How to ensure the best utilisation of healthcare resources in Ireland - the economist perspective

Improving Resource Allocation in the Irish Health Sector –

Some New InsightsPresentation to IPHA Conference on Enterprise and Health Solutions for

Irish Patients and the Irish Economy 25 November 2010

Frances Ruane, ESRI

Outline of Presentation

Context: Expert Group Report which sought to develop resource allocation and financing systems that support better health and better health services

Approach of the Expert Group Characterisation of the Systemic Issues Today’s system failures Guiding Principles for the future Key Recommendations

Better health through better health services

Focus on health and wellbeing requires The right services delivered by the right skills and facilities

in the right places Fairness, equity and focus on greatest needs Sustainable and efficient Joined up and fit for purpose All of these are stated objectives of Irish health policy How do we do better at achieving them?

Perspective: clinical, managerial, economic, administrative

Achieving these objectives

Sustainability

Achieving these objectives

Stated Policy Objectives

Service Delivery Systems Financing Methods

Achieving these objectives

Stated Policy Objectives

Service Delivery Systems Financing Methods

Expert Group Methodology

Gathered international* evidence on best practice and sought local submissions

Focus on integrated care: chronic disease Analysed stated health policy in Ireland Derived Guiding Principles Compared current arrangements with Guiding

Principles to identify failures systematically Systemic Approach: Aim to change how

things work so that individuals are supported

Integrated Care

Equity & Fairness

Population Health Needs

Allocation

Funding & Financial

Incentives

Public & Private Involvement

Key Elements

in System

Integrated Care

Equity & Fairness

Population HealthNeeds Allocation

Funding & Financial Incentives

Public & Private Involvement Integrated

Health Care System

Integration is essential

Current Systemic Failures [1]

Planning Vacuum No integration of capital/current expenditure No whole system analysis [public/private] No rational basis for national planning Focus on fiscal rather than total health cost

Incentives out of line with stated objectives Incentives to use hospital care No rewards for improvements in efficiency/safety No governance structures / budgeting processes to

locate service delivery in the appropriate setting

Current Systemic Failures [2]

Financing Unregulated GPs [fees/quality] for majority Access to care overly related to ability to pay Widespread anomalies in what/who is covered Continuing issues with consultant contract

Sustainability GP contract is totally inappropriate Pharmacy / GP charges are comparatively high Prescription rates have risen dramatically Little use of techniques to improve sustainability

What are the Guiding Principles? [1]

Money should follow need not history

Policy and entitlements should be set nationally, and delivered locally

We should fund activity not organisations

We should support integrated, safe, cost-effective sustainable care in the best settings – focus on Chronic Disease requires integrated system.

Primary Care Acute HospitalCare

Community andContinuing

Care

Is this the current system?

Primary Care

Acute HospitalCare

Community and

Continuing Care

This is what we have!

Institutional Care

Care inHome Settings

This is what we also have!

This is what we need!

What are the Guiding Principles? [2]

Financial incentives should:a) encourage providers to meet priorities and quality

standards set in policy at minimum costb) encourage users to use the appropriate services

People should pay according to their incomes and have access according to their needs

Arrangements should be sustainable.

Resource Allocation Recommendations:Systems

Strengthen planning frameworks / processes

Distribute resources based on real population need

Deliver locally within national frameworks and strengthened management – not => health boards!

Pay providers for what they deliver at (case-mix adjusted) prices that reflect efficient delivery.

Resource Allocation Recommendations:Delivery

Strengthen clinical protocols to manage major diseases fairly and efficiently

Develop and strengthen primary/community services and shift services from hospitals to community where appropriate

Guarantee rights to timely care – NTPF approach to apply to all HSE funding – phase out current NTPF role on waiting lists.

Financing Recommendations

Less pay as you go, more prepaid

Fairer and clearer entitlements

Increase transparency of flows to providers

Replace tax reliefs on medical expenses and private insurance with more targeted subsidies*

Lower and fairer user fees for GP services and drugs, based on income and health status

Sustainability Recommendations

Measures to improve information More fit-for-purpose contracts More evaluation of drugs and treatments Improved cost control Better regulation and performance management Better capital planning. Major changes for: DoHC, HSE, Hospital Care,

Primary Care, Community & Continuing Care

Relevance of the Report to Pharma Sector

Focus on Health and Health care Focus on moving to new models of care Focus on Chronic Disease Management – and

making sure that resources support it Focus on care provision outside institutions Focus on value for money and efficiency linked to

high standards [clinical protocols] Focus on sustainability – keeping down unit costs Specific recommendations

Specific Recommendations [1]

Evaluation of all high-cost, high-use drugs on the current GMS/DP lists, based on Irish costs and international experience of their outcomes

HSE and DoHC engage immediately in the development of official guidelines and clinical protocols on the use of new technologies

Develop reference pricing Review choice of comparator countries used for

setting ex-factory price of pharmaceuticals Extend tendering for sole supply contracts for

additional pharmaceutical products

Specific Recommendations [2]

Establish treatment and prescribing protocols that promote the use of generics

Introduce regulations to mandate that all prescriptions for public and private patients must contain the generics name so the drug prescribed

Introduce regulations to mandate all pharmacists to dispense the lowest cost version of the drug unless the patient specifically request a particular brand and is willing to pay the additional cost

Extend information on generics more widely among doctors, pharmacists and patients

Appendix

What will change for C&C* Care Before

~ Historic budgets Uneven resources Weak infrastructure Weak links to HC*/PC* Overlap of purchasers

and providers

After

Prospective funding Pop. health budgets Improved infrastructure Systemic links to HC/PC Move to separate

purchasers/providers

*C&C = Community and Continuing Care; HC = Hospital Care; PC = Primary Care

What will change for the DoHC?

Before Fragmented Policy

Framework Resource usage policy

oriented towards public health-care system

Lack of multi-annual capital/current system planning

Unclear boundary with HSE in relation to resource allocation

After Integrated Policy

framework Resource usage policy

covers total health-care system

Five-year planning framework to cover all health-care spend

Clarity with respect to resource allocation roles of DoHC and HSE

What will change for the HSE?Before

Integration of HSE roles as purchaser & provider

Separate budgeting for hospitals / PCCC*

Separate structures for resource allocation, management and clinical leadership

Targeted waiting times

After

Planned move to purchaser/provider split

Integrated budgeting for all sectors

Integrated leadership across resource allocation, management and clinical standards

Guaranteed waiting times

*PCCC = Primary, Continuing and Community Care:

What will change for Hospitals?

Before

Mostly Block Grant Inefficiency unknown Budgets supporting silo

work practices Large barriers between

hospitals and other care settings

After

Prospective funding Efficiency rewarded Budgets promoting team-

based approach Resources linking

hospitals and other care settings

What will change for the Patient?

Before

Unplanned eligibility patterns

GP/Drug payments not related to incomes and need / charge rates unregulated

Fragmented care – people getting services they do not need and lacking those they need.

After

Clear eligibility related to need

GP/Drug payments related to income and need – tiered medical card for all

Individual care pathways – crucial for caring for the ageing population