“Resource Allocation and Financing in the Health Sector" Presentation to NHI Annual Conference 10 November 2011 Frances Ruane, ESRI

Outline of Presentation Expert Group on Resource Allocation and Financing of the Health Care System tasked to develop resource allocation and financing systems that support better health and better health services Approach and Focus of the Expert Group Characterisation of the Systemic Requirements and Current Failures Guiding Principles and Key Recommendations Relevance to Nursing Homes Ireland

Better health through better health services Focus on health and wellbeing The right services delivered by the right skills and facilities in the right places at the right time Fair, equitable and focused 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 achieve them? Perspective: clinical, managerial, economic, administrative

Achieving these objectives Sustainability

Achieving these objectives Stated Policy Objectives Service Delivery SystemsFinancing Methods

Achieving these objectives Stated Policy Objectives Service Delivery SystemsFinancing 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 > change structures

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 encourage use of 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 not appropriate to meeting needs Pharmacy / GP / Consultant charges are relatively 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 Activity and not organisations should be funded An integrated system delivering safe, cost- effective sustainable care in the best settings is required to handle Chronic Disease

Primary Care Acute Hospital Care Community and Continuing Care Is this the current system?

Primary Care Acute Hospital Care Community and Continuing Care Actually this is what we have! Example: segmented budgeting

Low number of doctor consultations Source: OECD

Poor outcomes for chronic conditions Source: OECD

Institutional Care Care in Home Settings This is what we also have! Example: Fair Care Proposal

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 cost b) 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.

Recommendations: Systems Strengthen planning frameworks / processes Share resources fairly, based on population need Local delivery to be within national frameworks and strengthened management Pay providers for what they deliver at (case-mix adjusted) prices that reflect efficient delivery.

Recommendations: Delivery Stronger clinical protocols for managing major diseases fairly and efficiently Develop and strengthen primary/community services and shift more services from hospitals where appropriate Rights to timely care – NTPF-type approach to apply to all HSE funding – phase out current NTPF role on waiting lists.

Recommendations: Financing Less pay as you go, more prepaid Fairer 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

Recommendations: Sustainability 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. Changes implied for: DoH, HSE, Hospital Care, Primary Care, Community & Continuing Care

What are the Agents of Change? Programme for Government Articulation of key issues Governance Funding models Sustainability Troika Sustainability Competition Professional recognition of need for integrated approach [Chronic Disease Management] Clinical Programmes

Nursing Home Sector : Central to Integration

Nursing homes are central to Integration Resource allocation makes a difference Resource allocation makes a difference casemix-based funding likely to reduce length of hospital stay => nursing home stay required hospital sector interconnected with long-term care sector Treatment of strokes Issues Issues defining eligibility putting in place proper service level agreements ensuring that payment system does not incentivise patient selection provision of services by relatively appropriate staff

Guidelines relevant to Nursing Homes Ireland Guidelines separating funding and ownership Payments linked to ability to pay – Fair Deal Public/private providers operating together public and private providers should face the same payment methods, but not necessarily the same pricesObservation wide variation between the charges for public nursing homes and those for private/voluntary nursing homes

Nursing Home Sector

Appendix Changes for Health System envisaged by the Expert Group Report

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

What will change for Primary Care Before Limited clinical protocols Weak links to hospital Small Role in CDM* Few resources to support PCT**development After Integrated clinical protocols Systematic hospital links Major role in CDM Strong support for PCT development through HSE *CDM = Chronic Disease Management; ** PCTs = Primary Care Teams

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 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 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: