The collapse of managed competition

The colombian Health Minister has just announced the end of competition between insurers under a mandatory health insurance scheme. This is an important announcement, two decades after Ley 100, managed competition will be removed from health policy scene.
We still have to wait for the details, but the application of what Alain Enthoven considered the best efficient option to ensure competition and mandatory coverage is ending in Colombia. The reasons are multiple and difficult to summarise in a post. The explanation deserves a whole book. The breaking point has been the scandals, corruption and fraud in EPS, the insurers side. About 50 companies were intervened and the amounts of embezeled money are impressive. Crime has entered into health care arena.
In my opinion, the most important lesson is that the introduction of social experiments and innovations are not appropriate if regulators don't understand the concept and the tools to manage the system. The policy dynamics and short-term views act against any regulatory stability, unless the country is committed to preserve the underlying principles of the health system. Therefore, be careful on experiments, it can be extremely costly in social terms.

The greater good vs shopping

Engaged Patients Will Need Comparative Physician-Level Quality Data And Information About Their Out-Of-Pocket Costs

Access to quality and cost information for citizens is increasing in certain environments. Right now you can find for example the prevalence of nosocomial infection in acute care hospitals in Catalonia with a simple click (p.69). You can assess in advance the probability of being infected during your hospital stay and if you check the indicator you'll find wide variations. Unfortunately this information is not structured to take decisions.
A recent paper in HA groups two potential approaches, information for greater good vs. information for shopping.

The health care quality and cost reporting programs that fall under the “transparency for the greater good” model tend to be nonprofit and government initiatives focused on improving quality and efficiency, engaging consumers, and increasing awareness of variation in quality and cost. In contrast, the programs that fall under the “one-stop shopping” model tend to be private-sector initiatives that aim to provide personalized, integrated information on cost and quality to support consumers’ decision making regarding care providers and services.

Personnally, I'm not so convinced about the dissemination and use of such information to patients. I'm not so sure about the role of choice in general. I suggest you have a look at the book the Paradox of choice before entering into a dubious land. Anyway, I'm in favour for greater transparency, and initiatives like Central de Resultats are a good example, but I remain uncertain about its usefulness for " doctor shopping".

I should go to Viladecans exhibition on Espriu

The pieces of the puzzle

Charter for healthy living

Since we all agree that in developed world, non-communicable diseases are the greatest challenge for health, we are more and more convinced that the solution lies partly beyond the health care system. The issue is not to be convinced about this, the big question is how. And the answers may be different according to the approach. The World Economic Forum has just released a very interesting report and a toolkit on his topic. Though it is necessary to put together all the pieces of the puzzle, and there is a clear emphasis on a multistakeholder approach, I have the impression of some missing pieces. At least two: incentives and cognitive biases in behaviour and decision making. In this blog, I have pointed out the importance of it - remember Nudge or Mindspace- and I can't see it well reflected in the reports. Although there is a minor reference in the annex, you get the flavour of rational patients and governments, as rational consumers and regulators. The context and our departures from rationality are so important that we have to beware of them. Anyway, the most important is to have a look at the toolkit, not only to the report. The intention is clear, focus on the application.

Cristina Iglesias at Reina Sofia Museum

Patient focused episodes

We all know that no measurement means no management. In health care the measurement of the burden of disease is not that easy. Fortunately at a global level there is the recent study published at Lancet and quoted in this post. If we need to be precise in the measurement with consequences for health care management then we need better tools. Diseases finally appear around episodes, and we may have three type of episodes: event based, disease cohort and population based. The definition of episode needs to be patient-focused rather than disease centered. If you want to know the details of the newest approach to morbidity measurement have a look at this document. It is the evolution of former Clinical Risk Groups towards a new model that will be extremely helpful for management decision making and the definition of appropriate incentives.

PS. Some months ago I explained that new payment systems were in train of being defined. An impact analysis may be found here. My post was titled: A retrofuturist payment system. Now, I would like to change the title once I've seen the details, my proposal is: A complete MESS that needs to be rebuilt from scratch. (to be continued)

PS. Yesterday I attended a book presentation: "I am not Sidney Poitier", by Percival Everett. It was at La Central bookstore. Percival explained the rationale of the book and its subliminal messages.  This is not the kind of novel I'll read.

An active life ruled by reason

The humble economist

The works by Tony Culyer are so familiar for every health economist that we couldn't live without them. Those that have arrived a little bit late, now have the opportunity to read all his contributions in one book. My impression is that any university professor could create a syllabus following only this reader: Social Scientists and Social Science, Extra-Welfarism, Ethics, Need and Equity,Health Policy,Health Technology Assessment.
The introduction highlights his academic life, 250 articles, more than two dozens of books and a strong public impact of his works.
I still remember the first time I was reading about the extra-welfarist approach. In those days, the individual utility paradigm was the basis for any article you could read. I was feeling uncomfortable on the assumptions, Culyer gave the opportunity to open the windows for fresh air. Unfortunately his message has not always been understood and applied. Let me reproduce some paragraphs from the introduction:

Culyer’s concept of “extra-welfarism” helps to liberate health economists from the confines of the traditional “Paretian” or “welfarist” approach to evaluating alternative policies and institutions that dominated economic thinking in the nineteenth and twentieth centuries. Traditional “welfarist” economic analysis assumes that subjective individual preferences or “utilities” (understood either as the desires that motivate individual decisions or the feelings of happiness that may or may not follow those decisions) are the be all and end all of the social good when it comes to doing “economic” analysis properly. Culyer’s “extrawelfarist” approach allows economists to use additional sources of information about individual wellbeing or lourishing – i.e. additional to subjective desires and feelings – for evaluating alternative policies and institutions. In keeping with his professional humility, of course, he does not endorse any specific view of what constitutes a flourishing life: “Flourishing may mean different things to different people; all I require is that it be a high goal whose accomplishment gives a deep satisfaction to the one living it, and perhaps others too, as when it is said of someone who has died ‘that was a life well-lived’.

The concept of “extra-welfarism” builds upon the work of Amartya Sen, who first coined the term “welfarism” and wrote of the need to use “non-welfare” or “non-utility” information when assessing individual wellbeing. Culyer developed and refined this idea in the specific context of health care, showing in particular how non-welfare information about people’s health – and not merely people’s health-related preferences or desires – could be fruitfully used in the health care field. The three essays in turn set out the basic idea; develop and refine the distinction between “welfarist” and “extra-welfarist” approaches to health economics, in a multiauthor essay originally lead authored by the eminent Dutch health economist, Werner Brouwer; and then explore a range of different practical applications of both “welfarist” and “extra-welfarist” approaches in the health sector, showing how both can be fruitful in different contexts.

In this post I made some reviews of his recent work and here you'll find an interesting article that it is pending to be read and commented in this blog. 
Right now I only would like to share with all of you the opportunity to read the whole book again, some articles are not easy to find. Definitely, it is a reference book for any person interested in Health, Health Care and Social Decision Making, as it says the subtitle.
Congratulations!

PS. Check the extra-welfarist approach in p.59 of this excellent book of Vicente Ortún.

A new quality measurement paradigm

Quality Measure, Based On Health Outcomes, That Compares Current Care To A Target Level Of Care

The works by David Eddy et al. are a must read always. The latest one at HA February is specially relevant because it represents the introduction of new tools for measuring quality. The abstract says:

The quality of health care is measured today using performance measures that calculate the percentage of people whose health conditions are managed according to specified processes or who meet specified treatment goals. This approach has several limitations. For instance, each measure looks at a particular process, risk factor, or biomarker one by one, and each uses sharp thresholds for defining “success” versus “failure.” We describe a new measure of quality called the Global Outcomes Score (GO Score), which represents the proportion of adverse outcomes expected to be prevented in a population under current levels of care compared to a target level of care, such as 100 percent performance on certain clinical guidelines.

The tool-kit of this Global Outcomes Score is the Archimedes Model. Some months ago I devoted several posts to it. I'm absolutely sure that this approach has wide implications for our health system and I don't understand why we should delay its application. Eddy explains that in several specific situations -mostly population based- more quality represents less costs (-38%!!! p.2446). This is another excellent example of clever budget cuts. Are there any intelligent readers able to apply it? How long will we have to wait for it?

PS. If you don't have access to HA, go through Archimedes webpage.

Fresh data

Recently we have known that politicians were spotted while having lunch at a well known Barcelona restaurant. Our crazy world is becoming more unpleasant. At least two options for a politician: no lunch at a restaurant, or silent eating, unless somebody (justice) introduces more costs than benefits on spying. Up to now, spying has been profitable.
In health care, these days is appearing fresh information about hospitals, no spies needed to know P&L data. Data on 2011 hospital costs can be found at Central de Balanços. Those that want to know how money is spent in a consolidated way, can check the latest report. You  can find that outpatient pharmaceutical expenditure in hospitals decreased 5.19%. This is a historical achievement, and pharmaceutical inpatient expenditure lowered 12 % !!!. You may remember my last comment on such data in this post.
Besides a general improvement, hospital deficit in 2011 was 90 m euro, however on p. 36 there is a detailed explanation. Some hospitals account for most of the deficit (5 hospitals - out of 51- represent 64% of the amount of hospitals losses). These details are very important because these are the hospitals where budget cuts have not been effective. May be we can call them free riders? We can't confirm with data available on the report.
If you want to understand recent hospital expenditure, definitely you need to check this report (or mental health report and LTC report) and you'll reassure that the effort to trim costs has been very important, a substantial change in the former trend. Costs are lower, what about efficiency?

PS. ¿Why are there so many wicked  people in politics?. One answer to this question is given by Adolf  Tobeña connecting neurobiology, behaviour and economics. Yesterday I attended a very interesting speach. You may listen Adof Tobeña here in a similar speach (1 hour), or you can go straigth to minute 30 - and get the key messsage-, otherwise you can have a look at this pdf.

PS. A sound criticism towards ACOs, by Mark Pauly. Must read.

The great François Gabart, winner of Vendée Globe 2012

Clever budget cuts

Disinvestment in the age of cost-cutting sound and fury. Tools for the Spanish National Health System

The government has anounced that it is difficult to apply  new budget cuts again because it would harm citizen's health. However, a close look at this interesting article can provide light to take decisions that would reduce inappropriate care. The authors say:
Articulating the proposed approach to “value for money”, would require 3 basic elements:
(A) The mandate to do it: Regulatory framework
(B) The capacity to identify “low value” interventions and produce guidance on best practice
(C) The capacity to monitor compliance to and effects of “enforced” guidance.
My impression is that light is not enough. Government needs courage for clever reforms, and this means to surpass the existing hurdles. The article explains how. However, I'm uncertain about how many politicians will read this article, and still more uncertain about how many will take the suggested approach.


PS. I should read "Behavioral foundations of public policy".

Why are there high variation rates in procedures?

The Atlas of variations in health care describes what's going on in the real world. Once we know that there are large differences in hospitalization rates between geographic areas, we need to ask about the causes behind them. This is much more complicated.
Have a look at this article and you'll become convinced that it is possible to reduce potential inappropriate care, and hence reduce costs, without harming health. A key paragraph:

Si un área tuviese el comportamiento de las áreas con tasa en el percentil 25 como referencia, el exceso de coste anual oscilaría entre los 89 millones de euros en el caso de proctología hasta los 12 millones en el caso de revisión de artroplastia. En el caso de usar como umbral deseable la tasa del percentil 5, el exceso oscilaría entre los 22 millones atribuibles a revisiones de artroplastia y los 129 millones a procedimientos proctológicos.

This is a clear message for those at the helm of  budget cuts. It's the kind of message that a politician wants to avoid tackling. Anyway, handle with care, this is only a description. There is no clue about causes and consequences.

Why are we waiting?

Waiting Time Policies in the Health Sector What Works?

One could say quickly, waiting lists exist in NHS because prices are mostly absent and insurance plays a role. In consumer markets, waiting lists appear when there are creators of scarcity as Brandenburger-Nalebuff explained in his book as a specific strategy, or when there is a temporary mismatch between supply and demand. Since the solution in health care is not to introduce prices and forget insurance, we have to ask about the best practices on tackling such issue. The report by OECD says:

Supply-side waiting time policies, by themselves, are usually not successful. In the earlier OECD study on waiting time policies, the most common policy was to provide increased funding to health providers to decrease waiting times, and this type of policy continues to be a common approach. It has almost invariably been unsuccessful in bringing down waiting times over the long term. Generally, there is a short-term burst of funding that initially reduces waiting times, but then waiting times increase, and occasionally return to even higher levels when the temporary funding runs out. The other main supply-side policy is increasing hospital productivity, by introducing new payment methods such as activitybased financing (ABF) using diagnosis-related groups. This increases hospital productivity, but does not necessarily decrease waiting times.

The most promising tool is prioritisation within a waiting list. The cases of Norway and Australia are interesting examples to check. Nearer here we started with research, and finally a decree was prepared to be released. Unfortunately last April we received a phone call saying it was not possible to rule on waiting lists, that somebody would do it for us. At that moment I said that the intervention of health policy started. The answer today to the initial question - why are we waiting- is at least this one: we have made unnecessary political concessions and we should apply our legislation, we don't need the intervention from outside. That's it.

PS. Data on waiting lists at December 2012.

Dutch crossroads

EVALUATING REFORMS IN THE NETHERLANDS’ COMPETITIVE HEALTH INSURANCE SYSTEM

The quest for introducing systemic competition in health care is plagued with difficulties. This blog has explained its causes several times. There are at least two levels of competition: on the funding side and on the providers side. In my opinion the big issue is on the funding side. Under mandatory insurance, what is the outcome of managed competition (when insurers compete on quality rather than price)?. Although we don't have a case-control assessment, we can have a look at the Netherlands. Latest data confirm that costs are still rising although choice is greater than before. This article says:

Preliminary evidence shows that over the last six years health care costs have kept growing, quality information has become readily available, hospital efficiency has improved, and consumers have had greater choice

It is just a confirmation of my former post. I'm uncertain about the long term acceptance of dutch population for being the country that spends the most  on health in the EU. Can they afford the cost of choice? . Another wave of reform is approaching.

On corruption

These are days with one headline in the journal's front page: corruption. The anomalous funding of parties has created opportunities for "funding" opportunists in those parties. The case of Health Minister may be followed in this police report. The fight against corruption is not that easy. You may check recent proposals by World Bank in this book. I'm not so sure about the effectiveness of Income asset and disclosure as a tool, since we have had this for last 20 years and current news corroborate its failure.

PS. Acemoglu on innovation and growth. And the world of our grandchildren.

Overvaluing expensive drugs

A research from University of York has concluded that NICE is overvaluing expensive treatments because its cost threshold - the price at which a treatment is deemed good value for the NHS - is set too high. The threshold value per quality-adjusted life year (QALY) - a measure of the health benefits of a treatment - should be lowered from £30,000 to just £18,317, their analysis found. It suggests the NHS may be wasting money on treatments that are not as good value as first thought. Professor Sculped said:

It is crucial that the cost effectiveness threshold is seen as representing health forgone as the additional costs of new technologies are imposed on the fixed budgets of local commissioners. For decisions made by NICE and many policy options considered by the NHS and DH, this is the key to establishing the value for money of new services.

This is a strong criticism against QALYs, let's see if it has some impact in the near future. Fortunately, the British have the opportunity to debate on it. Nearer here, the press is saying now that 30% of drugs requested for approval were rejected (7 out of 24). No details available, no website, no transparent process. That's alleged democracy, southern style. NTA=Nothing to add.

PS. If you don't want to read the article, have a look at this presentation. I suggest you save it, it may be useful for the future.

PS. As you can see from my blog, in one week, two officials have said different numbers of rejected drugs for public funding (2 vs 7). Does this make any sense? Is there anybody asking for an explanation in Parliament?

PS. Follow the controversy on DSM-5 at BBC News.

PS. Check here how our drug prices have converged to the european average.

PS. Must read: Uwe Reinhardt blog.

PS. Interesting article on 20 years of economic evaluations of cancer.

Questions without answers

EESRI. Estadística dels centres hospitalaris de Catalunya, 2010

Statistics reflect facts, decision and behaviour of individuals and teams. Every year the hospital statistics might seem slightly similar to the previous one. The 2010 report, just released, splits results between publicly funded hospitals (public and private) and privately funded ones. Since the outlook is so different, I'm still asking some questions:

• Why private hospitals have a cesarean rate of 36% and public hospitals 22.7%? p.15
• Why discharges in private hospitals  are 10.5% of total if voluntary insurance is 24% of the population? p.18
•  Why "productivity" is double in private than in public hospitals? p.19 (31 vs 62 UMA/personal sanitari) p.19
• Why hospital discharge rate per 1.000 inhabitants in 2010 returns to 1995 data? (p.30)
• Does size matter for efficiency? Public hospitals average income 85m€ , private ones 19m €.

I have my own hypothesis, however the confirmation has to come from fresh research that I haven't found to date.