The implementation of a purchasing mechanism for hospital resource allocation in Portugal

Transcription

1 The implementation of a purchasing mechanism for hospital resource allocation in Portugal Authors: Nuno Amaro*, Cláudia Medeiros Borges*, Fátima Candoso*, Ana Cristina Ferreira*, Mª do Céu Valente # * ACSS Administração Central do Sistema de Saúde, IP # Centro Hospitalar Lisboa Norte, EPE 24th PCSI Working Conference 8th - 11th October, 2008 Lisbon 11 th October - Parallel Session 16

2 Portuguese NHS Hospitals Resource allocation Until NHS hospitals budget was based on the previous year s funding, updated for inflation In Case-mix was introduced (inpatient and ambulatory surgery were classified using Diagnosis Related Groups DRG)4A growing portion of the budget was based on the prevision of the hospitals activity (from 10 in 1997 to 50 in 2002) In of the public hospitals received a new statute4converted into public enterprises, with a change in management rules and financial responsibility. Over the last years more hospitals received this new statute Purchasing Mechanism was implemented Financing according to a contract established between the Ministry of Health, and the units responsible for delivering healthcare Hospitals.

3 Since its implementation, the purchasing mechanism has faced multiple changes - Not an easy task to evaluate the current resource allocation model introduction a) More hospitals changed into public enterprises over the last years, joining the first 33 hospitals; b) Hospital centers were created, gathering former public enterprise hospitals with non enterprise hospitals; c) The financing and purchasing methodology itself has evolved4new lines of activity being directly financed and contracted.

4 a) Two hospital groups considered: 28 Public Administrative Sector Hospitals (SPA Hospitals) - units existing in December, 31 st 2007; 19 Hospitals converted into Public Enterprise Hospitals (EPE Hospitals) in 2003, where the new resource allocation model was introduced - The only ones that have remained unchanged. b) Two periods considered: The pre-introduction of the model period The pos-introduction period. Methodology c) All the inpatient hospital activity, from 2000 to 2007, classified using the All Patient DRG Grouper, version 21. Production analyzed considering the resulting equivalent patients*, CMI and LOS. * Total of episodes after conversion of outlier episodes (short and long term stay) for each DRG into groups of patients equivalent to the medium length of stay for each DRG

5 Methodology d) Equivalent patients and CMI were used to calculate, in average, the payment by equivalent patient adjusted by case-mix, for each group of hospitals4how much was paid for each equivalent patient, considering the total amount received for inpatients by both SPA and EPE hospitals, in a period where no fixed price for inpatient was negotiated (2000 to 2002) and a time when purchasing was implemented (2003 to 2007). e) The difference between effective costs and revenues (operating results)4to analyze the financial performance of both groups of hospitals.

6 Hospital resource allocation model General Description Separation between healthcare provider - Hospitals - and the public payer - Healthcare System Central Administration (ACSS), Regional Health Authorities (ARS). Main Characteristics: i) Fixed price for each type of activity, yearly defined according to the available health budget; ii) Price structural adjustment according to four hospital groups; iii) Price complexity adjustment according to a negotiated case-mix index; iv) Establishment of production plafonds, limited by the imposed budget restrictions. The financing amount that each hospital will get for the healthcare provided depends on the type and amount of the effectively delivered services, on the contracted price and on the contracted case-mix index

7 Hospital resource allocation model General Description Contract: A key tool in purchasing Establishes the quantity and quality of the production hospitals must provide and its prices4active negotiation process, defining the responsibilities for each element in the process; Ministry of Health, as the purchaser/payer entity, identifies the healthcare needs of the citizens, plans which healthcare must be delivered according to the existing budget restrictions and contracts the needed services so that demand may be satisfied; Hospitals assure that the healthcare is delivered according to the contracted quantity and quality and manage their own activity with an efficiency converging to the contracted prices.

8 Hospital resource allocation model General Description A price for each line of activity is established, enabling a payment for the activity effectively done instead of cost reimbursement. Defined prices persuades EPE Hospitals into efficiency in 3 levels: i) Global, in consequence of the total available amount to pay the provided activity; ii) Inside each structure hospital group, with a fixed price for each hospital group; iii) Individual, by negotiating and establishing improvement goals, controlled through a convergence plan. Complexity adjustment by case mix index for inpatient and ambulatory care Calculated on an annual basis, considering data from the previous year. Structure adjustment Other factors, not taken into account by the case-mix adjustment, may also explain differences between hospitals costs. Four clusters of the Portuguese NHS hospitals were created, according to 32 variables considering structural factors intrinsic to each hospital4prices for each group were established making possible a price adjustment according to the hospitals structure

9 Hospital resource allocation model General Description Paid activity Type of care Figure Amount Case Mix Index Price Payment Inpatient (DRG) nº of equivalent patients x CMI for inpatient care From 1.841,56 to 2.396,25 x*cmii*group Price Medical & Surgival Ambulatory (DRG) nº of equivalent patients y CMI for ambualtor y care From 1.841,56 to 2.396,25 y*cmia*grou p Price Outpatient (first & following) nº of visits z - From 49,85 to 134,27 ; From 45,32 to 122,06 z*group Price

10 Hospital resource allocation model General Description Paid activity Type of care Figure Amount Case Mix Index Price Payment Emergency nº of emergency episodes w - From 39,35 to 137,2 w*group Price Day care Chronic Inpatient Care nº of sessions m - per day t - Home Care nº of visits v - Price by type of day care Price per day Price per visit m*price by type of day care t* Price per day v* Price per visit

11 Hospital resource allocation model General Description Marginal Production Contracted production is an estimation Degree of uncertainty Fixed component of the cost structure Specific activity (National Health Plans and other) Long term care units; Rehabilitation devices; drugs; etc

12 Hospital resource allocation model General Description Convergence value Temporary financing4more efficient hospitals have their financing reduced to free resources to compensate inefficiency from certain hospitals Enables a progressive convergence for less efficient hospitals4single price list for all hospitals Covers part of the difference between total cost and total negotiated revenues, depending on the available resources Strategic purchasing: provider performance analysis Convergence, in the short term, into the values performed by the best hospitals in the NHS; Effort levels according to each hospital s starting point4bigger effort is imposed on hospitals with a weaker performance; smaller effort is asked to better hospitals

13 Activity Payment Inpatient (DRG) Chronic inpatient care Medical and Surgical Ambulatory (DRG) Outpatients (first encounter and following) Emergency Day care Homecare Others: HIV/AIDS; Renal Chronic Insufficiency; Abortion; Drugs; Hospital resource allocation model General Description Fixed Costs and Marginal Production Payment of the Stable costs when the contracted production in Emergency is not accomplished When production goes up to 10 above of the contracted production, all this activity is paid at the fixed prices; Programmed surgery has no production limit. Specific programs and Health plans Long term care Rehabilitation Devices Cross-Border Healthcare Psychiatric care in private institutions Arteriovenostomy for Renal dialysis Diabetic Retinopathy Diagnosis Rare diseases (metabolic genetic diseases) Transplants Activity Based Costing Regional Oncology Registry Training of physicians (first year and specialization) Convergence Value Fixed Component of 60 so that hospitals may converge into acceptable levels of efficiency; Variable component of 40 - (45 depending on the fulfillment of national quality and efficiency goals, 20 depending on regional targets and 35 on institution goals) If hospital fulfill the variable component, and further 2 incentive will be distributed

14 Hospitals performance evaluation 2000 to 2007 Table 1: Operating Results (Revenues - Costs) 2000/ / /2007 SPA Hospitals -78,1-88,7-83,4 EPE Hospitals -67,5-49,1-65,1 2000/2007 period shows a significant reduction on the EPE hospitals differences between revenues and costs, although not as significant as in the SPA hospitals

15 Hospitals performance evaluation 2000 to 2007 Chart 1: Operating Results (Revenues - Costs) The operating results evolution at the EPE hospitals has been more constant in the 2003 to 2007 period when compared to SPA hospitals that show more differences across this period

16 Hospitals performance evaluation 2000 to 2007 To acknowledge how much each equivalent patient effectively costs to the payers entities, calculation was made considering the full amount paid per hospital for inpatient care, real equivalent patient and real CMI (not the contracted one) Table 2: Payment by equivalent patient by case-mix index SPA Hospitals EPE Hospitals through through through ,2 6,4 8, ,8-1,2 9,1 Since 2003, in EPE hospitals the increase tendency in the payment for each equivalent patient has effectively slowed down

17 Hospitals performance evaluation 2000 to 2007 Table 3: Equivalent Patients / / /2007 SPA Hospitals EPE Hospitals ,5-3,0-1, ,6-2,3 6,1 Table 4: Case-mix Index (CMI) / / /2007 SPA Hospitals EPE Hospitals 0,9363 0,9683 0,9798 0,9900 1,0200 1,0255 1,0564 1,0833 4,6 9,4 15,7 0,9206 0,9443 0,9650 0,9794 1,0119 1,0224 1,0285 1,0600 4,8 8,2 15,1

18 Hospitals performance evaluation 2000 to 2007 Table 5: Length of stay (LOS) adjusted by CMI / / /2007 SPA Hospitals EPE Hospitals 8,043 7,817 7,602 7,391 7,212 7,251 7,017 6,89-5,50-6,80-14,30 7,729 7,555 7,35 6,857 6,807 6,919 6,846 6,737-4,90-1,70-12,80 EPE hospitals were already more efficient (and therefore were chosen to became public enterprises hospitals).

19 Hospitals performance evaluation 2000 to 2007 Table 6: Outpatient visits / / /2007 SPA Hospitals EPE Hospitals ,1 27,8 48, ,3 39,3 101,8 Table 7: Emergency episodes / / /2007 SPA Hospitals ,4-2,5 10,0 EPE Hospitals ,3 18,6 6,8

20 Conclusions From the analyzed indicators4no whole strong positive impact on the studied EPE hospitals performance with the introduction of the described new resource allocation model; The inclusion, in the contract, of emergency episodes and outpatient visits, with a year pre-negotiated quantity and pre-established payment for the activity effectively done and the great emphasis given to ambulatory care (with no limit to its marginal production)4increase in this kind of production, pushing inpatient care to a decrease; The purchasing mechanism created an explicit contracting philosophy between payer and healthcare delivery unit4made the whole process more transparent, making the resource allocation clear for each intervening party, with the imposition of management by objectives tools and an obvious distinction between the state as a payer, a deliver and a shareholder;

21 Conclusions The definition of prices for equivalent patients in the EPE hospitals made it possible to slow down the amount effectively paid for this type of production, in these hospitals; Since 2006, the value EPE hospitals receive for production has increased in the global payment made by the NHS and the convergence value has decreased4purchasing promoted a better resource allocation among Hospitals and across the different types of delivered healthcare; Convergence values results from a congregate effort and commitment between the healthcare delivery unit and the State to prevent the deficit;

22 Conclusions Increase of the ambulatory activity and of the treated patients complexity as well as a decrease on the deficit of the EPE hospitals (getting costs closer to the pre-defined prices, improving their financial situation); Hospitals will not continue to increase their efficiency on the same basis.

23 Conclusions Not an easy task to evaluate the current resource allocation model introduction in a non-stable scenario Study of other variables, some of them independent from the financing model itself, that may have influenced the behavior of the 19 analyzed EPE hospitals With the ongoing resource allocation model and purchasing mechanism, a lot of research has to be developed to measure their real impact on hospitals performance

24 Obrigada! Thank You! Unidade Operacional de Financiamento e Contratualização Nuno Amaro - namaro@acss.min-saude.pt Cláudia Medeiros Borges - cborges@acss.min-saude.pt Fátima Candoso - mcandoso@acss.min-saude.pt Ana Cristina Ferreira - acferreira@acss.min-saude.pt Telephone Mª do Céu Valente Maria.Valente@hpv.min-saude.pt Telephone: