Health Systems Lecture 1 - Three Models of Healthcare Organization PDF

**Health Systems** **Lecture 1 - Three models of healthcare organization** +-----------------------------------------------------------------------+ | 1. Voluntary health insurance | | | |...

**Health Systems** **Lecture 1 - Three models of healthcare organization** +-----------------------------------------------------------------------+ | 1. Voluntary health insurance | | | | 2. Social health insurance | | | | 3. National health insurance | +-----------------------------------------------------------------------+ differ concerning funding mechanisms & in the way which the provision of healthcare services is organized +-----------------------------------+-----------------------------------+ | 3. Voluntary health insurance | - Citizens can **freely | | (VHI) | choose** whether to take out | | | a health insurance policy | | | with a private insurance | | | company | | | | | | - Each citizen (depending on | | | income, health condition and | | | inclination to risk) may | | | **design a custom-made | | | insurance policy** with | | | his/her insurance company | | | | | | - Provision of healthcare | | | services is usually entrusted | | | to **providers** who are | | | **independent** from | | | insurance companies | +===================================+===================================+ | 1. Social health insurance (SHI) | - Based on principle whereby | | | the government may require | | | **certain occupational | | | groups** to take out a health | | | insurance policy | | | | | | - State does not act directly | | | as an insurer; several | | | different **sickness funds** | | | do not-for-profit bodies | | | | | | - Health service providers | | | continue to be separate legal | | | entities, amongst which | | | citizens may choose | | | | | | - Germany was the first country | | | to adopt such a system with | | | the Bismarckian legislation | | | of 1883 | | | | | | - In the beginning, | | | obligation concerned only | | | a limited number of | | | occupational groups and | | | was extended to | | | | | | - Greater number of | | | occupational groups | | | | | | - Not just individual | | | subscribers, but also | | | their families | | | | | | - Not just workers, but | | | also pensioners | +-----------------------------------+-----------------------------------+ | 2. National Health Services | - Financed through general | | (NHS) | **taxation** | | | | | | - The state gathers & manages | | | the resources needed to | | | finance healthcare provision | | | | | | - Guarantee healthcare to the | | | **ENTIRE POPULATION** all | | | citizens have a right to the | | | same medical treatment which | | | is judged to be essential | | | | | | - Provision of services: most | | | hospitals are publicly owned; | | | most physicians are also | | | public employees | +-----------------------------------+-----------------------------------+ **Lecture 2 -- Financing health care** +-----------------------------------------------------------------------+ | *Funding models:* | | | | 1. Simple market | | | | 2. Voluntary insurance | | | | 3. Targeted programs | | | | 4. Social health insurance | | | | 5. Mandatory residence insurance | | | | 6. Universalist model | | | | 7. Medical Savings Accounts | +-----------------------------------------------------------------------+ 1. **Simple market** - All entities who/which provide healthcare services (providers) & healthcare service users interact **w/o mediation of third parties** - **NO** entities play the role of **insurers** - Providers are free to set the price of their services - Users pay relative fee directly to the provider (from their own pockets) 2. **Voluntary Insurance** - Citizens are free to choose whether or not to sign up for private health insurance if one doesn't want to/ can't, one has to pay for these healthcare services out of one's own pockets - Tax/cash incentives may be provided to those who opt for insurance - Private insurers compete with one another (Insurers may be for-profit insurance companies *apply risk-rated premiums* /non-profit institutions & funds *community rated/group rated premiums*) 3. **Targeted programs** - Often in countries with voluntary/social health insurance - Financed by general **taxation** & intended for particular target populations - **Beneficiaries**: most vulnerable categories, those that are most exposed to health risks (low-income individuals, elderly & minors, persons suffering from serious illnesses) not only "weaker groups", but also for professional categories considered worthy of protection by the state, such as military/civil servants - DIFFERENCE: Beneficiaries coincide only in part (or not at all) with those who finance such programs Program financed by the entire community, but only available to particular categories The general population is not covered +-----------------------------------------------------------------------+ | E.g. US Public programs: | | | | - **Medicare** covers Americans over age 65 and younger people with | | long term disabilities. | | | | - **Medicaid** is a mean-tested program, for low-income persons. | | | | - **Chip** (Children's Health Insurance Program) provides insurance | | to children of low-income families whose earnings exceed the | | Medicaid ceilings. | | | | - Others public schemes cover: war veterans, members of the Armed | | Forces, federal government employees, Native Americans and Alaska | | Natives, prisoners, and other "weak" groups (e.g. people affected | | with HIV/AIDS). Overall, public programs cover --completely or | | only in part --about one-third of US population. | +-----------------------------------------------------------------------+ 4. **Social health insurance (Bismarck model)** - State requires certain categories of workers to **pay contributions from their salary** into a **health insurance fund** managed by quasi-public, non-profit organisations subject to strict governmental regulation - Contributions to be paid into a health insurance fund (may be co-paid by employee and employer) are not calculated as a percentage of the overall income, but only **of the earned income** - Different health insurance funds -\> **not in competition** with one another +-----------------------------------------------------------------------+ | E.g. France | | | | - Since the 2000 reform (Coverture Maladie Universelle, CMU), the | | entire population has a **basic health coverage**. | | | | - Basic package. Plurality of sickness funds with compulsory | | registration. Sickness funds are financed partly by taxes and | | partly by employees' contributions. | | | | - The largest sickness fund is CNAM (Caisse Nationale de | | l\'Assurance Maladie), which assists over 90% of the population | | (employees in the industry and commerce sectors, and their | | families). Self-employed and student funds have also joined the | | CNAM. | | | | - The fund of farmers (MSA) covers about 7% of the population. | | | | - Other sickness funds: railway workers, the military, ministers of | | worship, parliamentarians, sailors, etc. | | | | - 7% of the population (those who are unable to pay contributions | | regularly) is covered by the CMU (targeted) scheme. The CMU | | scheme covers both the basic package and the complementary one. | | | | - Medical treatments included in the basic package are not free. | | Tickets modérateurs. | | | | - Patients' co-sharing: | | | | - 20% hospital admissions | | | | - 30% visits to a general practitioner | | | | - 30% dental care, ambulance, prescribed drugs. | | | | - Complementary insurance. 92% of French residents buy an | | additional insurance policy (mutuellesand for profit private | | companies). | +-----------------------------------------------------------------------+ 5. **Mandatory residence insurance:** - The state requires **all residents** to take out a private health insurance policy covering essential healthcare services, using individual resources - Pay a premium (not based on income) - For-profit & non-profit insurers **compete** with one another - **Multi-payer system**, in which citizens can choose their insurers - The state may provide **subsidies** for low-income citizens & may impose strict **regulation** of the insurance market +-----------------------------------------------------------------------+ | - Since the introduction of the Health Insurance Law in 1996, each | | person living in Switzerland is **obliged to purchase a health | | insurance policy**. | | | | - Basic insurance is offered by over **80 health insurers** or | | health funds. Insurers are strictly regulated and are not allowed | | to make a profit on mandatory health insurance. | | | | - Rates must be identical within each company for all insured | | persons in the same age category and region. Insurers must accept | | all applicants (open enrolment). | | | | - Income-based **subsidies** | +-----------------------------------------------------------------------+ 6. **The universalist model** - Financed through **general taxation** - IMPORTANT: State takes up the task of gathering & managing the resources needed to finance healthcare provision - Guarantee healthcare to the entire population: All citizens have a right to medical treatment which is judged essential **Single-player** insurance scheme covering **all residents** & financed through **taxation** - Progressive financing system; Taxation not only on earned income, but on all forms of income +-----------------------------------------------------------------------+ | - Canada has a universalist single-payer public insurance scheme, | | called Medicare. | | | | - Medicare is regionally administered, and it's designed to be | | universal, comprehensive, publicly administered and mostly free | | at the point of use. | | | | - The provision of healthcare services is publicly funded, but | | privately run (physicians are not salaried by the government; | | public hospital facilities do not belong to Medicare). | | | | - Hospitals are a mix of public and private, predominantly | | not-for-profit, organizations. They are often owned by religious | | orders, universities, municipalities, etc. | +=======================================================================+ | E.g. Sweden: | | | | - Sweden has a typical universalist system, funded through general | | taxation. The public system covers the entire population. The | | majority of care is provided by public facilities (hospital, | | ambulatories, primary care centers) belonging to the NHS. | | | | - A minority of specialist care is provided by private hospitals | | contracted with the NHS. | | | | - There are co-payments for visits to the family doctor, specialist | | visits, access to the emergency room and hospital admissions. | +-----------------------------------------------------------------------+ 7. **Medical savings accounts** - Individual deposit accounts into which workers periodically pay a fixed amount / percentage of their salary MSAs benefit from favorable tax treatment - Reserves on deposit can only be used to reimburse healthcare costs - At the end of the year, any amounts left unused accrue interest & are left in the deposit account for the years to follow Each account holder only accumulates resources for him/herself, **no solidarity or any form of risk pooling** (unlike voluntary insurance or SHI) Not autonomous in any of these countries: combined with some form of insurance coverage Not largely spread around the world You can not lose money in this system - if you are healthy you are not losing money Alternative to paying a premium/ having insurance +-----------------------------------------------------------------------+ | - **Medisave** is a compulsory (for employees) saving scheme, which | | is managed by Singapore's pension fund. | | | | - Under the scheme, every employee contributes 8%-10% of his | | **monthly salary** to a **personal Medisave account**. | | | | - Part of the income is thus put aside into a Medical Savings | | Account (MSA) to meet **future healthcare needs** | | (hospitalization, day surgery, certain outpatient expenses, long | | term care), especially during retirement. Medisave savings are | | transferable only to one's spouse, children and parents. | | | | - **MediShield Life**: mandatory (for the whole population) health | | insurance, covering 'catastrophic' healthcare costs (such as | | dialysis and chemotherapy). MediShield program covers all | | Singapore residents. | | | | - **Medifund** is a targeted program for the poor, financed by the | | government. | | | | When you die, the amount on your Medisave account will be transferred | | to members of the family | +-----------------------------------------------------------------------+ **Lecture 3 -- Financing health care: Hybrid Systems** There are not any national systems that use only one of the models discussed above. All national health systems are hybrids. ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- **SEGMENTATION**: the presence of dividing lines according to which the overall national system is broken up into subsystems to which different models of healthcare organisation/financing are applied. ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- +-----------------------------------+-----------------------------------+ | **Healthcare Services** | **Population** | +===================================+===================================+ | - It involves subdividing the | - It involves the subdivision | | entire range of healthcare | of citizens into distinct | | services into different | groups associated with | | \"packages\". | different insurance schemes. | | | | | In the Netherlands | - Common criteria are: | | | occupation (employees vs. | | | self-employed workers, or | | | government vs. private | | | employees); earned income; | | | age (programs only for the | | | young or the elderly); etc. | | | | | | [\[CHART\]]{.chart} | | | | | | In the USA | +-----------------------------------+-----------------------------------+ **E.g. USA**: - Segmentation of population (high level of population segmentation): Population is split into groups Elderly have a special program, children have a special program **E.g. The Netherlands**: Segmentation of healthcare into three distinct sectors: +-----------------------------------+-----------------------------------+ | 1\. \"Exceptional\" medical | - Related in particular to care | | expenses | for the disabled and | | | long-term care | | (WLZ) | | | | - Covered by a single | | | compulsory national scheme, | | | which covers the entire | | | population and is financed | | | through mandatory | | | income-related contributions. | +===================================+===================================+ | 2\. Basic package for essential | - All citizens residing in the | | care (ZVW -- second sector) | Netherlands are required to | | | have an insurance policy | | | covering essential | | | healthcare. | | | | | | - There are about 40 | | | (for-profit and non-profit) | | | insurers to choose from, in | | | competition with one another. | | | | | | - Basic package: public | | | subsidies are granted for | | | both low-income citizens and | | | minors. | | | | | | - Two categories of people are | | | excluded from mandatory basic | | | insurance: | | | | | | 1. the military, as they have a | | | dedicated targeted scheme | | | | | | 2. people who refuse insurance | | | for religious reasons or out | | | of principle (they must | | | nevertheless pay a | | | contribution, that is | | | deposited in MSA). 0.1% of | | | population is unable to pay | | | health insurance premiums | | | regularly. | +-----------------------------------+-----------------------------------+ | 3\. "Supplementary" procedures | - E.g. dental care, | | | physiotherapy, alternative | | | medicine, cosmetic | | | procedures, etc. | | | | | | - Supplementary care fits under | | | a typical voluntary private | | | insurance system. | | | | | | [∼]{.math.inline}80% have a | | | complementary insurance | | | policy | +-----------------------------------+-----------------------------------+ **HC Systems in 27 OECD countries** A table with different colored text Description automatically generated with medium confidence US is an outlier **Private health insurance** - Private health insurance plays different roles in different contexts. It is possible to identify three distinct roles: +-----------------------------------+-----------------------------------+ | **Substitutive / Primary** | - Private insurance replaces | | | mandatory coverage. | | **(not synonyms)** | | | | - People with private insurance | | | don't have any other basic | | | insurance (like in Germany) | +===================================+===================================+ | **Complementary** | - Covers services not included | | | or only partially covered by | | | mandatory insurance. | +-----------------------------------+-----------------------------------+ | **Supplementary /Duplicate** | Provides similar coverage as | | | mandatory insurance but offers | | | extra benefits. | | | | | | - Enhances provider choices | | | (e.g., private providers), | | | better amenities (e.g., | | | private rooms), and faster | | | healthcare access. | | | | | | - Individuals still need to pay | | | for mandatory insurance. | +-----------------------------------+-----------------------------------+ | GLOSSARY | | +-----------------------------------+-----------------------------------+ | **Group/community-rated | - premiums are priced on the | | premiums** | basis of the average | | | expenditure incurred by a | | | working category or a | | | "community" (a geographically | | | defined area). | +-----------------------------------+-----------------------------------+ | **Risk-rated premiums** | - premiums are priced according | | | to the individual's risk. | +-----------------------------------+-----------------------------------+ | **Opting out** | - a situation in which | | | individuals are allowed to | | | choose between statutory and | | | private health insurance | | | coverage; if they choose the | | | latter, they are exempt from | | | contributing to the former. | +-----------------------------------+-----------------------------------+ | **Risk selection | - a process whereby an insurer | | (cherry-picking)** | tries to attract people with | | | a lower-than-average expected | | | risk and deter those with a | | | higher-than-average expected | | | risk. | +-----------------------------------+-----------------------------------+ | **Open enrolment** | - a regulatory requirement that | | | prevents health insurers from | | | rejecting applications for | | | coverage. Insurers must | | | accept all applicants. | +-----------------------------------+-----------------------------------+ **Cost Sharing** - There are two main reasons for introducing cost sharing. 1. To reduce excessive use of health services facilitated by health insurance. 2. To raise revenue for the health system, particularly in countries where public budgets are under pressure. - Forms of cost sharing: +-----------------------------------+-----------------------------------+ | Co-payment | The user is charged a flat rate | | | per item or service received. | +===================================+===================================+ | Co-insurance | The user pays a fixed | | | proportion/percentage of the | | | total | | | | | | cost, the insurer pays the | | | remainder. | +-----------------------------------+-----------------------------------+ | Deductible | The user pays a fixed quantity of | | | the costs, the insurer the | | | | | | remainder. Deductibles can apply | | | to specific cases or a period of | | | time. | +-----------------------------------+-----------------------------------+ | Extra billing | An additional fee the provider | | | levies in addition to the | | | | | | payment received from the | | | third-party payer. | +-----------------------------------+-----------------------------------+ **Lecture 4 -- Health care provision** **Organisation of providers** Two rival models: (2 extremes, countries fall somewhere between the two) +-----------------------------------+-----------------------------------+ | **Separated model** | **Integrated model** | +===================================+===================================+ | - actors enjoy a high degree of | - actors belong to the same | | autonomy | organization | | | | | - pluralism | - stable and biunique | | | relationships (2 actors, you | | - contractual relations | can't choose between | | | different partners no | | - ample freedom of choice | alternatives) | | | | | Similar to market system | - hierarchy, internal rules | | | | | | - limited freedom of choice (of | | | all actors) | +-----------------------------------+-----------------------------------+ Two different types of integration: +-----------------------------------+-----------------------------------+ | **Organizational** | **Clinical** | +===================================+===================================+ | - Concerns the formal | - Evaluates to what extent | | contractual agreements that | different providers treating | | bind healthcare providers | the same patient actually | | together. | coordinated their efforts. | | | | | - Formal structure (belong to | - Actual interaction among | | the same organization) | providers. | | | | | | no formal agreement | +-----------------------------------+-----------------------------------+  1. **Vertical integration** +-----------------------------------+-----------------------------------+ | **Integrated model** | **Separated model** | +===================================+===================================+ | Insurers and providers belong to | Insurers and providers are | | the same organisation. | independent entities. | | | | | \(1) Denmark, Finland, Ireland, | \(2) Australia, Canada. | | Italy, New Zealand, Norway, | | | Portugal, Spain, Sweden, UK. | \(3) Austria, Belgium, Czech | | | Rep., France, Germany, Hungary, | | | Japan, | | | | | | Netherlands, Poland, Korea, | | | Switzerland, Turkey, US. | +-----------------------------------+-----------------------------------+ A diagram of a diagram of a diagram Description automatically generated with medium confidence 2. **Horizontal integration** +-----------------------------------+-----------------------------------+ | **Integrated model** | **Separated model** | +===================================+===================================+ | GPs and hospital specialists | Primary and secondary care | | belong to the same organisation. | provided by separate entities. | | | | | Finland, Greece, Portugal, Spain, | Australia, Austria, Belgium, | | Sweden. | Canada, Czech Rep, France, | | | Germany, Hungary, Israel, Japan, | | Denmark, Ireland, Italy, New | Netherlands, Poland, Korea, | | Zealand, Norway, UK (GPs are | Switzerland,Turkey, US. | | self-employed | | | | | | professionals). | | +-----------------------------------+-----------------------------------+  +-----------------------------------+-----------------------------------+ | **Primary care** | **Secondary care** | +===================================+===================================+ | - basic procedures performed in | - medical care of a specialized | | response to the most common | nature. | | illnesses and problems. | | | | - requires more sophisticated | | - provided in the consulting | equipment. | | rooms of general | | | practitioners, in outpatient | - provided by medical | | clinics, at the patient's | specialists who have a more | | home. | sectorial approach to | | | illnesses and whose | | - GPs follow the patient from a | relationships with patients | | continuous and broad- | are usually limited to single | | spectrum perspective. | pathological episodes. | +-----------------------------------+-----------------------------------+ 3. **Gatekeeping** +-----------------------------------------------------------------------+ | - Gatekeeping is the principle by which access to specialist | | healthcare is possible - apart from accidents and emergencies - | | only through referral by general practitioners. This means that | | patients do not have direct access to secondary care. | | | | - Gatekeeper GPs are given a fundamental role in sorting and | | filtering healthcare needs. GPs must ensure access to specialist | | care to only those patients who have a real need for it. The GP | | has to recommend the most suitable specialist to the patient. | | | | - The gatekeeper physician is also assigned an additional task: | | advising and guiding patients throughout their care process | | within the health system. The family doctor should coordinate the | | different specialist services, ensuring continuity of treatment. | +-----------------------------------------------------------------------+ +-----------------------------------+-----------------------------------+ | **Gatekeeping systems** | **Non-gatekeeping systems** | +===================================+===================================+ | Patients must have a referral | GP referral is optional | | from their GP to access a | | | specialist. | Austria, Belgium, Czech Rep, | | | France, Germany, Greece, Japan, | | Australia, Denmark, Finland, | Korea, Sweden, Switzerland, | | Ireland, Israel, Italy, | Turkey, US. | | Netherlands, New Zealand, Norway, | | | Portugal, Spain, UK. | | +-----------------------------------+-----------------------------------+ **Mixed:** Canada, Hungary, Poland 4. **Patient freedom of choice** - Patient access to different types of healthcare varies among countries, reflecting different levels of patient choice +-----------------------------------+-----------------------------------+ | **Complete freedom of choice** | **Free choice among public + | | | approved private providers** | +===================================+===================================+ | Patients are allowed to choose | Denmark, Finland, Greece, Israel, | | any provider (public or private) | Ireland, Italy, Spain, UK. | | | | | Australia, Austria, Belgium, | | | Canada, Czech Rep, France, | | | Germany, Japan, Netherlands, | | | Norway, Korea, Sweden, Turkey. | | +-----------------------------------+-----------------------------------+ **Limited choice**: Hungary, New Zealand, Portugal, Switzerland, US. 5. **Solo vs. group practice** +-----------------------------------+-----------------------------------+ | **Solo practice** | **Group practice** | +===================================+===================================+ | - it may be difficult for GPs | - can hire ancillary staff, | | to provide a broad range of | purchase equipment more | | services around the clock and | efficiently and have regular | | to coordinate with care | meetings for coordination and | | provided by others | joint policy-making | | | | | - Austria, Belgium, Czech Rep, | - Australia, Canada, Denmark, | | Germany, Hungary, Japan, | Finland, France, Greece, | | Korea, Switzerland | Ireland, Israel, Italy, | | | Netherlands, New Zealand, | | | Norway, Poland, Portugal, | | | Spain, Sweden, Turkey, UK, | | | US. | +-----------------------------------+-----------------------------------+ **Integrated vs. separated systems:** A table of text with black text Description automatically generated with medium confidence **Financing + Provision:** **Lecture 5 -- The US health care system** - Most of Americans have a private supplementary insurance - 91.6% of population are with healthcare insurance in the USA **The American "Healthcare Patchwork"** - Collection of systems - They range from a publicly funded, fully centralized system with salaried providers in the Veteran's Administration Health Care System to private insurance system that still provides complete freedom to choose providers and services in a competitive marketplace. - No national health coverage plan that provides universal access to medical care. The federal Medicare program provides nearly universal coverage for persons over age 65, but coverage for persons under 65 is highly variable and depends on the individual's characteristics. **PUBLIC PROGRAMS - Medicare** - Administered by the US government. Funded mainly by payroll taxes. - Medicare covers Americans over age 65 and younger people with long term disabilities (such as end-stage renal disease). - Part A (hospital insurance); part B (outpatient care); part C (not technically a package of care) since 2006, part D (drug coverage). Each component is financed differently. The program contains premiums, deductibles, out-of-pocket payments. - Medicare covers approximately 75% of health care costs for enrollees. In 2023, it provided insurance to 62.5 million Americans (18.9% of the US population). Medicare spending accounted for about 14% of the federal budget. **PUBLIC PROGRAMS - Medicaid** - Jointly funded by the state and federal governments, and managed by the states. - It's a mean-tested program, for low income and disabled persons. Poverty alone not necessarily qualify someone for Medicaid. - Medicaid eligibility and the effectiveness of coverage for the poor vary widely across the states. - In 2023, Medicaid provided coverage to 62.7 million low-income and disabled people (18.9% of US population). Medicaid covers a wider range of health care services than Medicare. Cost-sharing requirements are minimal. Both programs are very similar; almost the same amount of people are covered It is possible to be covered by Medicaid and Medicare **Other PUBLIC PROGRAMS** 1. CHIP (Children's Health Insurance Program) - Insurance to children of low-income families whose earnings exceed the Medicaid ceilings. - Stated are given flexibility in designing their SCHIP eligibility. The federal government finances 70% of SCHIP costs. - CHIP covers approximately 7.1 million children. In 2023, however 5.8% of children under 19 (4.4 million) remain uninsured. 2. Veterans' Health Administration (VA/CHAMPVA) national service 3. Military Health System (TRICARE) 4. Indian Health Service (IHS): not comprehensive 5. Programs covering individuals with particular diseases (e.g. HIV/AIDS). 6. The Federal Employees Health Benefits Program (FEHB): civilian government employees pay 1/3 of the cost of insurance; the government pays the other 2/3. **Employer Based Insurance** - Employers are not legally required to provide insurance to their workers, except in Hawaii and Massachusetts. - About 53.7% of population hold employer sponsored insurance coverage. - 99% of large firms offer health insurance. Only 47% of small firms offer employer-sponsored insurance. - In 2024, the average premium across all employer-sponsored plan types is \$8,951 for single coverage and \$25,572 for family coverage. **Individual insurance Policies** - Many health insurance companies sell nongroup policies to individuals who pay the premiums themselves. - Direct-purchase health insurance: 10.2% (34 million). Almost one-third of direct-purchase policies are bought through a Marketplace. Traditional indemnity plans (private, non-group insurance). The premiums for these policies tend to be higher than those for employer-group policies. **Health insurance coverage** - Overall, public programs cover 36.3% of population - 18.9% Medicaid + SCHIP; - 18.9% Medicare; - 3.6% military health care (2.6% Tricare + 1% VA). - 65.4% of population covered by private insurance 53.7% employed-based; - 10.2% direct-purchased (4 % Marketplace). - More than 20% of population with health insurance has multiple coverage. - Uninsured (2023): 8.0% (26,4 million). **The uninsured** A large number of individuals meet none of the above criteria - they are not over 65, they do not meet the eligibility requirements for Medicaid, they are not veterans, neither they nor their family members are employed in a firm that offers health insurance nor can they afford to purchase the employer-linked insurance. Many of these individuals --- 26.4 million in 2022 --- remain uninsured. In 2013 the uninsured rate was 13.3% (46 million). Individuals who do not have health insurance receive medical care from county hospitals, community health centers, migrant health centers, and free clinics. **Insurer-provider relationships** +-----------------------------------+-----------------------------------+ | **Indemnity insurance** | - Reimbursement of billed | | | charges. | | | | | | - No restrictions on the | | | patient's choice | +===================================+===================================+ | **Health Maintenance | - Vertical integration. | | Organizations** | | | | - HMOs directly provide, or | | | contract for, medical care. | | | Capitation payment. GPs | | | gatekeeper. | | | | | | - The patients pay no | | | co-payment as along as care | | | is obtained from the HMO's | | | affiliated physicians and | | | hospitals. | +-----------------------------------+-----------------------------------+ | **Preferred Provider | - The PPO presents financial | | Organizations** | incentives for its enrollees | | | to seek care within the PPO | | | network of physicians and | | | hospitals. PPOs offer the | | | option of going to a | | | non-contracted physician, but | | | with a higher co-payment. | | | | | | - PPO is the most common plan | | | type, enrolling around 48% of | | | covered workers. | +-----------------------------------+-----------------------------------+ **Problems:** - Fragmentation and conflictual relationships - Insurers vs doctors: high administrative costs - Patients vs physicians: malpractice claims - Patients vs insurers: pre-existing conditions - High costs - The problem of uninsured - safety net - episodic and acute care - uncompensated care **Patient Protection and Affordable Care Act (Obama)** 1. Individual mandate/ «play or pay» (starting in 2014) All individuals are required to purchase an approved insurance policy or pay a penalty. Exemptions for religious reasons and for low-income households. Penalties (2016): \$ 695 individual/ \$ 2,085 for families. A \$ 2,000 per employee penalty on employers with more than 50 employees who do not offer health insurance to their full-time workers. Individual mandate penalties abolished in 2019. 2. Health insurance exchanges (2014) State-regulated marketplace where individuals and small businesses can compare policies and premiums, and purchase insurance. (in 2023: 4% of population) 3. Federal subsidies Low-income individuals and families up to 400% of the poverty level will receive federal subsidies. Small businesses will get subsidies if they purchase insurance through an exchange. 4. Regulation of insurance companies (2014) Insurers must offer the same premium to all applicants of the same age and geographical location without regard to gender or pre-existing conditions. Insurers are prohibited from dropping policyholders when they get sick (2010). Insurers must spend 85% of premium dollars on health care and claims, leaving only 15% for administrative costs and profits (2011). 5. Medicaid expansion (2014) Medicaid will include all individuals and families up to 138% of the poverty level (\$ 20,783 in 2024) 2012: the Supreme Court allows states to opt out of the Medicaid expansion. (from 2013 to 2015: + 15 million) In 2024: 40 'Expansion States'; 10 'non expansion' states - Restructuring of Medicare reimbursement from FFS to 'bundled payments'. - Temporary high-risk pool (2010) - Children permitted to remain on their parents' insurance plan until their 26th birthday. **Lecture 6 -- Health care financing and provision in three countries: Germany, Canada and Switzerland** **GERMANY** **Infos:** - The German system of social insurance was first established in 1883 by the Bismarck government. - Around 78% of funding was derived from contributions to statutory health insurance, about 8% from general taxation and 11% from OOP payments. Voluntary private insurance accounted for the remaining 3%. - Since 2009, health insurance has been mandatory for all citizens and permanent residents (previously, certain populations could choose not to have insurance, though few did so). It is provided by competing, not-for-profit, nongovernmental health insurance funds (called "sickness funds") in the social health insurance scheme (SHI), or by substitutive private health insurance. - Members of an employee's family are also covered, usually nonearning spouse and children up to the age of 18. - What is covered? - The health insurance funds pay the cost of preventive services, inpatient and outpatient hospital care, physician services, dental care, prescription drugs, rehabilitation and hospice care. - Co-payments - GPs, specialists and dentists: free. - €5 to €10 for prescription drugs - €10 per day for hospital and rehabilitation stays. **Coverage:** - All employed citizens with a gross monthly income less than € 5,775 are mandatorily covered by social health insurance. - Employees whose gross wages exceed the threshold and the self-employed can choose either to remain in the SHI scheme on a voluntary basis or to purchase private insurance. +-----------------------------------+-----------------------------------+ | 4. Employees | **Compulsory SHI (75%)** | | | | | earning \< 69,300 € per year | | +===================================+===================================+ | 1. Employees | **Opting out (12% SHI; 5% private | | | insurance)** | | earning \> 69,300 € per year | | +-----------------------------------+-----------------------------------+ | 2. Self-employed | **NO SHI. Private insurance | | | (6%)** | +-----------------------------------+-----------------------------------+ | 3. Other groups | **Special regimes (2%)** | | | | | (Soldiers, Policemen, | | | | | | Civil servants, etc.) | | +-----------------------------------+-----------------------------------+ An estimated 0.1% of the population does not have insurance due to administrative hurdles or problems paying premiums. **Sickness funds:** - Sickness funds (which are currently around 100) are autonomous, not-for-profit, nongovernmental bodies. - Germans are free to choose their insurer, and 'open' sickness funds must accept any applicant. Before 1996, most Germans were assigned by law to specific insurance funds. - Since 2011, a uniform contribution rate has been set by the government. Employees currently contribute 7.3% of their gross wages, while the employer adds another 7.3% (plus a possible supplemental rate of 1%). - Sickness funds' contributions are centrally pooled and then reallocated to each sickness fund based on a risk-adjusted capitation formula, considering age, sex, and serious illnesses. **Provisions:** - *Hospitals*: 48% public; 52% private (33% private not-for-profit and 19% private for-profit). Regardless of ownership, hospitals are staffed principally by salaried doctors. - *Ambulatory care* is delivered by physicians who work in their own practices -around 56% in solo practice and 33% in dual practices. Ambulatory physicians are reimbursed on a FFS basis, with a fee schedule negotiated between sickness funds and medical associations. - *GPs.* Registration with a primary care physician is not required and GPs have no formal gatekeeping function. Sickness funds may however offer financial bonuses to those who use GPs as gatekeepers to specialist services. **CANADA** **Infos:** - Canada has a single-payer public insurance program, called Medicare. - The Canadian healthcare system is publicly funded, but privately run (physicians are not salaried by the government). - About 70% of total health expenditure comes from general tax revenues. - The organization and delivery of health services is highly decentralized, with the provinces and territories responsible for administering Medicare and planning health services. **Federal and provincial governments:** *Universal coverage* - The Canadian healthcare public scheme, known as Medicare, is designed to be universal, comprehensive, publicly administered and mostly free at the point of use. *Provincial plans* - Rather than having a national healthcare plan, Canada's health care is based on its 13 provinces and territories, each of which has its own health insurance plan. - While the provinces raise the majority of funds through own-source revenues, they also receive less than a quarter of their health financing from the federal government. **Medicare:** *Basic package* - The Medicare basic package that all provincial and territorial health insurance plans offer includes: hospital services, ambulatory care and preventing medicine. - Additional services (e.g. prescription drugs & dental care) may be offered under a provincial health insurance plan, funded & delivered on their terms & conditions. *Problems* - Long waiting times for specialty consultations or non-urgent surgeries. There\'s also the problem of scarcity of doctors in remote areas. **Private voluntary insurance:** - 71% of Canadians purchase private health insurance (average annual premium: \$756). VHI accounts for approximately 14% of total health spending. - *Private insurance* is obtained mainly through employment-based group plans, which cover services which are not includedinthe Medicare basic package (such as vision and dental care, prescription drugs, rehabilitation, etc.). Almost all PHI in Canada would thus be classified as complementary. Contributions to complementary employer-sponsored private insurance are deductible from income for tax purposes. - *Supplementary private insurance* is prohibited or discouraged by a complex array of provincial laws and regulations. **Provisions:** *Hospitals* - Hospitals are a mix of public and private, predominantly not-for-profit, organizations. They are often owned by religious orders, universities, municipalities, etc. - Most hospital-based physicians are not hospital employees & are paid FFS *Secondary care* - In Canada, most of specialist care is provided in hospitals. Specialists are paid mostly on a FFS basis. *Primary care* - Most physicians are in private practices and are remunerated fee-for-service, although an increasing number of GPs receive alternative forms of payment such as capitation or salary. - *Gatekeeping* - Patients can access the specialist directly, but it is common for family physicians to refer patients to specialty care because many provinces pay lower fees for non-referred consultations. - Many of recent reforms focus on moving from the traditional solo practice to inter-professional primary care teams that provide a broader range of primary health care services on a 24-hour, 7-day-a-week basis. As a consequences, most GPs work in group practice. **SWITZERLAND** Infos: - Since the introduction of the Health Insurance Law in 1996, each person living in Switzerland is obliged to purchase a health insurance policy. - Basic insurance is offered by over 80 health insurers or health funds. Although private, these are strictly regulated and are not allowed to make a profit on mandatory health insurance. - The federal government and the cantons provide income-based subsidiesto individuals or households to help cover mandatory insurance premiums. - Overall, around 30% of residents benefit from public subsidies. **Mandatory Health Insurance:** - Mandatory health insurance can be purchased from several competing insurers. To avoid discrimination, insurers must accept all applicants (open enrolment) and cannot vary premiums based on the health of each consumer. They are not allowed to make a profit on basic care but can on supplemental plans. - Insurers must charge the same price to every individual that buys a particular health care plan: rates must be identical within each company for all insured persons in the same age category and region, regardless of sex or state of health. Three age levels: children (0-18), young adult (19-25), and adults (26+). - In 2024, the average cost of a health insurance policy for an adult was around CHF 5,000 (EUR 5,480). For young adults: 3,800 euros. For children 1,450 euros. - A risk-equalization system seeks to compensate insurers for the varying risk profiles of their membership. - Insurers with a fewer number of women and the elderly than the average must pay money into a common pool, which is then redistributed to insurers with a greater than average number of women and the elderly. - Coverage is universal. Every individual intending to reside in Switzerland is required, within three months of arrival, to take out an insurance policy. - The mandatory basic insurance covers a broad range of treatments: most family doctor and specialist services, hospital care, physiotherapy, some preventive therapies. - Dental care is largely excluded. **Cost Sharing:** - Swiss patients are expected to contribute to the cost of treatments. 1. an annual deductible which ranges from a minimum of CHF 300 to a maximum of CHF 2,500. A higher deductible usually permits lower premiums. 2. insured persons pay 10% copayment above deductibles for all services (including GP consultations), but it is capped at CHF 700 per year. - *Out-of-pocket* payments account for 23% of total health expenditure. - Many residents also purchase complementary and supplementary VHI for coverage of services not covered under the basic package, for free choice of hospital doctor, or for improved accommodation when hospitalized. **Provision:** *Hospitals* - About 70% of acute inpatient care is provided by public or publicly subsidized private hospitals. Public hospitals are owned and often run by cantons, municipalities or foundations. Private hospitals are either for-profit or not-for-profit. - Most hospital doctors are salaried. *Secondary care* - Ambulatory services are largely provided by physicians operating as independent practices. Solo practice is the norm. - GPs and specialist doctors working in ambulatory-care settings are usually paid on a FFS basis. **Freedom of Choice:** - Swiss citizens are **free to choose** their health care physician and have free access (without referral) to specialists working in ambulatory care services. **There is no formal gatekeeping.** *Hospital care* - Patients' choice is restricted through cantonal hospital lists. *HMOs* - Patients are increasingly taking up the option to join HMOs or physician networks: almost 2/3 of Swiss residents hold a HMO insurance policy where they receive premium reductions in exchange for agreeing to a managed care arrangement. **Lecture 7 -- The politics of health care** **Role of the state:** +-----------------------------------+-----------------------------------+ | **Laissez-faire** | - minimal regulation | +===================================+===================================+ | **Stimulator** | - incentives/disincentives, no | | | obligations | | | | | | do not reduce freedom of | | | choice, but like to nudge | | | people into a certain | | | direction | +-----------------------------------+-----------------------------------+ | **Regulator** | - obligations, coercion | | | | | | Mandatory residence insurance | +-----------------------------------+-----------------------------------+ | **Protective** | - covers catastrophic risks | | | and/or weaker groups | | | | | | State does not providing | | | basic HC to the entire | | | population | +-----------------------------------+-----------------------------------+ | **Financier** | - E.g. Canada | | | | | | State only finances, does not | | | provide | +-----------------------------------+-----------------------------------+ | **Producer** | - National service | | | | | | State organizes and collects | | | the money to pay | +-----------------------------------+-----------------------------------+ **Standard developmental path:** +-----------------------------------------------------------------------+ | 1. The first stage corresponds to the diffusion, as a supplement to | | the market, of forms of voluntary insurance. | | | | **VH + subsidies + TPs** | | | | 2. The second stage coincides with the establishment of the | | principle of social health insurance. The first country to adopt | | such a system was Germany (1883). | | | | **SHI MRI** | | | | 3. The third stage corresponds to the establishment of a | | NHS/universalist scheme. The first country to adopt such a model | | was New Zealand in 1938. | | | | **NHS** | | | | The standard path followed by different national systems is thus | | marked by two crucial passages: the first, from VHI to mandatory | | insurance; and the second, from SHI to a NHS/universalist coverage. | +-----------------------------------------------------------------------+ **3 different periods of time:** - **1883 Germany** was the first country to introduce the SHI, many countries decided to follow the German example, Portugal was the last to adapt to this in 1946 - **1938 New Zealand** was first country to introduce a universalist scheme (NHS), a good number of countries decided to adopt this system and reformed their previous system (some countries decided to adopt to the system without having had a SHI before directly from 1-3). The last country to adopt this system was again Portugal. - **1994** the MRI was introduced in Germany and Switzerland (only 4 countries all together) - USA stopped at stage 1 Why have some countries stopped at the first stage (VHI), others at the second stage (SHI), and others have gone further and reached the third stage (NHS)? **The cultural explanation: Political culture affects the structure of a HC system** - **Communitarian** culture (such as Germany, Netherlands or Japan) prefer **SHI** model - **Egalitarian** culture (UK or Sweden) prefers **NHS** - **Individualistic** culture (such as the US) prefer **VHI** model **The ideological orientation of governments:** There are associations between parties & HC systems (most countries were not democratic between 1888-1920 ca. introduced SHI; most countries had governments on the left sides (socialist) between 1950 -- 1990 introduced NHS system) - There seem to be a link between healthcare models and ideological leaning. Most laws instituting a system of SHI were taken on by conservative or non-democratic governments; whilst most laws instituting a NHS/ universalist scheme were the work of social democratic governments. - The SHI model envisages a reduced public intervention; it seems therefore to be more congenial to right-wing parties (whether conservative or liberal). - The NHS model envisages a much more extensive intervention on the part of the State, and proposes equality of treatment for all citizens, even at the cost of the individual\'s freedom to choose. It should not be surprising that a system with these characteristics is more often invoked by leftist parties. **Health politics:** - The 'health politics' perspective assumes that the choices made by different countries in the field of healthcare largely result from clashes involving governments and competing interest groups. - The process of formulating health policies can be conceived as an arena in which actors --such as governments, health professionals, trade unions, employers, political parties and insurance companies --compete. The past outcomes of these clashes were influenced not only by the strength of the actors, but also by the rules of the game and the institutional constraints, which distinguish each national system. **The Obama Reform** +-----------------------------------+-----------------------------------+ | The problems to be solved | - Overall costs. The United | | | States is the country that | | | spends the most on health | | | care: total health care | | | spending in the United States | | | is 16 percent of GDP, | | | compared with an OECD average | | | of 8.8 percent. | | | | | | - The uninsured. 16.7 percent | | | of the population (more than | | | 50 million Americans) lack | | | health insurance. | | | | | | - Health insurance policies are | | | expensive. The average price | | | of a policy obtained through | | | the employer is around | | | \$5,000 annually. | | | | | | - Opportunistic and dishonest | | | behavior of insurance | | | companies (pre-existing | | | conditions, drop, cherry | | | picking). | +===================================+===================================+ | The political context | - Various polls confirm that a | | | majority of Americans believe | | | that the system needs to be | | | reformed, and that the | | | uninsured are a problem; | | | however, they are unwilling | | | to pay more taxes, and are | | | concerned about the rising | | | costs of insurance policies; | | | they are convinced that the | | | management of health care | | | should be in the hands of | | | private actors, not the | | | government. Those with health | | | insurance are generally | | | satisfied with the quality of | | | care they receive; they are | | | not willing to give up their | | | freedom of choice. | | | | | | | | | | | | - House: 258 Democrats (out of | | | 435 deputies). | | | | | | - Senate: 58 Democrats; 39 | | | Republicans; 2 independents | +-----------------------------------+-----------------------------------+ | Interest Groups | 1. American Medical Association. | | | | | | 2. American Hospital | | | Association. | | | | | | 3. Phrma (union of | | | pharmaceutical companies). | | | | | | 4. AHIP (America's Health | | | Insurance Plans). The health | | | insurance companies | | | | | | 5. AARP (American Association of | | | Retired Persons). The | | | pensioners\' union | | | | | | 6. Chamber of Commerce. Large | | | enterprises | | | | | | 7. NFIB (National Federation of | | | Independent Business). Small | | | enterprises | | | | | | 8. Club for Growth e Tea Party. | | | Lobbies of those who claim to | | | be \"fiscally conservative.\" | +-----------------------------------+-----------------------------------+ | Other key players | 1. **President Obama**. He | | | promised a radical reform of | | | the healthcare system. | | | | | | 2. **Rahm Emanuel** is President | | | Obama\'s chief of staff. | | | | | | 3. **Blue Dogs**. A group of | | | moderate and conservative | | | Democratic members of the | | | House of Representatives. | | | | | | 4. **Independent senators**. To | | | avoid obstructionist | | | practices, a bill must be | | | passed by a majority of 60 | | | senators. The two independent | | | senators are decisive to | | | reach 60. | | | | | | 5. **Supreme Court**. The Court | | | consists of 9 justices, with | | | a balance of 5 conservative | | | justices and 4 liberal | | | justices. | +-----------------------------------+-----------------------------------+ **The importance of institutional rules: MAJORITARIAN MODEL**  A diagram of a government Description automatically generated Big reforms are more difficult to reach in dispersed consensual systems than in majoritarian systems. These countries will usually still have a SHI system (Germany) or USA (VHI) whereas majoritarian can more easily complete the standard evolutionary path towards universalist healthcare (Denmark). **CONCLUSION:** - The ideological orientation of governments. SHI schemes have more commonly been adopted by conservative governments, while the majority of laws instituting a NHS have been passed by social democratic executives. - The importance of political institutions. Completing all the stages of the standard developmental sequence (from VHI to NHS) has been easier and quicker in those political systems which have fewer veto players. **Lecture 8 -- The Italian health care system; How hospitals and doctors are paid** **History:** - Until 1930s VHI (targeted program for the poor) - End of WW II SHI - 1978 reform established NHS (radically reorganized in early 1990s) **NHS (Servizio Sanitario Nazionale, SSN)** - Financed through general taxation - Committed to guaranteeing people resident in Italy a basic package of health services Benefits package includes: preventive services, hospital care, family doctors and specialist services. \[Dental care, rehabilitation and vision care are -- on the contrary -- largely excluded\] - Inpatient & primary care are free at point of use - Patients pay a co-payment for diagnostic procedures, specialist vists and pharmaceuticals COST-SHARING exemptions exist for low income people / people with chronic or rare diseases +-----------------------------------+-----------------------------------+ | **Ministry of Health** | 1. responsible for determining | | | the overall budget for the | | | SSN | | | | | | 2. definition of the so-called | | | 'essential levels of | | | assistance' (Livelli | | | essenziali di assistenza -- | | | LEA) | +===================================+===================================+ | **Regional level** | - Can decide how to organize | | | the provision of health | | | services in their territory. | | | (in compliance with the | | | general principles | | | established by the national | | | government) | | | | | | - The individual regional | | | government is responsible for | | | identifying hospitals to turn | | | into hospital agencies and | | | deciding how many local | | | healthcare agencies to divide | | | their territory into. | | | | | | *The autonomy enjoyed by Italian | | | regions is such that some | | | consider it no longer appropriate | | | to talk of a single national | | | health service, but rather of | | | twenty different regional | | | systems.* | +-----------------------------------+-----------------------------------+ | **Local level** | - Required to guarantee LEAs | | | over their territory. | | *(aziende sanitarie locali , | | | ASL)* | - The whole Italian territory | | | is currently divided into 120 | | | ASL (with an average number | | | of about 500,000 people). | | | | | | - Some hospitals have been | | | separated from the respective | | | ASL and transformed into | | | independent hospital agencies | | | (aziende ospedaliere, AO = 43 | | | in Italy). In most cases, it | | | is the larger and most | | | specialised hospitals. | +-----------------------------------+-----------------------------------+ | Ongoing reforms | | +-----------------------------------+-----------------------------------+ | **Community Houses** | - With Next Generation | | | EU/Recovery Plan funding, all | | | regions are expected to adopt | | | the 'Community House' ('Case | | | della comunità') model. | | | | | | - This model calls for all | | | health professionals and | | | social workers responsible | | | for the same territorial | | | community to work in the same | | | building and integrate with | | | each other. | | | | | | - More than 1,000 community | | | houses are to be established | | | by mid-2026, spread over the | | | entire country. | +-----------------------------------+-----------------------------------+ **The intertwining of public and private healthcare** +-----------------------------------+-----------------------------------+ | **Funding** | **Provision** | +===================================+===================================+ | - Spending on healthcare in | - On average, the Italian NHS | | Italy comes 76% from tax | spends around EUR 2,210 per | | revenues (it is used to | patient per year. | | finance the NHS), while the | | | remaining 24% is private | - Two thirds of the healthcare | | (21.4% out-of-pocket; 2.7% | funded by the SSN is issued | | PHI). | by public suppliers, while | | | one third is provided by | | - Italians are used to going | private suppliers holding | | private for many treatments | special agreements with the | | that they could receive from | public service. | | the public service. | | | | - Every Italian spends an | | - The possibility to skip | average of about EUR 700 per | | waiting lists, to choose the | year on health care purchased | | individual health | from the private sector. | | professional and the ease of | | | access are the main reasons | - Looking at the whole system, | | why people turn to private | approximately 51% of | | providers. | healthcare services are | | | provided by public providers | | | (belonging to the NHS) and | | | 49% by the private providers. | +-----------------------------------+-----------------------------------+  - Private HI: - VHI is provided both by mutual associations distinguished by their nonprofit status, and by for-profit commercial companies. - In 2004, there were fewer than 5 million Italians with some form of private health insurance. - In 2022, Italians with some form of supplementary health coverage are about 30% of the population (18 million). - 76% of private health policies are included in employment contracts, 24% are purchased individually. **Comparing national health services in Northern and Southern Europe** +-----------------------------------+-----------------------------------+ | **Total Health expenditure**A | | | table with green and white text | | | Description automatically | | | generated | | +===================================+===================================+ | **Public vs. private | | | expenditure** | | +-----------------------------------+-----------------------------------+ | **Hospital beds** | | | | | | A table with green squares and | | | numbers Description automatically | | | generated | | +-----------------------------------+-----------------------------------+ | **Satisfaction with the public | | | health service** | | | | | |  | | +-----------------------------------+-----------------------------------+ **\ ** **Lecture 9 -- Health care reforms over the last 30 years** **Five major reform trends:** +-----------------------------------+-----------------------------------+ | 5. Stimulation of greater | UK 1990 | | competition | | | | Germany 2007 | | | | | | Netherlands 2006 | +===================================+===================================+ | 1. Promotion of integration | France (1996-1999) | | (both in terms of financing | | | and delivery) | South Korea (1999) | | | | | | Netherlands (2006) | +-----------------------------------+-----------------------------------+ | 2. Decentralization | Spain (2002) | | | | | | Sweden (2005) | | | | | | France (1996-1999) | +-----------------------------------+-----------------------------------+ | 3. Strengthening patients' | UK (2001-2005) | | rights and freedom of | | | | Sweden (2005) | | | | | | Netherlands (2006) | +-----------------------------------+-----------------------------------+ | 4. Extension of insurance | France (1999) | | coverage | | | | Germany (2007) | | | | | | South Korea (1999) | +-----------------------------------+-----------------------------------+ **UK** +-----------------------------------+-----------------------------------+ | **1990:** | **2001-2005:** | +===================================+===================================+ | Thatcher government | Second Blair administration: | | | strengthening of patients' | | - Inspired by the principles of | choice. | | the 'internal market' | | | (fundamental component = | - \(2006) Patients would have t | | separation of suppliers and | he | | purchasers) | right to choose from a list o | | | f | | - The split promised efficiency | at least four hospital | | by introducing a system of | providers selected by their G | | provider competition in which | P, | | 'money would follow the | including an option in a | | patient'. | private hospital. | | | | | - Local health authorities | - \(2008) patients would be | | would receive a budget, with | allowed to choose from any | | which to purchase services | provider meeting the Healthca | | from a vast array of | re | | providers. | Commission's standards and | | | charging the NHS price. | | - 'Fund holding' GPs | | | represented a second category | | | of purchasers. | | | | | | - The provision of services was | | | the responsibility of | | | hospitals transformed into | | | autonomous 'trusts.