International Research Project on Financing Quality in Healthcare InterQuality Prof. dr hab. Tomasz Hermanowski Medical University of Warsaw

Tomasz HermanowskiMedical University of Warsaw Incentives Effect in Complex Social Systems There are two fundamentally different ways of thinking about complex social systems: the economic approach and the engineering approach The social engineer sees society as disorganized, unplanned and inefficient. He wants experts to study the problem, discover what should be produced and plan how to do it

Tomasz HermanowskiMedical University of Warsaw Incentives Effect in Complex Social Systems Social engineers believe that a plan devised by people at the top can work, even though everyone at the bottom has a self interest in defeating it Implicitly, they assume that incentives don’t matter. Or, if they do matter, they don’t matter very much

Tomasz HermanowskiMedical University of Warsaw Incentives Effect in Complex Social Systems To the economist, by contrast, incentives are everything To have the best chance of good social outcomes, people at the bottom must find that when they pursue their own interests they are meeting the needs of others Perverse incentives almost always lead to perverse outcomes

Tomasz HermanowskiMedical University of Warsaw Incentives Effect in Complex Social Systems In the 20th century, country after country tried to impose an engineering model on society as a whole. Most of those experiments have thankfully come to a close Yet there are two fields that are still completely dominated by people who steadfastly resist the economic way of thinking. They are health care and education

Tomasz HermanowskiMedical University of Warsaw Incentives Effect in Complex Social Systems Health care can be described as a sea of mediocrity, punctuated by islands of excellence The islands of excelence always spring from the bottom up, never from the top down; they are the result of enthusiasm, leadership and entrepreneurial skills of a small number of people; and they are almost always penalized by the payment system John Goodman

Tomasz HermanowskiMedical University of Warsaw Scope of InterQuality Research Project to investigate the effects of different financing models and incentives on the quality, effectiveness and equity of acess to: Outpatient care Hospital care Pharmaceutical care To establish the feasibility of collaborative practice models, involving physicians, hospitals and pharmacy-service providers in the context of implementing integrated care and innovative P4P financig models

Tomasz HermanowskiMedical University of Warsaw WP1 Incentives WP2 Value/benefits WP3 Pharmaceutical Care WP4 Hospital Care WP5 Outpatient, Home Care WP6 Integrated Care WP 7 Dissemination WP8,9 Scientific Coordination, Management

Tomasz HermanowskiMedical University of Warsaw WP1 – 2; Incentives, Values/Benefits The first two work packages will provide detailed theoretical background WP 1 will discuss into the effects of financial and non-financial incentives of reimbursement systems based on the neoclassical economics principal agent theory WP 2 will assess the benefits of reimbursement incentives in the light of their effects on the quality of care

Tomasz HermanowskiMedical University of Warsaw WP 3 – 6; Empirical Experiences The results of these theoretical considerations will flow into Work Packages 3-6. Based on the findings from the theoretical considerations, concrete projects from different sectors of different countries will be assessed and lessons to learn elaborated These work packages are formulated to provide results on empirical experiences with incentives programs in pharmaceutical care, the hospital sector, the outpatient/home care sector and within integrated care

Tomasz HermanowskiMedical University of Warsaw Methods New Institutional Economics (Olivier Williamson, Nobel prize 2009) –Agency (Principal-Agent) Theory –Transaction costs analysis Use of Patient Reported Oucomes data to assess healthcare quality and efficiency: –English NHS PROMs programme, –Reimbursement for providers linked to PROMs performance, via local incentive contracts (‘CQUIN’ payments) –If the purpose of a health system is to improve health, not just to produce healthcare services - than PROMs are essential!

Tomasz HermanowskiMedical University of Warsaw The Consortium Medical University of Warsaw (WUM) – project coordinator Hannover Medical School (MHH) Università degli Studi di Catania (UniCT) University of Southern Denmark (SDU)

Tomasz HermanowskiMedical University of Warsaw The Consortium Urban Institute Washington (UI) Sopharm Warsaw (SPH) Standing Committee of European Doctors (CPME) European Patients Forum (EPF)

Tomasz HermanowskiMedical University of Warsaw Time-frame and Budget June 2009 – call for proposals November 2009 – submission deadline March 2010 – evalution by EU experts June- October 2010 – contract negotiations December 2010 – project beginning, January kick-of meeting December 2013 – project termination Total budget ,80 €

Tomasz HermanowskiMedical University of Warsaw Credits Excellent Consortium Partners Dedicated Project Team Support by MUW Rector, prof. Marek Krawczyk, Deputy Rector, prof. Sławomir Majewski and Chancellor, Mrs. Małgorzata Kozłowska Advice from National Contact Point experts Proposal development subsidy granted by the Ministry of Science and Higer Education

Tomasz HermanowskiMedical University of Warsaw Thank you for your attention!