Topic 9: Supply Side Reform and Reimbursement
a
Module: Health systems, economics and policy
Topic 9
Topic 9: Supply Side Reform and Reimbursement
Objectives/learning outcomes
Recognise and understand funding and reimbursement methods, including, global budgets and block grants, case payment, capitation, copayments and cost sharing and user charges;
Analyse the equity effects of different funding and payment mechanisms.
Seminar: How reimbursement mechanisms are used to move financial risk around the system
Take an example of a capitated or an activity-based payment mechanism and critically examine its effects on financial risk allocation and service integration. Short presentations for class discussion. Data should be drawn from the WHO or Health Systems in Transition database (summaries only), (http://www.euro.who.int/en/who-we-are/partners/observatory/health-systems-in-transition-hit-series).
You should consider: the extent to which these types of payment mechanisms affect needs-based planning; the extent to which the financial constraints are ‘hard’ or ‘soft’; and how facilities might try to manage the financial risk.
Set reading
Figueras J et al (2005) Purchasing to improve health system performance. Maidenhead: Open University Press, chapter 11. HERE
Kutzin J (2008) Health financing policy: a guide for decision-maker. Geneva: WHO, paragraphs 46 and 47. HERE
Lecture Supply side reform
In non-market systems financial risks of ill-health are borne by the funder or government, not by the hospital or clinic, and allocation is based on historical costs plus estimates of need. In market systems, such as those in which a purchasing function has been developed, payment or purchasing mechanisms are deliberately designed to devolve varying degrees of financial risk on to the provider and is based on some calculation of sales value. Provider reimbursement or payment is one of the main focuses of health system reform because payment methods are linked in economic theory to cost efficiency. We will be concerned in this lecture with the extent to which financial risk is devolved by the system of remuneration on to health care providers and through them on to patients.
