Cost recovery in the health-care sector in Sub-Saharan Africa

Cost recovery, or the pricing of health-care services in government-run health-care facilities, continues to be a politically delicate subject in Sub-Saharan Africa. Nevertheless, ministries of health are now beginning to understand that the selective pricing of healthcare services can be a powerful tool for achieving the efficiency and equity goals that their governments have set, and for increasing ministry financial resources that can be used to improve the quality of care offered. This article provides a blue-print for these nascent cost-recovery efforts. After a consideration of the rationale for cost recovery within a theoretical context, a set of pricing principles for the whole public health sector is presented and a prototypical systemic price schedule is derived from the principles. Constraints to effective and equitable cost recovery are then discussed, and topics for further empirical research are suggested.     

Health care expenditures for the elderly and reforms in the health care system in Japan

In recent times, significant reforms have been instituted in Japan's health care system, such as the introduction of hospital categorization and the clarification of hospital roles, together with the establishment of geriatric health care facilities, and the reform of the pharmaceutical distribution and pricing system. These reforms are expected to improve the efficiency and quality of the health care system in Japan and to provide better care for the aging society. The changes will also eventually affect health care costs and patterns of services. This paper describes Japan's health care system, including the recent reforms, and then examines the costs and patterns of health care services for the elderly in the light of the recent changes in the system. While more resource allocation is necessary for training of workers for nursing, rehabilitation and care-giving, drugs should be more cost-effective and fit for use at home and in non-medically oriented institutions. Health care providers, health care industries and the government need further to properly respond to the changes in demography, patterns of diseases and disabilities and patients' wishes for better quality of life.     

Primary health services in Ecuador: Comparative costs, quality, and equity of care in ministry of health and rural social security facilities

This study of costs, quality and financial equity of primary health services in Ecuador, based on 1985 data, examines three assumptions, common in international health, concerning Ministry of Health (MOH) and Social Security (SS) programs. The assumptions are that MOH services are less costly than SS services, that they are of lower quality than SS services, and that MOH programs are more equitable in terms of the distribution of funds available for PHC among different population groups. Full costs of a range of primary health services were estimated by standard accounting techniques for 15 typical health care establishments, 8 operated by the MOH and 7 by the rural SS program (RSSP), serving rural and peri-urban populations in the two major geographical regions of Ecuador. Consistent with the conventional premise, MOH average costs were much lower than RSSP costs for several important types of services, especially those provided by physicians. Little difference was found for dental care. The lower MOH physician service costs appeared to be attributable primarily to lower personnel compensation (only partially offset by lesser productivity) and to greater economies of scope. Several measures of the quality of care were applied, with varying results. Based on staff differences and patterns of expenditures on resource inputs, notably drugs, RSSP quality appeared higher, as assumed. However, contrary to expectation, a questionnaire assessment of staff knowledge and procedures favored the MOH for quality. Program equity was judged in terms of per capita budgeted expenditures (additional measures, such as the likelihood of receiving necessary care, would have required household survey data beyond the scope of this program-based study). The results support the assumption of greater MOH financial equity, as its program reveals less variation in budgeted expenditures between different population groups covered. Additional evidence of equity, using other indicators, would be helpful in future research. The paper's findings have policy implications not only for Ecuador's health sector but also for policy-makers in other countries at similar levels of socioeconomic development. These implications are spelled out in order to guide officials wrestling with issues of efficiency, quality, and equity as they search for the best use of scarce resources to promote health.     

Modern medical practice: a profession in transition

Modern medical practice is in a state of transition. The solo practitioner is slowly giving way to the large organized groups of health care providers. Driving this force of change is a change in payment for health care services from cost plus to preestablished pricing. For the first time, medical practice patterns are having a direct impact on the financial viability of the health care institution. To maintain quality of patient care and contain costs, more and more physicians are becoming involved in the administrative side of running a hospital. This article describes the forces of change, the change itself, and the future of medicine.     

If they get sick, they are in trouble: health care restructuring, user charges, and equity in Vietnam.

The transition from a centrally planned economy in the 1980s and the implementation of a series of neoliberal health policy reform measures in 1989 affected the delivery and financing of Vietnam's health care services. More specifically, legalization of private medical practice, liberalization of the pharmaceutical industry, and introduction of user charges at public health facilities have effectively transformed Vietnam's near universal, publicly funded and provided health services into a highly unregulated private-public mix system, with serious consequences for Vietnam's health system. Using Vietnam's most recent household survey data and published facility-based data, this article examines some of the problems faced by Vietnam's health sector, with particular reference to efficiency, access, and equity. The data reveal four important findings: self-treatment is the dominant mode of treatment for both the poor and nonpoor; there is little or no regulation to protect patients from financial abuse by private medical providers, pharmacies, and drug vendors; in the face of a dwindling share of the state health budget in public hospital revenues and low salaries, hospitals increasingly rely on user charges and insurance premiums to finance services, including generous staff bonuses; and health care costs, especially hospital costs, are substantial for many low- and middle-income households.     

Monitoring health reform: a report card approach

During the past several years, budget cuts have forced hospitals in several countries to change the way they deliver care. Gilson (Gilson, L. (1998). Discussion: In defence and pursuit of equity. Social Science & Medicine, 47(12), 1891-1896) has argued that, while health reforms are designed to improve efficiency, they have considerable potential to harm equity in the delivery of health care services. It is essential to monitor the impact of health reforms, not only to ensure the balance between equity and efficiency, but also to determine the effect of reforms on such things as access to care and the quality of care delivered. This paper proposes a framework for monitoring these and other indicators that may be affected by health care reform. Application of this framework is illustrated with data from Winnipeg, Manitoba, Canada. Despite the closure of almost 24% of the hospital beds in Winnipeg between 1992 and 1996, access to care and quality of care remained generally unchanged. Improvements in efficiency occurred without harming the equitable delivery of health care services. Given our increasing understanding of the weak links between health care and health, improving efficiency within the health care system may actually be a prerequisite for addressing equity issues in health.     

A cost-based equity weight for use in the economic evaluation of primary health care interventions: case study of the Australian Indigenous population

Background

Efficiency and equity are both important policy objectives in resource allocation. The discipline of health economics has traditionally focused on maximising efficiency, however addressing inequities in health also requires consideration. Methods to incorporate equity within economic evaluation techniques range from qualitative judgements to quantitative outcomes-based equity weights. Yet, due to definitional uncertainties and other inherent limitations, no method has been universally adopted to date. This paper proposes an alternative cost-based equity weight for use in the economic evaluation of interventions delivered from primary health care services.

Methods

Equity is defined in terms of 'access' to health services, with the vertical equity objective to achieve 'equitable access for unequal need'. Using the Australian Indigenous population as an illustrative case study, the magnitude of the equity weight is constructed using the ratio of the costs of providing specific interventions via Indigenous primary health care services compared with the costs of the same interventions delivered via mainstream services. Applying this weight to the costs of subsequent interventions deflates the costs of provision via Indigenous health services, and thus makes comparisons with mainstream more equitable when applied during economic evaluation.

Results

Based on achieving 'equitable access', existing measures of health inequity are suitable for establishing 'need', however the magnitude of health inequity is not necessarily proportional to the magnitude of resources required to redress it. Rather, equitable access may be better measured using appropriate methods of health service delivery for the target group. 'Equity of access' also suggests a focus on the processes of providing equitable health care rather than on outcomes, and therefore supports application of equity weights to the cost side rather than the outcomes side of the economic equation.

Conclusion

Cost-based weights have the potential to provide a pragmatic method of equity weight construction which is both understandable to policy makers and sensitive to the needs of target groups. It could improve the evidence base for resource allocation decisions, and be generalised to other disadvantaged groups who share similar concepts of equity. Development of this decision-making tool represents a potentially important avenue for further health economics research.     

The implementation cost of a safety‐net hospital program addressing social needs in Atlanta

ObjectiveTo describe the cost of integrating social needs activities into a health care program that works toward health equity by addressing socioeconomic barriers.Data Sources/Study SettingCosts for a heart failure health care program based in a safety‐net hospital were reported by program staff for the program year May 2018–April 2019. Additional data sources included hospital records, invoices, and staff survey.Study DesignWe conducted a retrospective, cross‐sectional, case study of a program that includes health education, outpatient care, financial counseling and free medication; transportation and home services for those most in need; and connections to other social services. Program costs were summarized overall and for mutually exclusive categories: health care program (fixed and variable) and social needs activities.Data CollectionProgram cost data were collected using a activity‐based, micro‐costing approach. In addition, we conducted a survey that was completed by key staff to understand time allocation.Principal FindingsProgram costs were approximately $1.33 million, and the annual per patient cost was $1455. Thirty percent of the program costs was for social needs activities: 18% for 30‐day supply of medications and addressing socioeconomic barriers to medication adherence, 18% for mobile health services (outpatient home visits), 53% for navigating services through a financial counselor and community health worker, and 12% for transportation to visits and addressing transportation barriers. Most of the program costs were for personnel: 92% of the health care program fixed, 95% of the health care program variable, and 78% of social needs activities.DiscussionHistorically, social and health care services are funded by different systems and have not been integrated. We estimate the cost of implementing social needs activities into a health care program. This work can inform implementation for hospitals attempting to address social determinants of health and social needs in their patient population.     

Reconstitution of the not-for-profit hospital: new ethics, new equity

In meeting the challenge of economic competition, the not-for-profit hospital has made two significant responses: corporate reorganization and formation of multihospital systems. However, an additional response is needed to improve access to equity capital. This can be achieved by separating the hospital into a not-for-profit entity that contains nursing care, administration, and support services and a series of economic partnerships with members of its medical staff and other investors for provision of ancillary diagnostic and treatment services. Additionally, it is proposed that the parent holding company add an insurance arm, form a primary care network, and vertically integrate all modalities of care.     

Primary health concept revisited: where do people seek health care in a rural area of Vietnam?

The government of Vietnam is committed to promote and secure equity in access to health care for all citizens. The current rapid changes towards a market economy may challenge the government's wish for maintaining equity, especially for low income and vulnerable groups. The aim of this study was to investigate aspects of access and utilisation of health care of rural people. The study included a random sample of 1075 out of the 11,547 households in the Field Laboratory in Bavi district, northern Vietnam and a structured questionnaire was used. The results indicate that self-treatment is common practice and private providers are an important source of health services not only for those who are better off but also for poor households. The costs for health care are substantial for households, and lower income groups spent a significantly higher proportion of their income on health care than the rich did. The poor are deterred from seeking health care more often than the rich and for financial reason. As regards sources for payments, the poor relied much more on borrowing money to pay for their health care needs, while those who are better off relied mostly on household savings. A burden of high cost for treatment implies high risks for families to fall into a 'medical poverty trap'. Our findings suggest a need for developing risk-sharing schemes (co-payment, pre-payment and insurance), and appropriate allocation of scarce public resources. We suggest that the private health care sector needs both support and regulations to improve the quality and access to health care by the poor.     

Global budgeting of hospitals in Hong Kong.

Policy-makers in industrialized countries face the dilemma of having to contain soaring hospital costs while resisting any reduction in the quality and quantity of hospital services. Among the many hospital financing systems, centralized control via global budgeting is advocated by some to be the most effective in containing hospital costs. Containing hospital costs, however, is but one aspect of the trade-off between cost containment and quality of care. The hospital financing system of Hong Kong provides some insights into the extent to which cost control can be achieved through global budgeting; and its impact on the accessibility of hospital care. The case of Hong Kong highlights three necessary conditions for effective cost control: (1) the payer must have a clear policy stance on overall public spending; (2) the payer must have a clear policy stance on the importance of hospital care relative to other goods and services; and (3) the payer must also have the will and ability to limit hospital spending within finalized global budgets. However, successful cost containment in Hong Kong affects the accessibility of hospital care. In a time of population growth and economic prosperity, new community needs seem to have preceded government plans and actions to build hospital facilities.     

东西部医院腹腔镜胆囊切除术医疗费用比较

目的：研究患者对医疗费用感受的区域性差异及医疗服务定价的合理性,以期为医疗服务价格改革提供一定的参考依据。方法选取东西部同等级医院2013—2014年度腹腔镜胆囊切除术的住院患者,分析比较两所医院的住院费用、医疗服务定价标准及当地居民收入。结果应用某一成熟医疗技术诊治疾病的费用,上海高于昆明。费用差距的主要原因在于部分项目定价及医师的治疗项目选择。对比人均收入,上海居民的价格感受优于云南昆明。结论按项目付费的方式存在明显弊端,省级之间定价差不合理因素较多,因此需加快医疗服务定价方式的改革,推行临床路径,以稳步推动区域化医疗的进程,实现区域间医疗和费用公平性。     

How can patient education contribute to improved health care under prospective pricing?

Clinicians and policy makers are faced with one central dilemma under prospective pricing: how to maintain high quality of care with restricted financial resources. Patient education is one element of care which has been proposed to have the ability to improve the quality of care, while reducing costs for some conditions. This paper reviews the empirical evidence which touches on this question, including preoperative education, home care education, cooperative care units, diabetes patient education, and others. The evidence indicates that patient education can improve the quality of care, while in some cases also reducing the cost of providing medical care. This conclusion has important policy implications under conditions of reduced resources for medical care, as is occurring under prospective pricing in the United States.     

European hospital reforms in times of crisis: Aligning cost containment needs with plans for structural redesign?

Hospitals have become a focal point for health care reform strategies in many European countries during the current financial crisis. It has been called for both, short-term reforms to reduce costs and long-term changes to improve the performance in the long run. On the basis of a literature and document analysis this study analyses how EU member states align short-term and long-term pressures for hospital reforms in times of the financial crisis and assesses the EU's influence on the national reform agenda. The results reveal that there has been an emphasis on cost containment measures rather than embarking on structural redesign of the hospital sector and its position within the broader health care system. The EU influences hospital reform efforts through its enhanced economic framework governance which determines key aspects of the financial context for hospitals in some countries. In addition, the EU health policy agenda which increasingly addresses health system questions stimulates the process of structural hospital reforms by knowledge generation, policy advice and financial incentives. We conclude that successful reforms in such a period would arguably need to address both the organisational and financing sides to hospital care. Moreover, critical to structural reform is a widely held acknowledgement of shortfalls in the current system and belief that new models of hospital care can deliver solutions to overcome these deficits. Advancing the structural redesign of the hospital sector while pressured to contain cost in the short-term is not an easy task and only slowly emerging in Europe.     

Improving access to hospital care for the poor: comparative analysis of four health equity funds in Cambodia

There is a large body of evidence that user fees in the health sector create exclusion. Health equity funds attempt to improve access to health care services for the poorest by paying the provider on their behalf. This paper reviews four hospital-based health equity funds in Cambodia and draws lessons for future operations. It investigates the practical questions of 'who should do what and how'. It presents, in a comparative framework, similarities and differences in objectives, the actors involved, design aspects and functional modalities between the health equity funds. The results of this review are presented along the lines of identification, hospitalization rates and relative costs. The four schemes had a positive impact on the volume of utilization of hospital services by the poorest patients. They now account for 7 to 52% of total hospital use. The utilization of hospitals by paying patients has remained constant in the same period. The comparative review shows that a range of operational arrangements may be adopted to achieve the health equity fund objectives. Our study identifies essential design aspects, and leaves different options open for others.     

Benefits and costs of a free community-based primary care clinic

This study estimates the benefits and costs of a free clinic providing primary care services. Using matched data from a free clinic and its corresponding regional hospital on a sample of newly enrolled clinic patients, patients' non-urgent emergency department (ED) and inpatient hospital costs in the year prior to clinic enrollment were compared to those in the year following enrollment to obtain financial benefits. We compare these to annual estimates of the costs associated with the delivery of primary care to these patients. For our sample (n = 207), the annual non-urgent ED and inpatient costs at the hospital fell by $170 per patient after clinic enrollment. However, the cost associated with delivering primary care in the first year after clinic enrollment cost $505 per patient. The presence of a free primary care clinic reduces hospital costs associated with non-urgent ED use and inpatient care. These reductions in costs need to be sustained for at least 3 years to offset the costs associated with the initially high diagnostic and treatment costs involved in the delivery of primary care to an uninsured population.     

Medicare payment policy and the controversy over hospital cost shifting

This article examines (i) the background and debate over cost shifting; (ii) hospitals as business institutions that often shift the financial responsibility for their costs in the form of differential pricing; and (iii) how the cost-shifting debate affects and is affected by Medicare. The aim is to gain a better understanding of how changes in reimbursement by large government health insurance programmes affect hospital behaviour. The article argues that the controversy over cost shifting is becoming an increasingly important issue for hospitals in the US and their ability (or willingness) to provide uncompensated charity care. The issue has also become very important for workers and their dependants. This is because workers have shouldered the largest portion of the dramatic growth in healthcare costs that have occurred in the US in recent years, due in large part to increased cost shifting (or 'sharing of financial responsibility') from their employers.     

Kostenmessung in der ökonomischen Evaluation von Gesundheitsleistungen: die Kosten stationärer Akutversorgung am Universitätsklinikum Ulm

A core element in economic evaluation studies is the patient-based measurement of costs. As the University Hospital of Ulm is not endowed with a patient-based cost accounting system, it was necessary to develop a concept for the measurement of the cost of acute inpatient care for economic evaluation purposes. For accounting, a partial cost accounting system is available. The measurement concept aimed at was supposed to be consistent, to adequately attribute costs to resource consumption and to be precise enough in order to identify differences between health care alternatives in an incremental economic evaluation study. Both prospective and retrospective uses were aimed at, and it was hoped to be able to transfer the approach to other hospitals, for example in the context of multicentre studies. The cost accounting concept used specifies unit costs according to direct patient cost centres and uses a simple mark-up percentage to account for the overhead costs of infrastructure services. The collection of service data is based upon routine documentation. Monetary figures used for the pricing of services are derived from the cost accounting system of the hospital. Diagnostic and therapeutic services which are rendered by cost centres not directly caring for patients are priced using the fee-for-services schedule of the Deutsche Krankenhausgesellschaft (DKG-NT). In the basic approach, medical care is determined for each individual patient in the areas of diagnostic and therapeutic services, operations and standard care in a normal ward. In terms of lump sums, the cost of care is measured for drugs, for basic physician services in the ward, and for nursing care in intensive wards. The standard approach can be developed into a more detailed approach in which higher effort of calculation would render more precise cost measurement. In general, the measurement concept is believed to be precise and consistent, and to be transferable to other hospitals as well. In addition, the approach can be considered a contribution to the development of costing methods in acute inpatient care. The concept is suited for all economic evaluation studies which intend to measure costs from a societal perspective or from the perspective of a hospital.     

Improving access for the poorest to public sector health services: insights from Kirivong Operational Health District in Cambodia

This article presents research findings into the effectiveness of an innovative equity fund approach to improving access to public sector health services for the poor in Kirivong Operational Health District in Cambodia. The operational health district is the lowest organizational level in the Cambodian health system, providing services through health centres and a single referral hospital. An equity fund involves a third party identifying the poor and paying user fees on their behalf by reimbursing the service provider, thus relieving health staff of such responsibility. We explore the appropriateness of utilizing community members to identify the poorest. The impact of newly introduced pagoda-managed equity funds on access to public health services for the poorest, and on their out-of-pocket expenditure during illness episodes, is then examined. We conclude with an evaluation of the contribution of the equity funds to community participation. The research indicates that identification by community members of those eligible for equity funds is feasible, accrues minimal direct costs, and is effective. Households identified as eligible for equity fund benefits were poorer than those identified as non-beneficiaries. Direct costs associated with seeking care were considerably lower for equity fund beneficiaries than for non-beneficiaries, and fewer beneficiaries than non-beneficiaries initially consulted the private sector, providing evidence of the equity fund's ability to attract the poorest to the public sector. The level and nature of community participation was enhanced considerably following the introduction of the pagoda-managed equity funds. In order to maximize and sustain the equity benefits of such funds, we recommend that external agencies (such as international non-governmental organizations) limit their role to the provision of technical support and advice, rather than taking the lead on implementation and administration. Facilitating the design, implementation, administration and management of equity funds by indigenous community-based organizations has the advantage of not only greatly reducing administrative costs, allowing a large proportion of the fund to be spent on services for the poor, but also of enhancing local ownership, thus increasing the likelihood of equity funds being sustained in the future.     

Progress towards universal coverage: the health systems of Ghana, South Africa and Tanzania

A desire to enhance protection against health care costs and improve equity of access to health care lies at the core of many health sector financing initiatives. Until recently, international debates about financing and health equity have focused primarily on mechanisms to promote equity in relation to very specific elements of health systems. However, in recent years there has been growing interest in considering these equity challenges from a more systemic perspective. In this context, universal health coverage is becoming a rallying call, with a focus on how best universal coverage can be financed. This paper is the first in a special issue which presents a body of research whose overall aim was to critically evaluate existing inequities in health care financing and provision in Ghana, South Africa and Tanzania, and the extent to which health insurance mechanisms (broadly defined) could address financial protection and equity of access challenges. In this first paper we introduce the countries' health systems, with a special emphasis on existing mechanisms for financial protection. We also identify in broad terms the key challenges for universal coverage, setting the scene for the subsequent papers.