1. Relative Value Scales Yogjakarta May 2014

2. Emergent Payment Systems
Fee-for-Service/Fee Schedule
Payment Per Service
U.S., Canada, Japan, Taiwan, China
Selectively: Britain and Netherlands (preventive services)
most complicated: RB-RVS
Per Admission (Case-Mix Adjusted)
Hospital “Product Lines”
DRGs: Fixed Payment/Inpatient Stay
Brazil (266); U.S. (579); Britain (650); most of Europe; Thailand

3. Pay Level Unit Global Budgets Capitation Admission-Based/DRGs
Fee for Service

4. 1) FEE-FOR-SERVICE + - (Cambodia, Philippines) ACCESS/ DEMAND QUALITY
COST-CONTAINMENT

5. FFS -- Cost Explosion United States Canada Croatia Czech Republic Iran
Russia
China
Taiwan
……..

6. FFS -- Cost Explosion…and More
United States
Canada
Croatia
Czech Republic
Iran
Russia
China
Taiwan
……..
15-20% per year costs increase
Excessive admissions
Unnecessary services and drugs
Budgetary crisis
Poor financial protection; overuse of drugs

7. Distortions in Inputs and Outputs…
Line Item
Issues
Flexibility?
Right Input Mix
Responsive?
Fee For Service
Issues
Cost Explosion?
Overutilization of Services?
Unnecessary Services?
Loss of Financial Protection?
Higher Fees for Specialists ?

8. RVS Fee Schedule Pre-Set Tariffs
Developed at Harvard (Professor William Hsiao) over 20 Years
Objective -- to Re-weight Primary Care Services Relative to Specialists
Used in US Medicare Program

9. Formula
Tariff = Work (Time + Intensity)

10. Formula
Tariff = Work (Time + Intensity) + Practice Cost (Surveys of MD cost structure)

11. Formula
Tariff = Work (Time + Intensity) + Practice Cost (Surveys of MD cost structure) Educational Costs

12. Formula
Tariff = Work (Time + Intensity) + Practice Cost (Surveys of MD cost structure) Educational Costs
Primary Care Pool
Specialist Pool

13. Easier Canada Canada vs US Stakeholders Sit in 1 Room
Negotiate Fee Schedule to set Prices >3000 services
Volume Caps in Some Provinces (Enforced)
Strict Limits on Balance Billing (Enforced)
Canada vs US

14. Easier Japan Stakeholders Sit in 1 Room
Fee Schedule to set Prices >3000 services
Lower Fees for High Technology
Fees < Costs
Higher Fees for Primary Care
Fees > Costs
Volume Caps (Enforced)
Strict Limits on Balance Billing (Enforced)

15. Pay Level Unit Global Budgets Capitation Admission-Based/DRGs
Fee for Service

16. Fixing PHC Capitation Short Term Standardized coding ICPC-2/MIS
Monitoring and Evaluation Framework
Adjustment for Case Mix
Adjustment for Urban and Rural

17. Fixing PHC Capitation Short Term Longer-Term
Standardized coding ICPC-2/MIS
Monitoring and Evaluation Framework
Adjustment for Case Mix
Adjustment for Urban and Rural
P4P for Managing Referrals
Enrollment Choice

18. Terima Kasih!