Improving Resource Allocation in the Irish Health Sector – Some New Insights Presentation 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 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 so that individuals are supported

Key Elements in 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 Hospital Care Community and Continuing Care Is this the current system?

Primary Care Acute Hospital Care Community and Continuing Care This is what we have!

Institutional Care Care in Home 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 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.

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