6.5. Mechanisms to facilitate integration
6.5.3. Financing
According to the WHO framework (2000), financing reflects fair and strategic distribution of funds. It is evident that the creation and management of resources for integrated health care is heavily affected by funding arrangements. The mix of state and federal funding is one of the factors that makes Australia’s health system complex (see Table 16 for an outline of roles and responsibilities across different levels). The Australian government has acknowledged the challenges related to funding and specified financing and system performance is one of the building blocks for reform in PHC (Commonwealth of Australia, 2010). In particular, the Commonwealth government shares responsibility (funding and services) with the State/Territory governments in the areas of hospital, PHC and aged care. From a meso level perspective, this is important as MLs are federally funded PHCOs operating in local contexts and promoting partnerships with State-funded bodies. It has been suggested that introducing fiscal mechanisms, such as the use of incentives to encourage
coordinated care, continued investment in infrastructure, and sharing of resources will be beneficial actions as MLs promote integration across health sectors (Cranleigh Health, 2012).
There is a variety of methods of payment that are employed by the PHCOs discussed in this report and that fit along a continuum (Figure 10). Internationally, financial incentives for PHCOs are generally recognised as a useful mechanism to recognise and reward effort. However, research suggests that providing financial incentives to achieve certain activities can lead to ‘gaming’ (Custers et al., 2008) (U.K. Quality and Outcomes Framework), which may adversely impact on the delivery of high quality care. On the other hand, PHCO programs like NZ’s PPP (New Zealand Ministry of Health, 2006) have funding which, although considered substantial, is not large enough to drive
inappropriate target achievement activity. In this setting, mixed payment models are well endorsed and considered to be the most effective type of incentivised funding model (Mechanic and Altman, 2009, Rosenthal, 2008, Wranik and Durier-Copp, 2010). This consists of funding distributed directly to the practice to recognise achievement while retaining the remaining funding to support PHO level support services.
Figure 10 The payment method continuum
Funding and financing arrangements
The complex mix of funding between Commonwealth and state/territory governments adds to the challenge of aligning objectives, policies, protocols, responsibilities and roles. While there is an expectation that organisations will take steps to improve integration, they do not always have the resources, authority or budgetary control to enable development of the appropriate links or implement strategies to integrate services (Cumming, 2011).
Responsibility for contracting and commissioning gives PHCOs considerable leverage to influence the availability and range of PHC services. A capitation-based funding system and associated patient enrolment enables a population focus and care over time, while aligned regional and local planning boundaries between PHCOs and other health service planning boundaries also help with more coordinated approaches to planning, service development and service delivery. In a comparison and critique of international health care systems, McDonald et al. (2007) suggested that these elements are largely absent in the Australian health care system and set significant limitations on the role of DGPs and PCNs/PCPs. The analysis indicated that while DGPs may have contributed to improving general practice quality and access to multidisciplinary care, and PCNs/PCPs improved coordination, their scope of responsibilities and authority needed strengthening to enable them to take a more comprehensive approach to ensure access to PHC, service coordination and to address population health needs (McDonald et al., 2007). Recently there have been additional funding models proposed such as one in which social insurance is used to fund the healthcare system and empower
consumers (Doetinchem et al., 2010, NSW Government, n.d.).
Balancing competition and integration
A tension exists between establishing and promoting integration across health services and using competition to influence improvements in integrated care (Ham, 2012). On the one hand,
competition in a free market is expected to drive innovation and improvements in performance in integrated care; whereas the counter-argument is that competition undermines integration between organisations that are potentially competing for the same ‘business’ (Ham, 2012). In a competitive market, where the need to secure economic viability is critical, health care provider organisations may focus on individual organisational goals rather than improvements in population health from the perspective of the local community. Conversely, as Curry and Ham suggest:
integrated care could act as a barrier to choice and competition if it were to entail
establishment of organisations that take on the appearance of monopoly providers of care in their areas (Curry and Ham, 2010, p 1).
The right kind of integration is critical – i.e. patient-centred, whole-of-system integration that meets the needs of an ageing population with multiple morbidities, rather than disease-specific integration, which “risks creating new siloes to replace old ones” (Ham, 2012, p 2).
Fee for Service (FFS)
FFS + shared savings
Episode payment
Partial compensator
y care payment +
pay for performance
Comprehensiv e care (Global)
payment
Capitation
A case study in Amsterdam provides an illustration of how a long-standing collaboration between local health care providers and introduction of regulated competition in the Dutch health care system led to a shift in focus away from community-based integrated PHC towards integrated care for the elderly, but without the strong partnerships and prioritisation of community needs that existed previously (Plochg et al., 2006):
Thus, tension exists between the need to collaborate and the need to compete (Plochg et al., 2006).
However, Curry and Ham also suggest that both integration and competition could both play a role in improving performance so long as patients have a choice in their care providers within or between integrated care organisations (Curry and Ham, 2010); and if policies support and enable them (Ham, 2012).