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Health care reform in the Russian Federation.

This paper discusses the reasons for and the aims of a new model of health care under consideration in the Russian Federation. The concepts on which the reform is based and the mechanisms to transit from the existing centrally planned and financed health services into more decentralized services, funded in a competitive environment from multiple sources including health insurance, are discussed. The related draft legislation is complemented with viewpoints and opinions of the author.

Budgets↗

Reforming Swedish health care in the 1990s: the emerging role of 'public firms'.

A growing number of Swedish county councils have started to develop more flexible methods by which to produce and deliver health services. This paper explores the current status of this reform process both empirically and conceptually. Empirically, it draws upon data obtained by a 1990 questionnaire from all 26 county councils to chart the level of movement across the entire system. Conceptually, it distills from this reform activity a key element that provides an organizational basis for the future, namely the transformation of provider institutions into 'public firms'. The paper concludes that while the precise outcome may be hard to predict, the reform process itself is well underway.

Delivery of Health Care↗

Guidelines for pragmatic assessment for health planning in developing countries.

Although the primary health care strategy implemented since the Alma Ata declaration of 'health for all' appears to have contributed to improvements in selected health outcomes, the current ad hoc approach to health assessment and planning has impeded more substantial gains. A comprehensive yet pragmatic framework for country-level health programmers is needed that would permit consideration of the multiple steps involved in policy formulation and implementation. In the present paper, drawing upon an epidemiologic model (Iterative Measurement Loop) and an economic model (Cost-Effectiveness Analysis), we present guidelines for a pragmatic assessment for health planning. A format is provided for the conduct of these tasks which is operational in nature, is specific to the target country (or relevant region), can simultaneously consider multiple interventions, and is comprehensible to persons without sophisticated medical and/or economic backgrounds. Such a format enables articulation and consideration of local concerns as well as national and global considerations.

Cost-Benefit Analysis↗

Competitive bidding for health insurance contracts.

The determination of the payment or premium to be paid to the insurer by a large purchaser of care must accurately represent the risk of the enrolled persons. One approach is a risk-adjusted payment established by a mathematical formula, which estimates the effect of many variables on total care costs, and for different groups of persons determine an average cost. This method has several problems, and an alternative is competitive bidding. Market forces pressure providers to offer the lowest possible bids while attempting to remain fiscally viable and provide high-quality services. Research from the U.S. demonstrates that competitive contracting effectively lowered the costs of health care for those sectors of the health care system that used this strategy. Bidding by area gave far more equitable results than could have been obtained with a state-wide system with crude adjustments for each area. It is an alternative which can create strong incentives for innovation and cost-containment, and at the same time allows insurers to take into account local variation in supply and demand of care. As a potential alternative to a regulatory system, competitive bidding should be considered for regional experimentation in health insurer payment.

Actuarial Analysis↗

Fixed price contracts: the case of pediatric acute lymphoblastic leukemia.

This paper describes a new type of hospital contract. It is a contract made with payers and represents an attempt to tackle the issues of cost-containment, physicians' dissatisfaction with control over their practise, cost-effective care and quality of care. The case chosen for this attempt is pediatric acute lymphoblastic leukemia. The basis for setting the price of treatment is the division of the illness into episodes of care that correspond to medical events. There is a fixed fee schedule for each episode, and this fee schedule covers all the expenditures incurred during the episode. The fee schedule is fixed at the onset of the disease and depends solely on medical risk factors. Physicians can use the combination of resources they consider best for their patients and hospital management must find a cost-effective way to provide the required care. The advantage to patients is that they no longer have to obtain payers' agreement but receive state-of-the-art treatment in a teaching hospital.

Child↗

Economic evaluation of osteoporosis prevention.

In this paper economic evaluation of osteoporosis prevention is discussed. So far economic evaluation in this area has been limited to cost-effectiveness analysis. Four cost-effectiveness analyses of osteoporosis prevention are reviewed. It is noted that the major problem with these studies is the lack of reliable and valid data to base the cost-effectiveness analyses on, which precludes clear-cut conclusions about the cost-effectiveness of osteoporosis prevention. The studies, however, form a basis for future cost-effectiveness analyses in this field and as new data become available it should be possible to improve the accuracy and precision of the analyses. Due to the methodological problems of cost-effectiveness analysis and the decision-maker approach to economic evaluation, it is also argued that the contingent valuation (CV) method of measuring willingness to pay should be tested in this area. The CV method can be used both to value an actual treatment and the outcome of that treatment and the resulting amount can be compared with the costs (including the costs of externalities) to carry out cost-benefit analysis. It is concluded that a lot of work remains to be done in this area before economic evaluations can give a real contribution to policy, but such work may well be worthwhile due to the importance of this public health problem.

Aged↗

The treatment and care costs of people with HIV infection or AIDS: development of a standardised cost framework for Europe.

A number of European studies have attempted to assess the treatment and care costs of people with HIV infection or AIDS. However, because of the different methods used, the various cost estimates produced are difficult to compare. This paper reviews several European HIV-AIDS costs studies and outlines the differences in methods used and where better approaches to cost estimation could have been adopted. The application of a standardised cost framework to new cost studies would improve the basis for making cost comparisons of models of care in different sites and countries and the identification of actual (rather than methodological) variations in costs across sites. The final part of the paper provides a discussion of the development and application of a standardised framework for assessment of the costs of HIV-AIDS treatment and care in Europe.

Acquired Immunodeficiency Syndrome↗

Creating a market: an economic analysis of the purchaser-provider model.

The focus of this paper is the extent to which the purchaser-provider split and the creation of a market in the provision of health care can be expected to bring about greater efficiency within the new NHS. The starting point is a theoretical discussion of markets and competition. In particular, emphasis is placed upon the economic model of perfect competition. It is argued that because of the existence of externalities, uncertainty and a lack of perfect information, an unregulated market in health care will almost certainly fail. In view of this, the imperfect provider markets of monopoly and contestable markets, which are of particular relevance to health care, are discussed. A description of the new health care market and the principal actors within it is followed by an evaluation of the new health care market. It is argued that in view of the restrictions to competition that exist between providers, some form of price regulation will be necessary to prevent monopolistic behaviour in the hospital sector. Regulation of purchasers is also suggested as a means of improving efficiency. It is concluded that competition may be a necessary condition for increased efficiency in health care provision, but is not sufficient in itself. Other incentives in the hospital sector are necessary to assist the market process and to enhance its impact on efficiency.

Contract Services↗

Case-based hospital financing: the case of Norway.

Several European countries are experimenting with new ways of organising and financing the hospital sector. This paper discusses the present Norwegian reform, where a system of fixed grants is replaced by a combination of payment per case and fixed grants. Initially implemented in four hospitals only, the decision to move to a full-scale reform will be based on the evaluation of this pilot project. The paper presents two alternative hypotheses on how a system with case-based financing will influence the performance of hospitals. Given that hospitals adjust passively to the constraints imposed by the financing system, increased efficiency is to be expected. If hospitals and hospital owners (i.e. the counties) interact in a game dominated by the hospital, however, the efficiency of the hospital will not be influenced by the financing system. We argue that the design of the pilot project limits the possibility of discriminating between these two hypotheses. Nevertheless, a comparison of key variables in the pilot hospitals with a set of reference hospitals indicates that the change of financing system has not had any substantial effect on hospital efficiency. Thus we are inclined to believe that hospitals in fact are able to set the level of efficiency independent of whether they are financed by fixed grants or a payment per case.

Data Collection↗

The influence of system factors upon the macro-economic efficiency of health care: implications for the health policies of developing and developed countries.

This paper aims to clarify the global association of system factors with the attainment of health policy goals, through economic analyses of cross-country data. In the case of OECD (the Organization for Economic Co-operation and Development) data for 1990, the variation in total expenditure on health among 24 countries can be explained by various factors including Gross Domestic Product (GDP). Among these, the variables representing the level of public sector involvement through social protection or public-private mix within a health care system, such as the Public-to-Total Expenditure Ratio, Coverage Rate and Public Cost Sharing, are significantly negative when factors such as GDP are controlled. This suggests that countries attaining higher equity or accessibility are in a better position to gain higher cost-containment or macro-economic efficiency. The results of this study may be helpful for developing countries searching for a long-term health care system as well as for developed countries facing health care system reforms.

Costs and Cost Analysis↗

Cost-effectiveness and the socialization of health care.

The more health care is socialized, the more cost-effectiveness is an appropriate criterion for expenditure. Utility-maximizing individuals, facing divisibility of health care purchases and declining marginal health gains, and complete information about probable health improvements, should buy health care according to its cost-effectiveness. Absent these features, individual health spending will not be cost-effective; and in any case, differences in personal utilities and risk aversion will not lead to the same ranking of health care interventions for everyone. Private insurance frees consumers from concern for cost, which undermines cost-effectiveness, but lets them emphasize effectiveness, which favors value for money. This is most important for costly and cost-effective interventions, especially for poor people. Cost-effectiveness is more appropriate and easier to achieve under second-party insurance. More complete socialization of health care, via public finance, can yield greater efficiency by making insurance compulsory. Cost-effectiveness is also more attractive when taxpayers subsidize others' care: needs (effectiveness) take precedence over wants (utility). The gain in effectiveness may be greater, and the welfare loss from Pareto non-optimality smaller, in poor countries than in rich ones.

Cost-Benefit Analysis↗

Abnormal economics in the health sector.

The implosion of centrally-planned economies has led to a widespread and uncritical belief that a free market is the best mechanism for structuring the economic and social sectors. Many international agencies have pushed this belief on the developing nations. This paper offers a critical analysis of the effectiveness of using free market principles to structure the health sector. We try to answer two questions: in what spheres can the market operate freely? In what spheres is government action required? According to economic theory, the market is only appropriate for producing and distributing private goods. This study analyzed health care and subdivides it into three categories (public, merit, and private goods) to clarify where the market has a legitimate role. Next, we analyze two of the five markets in the health sector--financing and delivery--and assess the respective roles of the market and government Competitive markets have certain prerequisites. We identify the major market failures by evaluating where these conditions are not satisfied. Next, we draw on international experience to ascertain the seriousness of those failures and the capacity of government action to correct them. Lessons are drawn for developing nations about the appropriateness of market strategies to finance and deliver health care.

Commerce↗

New methods of financing and managing health care in the Russian Federation.

Poor outcomes in Russian Federation health care performance have led to greater efforts being devoted to the search for new methods of finance and management. The new financial and managerial scheme was designed to introduce elements of market relations into a highly bureaucratic system. Strengthening the primary care sector and granting providers more economic freedom were intended to increase the quantity and quality of medical care, and make it more accessible to the population. In the late 1980s, economic experiments started in several regions of the country. This paper highlights the new methods of management, payment of providers, and quality assurance that were the focuses of the experiments. The impact of the experiments will be discussed.

Ambulatory Care Facilities↗

Nurse education in the post-Fordist era.

This paper aims to place the current changes impacting on nurse education into the wider context of massive organisational and managerial upheaval, at present affecting the entire welfare state. This innovation and structural change is, however, merely an echo of deeper societal processes and the influence of the technological revolution on the private industrial sector and market economy. Within this frame of reference the implications of current reforms for the future organisational form, and management, of colleges of nursing are considered. Concerns are also expressed as to the tenuous control of the professional curriculum.

Education, Nursing↗

More resources better health? A cross-national perspective.

This study is an attempt to examine the relative importance of health care resources in predicting infant mortality within industrialized, developing, and underdeveloped countries. The analyses were based on the data of 117 countries. Findings from this study suggest that health resources as a whole do not make a significant contribution to accounting for the variance of infant mortality rates over and above the variance accounted for by socioeconomic resources only. The contribution of health resources to the health of the population as a whole is really rather small in comparison to the role of socioeconomic resources.

Developing Countries↗

Cost utility analysis: what should be measured?

The paper re-examines the issue of the appropriate unit for measuring output in cost utility analysis and the technique that will measure it. There are two main themes. The first is that utility, as it is often conceived and quantified, is not an appropriate basis for measurement. Consequently, a question arises concerning the selection of an appropriate unit of measurement. The second theme is that there is a need to establish criteria for the evaluation of measurement units. Four criteria are proposed which follow from commonly accepted social objectives and from the requirements of a measurement unit. It is concluded that, as judged by these criteria, the measurement units produced by the time trade-off and person trade-off (equivalence) techniques are more satisfactory than the units produced by the rating scale, magnitude estimation or the standard gamble.

Choice Behavior↗

Using Gini-style indices to evaluate the spatial patterns of health practitioners: theoretical considerations and an application based on Alberta data.

The paper analyzes how Gini-style indices are optimally used in the evaluation of economic spatial models designed to predict where health care practitioners are likely to locate under competitive market conditions. At a conceptual level, the analysis establishes that Gini-style indices can be brought to bear on economic models, only if the ordering of geographic areas required to give Gini-coefficient values internal technical coherence also has meaning in terms of the conceptual predictions of the modelling. This, in turn, implies that Gini-indices are most likely to prove useful for fairly aggregated forms of economic analysis, involving relatively few and large geographic divisions. At an applied level, the analysis establishes that one particular geographic distribution of health practitioners is empirically dominant, and that is the distribution which involves the lowest practitioner:population ratio in rural areas, and the highest ratio in large urban areas, with the ratio for small urban areas in between. The empirical evidence also suggests that the spatial practitioner distributions are highly stable for most kinds of health personnel, making it problematic whether these distributions can be changed through normal types of public policy interventions.

Alberta↗

Fee-for-benefit: a strategy to improve the quality of health care and control costs through reimbursement incentives.

OBJECTIVES: The purpose of this study was to determine whether reimbursement in direct proportion to expected therapeutic benefit is capable of improving the utilization and cost of health care. BACKGROUND: The benefit associated with a particular medical or surgical treatment varies widely from patient to patient. Nevertheless, payment to the provider of the treatment is essentially invariant under the current fee-for-service system. Under an alternative fee-for-benefit strategy, empiric data are used to construct a multivariate model to predict the expected benefit to an individual patient from a particular health care service on the basis of conventional clinical descriptors. The payers and the providers of the service then openly negotiate an explicit economic relation between expected benefit and monetary payment such that payment is directly proportional to benefit. METHODS: Computer simulations were performed to determine the potential impact of this fee-for-benefit strategy with respect to medical versus surgical treatment of coronary artery disease. RESULTS: Compared with conventional fee-for-service, fee-for-benefit resulted in a 12% improvement in patient benefit (quality-adjusted survival), a 22% reduction in provider payments and a 55% increase in cost/benefit (the ratio of benefit to payment). CONCLUSIONS: The incentives embodied in a fee-for-benefit strategy can be an effective mechanism for encouraging more appropriate health care utilization while simultaneously controlling health care costs.

Actuarial Analysis↗