01 Global HC Model

HealthCare Knowledge Sharing Workshop
involving
Tech Mahindra Team

And Aptsource SMES
Aptsource
Powered By Knowledge
URL:www.aptsourcesoftware.com
Jan 2013
Session Goals
Identify major healthcare systems around the

g
globe
Compare and contrast major systems of
healthcare
Aptsource
The Universal Declaration of Human Rights
The General Assembly of the United Nations

adopted and proclaimed these principles in 1948
Article 25
Everyone
y
has the right
g to a standard of living
g
adequate for the health and well-being of himself
and of his family, including food, clothing, housing
y social services, and
and medical care and necessary
the right to security in the event of unemployment,
sickness, disability, widowhood, old age or other lack
of livelihood in circumstances beyond his control.
Aptsource
But who pays to uphold the right ?
Out of Pocket Expenses
Patient Community
Payments
P
Payments
/F
Facilities
ili i etc.
Insurance
G
Government
Insurance Premium
Taxes / Levies etc

etc.
Aids / Grants etc.
Aptsource
International
Bodies
Patterns of Healthcare Dispensation Models
Each nations health care system is a reflection of its:
History
Politics
Economy
y
National values
They all vary to some degree.

H
However,
they
th all
ll share
h
some common principles.
i i l
There are four basic health care models around the world,
others being combinatorial derivatives
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1. The BEVERIDGE Model
Named after William Beveridge inspired Britains NHS

Great Britain, Italy, Spain, and Cuba
Characteristics:
Healthcare is provided and financed by the government, through

tax and cost layouts
There are no medical bills
Medical treatment is a public service
Providers are likely to be government employees / institutions
Lows costs b/c the government controls costs as the sole payer
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2. The BISMARCK Model
Example : Germany, Japan, France, Belgium, Switzerland,

Japan, and Latin America
Named for Prussian chancellor Otto von Bismarck,
Bismarck propounder
of theory of welfare state
Characteristics:
Providers and payers are private

Private insurance plans financed jointly by employers and
p y
through
g p
payroll
y
deduction community
y for unemployed
p y
employees
The plans cover everyone and do not make a profit
Tight regulation of medical services and fees (cost control)
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3. The National Health Insurance Model
Ca ada, Taiwan,
Canada,
a a , Sout
South Korea
o ea
Characteristics:
Providers are private

Payer
P
is
i a government-run
t
i
insurance
program th
thatt every citizen
iti
pays into; has considerable market power to negotiate lower
prices
National
N ti
l insurance
i
collects
ll t monthly
thl premiums
i
and
d pays
medical bills
Plans tend to be cheaper and administratively much simpler
th American-style
than
A
i
t l iinsurance
Can control costs by: (1) limiting the medical services they will
pay for or (2) making patients wait to be treated
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4. The OutOut-of
of--Pocket Model
Rural regions of Africa, India, China, and South America

no-system countries
Characteristics:
Only the rich get medical care; the poor stay sick or die
Most medical care is paid for by the patient, out-of-pocket
No insurance or government plan, sparse and inadequate Govt.
f iliti
facilities
Aptsource
MIXED Model - USA

Characteristics:
Providers are mostly

yp
private
Financing and Insurance mechanisms are divided
into :
oPrivate (employer based or privately purchased
health insurance )
oPublic ( Medicare and Medicaid services )
Insurance collects monthly premiums and pays
medical bills
Plans may be complex
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No centralized national level planning authority

however government authorities can enact and
implement laws , licensure, certification and
accreditation
10
Common Goals across Models
Coverage
Coverage for every resident (old or young, rich or poor)

Every country rations care not everything is covered!
Quality
Produce better quality outcome.
Cost
Reduce costs of healthcare delivery
Choice
Offer greater choice
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11
Some situational realities USA (1)
Coverage
C
More than 20% not covered, millions underinsured
Spending
16% of GDP
Funding
aye s co
comprised
p sed o
of p
private
ate insurance
su a ce , o
only
y cou
country
t y tthat
at relies
e es o
on
Payers
profit-making health insurance companies
Private Insurance
80% of Americans have private health insurance
Physician Compensations
Providers make unlimited money
Aptsource
12
Some situational realities USA (2)
Physician Choice
Patients have choice
Copayment/Deductibles
Deductibles
D d tibl may b
be th
there
Copayments possible
Waiting Times
Not a major problem
Technology
Matured system definitions
Driven by regulations
Aptsource
13
Some situational realities Great Britain (1)
IInsured
d
100% of population covered
Spending
7.5% of GDP
Funding
Single
g e payer
paye syste
system funded
u ded by ge
general
e a revenues
e e ues ((National
at o a Health
ea t
S
System); operates on huge deficit
Private Insurance
10% of Britons have private health insurance
Similar to coverage by NHS, but gives patients access to higher
quality of care and reduce waiting times
Physician Compensations
Most providers are government employees
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14
Some situational realities Great Britain (2)
Physician
y
Choice
Patients have very little provider choice
No deductibles
Almost no copayments (prescription drugs)
Waiting Times
Huge
H
problem
bl
Benefits Covered
Offers comprehensive coverage
Terminally ill patients may be denied treatment
Technology
Huge
- full of redundancy
g spending
p
g but disorganized
g
y and
gaps
Lot of unfulfilled policies and tentative plans several
projects
j
virtually
y abandoned.
critical p
Aptsource
15
Some situational realities Canada (1)
Coverage
Si
Single
l payer system
t
100% iinsured
d
Each province must make insurance:
Universal (available to all)
Comprehensive
C
h
i (covers
(
all
ll necessary hospital
h
it l visits)
i it )
Portable (individuals remain covered when moving to another province)
Accessible (no financial barriers, such as deductible or copayments)
Funding
d
Federal government uses revenue to provide a block grant to the provinces

(finances 16% of healthcare)
The
Th remainder
i d iis ffunded
d db
by provincial
i i l taxes ((personall and
d corporate iincome taxes))
Spending
9% of GDP
Private Insurance
At one time all private insurance was prohibited; changed in 2005

Many private clinics now offer services on the black market
Aptsource
16
Some situational realities Canada

Canada (2)
Physician Compensation
Ph
Physicians
i i
work
k iin private
i t practice
ti
Paid on a fee-for-service basis
These fees are set by a centralized agency; makes wages fairly low
Ph i i Choice
Physician
Ch i
Referrals are required for all specialist services except the ED
Generally no copayments or deductibles

Some provinces do charge insurance premiums
Waiting Times
Long waiting lists
Many travel to the U.S. for healthcare
Technology
There are evolving footprints but neither sophisticated nor adequate

No incentive scheme for HIT
Aptsource
17
Some situational realities France (1)
Insured
About 99% of population covered
Cost
3rd most expensive health care system
11% of GDP
Funding
13.55% payroll tax (employers pay 12.8%, individuals pay
0.75%)
5.25% general social contribution tax on income
Taxes on tobacco, alcohol and pharmaceutical company
revenues
Private Insurance
more than 92% of French residents have complementary
private insurance
U S ); the only
These funds are loosely regulated (less than U.S.);
requirement is renewability
These benefits are not equally distributed (creates a two-tiered
y
system)
Aptsource
18
Some situational realities France (2)
Providers paid by national health insurance system based on a centrally

planned fee schedule fees are based on an upfront treatment lump sum
(similar to DRGs in US)
However, doctors can charge whatever they want
The patient or the private insurance makes up the difference
Medical school is free
Legal system is fairly tort averse
Physician Choice
Fair amount of choice in the doctors they choose
Copayment/Deductible
10% to 40% copayments
Waiting Times
Very little waiting lists/times
Technology
Government does not reimburse new technologies very generously

Little incentive to make capital investments in medical /HI Technology
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19
Some situational realities Germany

Germany
(1)
Insured
99
99.6%
6% of population sickness funds
Those with higher incomes can buy private insurance
The Federal Govt. decides the global budget and which procedures
to include in the benefit package
Funding
Sickness funds are financed through a payroll tax (avg. 15% of

income)
The
Th ttax iis split
lit between
b t
the
th employer
l
and
d employee
l
Private insurance
9% of Germans have supplemental insurance; covers items not paid

for by the sickness funds
Only middle- and upper-class can opt out of sickness funds
Reimbursement set through

with the sickness funds
g negotiation
g
Providers have little negotiating power
Very low compensation
Significant reimbursement caps and budget restrictions
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20
Some situational realities Germany

Germany
(2)
p y
/
Almost no copayments or deductibles
Waiting Times
WHO reported that waiting

waiting lists and explicit rationing decisions
are virtually unknown
Benefits Covered
There is an extensive benefit package which even includes sick pay

(70% to 90% of pay) for up to 78 weeks
Technology
Devices are advanced and sophisticated keeping part with global

standard
Healthcare processes and individual provider centric and fairly
son-standard, HIT is still evolving and needs to advance
Aptsource
21
Some situational realities Japan (1)
Insured
U
Universal
i
lh
health
lth insurance
i
based
b
d around
d a mandatory,
d t
employment-based
l
t b
d iinsurance
The Employee Health Insurance Program requires that all companies with 700 or more
employees to provide workers with health insurance
Small business workers join a government-run
government run small business national health insurance
plan
The self-employed and the retired are covered by Citizens Insurance Program
administered by municipal governments
Costs
Not as high as U.S.; average household spends $2300 per year on out-of-pocket costs
Japans have a healthy lifestyle lower incidence of disease
Funding
8.5% (large business) or an 8.2% (small business) payroll tax

Payroll taxes are split almost evenly between employer and employee
Those who are self-employed or retired must pay a self-employment tax
Private Insurance
Very rare for Japanese to use this; less than 1%
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22
Some situational realities Japan (2)
Hospital physicians are salaried

Non-hospital physicians are paid on a fee-for-service basis
Hospitals and clinics are privately owned but the government sets the fee schedule
Physician Choice
No restrictions on physician or hospital choice

No referral requirements
Copayments are 10% to 30%

Capped at $677 per month for the average family
Technology
High levels of technology; comparable to U.S.
Waiting Times
Significant problem at the best hospitals because they cannot charge higher prices
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23
Typical Questions in Controlling

Healthcare Management
g
What is the quality of service and outcome ?
- Preferred Region ? Like UK,
UK US or Australia
- Self Reliant and Stable ? Like France, Germany or Japan
- Growing from basic to advanced ? Like India or Singapore
- Struggling at basic ? Like many emerging economies
What is the availability and affordability of the service ?
- For everyone ? Like UK
- Everyone but varying privileges ? Like France or Germany
- Mostly for the privileged ? Like USA or India
- Not yet available ? Like many emerging economies
Who manages the cost of products and services ?
- Govt. ? Like UK
- Private Market ? Like France
- Mixed ? Like Singapore , or
- Uncontrolled ? Like emerging economies
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24
Global Direction for HealthCare Management
Evidence based medicine

Use of protocol and guidelines
Reduction of administrative costs
Management of chronic diseases
P
Promotion
i
off healthier
h l hi living
li i
Use of HIT
U if
Uniformity
i off Healthcare
H lh
Practice
P
i
Aptsource
25
We would be happy to be of service
Aptsource
URL:www.aptsourceindia.net
26

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01 Global HC Model

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HealthCare Knowledge Sharing Workshop

Tech Mahindra Team

Identify major healthcare systems around the

The Universal Declaration of Human Rights

The General Assembly of the United Nations

But who pays to uphold the right ?

Out of Pocket Expenses

Taxes / Levies etc

Aids / Grants etc.

Patterns of Healthcare Dispensation Models

Each nations health care system is a reflection of its:

They all vary to some degree.

1. The BEVERIDGE Model

Named after William Beveridge inspired Britains NHS

Healthcare is provided and financed by the government, through

2. The BISMARCK Model

Example : Germany, Japan, France, Belgium, Switzerland,

Providers and payers are private

3. The National Health Insurance Model

Providers are private

Rural regions of Africa, India, China, and South America

MIXED Model - USA

Providers are mostly

No centralized national level planning authority

Common Goals across Models

Coverage for every resident (old or young, rich or poor)

Produce better quality outcome.

Reduce costs of healthcare delivery

Offer greater choice

Some situational realities USA (1)

Some situational realities USA (2)

Some situational realities Great Britain (1)

Some situational realities Great Britain (2)

Some situational realities Canada (1)

Federal government uses revenue to provide a block grant to the provinces

At one time all private insurance was prohibited; changed in 2005

Some situational realities Canada

Referrals are required for all specialist services except the ED

Generally no copayments or deductibles

There are evolving footprints but neither sophisticated nor adequate

Some situational realities France (1)

Some situational realities France (2)

Providers paid by national health insurance system based on a centrally

Fair amount of choice in the doctors they choose

10% to 40% copayments

Very little waiting lists/times

Government does not reimburse new technologies very generously

Some situational realities Germany

Sickness funds are financed through a payroll tax (avg. 15% of

9% of Germans have supplemental insurance; covers items not paid

Reimbursement set through

Some situational realities Germany

Almost no copayments or deductibles

WHO reported that waiting

There is an extensive benefit package which even includes sick pay

Devices are advanced and sophisticated keeping part with global

Some situational realities Japan (1)

8.5% (large business) or an 8.2% (small business) payroll tax

Very rare for Japanese to use this; less than 1%

Some situational realities Japan (2)

Hospital physicians are salaried

No restrictions on physician or hospital choice

Copayments are 10% to 30%

High levels of technology; comparable to U.S.