1 An analysis of hospital autonomy reforms in Albania, Bulgaria and Slovakia Jeremy Veillard WHO Regional Office for Europe Technical Officer Hospital Management

2 Autonomy is the extent of decision rights hospitals have over various aspects of production, including inputs, outputs and management processes Autonomy is important because:  It provides the critical instrument that enable organizations to respond to incentives  The ability to tackle a problem locally is likely in most cases to lead to faster and better decisions  Local circumstances vary sufficiently to call for local flexibility  If central government control is to be made less rigid, then local accountability should be strengthened

3 Key decision rights to be allocated to increase hospital autonomy InputsOutputsOutcomesManagementprocesses Labour (hiring, firing, remuneration) Level of throughput Targets for specific health outcomes Strategic management Capital (investment in and sale of any kind of assets) Mix of services Financial management incl. setting user charges Other inputs (procurement of consumables etc.) Clinical management Administrative processes

4 Autonomy and accountability should be closely linked If management autonomy is increased at hospital level, managers should be publicly accountable (to central and local levels) for how they exercise that autonomy:  Financial probity and accountability in use of funds  Conformity with central government policies  Satisfying local community on range, quantity and quality of services provided  Fitting into the local pattern of services

5 Decision rightsAlbaniaBulgariaSlovakia Skill mix of hospital staffCentralHospital Staff salariesCentralMixed Central & local Hospital Hospital physical assetsCentralOwnerCentral Purchase of pharmaceuticals for hospitals Central w/ hospital Hospital Scope and prices of expensive drugs reimbursed to hospitals Central Mixed central & HIC Implementation of new technologies in hospitals CentralMixed central & local Appointment of hospital directors CentralOwnerMixed central & local Hospital decision rights in Albania, Bulgaria and Slovakia: an overview (1/2)

6 Decision rightsAlbaniaBulgariaSlovakia Hospital bed capacitiesCentralOwnerCentral Mix of medical services available in hospitals CentralOwnerMixed Targets for specific public health outcomes CentralMixed Central & Regional Central Performance and/or quality targets to be reached by hospitals Central w/ Hospital CentralHospital Hospitals strategic management Central Hospital Setting user charges for supplementary services CentralHospitalCentral Hospital clinical management Hospital Hospital decision rights in Albania, Bulgaria and Slovakia: an overview (2/2)

7 Accountability mechanismAlbaniaBulgariaSlovakia Effective and accessible patient complaint handling towards hospitals NOYES Community and business leaders representation on hospital boards NOYESNO Contracts between Health Insurance Companies and hospitals NOYES Mechanisms for accreditation of hospitals NOYESNO Minimum quality standards and safety requirements NOYESNO Formal performance reporting for hospitals NO Accountability mechanisms in Albania, Bulgaria and Slovakia: an overview

8 Incentive structures AlbaniaBulgariaSlovakia Financial incentives related to performance (e.g. financial bonus / penalties for good/poor performance) NO Monitoring and dissemination of comparative information on hospital performance NO Published independent audits on hospitals NO Selective contracting of hospital services NO Subsidizing hospitals investments on quality NO Technical assistance from Health Insurance Companies for quality improvement projects NO Incentive structures in Albania, Bulgaria and Slovakia: an overview

9 Discussion (1/2)  Well-designed provider payment mechanisms have proven to be not sufficient conditions for restructuring hospital systems  Lack of alignment between reform of provider payment mechanisms and organizational reforms (including hospital autonomy & accountability)  Albania, Bulgaria, Slovakia: three different socio-economic profiles but have all started decentralization of decision rights to hospitals even if achievements are very different  More decentralization of decision rights is not going with appropriate accountability mechanisms and incentives

10 Discussion (2/2)  Steering role of the Ministry of Health is crucial in building up an aligned architecture of hospital reforms  Need to update the quality of information systems: need to produce smart information to decision-makers and to communities (central and local accountability)  Need to develop national capacities for reform management  Focus on accountability and governance

11 The way forward: key components for hospital reforms in Albania, Bulgaria and Slovakia  Strengthening capacities of the Ministry of Health to fulfil a strategy-setting stewardship function  Introducing new accountability mechanisms through more effective use of contracts, quality assurance and performance monitoring  Aligning incentives and decision rights including completing the transition to a more proactive health-service purchasing model  Clarifying the role of local governments  Improving hospital governance

12 Assessment of hospital autonomy reforms effects  What are the effects of the new mix of hospital autonomy and accountability on the hospital and its performance?  How has the mix of funding sources changed, and have funding levels increased?  Has management become more efficient and responsive, as anticipated?  What have been the effects of the new mix of hospital autonomy and accountability on the allocative efficiency and equity of resource allocation patterns in the health sector?  Are the services provided by the hospital more closely aligned to its intended role and function in the health system? Or has the autonomy policy caused a divergence, suggesting a negative impact on sectoral efficiency?

13 Selected references  Robert J. Maxwell: “Decentralizing authority to health facilities: a framework for descriptive analysis and assessment of hospital autonomy”, WHO, Geneva, August 1997  Mukesh Chawla et al., “Improving hospital performance through policies to increase hospital autonomy: methodological guidelines”, Harvard University, August 1996  Martin McKee et al., “Hospitals in a changing Europe”, European Observatory on Health Care Systems and Policies, 2002  Alexander S. Preker et al., “Innovations in Health Service Delivery: the corporatization of public hospitals”, The World Bank, January 2003  Health in Transition Profiles for Albania, Bulgaria and Slovakia, European Observatory on Health Care Systems and Policies

14 Acknowledgments  Dr Silvana Novi, Chief expert, Hospital Directorate, Ministry of Health, Albania  Dr Mariette Hristozova, Head of the Regional Public Health Directorate, Stara Zagora Region, Bulgaria  Dr Eugen Nagy, Chief expert, Health Sector Directorate, Ministry of Health, Slovakia Contact: