2016 Jamsos Askes Sesi 9 dan 10 LT Strategic Purchasing

(1)

Strategic

Purchasing

and

Contracting in

Universal

Health

Coverage

Indonesian Case

Laksono Trisnantoro and

Yulita Hendrartini

Universitas Gadjah Mada

R

p

R

(2)

Content:

Part I. Health Finance Functions

•

The Concept

•

The case of Indonesia health financing

•

Group Work

Part II. The Growth of Private Hospitals and

Contracting

Group

Work

Part III. Strategic Purchasing

•

The concept

•

What happened in strategic purchasing: Is there

any good contract? The case of Indonesia

•

Group Work

(3)

Health Financing Functions and

Objectives

Functions

Objectives

Revenue

Collection

Pooling

Purchasing &

raise sufficient and sustainable revenues in an efficient and equitable manner to provide individuals with both a basic package of essential services and financial protection against unpredictable catastrophic

financial losses caused by illness and injury

manage these revenues to equitably and efficiently pool health risks

assure the purchase and

(4)

Broad Definition of

Financing

Collect

Fund

Allocate

Resource

Pool the Risk

Paymen

t

(5)

(6)

Health Financing in Indonesia

for SHI (2014)

Resource collection Pooling purchasing

Government contribution for poor and near poor:

Rp. 19.225 (USD 1.5) PMPM

BPJS as single purchaser

PHC public & private providers: capitation

Public and private Hospitals : DRGs (INA-CBG) based payments vary according to

region

3 rd class IP for poor 2 nd class IP for non poor

1st class for non poor (depends on premium) contributions Civil servant and

military 5% of monthly wages 2% from employee

3% from employer

Contributions Laborers – 5% of monthly wages

(7)

(8)

Revenue

Collection

APB

N

BPJ

S

Tax Incom e Non-tax Income Self Funded

Primary

Care

Referral

Care

Contribution from Workers

MoH

Out of pocket

Other Ministries PBI Pemda 8 Local Gov Private Insurance (67,5 T)

(9)

(10)

Purchasing

by BPJS for

UHC

APB

N

BPJ

S

Tax Incom e Non-tax Income Self Funding

Primary

Care

Referral

Care

MoH

Out of pocket

(11)

II

(12)

Trend of Hospital Growth

Non Proft Private H

(13)

In the last 15 years:

More public finance

more private hospitals

(14)

Public-Private

Mix

Public

Hospital

Private

Public source 1

2

Private

source

3

4

14

Providers

B

u

d

g

e

t S

o

u

rc

(15)

Whether Government

using Contractual

Arrangement?

Public

Hospital

Private

Public source 1

2

Private

source

3

4

Providers

B

u

d

g

e

t S

o

u

rc

(16)

Whether Government

using Contractual

Arrangement?

Public

Hospital

Private

Public source 1

2

Private

source

3

4

16

Providers

B

u

d

g

e

t S

o

u

rc

e

(17)

A complex mechanism of

fund channeling from

government to private

hospitals:

Government budget for

poor family is channeled

through BPJS pool

(18)

Purchasing

by BPJS

APB

N

BPJ

S

Tax Incom e Non-tax Income Self Funding

Primary

Care

Referral

Care

MoH

Out of pocket

Other Ministries PBI Pemda 18 Local Gov Private Insurance (67,5 T) Public Providers: Compulsory

Private Providers: by contract_{Is it by}

(19)

Contracting defined

•

Contracting is a purchasing mechanism

used to acquire:

▫

from a specific

provider

▫

a specified

service

▫

for an explicit

quantity

▫

of a known

quality

▫

at an agreed-on

price

▫

for a given period of

time

•

In contrast to a one-off exchange, the term

Contracting implies an on-going

(20)

Contracting defined

Example of purchaser-provider split from the

U.K.

•

In 1991: NHS introduced “internal markets” in public

system.

–

District authorities & “GP fund-holders “ buy services for

community from public hospitals (“NHS trusts”), which

compete for contracts.

•

Results (Peacock, 1997)

– Quality: Non conclusive evidence on waiting times, cleanliness, referral system, and clinical quality.

– Efficiency. Limited impact due to:

i. Existence of oligopolies (few providers with important market power)

ii. Competition focused more on marketing than on prices or quality iii. Information asymmetries and

iv. Costs of contracting.

– Equity: Concerns about potential risk selection by GP fund-holders.

20

(21)

Discussion: Is there a contracting

scheme for UHC in Indonesia?

Public

Hospital

Private

Public source 1

2

Private

source

3

4

Providers

B

u

d

g

e

t S

o

u

rc

e

(22)

Public

Hospital

Private

Public source 1

2

Private

source

3

4

22

Providers

B

u

d

g

e

t S

o

u

rc

e

?

Should be discussed using strategic purchasing concept

Discussion: Is there a contracting

scheme for UHC in Indonesia?

(23)

Part III. Strategic

Purchasing

From:

(24)

•

“Passive”

–

resource allocation

based on historical

patterns and means

–

little/no selectivity of

providers

–

little/no quality

monitoring

–

price and quality

taker

Passive

Strategi

c

•

“Strategic”

–

payment systems

that create

deliberate

incentives

–

selective

contracting

–

quality

improvement efforts

and rewards

–

price and quality

maker

Passive vs. strategic

examples

(25)

Know how much money they have and how much they

(can) spend

Project and manage revenue and expenditures (including implications

for service entitlements)

Project and manage revenue and expenditures (including implications

for service entitlements)

Decide what to buy and from whom to

buy

Select providers and enter into contracts with them to deliver goods and service entitlements in

line with population needs Select providers and enter into

contracts with them to deliver goods and service entitlements in

line with population needs

Decide how and how much to pay

providers

Develop and implement provider payment systems and calculate

payment rates

Develop and implement provider payment systems and calculate

payment rates

Know and make known how the money is being used

Monitor provider performance, service utilization & quality, and

publicly report on provider & Monitor provider performance, service utilization & quality, and

publicly report on provider &

(26)

… to

achieve

•

Equity in resource

distribution

•

Efficiency in resource use

•

Access to and utilisation

of services on the basis of

need

•

Quality services that are

effective

•

Financial protection

(27)

Strategic purchasing

actions

•

To fulfil responsibilities, purchaser must

develop, manage and use information

systems:

–

Population health needs

–

Utilisation-related information, such as:

•

Patient demographics

•

Diagnosis & treatment (tests, medicines, procedures)

•

Referral

(28)

Strategic Purchasing Action

28

(29)

(30)

actions: Citizen -

purchaser

•

Registration of beneficiaries (where

required)

•

Active assessment of health needs of the

population, updated regularly

•

Mechanisms for engaging with population

to determine values and preferences

•

Using this information to assess if the

services purchased adequately meet

population needs

(31)

actions: Citizen -

purchaser

•

Making population aware of

entitlements & responsibilities (e.g.

follow referral route)

•

Public reporting by purchaser(s) on

its/their performance

•

Mechanisms for holding purchaser(s)

(32)

32

(33)

actions:

Purchaser - provider

•

Implies some ‘separation’ of purchasing &

provision responsibilities (even if done within

same organisation, at least some ‘separate

thought processes’/explicit ‘purchasing’

actions)

•

Active decision-making on which providers to

purchase services from (e.g. accreditation):

–

Meets core structural quality of care requirements

–

Location relative to distribution of population

(34)

actions:

•

Preparation of guidelines for providers

(some evidence-based decision-making

capacity):

–

EDL/formulary

–

Standard treatment guidelines (STGs):

•

Diagnostic tests

•

Drug treatment

•

Supplies for surgical procedures (e.g. type of

stent that can be used)

•

PHC gatekeeping and referral pathways

(35)

actions:

•

Contracting with providers

,

specifying:

–

Range of services required

–

Compliance with STGs

–

Quality expectations

–

Payment issues

–

Requirements for information submission

–

Penalties for non-performance and rewards for

good performance

–

No balance-billing permitted (financial

(36)

actions:

•

Influencing drug prices (e.g. reference

pricing)

•

Determining provider payment

mechanisms and setting payment rates:

–

Using mechanisms that create incentives for

efficiency and quality

–

Assessment of how providers are responding to

incentives and what refinements needed

–

Closed ended / budget neutral approaches

important (e.g. DRGs with global budget)

•

Auditing of bills & timely payments to

providers

(37)

actions:

•

Monitoring provider performance:

–

Clinical quality of care (e.g. diagnosis and

treatment in line with STGs, hospital infection

rates, etc.)

–

Efficiency (e.g. compliance with EDL/formulary

and referral procedures; claims audits)

•

Taking action on performance:

–

Poor performance – e.g. quality improvement

plan, accreditation not renewed

–

Good performance – nature of rewards

•

Financial management (ensuring

(38)

38

(39)

actions:

Government -

purchaser

•

Establishing clear policy and regulatory

frameworks within which purchaser(s)

(and providers) will function, including:

–

Explicit expectations of purchaser(s)

–

Governance structures and mechanisms

–

Autonomy for purchaser in day-to-day

management decision-making and operations

–

Requirements for reporting by purchaser(s)

–

Ability to take action on poor performance

(40)

actions:

Government -

purchaser

•

Specifying service entitlements for

population (e.g. ‘itemised’ benefit package,

or comprehensive services with some

exclusions)

•

Influence over resource flows to purchaser(s)

– e.g. contribution rates to insurance

schemes; tax-funded allocations (including

extent to which government engages with

purchaser(s) over resource requirements to

meet needs of population)

(41)

•

“Passive”

–

resource allocation

based on historical

patterns and means

–

providers

–

little/no quality

monitoring

–

price and quality

taker

Passive

Strategi

c

•

“Strategic”

–

payment systems

that create

deliberate

incentives

–

selective

contracting

–

quality

improvement efforts

and rewards

Wheter

Passive or strategic

examples?

(42)

A Critical Analysis

of Purchasing

Arrangements

under BPJS in

Indonesia

Yulita Hendrartini

Laksono

Trisnantoro

Gadjah Mada University, Indonesia

iHEA, Milan; Tuesday 14 July, 2015

(43)

(44)

44

(45)

Summary: Mechanism for

strategic purchasing

Principle agent

relationship on going proccess Key Challenge

Purchaser - government

• Organizational structure

• Capacity building for DHO

• Negociated budget

• Unclear Role of stakeholder

• Lack of Data for monitoring

• Updating

• Lack of health facilities investment

Purchaser -

citizen • Review benefit package annualy

• Patient satisfaction review

• Lack of Citizen voice

• Limitation of Custommer right

• Prospective Payment

• Selection and credentialing

• Capitation not effective

• DRG Tariff in adequate

(46)

46

(47)

Purchaser-Government

on going proccess

Key Challenge

•

Organizational structure

•

Capacity building for

DHO

•

Negociated budget

•

Unclear Role of

stakeholder

•

Lack of Data for

monitoring

•

Updating

•

Lack of health

(48)

Gaps in government actions

to promote strategic

purchasing

•

Unclear organizational roles

•

Accountability lines between BPJS / purchaser and

the Ministry of Health (and District Health Office)

•

Inadequte monitoring activities

•

Data limitation and lack of DHO capacity to monitor

the program

•

Problems in reducing the inequity of

services.

•

Limited budget to developing new health service

infrastructure and deploy strategic human

(49)

(50)

Purchaser-Citizen

on going

proccess

Key Challenge

•

Review benefit

package

annualy

•

Patient

satisfaction

review

•

Lack of Citizen

voice

•

Limitation of

(51)

Gaps in relation to role of

citizens and population in

strategic purchasing

•

The needs, preferences and priorities of citizens

in determining service entitlements is not clear

in the policy design and implementation

.



Many regions where community needs are not met



indicates that

there is no mechanism to ensure

beneficiaries can access available services

, especially

the marginalized groups



Lack of evidence on health needs



no evidence that

citizens can participate in the process of determining health

needs and priorities



No representation in purchasing boards



Limitation of patients’ rights legislation

(52)

52

(53)

Purchaser-Provider

on going

proccess

Key Challenge

•

Prospective

Payment

•

Selection and

credentialing

•

Setting indicator

•

Capitation not

effective

•

DRG Tariff in

adequate

•

In equity provider

distribution

(54)

Gaps in relation to

providers in strategic

purchasing

•

Purchaser (BPJS) has inadequate credentials and

capacity to contract



especially in government

providers. There is

no clear Contractual

Arrangement

•

Poor monitoring mechanisms to control health

services



moral hazard (potential fraud)

•

No fraud regulation

•

Provider response to prospective payment system

(capitation and DRG payment)



problems:



Provider ability/capacity to respond to incentives



accept limitation

(55)

•

“Passive”

–

resource allocation

based on historical

patterns and means

–

providers

–

little/no quality

monitoring

–

price and quality

taker

Passive

Strategi

c

•

“Strategic”

–

payment systems

that create

deliberate

incentives

–

selective

contracting

–

quality

improvement efforts

and rewards

In Indonesian Case, the

position:

(56)

The Contractual arrangment is

not clear

Public

Hospital

Private

Public source 1

2

Private

source

3

4

56

Providers

B

u

d

g

e

t S

o

u

rc

e

(57)

Can Indonesia achieve

strategic purchasing in the

context of UHC?

•

Equity in resource distribution

(Difficult if

there is no policy)

•

Efficiency in resource use

(Probably No)

•

Access to and utilisation of services on the

basis of need

(No)

•

Quality services that are effective

(No)

(58)

Group Work 2: Describe

the relationship

between purchaser(s)

and providers in your

country?

Purchaser(s )

Purchaser(s )

Providers

Governme

nt

Governme

(59)

Group Work 3:

Is there any contractual arrangement for UHC

in your country?

Public

Hospital

Private

Public source 1

2

Private

source

3

4

Providers

B

u

d

g

e

t S

o

u

rc

e