capitation payment method as a policy tool, versus fee for services, or the financial...

7/30/2019 Capitation Payment Method as A Policy Tool, Versus Fee for Services, or the Financial Sustainability of The Nation

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Capitation Payment Method as A Policy Tool, Versus Fee for Services,for the Financial Sustainability of The National Health Insurance in Sudan:

Algadarif State Case Study.Mr.Ammar Alasha

1

Abstract

Moving away from Fee-For-Services payment method in the National Health Insurance fund-

Algadarif State to capitation, is an important step towards averting the financial sustainability problem of

the scheme associated with such payment method. The objectives of this study are to analyze the cash

flow and the financial status of the National Health Insurance-Algadarif State during the last five years

(2008-2012), and to evaluate the financial status during the years 2013-2017 if the Fee for Services

payment method changes into capitation payment method for the outpatient care services. The study

tries to calculate the per capita rate by using top-down allocation method and then investigates the

financial sustainability in three different scenarios; Scenario (A) The total revenues increase according to

the trend in the past and the total health expenditures under the current Fee-for-Services expected

inflation rate 30%,. Scenario (B) the same as (A) but the outpatient paid under capitation payment

method adjusted to the same inflation rates. Scenario (C) same as scenario (B) but the revenues increase

by 2% in each coming year.2013-2017. The methods used by the study are based on cash flow analysis,

trend analysis, growth ratio method and per capita calculation method. Data used for analyzing total

revenues, total expenditures and calculating per capita rate are obtained from the financial and coverage

records of the NHIF-Algadarif State during the year 2008-2012 and the actual outpatient expenditures data

are obtained from the providers in the year 2012. The findings indicate that, the financial gap for the years

2008-2012 are negative except in the year 2008 and 2009, therefore the expected financial gap are

negative in the three scenarios except when the outpatient paid according to its actual provider's cost.

Moreover introducing capitation for outpatient care services will decrease the NHIF-Algadarif State

expenditures by 14% of Fee for Services for the coming year 2013-2017, at the same time the providers

can continue gaining profit by 32% of their actual outpatient cost in same years.

Key words: Capitation, Fee-for Services, Financial Sustainability, National Health Insurance Fund in Sudan,Algadarif State.

1

Masters Student, Health Economics and Health Care Management Program, Chulalongkorn University;

E-mail: [email protected]


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Introduction

Over the past sixteen years, since government of Sudan embraced a National Health Insurance

Fund (NHIF)scheme as a policy aims at; promoting equitable access, improving quality of the curative

medical services and raising revenues for the health sector, issues of escalating expenditure on health

services against limited resources has become more and more prominent putting the financial

sustainability2

of the scheme under great pressure and high risk .However, until relatively recently, a little

had been written on these issues and a little actions had been taken on the real ground to know and

treat some of root causes of this fatal issue.

The National Health Insurance in Sudan, and at the level of Executive Directorates which

represent the Health insurance scheme in the State, has been suffering from many issues that threatening

its financial stability, and may lead to a disastrous reduction in capacity for functioning and producing an

effective benefit for both users and stakeholders over time. Firstly, the enrollment unit of the health

insurance scheme is the family that usually includes 5-7member/family in the State, the average monthly

premium for a family is range between 9-30 SDG and the average cost of medical services that provided

per member between 25-35 SDG monthly (4-6$), so when we compare the average premium with the

average cost we can notice the vast gap between them. Moreover, the utilization rate per member is

2times/year, and this rate is relatively high comparing with the standards. Secondly, the actual obtained

premium has been paid by the Federal and state Ministry of Finance as employers which equivalent 10%

of an employee's salary (Civil Servant) varies between 50-70% of the approved government budget.

Thirdly, the decision of the President in 2010, considers the health facilities that are owned and under

supervision of the health insurance scheme to divert its ownership to the Ministry of Health, accordingly

the health insurance scheme will only acts as purchaser, at the same time those health facilities are

experienced as an effective tool for cost containment

Finally, the health insurance Fund in the State as well as in all Sudan, has been used to

compensate for providers by fee for services, and no doubt this method can lead to escalation of the

health care expenditure, as it financially incentives the providers to overutilization of the health care

services, regarding to prescribing an unnecessary services, corrupted claims and supplier induced demand

(SID) which always taken a place.

The above mentioned factors can lead to either increasing the health care expenditures, or

decreasing the scheme's revenues. Find a solution is our challenge, and it is not possible to solve this

issue through those factors linked to economic crises, or the President decision, so this enforce us to

select the provider payment arena to enable the scheme be self financially sustainable.

2The scheme is financially sustainable when the revenues exceed the expenditures or at least the scheme at the break-

even point.


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Figure 1: The Total Revenues and the claim paid by the State 2006-2011

! depicts the total revenues of the State and the claims paid for the providersin million SDG, for the years 2006-2011 under FFS as the dominant payment mechanism, we can notice

the gap is getting smaller and smaller over this period. Moreover, the expenditure was not included the

other expenses eg.operational

Objective and Scope

ObjectivesThe objectives of this study are to;

1. Analyze the existing situation of the revenues both government and non-government revenue andthe health care expenditures.

2. Project for revenues and the health expenditures of both government and non-government budgetafter changing the payment method onto capitation.

3. Come up with the per capita rate that would allow NHIF Algadarif State to be financiallysustainable.

4. Compare between the capitation and Fee- for-Services as a mix payment method for purchasinghealth services, with the current Fee-For-Services method in term of financial sustainability.

ScopeThe study makes an attempt to analyze the financial status of the NHIF - Algadarif state before

changing the current FFS payment mechanism into capitation payment mechanism in term of financial

ratio and financial gap for the year 2008-2012 The capitation will be used for the outpatient care services,

that including; Medical Doctors visit, Medical, Assistants visit, Specialist consultation, laboratory


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investigations services, diagnostic services (x-ray, us scanning) and the prescribed drugs. The inpatient care

services will remain paid under fee-for-services.

Literature Review

There are many studies concerned about capitation payment method comparing with the other

payment methods in term of cost, access, utilization, satisfaction etc. Benjamin T. et al(2009) conducted a

study that analyzed the financial effect of capitation system on total knee and total hip, and the study

found that, in the first year after implementation of capitation system, cost for hospital decreased by

26%.Winnie C and Siripen S. et al.(2001) conducted study in Thailand, attempted to detect the impact of

capitation payment system which adopted by Social Security Scheme(SSS) on the use of resources, the

study revealed that, SSS patient in general use fewer resources with capitation when compare to Fee-For-

Services payment method. Catalano R. et al (2000) conducted a study comparing the cost of mental

health services for children and youth under FFS, and under capitation, the authors concluded that

compared to FFS, capitation reduces health service costs. Joan R. et al (2002) conducted study in

Colorado, to examine cost and access for mental illness patient services for two group of patient, the first

group the providers paid under FFS and the second group the providers paid under capitation payment

mechanism, and the variable measured are services cost, utilization and access, study found that cost per

person was reduced under capitation payment compare to patient under FFS and by the end of year two

cost reduced by two-third comparing capitation to FFS, and the access also reduced. Gosden T. et

al.(2003) Conducted a before and after study, investigating whether a change in payment mechanism

from capitation to capitation and fee-for services, lead to significant change in primary care physician

activities,. The author concluded that physician activities increased and referral rates decreased under

capitation and FFS payment method

Conceptual Framework

The current financial sustainability of the National Health Insurance- Algadarif State will be

measured in term of financial gap and financial ratio3. The financial gap represents the surplus or deficit of

the revenues4

over expenditures5

by using cash flow analysis in the years 2008-2012. The current financial

ratio will be measured using the data of total assets and total liabilities in the year 2012, the total current

3Measure the ability of the scheme to pay its debts for the next 12 month, the normal ratio should be 1.5-3, the higher

current ratio indicates the financial status is healthy.

4Categorized into government revenues and non-government revenues

5 Includes the direct health expenditures(outpatient and outpatient) and the indirect health expenditures (labor,

capital and material cost)


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assets include; cash in vault, cash in bank, account receivable and inventories (drugs, medical equipment,

land, vehicles etc.), the total current liabilities include; account payable for health services, maintenance,

repair, and compensation and allowance.

Forecasting for expenditures and revenues for the years 2013-2017, will depends mainly on the

data collected for the years 2008-2012 by defining its growth ratio and by using the trend analysis, then

the revenues and expenditures in the year 2012 will be used as a base for forecasting the coming

revenues and expenditures. The forecasted expenditures, firstly will represents the current situation under

FFS payment method, secondly, will represent the new situation under capitation payment method for

the outpatient care services and thirdly will represent the actual providers cost. Calculation for per capita

rate will depend on top-down allocation for the outpatient care service. Data for the year 2012, displays

the actual providers cost of outpatient care services will be used. The inpatient care services will remains

paid under Fee-for services. The revenues and expenditures will be adjusted to the events might take a

place in the future, followed by measuring and comparing the forecasted financial gaps under the

different payment method.

Study methods

For the current situation analysis in the years 2008-2012, the total revenues and the total

expenditures for each year will be calculated, and then we can come up with the financial status in term

of financial gap by the following equation:

FG = TR-TE

Where

FG = Financial Gap

TR = Total Revenues

TE=Total Expenditures

Financial status in term of current ratio for the year 2012 can be given by the following equation:

Current Financial Ratio =

Calculating the per capita rate for the outpatient care services in the year 2012, the study will

use top-down allocation by the following equation:

Per Capita Rate =

The forecasted situation under the capitation payment mechanism to be more consistency,

assumptions to reflect the possible events that may take a place in the future should be considered,

include:

1) The revenues will be treated as its trend in the past but will increase only by the average growth rate


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2) The expenditures will increase by the expected inflation rate (30%)3) Stakeholders will support the new payment mechanism, and the providers will not going to change

their behaviors.

To fulfill the above target, three different scenarios are considered, that include;

Scenario (A) the revenues for the year 2013-2017, will increases according to the trend in the past,and the actual expenditures under FFS will increase by the inflation rate.

Scenario (B) the same as (A) but the capitated outpatient services adjusted to increase by theexpected inflation rate

Scenario (C) the same as (A), but the actual provider's outpatient cost adjusted to the expectedinflation rate.

Research Results

The results of the study depend mainly on the conceptual framework, design and assumptions.

The current financial status:The financial gap for the years 2008-2012 is 2,395.08 , 109.850 , -1,865.41 , -1,865.6 , -1,198.61 million SDG, so the NHIF-Algadarif State had a surplus in the years 2008 and 2009, then

incurred deficit in the years 2010,2011 and 2012, that means its financially unsustainable during the last

three years.(Table 1).The financial sustainability in term of current financial ratio in the year 2012, the study found

that, the total current assets of the State is 40,787.7 million SDG and the total liabilities is 28,253.96

Million SDG, so the current financial ratio;

Table 1: Revenues, Expenditures and Financial Gap in the years 2008-2012AverageGrowth

rate

Averageamount

20120110100000

24.9%8,395.4327,642.2619,261.7015,618.8614,587.0211,594.38Total Revenuesxpenditures

utpatient CareServices

2.053.133,411.94,350.76,040.6391.12230.023 G.PConsultation

6.5984.611.7520.0387.437.151 M.A


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Consultation

27.45927.10125.54352.42151.18481.046 SpecialistConsultation

,478.22,641.01,830.48,214.0376.88928.682 LaboratoryInvestigations

40.6%74.98295.7627.02151.50151.50649.116 DiagnosticServices 35.9%,096.023,591.6

17,948.07,303.91,851.96,784.5

7 Medicines

0,338.18,502.03

11,785.63,382.53,440.09,580.59

Total OutpatientServices

,205.27),885.89(23.9%)

5,363.52(25.4%)

3,167.08(18.1%)

4,283.20(29.6%)

1,326.69

(14.4%)

Total InpatientExpenditures

15.7%,676.28,452.95,948.15,934.39,753.88,292.03Total IndirectHealthExpenditures

34%8,219.738,840.81,097.307,484.00

14,477.17

9,199.30

Total Expenditures

478.89-1,198.61

-1,835.60

-1,865.41

109.85,395.08

Financial GapTR-TE

The current Financial Ratio =1.4

That means for every one million SDG the NHIF-Algadarif State owes, it has 1.4 available in current assets,

but this current ratio indicates that the scheme has some financial stress as the healthy current ratio is

range between 1.5-2. (Barton A, 2005)

Outpatient per capita rate: Per capita rate for the outpatient care services, and after defining thecapitation package that going to be paid under the new capitation payment method, the study used Top-

Down allocation method by assigning the specified amount of budget allocated to the package in the

year 2012 and then divided by the number of eligible clients all over the State. (Table 2)


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Outpatient per Capita Rate = 34.3 SDG

That means the NHIF-Algadarif State should pay for the providers 34.3 SDG for each individual

enrolled in the scheme for the outpatient care services.

Table 2: Per Capita Rate for Outpatient ServicesAmount SDG Total

Expenditures%

Total outpatient Budget 15,960.00Total Number of Clients 465.631Outpatient Per Capita amount 34.3 15,960.1 100%Outpatient Care Services

-G.P Consultation

-M.A Consultation

-Specialist Consultation

-Laboratory Investigation

-Diagnostic Services

-Medicines

5.6

0.8

4.9

5.4

1.1

16.5

2,607.53

372.505

2,281.6

2,514.4

512.194

7,682.9

16%

2.2%

14%

15.8%

3%

49%

Forecasted financial status: The financial sustainability of the scheme in the years 2013-2017, dependsmainly on the scenarios developed by the study. In scenario (A) that indicates the revenues increased by

the growth rate in the past and the expenditures under the current Fee-for-Services payment method

adjusted to the expected inflation rate 30%, the study found that the NHIF-Algadarif State will incur

deficit if continue on the bureaucratic payment system in the years 2013-2017 by -2,797.9 , -6,559.4 , -

9,086.3 , -13,416.0 and -18,447.0 million SDG respectively, therefore the scheme in order to be financially

sustainable should either decrease the expenditure or increased the revenues for the years 2013-2017 by

8%, 15%, 17%, 19% and 21% respectively, the average is 16%.(Table 3)

For scenario (B) that indicates the revenues increase as in scenario (A), and the outpatient care

services paid under the capitation payment method adjusted to 30% inflation rate, the findings show the

NHIF-Algadarif State financial gap for the years 2013-2017 will be 506.57, -1,283.7, -3,561.6, -6,157.9 and -

9,045.1 million SDG respectively, so the scheme and for its financial sustainability should either decrease

the expenditures or increase the revenues in the years 2013-2017 by 0%, 3%, 7%, 9% and 10%

respectively, the average is 6%(Table 4)

Table 3: The Forecasted Revenue and Expenditures 2013-2017, Scenario (A)


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Forecasted RevenuesctualRevenuesandExpenditures

201720162015201420132012

88,601.0(100)

68,954.4(100)

54,277.1(100)

43,181.6(100)

34,695.2(100)

27,642.2(100)

*Total Revenues

107,048.(100)

82,372.4(100)

63,363.4(100)

48,741.0(100)

37,493.1(100)

28,840.8(100)

Total Expenditures

68,696.7(64)

52,843.6(63.9)

40,648.(64)

31,268.4(64.2)

24,052.6(64.1)

18,519.6(64)

* Outpatient Expenditure

5,242.3

(4.9)

4,032.7

(4.9)

3,102.0

3

(4.9)

2,386.1

8

(4.9)

1,835.52

(4.9)

1,411.94

(4.9)

G.P Consultation

128.508

(0.1)

98.852

(0.1)

76.040

(0.1)

58.493

(0.1)

44.994

(0.1)

34.611

(0.1)

MA Consultation1,214.5

(1.2)

934.233

(1.2)

718.64

1

(1.2)

552.80

1

(1.2)

425.231

(1.2)

327.101

(1.2)

Specialist Consultation

1,840.7

(1.7)

1,415.9

(1.7)

1,089.1

8

(1.7)

837.83

4

(1.7)

644.488

(1.7)

495.76

(1.7)

Diagnostic Services

9,805.8

5

(9.1)

7,542.9

(9.1)

5,802.3

(9.1)

4,463.3

(9.1)

3,433.3

(9.1)

2,641.0

(9.2)

Laboratory Investigations

50,464.

7

(46.5)

38,818.9

(46.6)

29,860.

8

(46.6)

22,969.

8

(45.6)

17,669.1

(46.5)

13,591.6

(46.6)

Medicines

25,566.8(24)

19,666.8(23.8)

15,128.3(24)

11,637.2(23.8)

8,951.7(23.8)

6,885.9(24)

Inpatient Expenditures

1,418.1984.83683.91474.94329.82229.04 Admission Services


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6

(0.8)

(0.8)(0.8)(0.8)(0.8)(0.8)

10,542.

1

(4.76)

7,028.1

(4.8)

4,685.4

(4.8)

3,123.6

1

(4.8)

2,082.4

(4.8)

1,388.27

(4.8)

Surgical Operations

28,335.

6

(18.3)

20,239.7

(18.3)

14,456.

9

(18.3)

10,326

(18.3).

7,376.01

(18.3)

5,268.58

(18.3)

Other inpatient HealthExpenditures

12,820.6(12.8)

9,861.9(12)

7,586.1(12)

5,835.5(12)

4,488.8(12)

3,452.9(12)

*Indirect health Expenditures

6,962.9

(6.4)

5,356.1

(6.5)

4,120.1

(6.5)

3,169.3

(6.4)

2,437.9

(6.4)

1,875.33

(6.5)

Labor cost480.512

(0.4)

364.7

(0.4)

284.4

(0.4)

218.65

(0.4)

168.417

(0.4)

129.47

(0.4)

Material Cost928.23

(0.9)

714.02

(0.9)

549.25

(0.9)

422.5

(0.9)

325

(0.9)

250

(0.9)

Capital Cost4,448.6

(4.1)

3,422.0

(4.1)

2,632.3

(4.1)

2,024.8

(4.2)

1,557.6

(4.1)

1,198.15

(4.1)

Expenditures

-18,447.0(16%)

-13,418.(21%)

9,086.3(19%)

-6,559.4(17%)

-2,797.9(15%)

-1,198.5(8%)

Balance(TR-TE)financial gap6

The scenario (C) indicates the financial sustainability if the revenues increased by the same

pattern in the past and the outpatient expenditures from the provider's perspective adjusted to inflation

rate 30%. The study found the financial gap for NHIF

Table 4: The Forecasted Revenues and Expenditures 2013-2017, Scenario (B)Forecasted Revenuesctual

Revenues201720162015201420132012

88,601.0

68,954.4

54,277.13,181.6

34,695.2

27,642.2Total Revenues

6Financial Gap percentage indicates, the percentage of the financial gap of the total revenues, in the forecasted years


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97,646.1(100)

75,112.3(100)

57,12.34(100)

44,465.3(100)

34,188.7(100)

26,298.9(100)

Total Expenditures

59,258.7(64)

45,583.6(63.9)

35,064.3(64)

26,972.6(64.2)

20,748.1(64.1)

15,960.1(64)


9,681.5

(4.9)

7,447.3

(4.9)

5,728.7

(4.9)

4,406.7

(4.9)

3,389.7

5

(4.9)

2,607.5

(4.9)

G.P Consultation

1,383.1

(0.1)

1,063.9

(0.1)

818.393

(0.1)

629.53

3

(0.1)

484.25

6

(0.1)

372.505

(0.1)

MA Consultation

8,430.6

(1.2)

6,485.1

(1.2)

4,988.5

(1.2)

3,837.3

(1.2)

2,951.8

(1.2)

2,270.6

(1.2)

Specialist Consultation9,335.8

(1.7)

7,181.4

(1.7)

5,524.1

(1.7)

4,249.3

(1.7)

3,268.8

(1.7)

2,514.4

(1.7)

Diagnostic Services1,901.8

(9.1)

1,462.8

(9.1)

1,125.3

(9.1)

865.61

(9.1)

665.85

(9.1)

512.194

(9.2)

Laboratory Investigations28,526.

1

(46.5)

21,943.

1

(46.6)

16,879.3

(46.6)

12,984.

1

(45.6)

9,987.8

(46.5)

7,682.9

(46.6)

Medicines

25,566.8(24)

19,666.8(23.8)

15,128.3(24)

11,637.2(23.8)

8,951.7(23.8)

6,885.9(24)


1,418.1

6

(0.8)

984.83

(0.8)

683.91

(0.8)

474.94

(0.8)

329.82

(0.8)

229.04

(0.8)

Admission Services

10,542.

1

(4.76)

7,028.1

(4.8)

4,685.4

(4.8)

3,123.6

1

(4.8)

2,082.4

(4.8)

1,388.27

(4.8)

Surgical Operations

28,335.

6

(18.3)

20,239.

7

(18.3)

14,456.9

(18.3)

10,326

(18.3).

7,376.0

1

(18.3)

5,268.58

(18.3)


12,820.6(12.8)

9,861.9(12)

7,586.1(12)

5,855.5(12)

4,488.8(12)

3,452.9(12)



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6,962.9

(6.4)

5,356.1

(6.5)

4,120.1

(6.5)

3,169.3

(6.4)

2,437.3

(6.4)

1,875.33

(6.5)

Labor cost480.32

(0.4)

369.21

(0.4)

248.41

(0.4)

218.82

(0.4)

168.33

(0.4)

129.47

(0.4)

Material Cost928.23

(0.9)

714.02

(0.9)

549.25

(0.9)

422.5

(0.9)

325

(0.9)

250

(0.9)

Capital Cost4,448.6

(4.1)

3,422.1

(4.1)

2,632.3

(4.1)

2,024.8

(4.2)

1,557.6

(4.1)

1,198.15

(4.1)

HealthExpenditures

-9,045.1(10%)

--6,157.9(9%)

--3,561.6(7%)

-1,283.7(3%)

5506.57(0%)

1,343.30Balance(TR-TE)Financial gap (1)

at Algadarif State in the years 2013-2017 will be 5,531.7 , 5,222.96 , 4,864.4 , 4,622.0 , 4,831.6 million SDG

respectively, and this high figures indicate that, the providers are gaining high profits and the NHIF-

Algadarif State is mainly bearing the risk under Fee-For-Services payment mechanism if we comparing the

actual outpatient expenditures from the NHIF perspective, with the actual cost from the providers

perspective.(Table 5)

Table 5: The forecasted Revenues and Expenditures 2013-2017, Scenario (C)Forecasted Revenuesctual

Revenuesand actualExpenditures

201701601501401301288,601.08,954.454,277.143,181.64,695.227,642.2Total Revenues83,769.4(100)

64,332.4(100)

49,412.7(100)

37,958.6(100)

29,163.4(100)

22,475.7(100)

Total Expenditures

44,814.9(53)

34,472.6(53)

26,517.9(53)

20,398.8(53)

15,690.9(53)

12,069.8(53)


2,839.92

(4.9)2,469.49

2,147.38

1,867.29

(4.9)1,623.73

754.532

(4.9)

G.P Consultation


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(4.9)(4.9)(4.9)

69.62

(0.1)

60.53

(0.1)

52.64

(0.1)

45.77

(0.1)

39.80

(0.1)

10.176

(0.1)

MA Consultation657.92

(1.2)

572.10

(1.2)

497.48

(1.2)

432.59

(1.2)

376.17

(1.2)

127.579

(1.2)

Specialist Consultation943.562

(1.1)

725.81

2

(1.1)

558.31

7

(1.1)

429.475

(1.1)

330.36

5

(1.1)

254.127

(1.1)

Diagnostic Services

5,311.99

(9.1)

4,619.1

3

(9.1)

4,016.6

3

(9.1)

3,492.72

(9.1)

3,073.1

5

(9.1)

928.438

(9.2)

Laboratory Investigations

37,111.1

(46.5)

28,547.

0

(46.6)

21,959.

2

(46.6)

16,891.7

(45.6)

12,995.

7

(46.5)

9,995.1

(46.6)

Medicines

25,566.8(24)

19,666.8(23.8)

15,128.3(24)

11,637.2(23.8)

8,951.7(23.8)

6,885.9(24)


1,418.16

(0.8)

984.83

(0.8)

683.91

(0.8)

474.94

(0.8)

329.82

(0.8)

229.04

(0.8)

Admission Services10,542.1

(4.76)

7,028.1

(4.8)

4,685.4

(4.8)

3,123.61

(4.8)

2,082.4

(4.8)

1,388.27

(4.8)

Surgical Operations28,335.6

(18.3)

20,239.

7

(18.3)

14,456.

9

(18.3)

10,326

(18.3).

7,376.0

1

(18.3)

5,268.58

(18.3)


12,820.6(12.8)

9,861.9(12)

7,586.1(12)

5,855.5(12)

4,488.8(12)

3,452.9(12)


6,962.9

(6.4)

5,356.1

(6.5)

4,120.1

(6.5)

3,169.3

(6.4)

2,437.3

(6.4)

1,875.33

(6.5)

Labor cost480.32

(0.4)

369.21

(0.4)

248.41

(0.4)

218.82

(0.4)

168.33

(0.4)

129.47

(0.4)

Material Cost928.23

(0.9)

714.02

(0.9)

549.25

(0.9)

422.5

(0.9)

325

(0.9)

250

(0.9)

Capital Cost4,448.6

(4.1)

3,422.1

(4.1)

2,632.3

(4.1)

2,024.8

(4.2)

1,557.6

(4.1)

1,198.15

(4.1)

Expenditures

4,831.65

4,622.0-

4,864.45,222.965

5,531.75,233.6Balance(TR-TE)Financial gap (1)


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[77]

Conclusion

The study findings show that if the NHIF-Algadarif State chooses to continue paid the outpatient

care services under FFS, the financial gap in the coming years 2013-2017 will be -2,797.9, -6,559.4, -

9,086.3, -13,418.0 and -18,447.0 million SDG respectively. To achieve the financial sustainability the NHIF-

Algadarif State has to decrease the expenditures or increase the revenues in coming years 2013-2017 by

8%, 15%, 16%, 19% and 20% respectively. Moreover, the providers will gain profit by 8,361.66, 10,870.18,

14,150.32, 18,370.6 and 23,881.8 million SDG respectively, these profits represent 53% of their actual

outpatient expenditures in each coming year.

By introducing capitation payment method for the outpatient care services ,the study found that,

the financial gap in coming years 2013-2017 will be 506.570, -1,283.7, -3,561.6, -6,157.9 and -9,045.1

million SDG respectively, so in order the NHIF-Algadarif State achieve its financial sustainability has no

need to increase or decrease its revenues in the year 2013 as the revenue is almost near the breakeven

point, but the State has to decrease the expenditures or increase the revenues for the year 2013-2017 by

only 0%, 3%, 6%, 9% and 10% respectively Introducing capitation for the outpatient care services will

decrease the expenditures in the years 2013-2017 comparing with FFS by 3,304.5, 4,295.8, 5,583.7, 7,259.9

and 9,437.9 million SDG respectively and that represent 14% of total outpatient expenditures for each

coming year. Moreover, the providers will continue gaining profit in the years 2013-2017 by 5,057.2,

6,574.4, 8,546.7, 11,110.6, 14,443.84 million SDG respectively and these profits represent 32% of their

actual outpatient expenditures for coming years.

The study, and according to the results, will suggest changing the outpatient payment

mechanism from Fee-for-services onto capitation in order to be closer to achieve the financial

sustainability of the scheme.

References

Berman A. et al 2005. Liquidity ratio: Can we pay our bills . Available from http://www.qfinance.com.[January 9, 2013].

Catalano.R, Libby.A, Snowden.L, Cuellar.AE. 2000. the effect of capitated financing on mental health

services for children and youth: the Colorado experience. Am J Public Health 90(12) : 1861-1865.Coleman EA et al. 2000. Acomparison of functional outcomes after hip fracture in group/staff HMOs and

fee-for-services system. . Eff Clin Pract 3(5) : 229-239.Dusheiko.M, Gravelle H, Jacobs R et al. 2006. The effect of financial incentives on gatekeeping doctors:

Evidence from a natural experiment. Journal of Health Economics. 25(3) : 229-239.


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Gosden T et al. 2000. Capitation, Salary, FFS, Mixed System of payment. Effect on the behaviour of PHCprovider.Available from: http://www.hpm.org [January 5, 2013]

John C, Cheryl C, Sheila O. 2009. Designing and Implementing Health Care Provider Payment System,

How-To Manuals. Washigton DC: THE WORLD BANK 2000.NHIF, S. 2008-2012. Statistical Report. Algadarif: National Health Insurance -Algadarif State.Olsen T. 1988. Sustainability of Health Care:a Framework for Analysis.Oxford Journals, Health Policy and

Planning 13(3) : 287-295.Winnie C, Supakankunti S, Sriratanaban J, Wattana S and Pongpanich S. 2001. Impact of capitation

payment: the Social Security Scheme of Thailand. Available from http://www.econ.chula.ac.th[January 9, 2013].

capitation payment method as a policy tool, versus fee for services, or the financial...

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