic NCD 1999 versus 2004 [Thai WG on BOD]
Little investment in primary preventions of risk and social mobilization Limited financing role of Thai Health Fund, 2% earmark tax
from tobacco/alcohol
Increasing concerns on chronic diseases and emerging diseases
Lacking of health resources both human resource and facilities.
Relying on government budgets
Multi-government health insurance schemes with different benefit packages
Shortage and mal-distribution
problems of physicians and nurses
Substantial increase of financial
incentives for rural MD to prevent
internal brain drain and its financial
consequence
Cost increase but efficiency
improvement?
Huge income difference (need evidence)
rural & urban,
doctors & nurses,
public & private practice
Challenges of Health System
Challenges of Thai health system
Inequity among three public health insurance schemes
Demand increases from increased access to health care and high cost medicines/ demographic changes/high technology?
During 2003-2009: actual OP utilization increased by 33% and IP by 67%
Aging society: Pop > 60 yrs = 11.9% in 2010 and will be 25% in 2030 (service utilization rate = 2.3 times of general pop)
Emerging diseases and NCD
83
Moving forward
Health system related issues
Financing and management issues
Stakeholder and networking
• Strengthening health system by primary care approach
• Prevention and promotion to reduce cost of treatment
• Long term care for aging society
• Decentralized of service and commissioning
• Human resource distribution
• Quality assurance and Health technology assessment • Development of a more equitable health facility plan and re-
orientation of existing system to fit with the health facility plan
• Reassuring people about quality of care provided by primary care provider and the necessity to have a registration system based on primary care
• Special measures to target and to organize health services for the marginal and specific groups of Thai citizen (e.g. migrant worker, solider, taxi- driver, prisoners and etc.)
• Engaging private sector in the provision of health care especially in urban areas and establish a system for public and private health-care providers in Thailand
• Developing model to manage epidemiological transition and the aging of the population
Moving forward
Health system related issues
Financing and management issues
Stakeholder and networking
• Ensuring long term financial sustainability and equity in financing of the UCS
• Seeking innovation way to reduce cost of care and make health security system sustainable
– Harmonization of benefit package and provider payment methods among public health insurance schemes
– Standardization of provider payment methods and benefit packages among schemes
– Establishment of active and effective health care purchaser (central and local)
– Co-finance with community fund
• Using purchasing power to increase quality of care
85
Moving forward
Health system related issues
Financing and management issues
Stakeholder and networking
• Balancing the use of financing mechanism and other measures to maintain a good relationship between health care providers, and between health care providers and consumers
• Strong network of public and private participation
86
Future Health Service Development
Model Goals
Primary care strengthening; concentrated on long term care for chronic diseases, health promotion
Promoting accessibility with Equity Quality of care Effectiveness Safety Efficiency
Equity of care and effectiveness including appropriate drug administration and medical technology
Harmonization between public health insurance schemes
Cost control Responsiveness
Holistic care and communitarian care model
Human and patient right
