HERU is funded by the Chief Scientist Office of the Scottish Executive Health Department The Future of General Practice in Europe. A Health Economics Perspective Anthony Scott Senior Research Fellow Health Economics Research Unit University of Aberdeen Scotland, UK

What is health economics? General Practice in Europe Highlight main economic issues and evidence Outline

Definition of Economics “The study of how men and society end up CHOOSING, with or without the use of money, to employ SCARCE productive RESOURCES that could have ALTERNATIVE uses, to produce various commodities and DISTRIBUTE them for consumption, now or in the future, among various people and groups in society. It analyses the costs and benefits of improving patterns of resource allocation” Paul Samuelson

Central concept of economics Resources are scarce. Every time we use them we give up the “opportunity” to use them in many other ways. The benefit or satisfaction given up in the best alternative use of the resources is the ‘OPPORTUNITY COST’ Every time you hear the word ‘COST’ think: ‘BENEFITS GIVEN UP’

Example: How much should we spend on General Practice? Resources (£) Health status ‘Flat of the curve’

Real expenditure on Primary Care Physician Services (% change compared to 1990)

Expenditure on Primary Care Physician Services as % of Total Health Care Expenditure

Main economic issues and trends Doctor-patient relationship ‘Gatekeeping’ role of GPs Medical practice variations and evidence-based medicine Integration in primary care Paying GPs

Doctor-patient relationship Imbalance of information between doctor and patient Doctors are in a powerful position: –regulation of medical profession –financial incentives Reduce the imbalance of information: –long term relationships and continuity of care –involve patients in decision making –provide patient with more information about treatment options –improve doctors’ communication skills

‘Gatekeeping’ General practice is the main point of contact for non- emergency medical conditions Controls access to more expensive specialist/hospital care Leads to lower health care costs Evidence?

Gatekeeping - evidence

Reducing variations in medical practice

Practice variations and evidence-based medicine (EBM) Lack of information on what is ‘best’ practice Need information on cost-effectiveness of interventions Large investments in gathering, summarising and implementing such information: –Cochrane Collaboration –Role of guidelines Is clinical practice changing as a result?

Integration in Primary Care (Managed Care) Horizontal integration –GPs in group practice –HMOs, GP fundholding, Primary Care Groups, out of hours care Vertical integration –Changes in the balance of care between primary and secondary care –minor surgery, diagnostic testing, outreach clinics

Evidence on integration Horizontal integration –higher quality of care and economies of scale –provision of wider range of services –increases in management costs –no evidence about effects on patients’ health status and other outcomes Vertical integration –evidence mixed

Paying GPs Method of paying doctors influences costs and quality of care The end of fee-for-service? –related to increasing health care costs –less chance of long term doctor-patient relationships –more chance of ‘unnecessary’ care –lower rate of patient visits Move towards mixed systems of prospective payment Effect of payment systems on GP recruitment

Conclusion Role of Health Economics Strengthening of Primary Care in Europe –belief that primary care is less costly than secondary care –improves access for patients –more resources –increased GP workload –increased accountability patient expectations explicit rationing / priority setting

Conclusion Strengthening of primary care depends on: –geography –epidemiology –cultural differences –attitude of GPs –differences in payment and financing Much more evidence is needed about what type of primary care system provides the greatest health status from the resources available