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Primary Health Care in theReforms of the Health CareSystemRobert L. Goldman Dr. PhD a ba Health Care Management at Centerex Corporation,an export/import consulting firmb University of California-Berkeley Extension andFrederick Taylor University , USAPublished online: 25 Sep 2008.

To cite this article: Robert L. Goldman Dr. PhD (1999) Primary Health Care in theReforms of the Health Care System, Health Marketing Quarterly, 17:2, 87-93, DOI:10.1300/J026v17n02_09

To link to this article: http://dx.doi.org/10.1300/J026v17n02_09

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Primary Health Carein the Reforms of the Health Care System:An Analysis of Reformation Schemesof Emerging and Developing Countriesas Applied to the Republic of Macedonia

Robert L. Goldman, PhD

INTRODUCTION: HEALTH CARE IN TRANSITION

Managed care has become increasingly popular in both emergingfree-market economies and developed countries. Financial impera-tives as well as the need to provide quality primary health care areforcing changes within the Macedonian health care system. Some ofthe changes are being brought about by physicians in private practice,while others have been initiated by the Ministry of Health and theMedical Faculty.Prior to discussing changes within Macedonia’s situation, an analy-

sis of similar trends will help set the stage for the discussion. A reviewof studies regarding health care reform in thirteen countries (plusMacedonia) and three multi-national regions (Europe, including east-ern Europe and Latin America), reveals surprisingly high levels ofsimilar problems and progressive steps as follows:

Robert L. Goldman is Vice President, Health Care Management at CenterexCorporation, an export/import consulting firm. In addition, Dr. Goldman is Professorat both the University of California-Berkeley Extension and Frederick Taylor Uni-versity where he teaches courses on managed care.

The author wishes to thank his editors, Laurie Martin and Pierre Reynolds, andhis graduate students, Berrin Asli Sever, Luis Gonzales and Roberto Trombini fortheir research contributions between April and September, 1998. All errors or omis-sions are the responsibility of the author.

Health Marketing Quarterly, Vol. 17(2) 1999E 1999 by The Haworth Press, Inc. All rights reserved. 87

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HEALTH MARKETING QUARTERLY88

S Most countries moving towards privatization have continued tomaintain a government-based health care system.12

S Primary Care doctors must have a greater role in establishingcost containment mechanisms, quality control, the developmentof transfer protocols to specialists.

S Many of the studies noted that primary care physicians routinelytransfer most patients to specialists even when the primary caredoctor is fully capable of managing the problem.34

S Almost universally, state funded plans are underfinanced to thedetriment of the poor.5

S Each country’s system took into account variances in economicprosperity, ethnic/cultural population differences and the fact that alarge percentage of the population was under-insured, receivedthrough multiple systems or had no health insurance whatsoever.67

S Health care as a percentage of GDP seems to be constant at be-tween 15% and 20%, when all forms of medical service are con-solidated.8,9,10,11,12

After reviewing these articles, it is easy to conclude that privatiza-tion is more difficult than expected, does not meet the needs of allstakeholders and requires radical but gradual changes in the minds ofhealth care providers, employers and customers--that is, people seek-ing treatment.Chronic diseases,13 such as Diabetes and Hypertension pose special

problems for the unemployed, the disabled, pensioners, and some-times, self-employed individuals in struggling economies. Anothercommon theme is the prevalence of HIV/AIDS as a growing problemboth medically and economically.

BUILDING A VIABLE AND EQUITABLEHEALTH CARE DELIVERY SYSTEM

Such a system would provide close-to-equal access to its customers.It should also permit customers to obtain care outside the state man-aged system and permit health care providers to build private prac-tices, while still participating in the state plan. In all likelihood, a statesubsidized system would continue to provide care for those who donot contribute insurance premiums.It would require primary care doctors to become gatekeepers who

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Robert L. Goldman 89

refer to specialists those patients that present with complex problemsthat are more effectively and efficiently managed by specialists. Specif-ic protocols for transferring patients from the primary care doctor to thespecialists, must be adopted, while taking into account local conditions.For example: a pensioner within an economy that has experiencedhyperinflation often will not be able to meet co-payment requirements.Economic risk is a critical factor for success for managed care orga-

nizations. Some practitioners recommend that risk be centered withinthe primary care group, who then apply transfer protocols when refer-ring a patient to a specialist. Risk motivates physicians to be frugalwhen prescribing treatments and medicaments. If the doctor over-pre-scribes and over-treats, money is lost and if physicians are able toreduce costs they then have a potential to earn additional money. Plac-ing physicians at risk is a prime example of entrepreneurship. Theusual methods for applying risk, in this context, include (1) capitation,(2) risk pools and stop loss insurance. Thus providers are paid regard-less of the amount of service of the individual within the risk group andare protected from losses due to high cost situations.Premium participation is usually levied on employers and em-

ployees and the state’s general funds for those not able to pay theirown. Thus, there is often a hidden cost to health care. Systems that tryto provide coverage for all residents or citizens, but fail to fully fundprograms, encourage customers to find alternative therapy in the pri-vate sector.14 Participating employers may, as I stated in 1996, paysalaries in-kind goods in order to lower the insurance premium levy.15

THE ROLE OF PRIMARY CARE PHYSICIANSIN MACEDONIA

Several principles have emerged from the research that I and mygraduate assistants have conducted. While these principles have al-most universal acceptance, it must be understood that the conditions inMacedonia require moderation to meet the health care needs of itsmulti-ethnic population and current medical community.

S Macedonians who are members of minority groups with differinghealth care perceptions will raise issues of accessibility and af-fordability that must be answered by primary care physicians inparticular. Of course, this will require sensitivity and flexibilityon the part of these primary care providers and their co-workers.

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HEALTH MARKETING QUARTERLY90

S An integrated management-medical information system (MMIS)is also essential. Such a system can be based on the health carestructure that has been in place for years: polyclinics feeding intohospitals, coupled with home health activities and public healthefforts. Such a system needs to be able to provide authorizedhealth care professionals with current information while main-taining patient confidentiality.

The MMIS will have to contain a central management system thatkeeps track of members and providers, contacts between them, diag-noses and treatments as well as cost figures. A security sub-systemwill provide access on a need-to-know basis. For example: a pharma-cist may need to see the complete medical record of a patient in orderto determine whether or not adverse drug interactions may take place.On the other hand, a person deriving statistical public health datawould be restricted to specific parts of the record.Placing health care providers on economic risk contracts that permit

those contracting with the health scheme to earn profits or incur losses, Irecommend that the Macedonian medical community initially restrict riskbearing to primary care providers. However, once everyone is familiarwith economic risk, the risk pool would be extended to all providers.Mandatory co-payments should be adopted to discourage frivolous

visits to physicians, stomatologists and other providers of primary healthcare. However, there are a number of groups within the Republic who donot have the capability to pay co-payments. I recommend that co-pay-ments be considered during any pilot projects and applied judiciously.There should be development of utilization controls such as pre-ad-

mission/pre-procedure authorization and concurrent review. The ob-jective has been to reduce costs including the costs of lengthy hospitalstays. Because of previous economic incentives, hospital admissionsand lengths of stay are higher than an economically viable system canafford. Reductions should be a mid-term objective once all partici-pants have bought into the concept.A critical factor that must be developed if a managed care approach

is to succeed is the development of protocols to transfer or retainpatients by the primary care provider to specialists. Few such proto-cols exist in any specialty at this time.

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Robert L. Goldman 91

ETHICAL ISSUES AND PRINCIPLESA recent letter in the New England Journal of Medicine,16 raises

ethical issues that must be considered in the Macedonian capitatedhealth plan. The authors do not judge standard fee-for-service plansand capitation-based plans. Instead, they compare financial incentivesfor you to judge (see Exhibit 1).This excellent construct pragmatically assists managed care physi-

cians to adopt payment procedures and incentives that can reduce oravoid the specific problem. However, there is also a need for a broaderset of guidelines that also apply to the managed care setting (SeeExhibit 2).It is obvious that these principles need to be modified in light of

managed care. For example, number 2 should withholding necessaryservices.

CONCLUSIONSMacedonia must develop a health care delivery system that offers

access to care to a high percentage of residents at a reasonable cost to

EXHIBIT 1. Specific Design Features of Compensation Systems Based onCapitation and Their Effects on the Degree of Conflict of Interest Faced byPhysicians17

More Conflict of Interest Less Conflict of Interest

> 20% of income at risk < 10% of income at riskNo per-patient stop-loss insurance Per-patient stop-loss providedPrimary care physicians bear risk alone for Primary care physicians at risk

services outside the scope of practice only for services they controlBonuses and ‘‘withholds” calculated Bonuses and ‘‘withholds” calculated

frequently and paid as distinct lump sums infrequently and paid according toIndividual physicians at risk a sliding scaleSmall groups of enrollees in risk pool (< 250) Larger groups of physicians at riskNarrowly targeted incentives to reduce (> 15)

specific services, implemented without Larger groups of enrollees in theguidelines or monitoring for underuse risk pool (> 250)

Per capitated payments with incentives No incentives targeted to reducelinked only to use of services costs of specific services such as

No risk adjustments Radiology or drugsIncentives for improved access tocare, prevention, patient satisfaction,and clinical outcomes

Risk adjustment of capitation rates

SOURCE: Pearson, Steven D., James E. Sabin & Ezekiel J. Emanuel, ‘‘Ethical Guidelines for PhysicianCompensation Based on Capitation,” The New England Journal of Medicine, Volume 339, Number 10, Septem-ber 3, 1998, pp.689 ff.

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HEALTH MARKETING QUARTERLY92

EXHIBIT 2. Ethical Principles of Health Care Marketing18

1. The Primacy of the Patient’s Good.2. The Avoidance of Unnecessary Services.3. High Standards of Honesty and Accuracy.4. Public Accountability.

SOURCE: Nelson, Laurence J., H. Westley Clark, Robert L. Goldman & Jean E. Schore, ‘‘Taking the Train to aWorld of Strangers: Health Care Marketing and Ethics,” Hastings Center Report, September/October, 1989,pp 38-9.

enrollees, employers and the State. Cost containment must be coupledwith quality care through the application of a Medical ManagementInformation System. The needs of special groups such at the elderly,the disabled or minority ethnic groups must be met within the system.Further, the usual principles and strategies need to be modified to meetlocal conditions to succeed in Macedonia.

AUTHOR NOTE

Since the original research was conducted, there has been a change in govern-ments and a study by a major consulting organization. The funds for the study wereextracted from a World Bank loan as a condition of the Macedonian Governmentreceiving the loan. As late as December, 1999, health care reform has been placed onthe back burner because of more current issues such as dealing with the aftermath ofthe war in Kosovo.

REFERENCES

1. Ferrax, M.B., ‘‘Health care trends in Brazil and other Latin American coun-tries,’’ Brazilian Journal of medical and biological research, Volume 31(3), March1998, pp. 315-316. Also comments and responses to the initial article.

2. James, Chris, ‘‘Managed Care Plays Increasing Role In European HealthCare,’’ CIGNA release, two pages, undated.

3. Kincses, Gyula, ‘‘The Process of Restructuring Hungarian Health Care,’’Ministry of Welfare, Budapest, undated.

4. ‘‘The Colombian Social Security System on Health Care,’’ Social SecuritySystem on Health Care Reform, pp. 1 ff, (undated).

5. Jakšić, Želimir, ‘‘Primary health care (PHC) in the context of health reforms,Strategies to develop General Practice/Family Medicine (GP/FM),’’ in collaborationwith WHO Collaborating Center for Primary Health Care & Andrija Štampar Schoolof Public Health, Zagreb, Croatia, (undated) p. 16.

6. ‘‘Healthcare in Turkey,’’ Turkish Ministry of Health, undated, p. 2.7. Blobel, Bernd, ‘‘Health Care, Health Issues and Social Welfare: Health Care

and Health Insurance,’’ Otto van Guericke Universitaet Magdeburg, Germany p. 1,(Undated).

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Robert L. Goldman 93

8. Uchida, Hiroshi & Hiroaki Yamashita, ‘‘A Study of Japanese Health Care,’’Bain & Company, Japan, p. 2, July 7, 1998.

9. ‘‘Healthcare in Turkey,’’ Turkish Ministry of Health, undated, p. 1.10. ‘‘Reform of the Health Insurance Scheme in Romania,’’ Romanian Ministry

of Health, p. 9, (undated).11. Albert, Alexa, Charles Bennett, Martin Bojar, ‘‘Health Care in the Czech Re-

public: A system in Transition,’’ JAMA, May 13, 1992, Vol. 267, No 18, p. 2466.Note: the letter does not specifically state a percentage of GDP allocated to healthcare.

12. When the several elements of the Colombian system are totaled, it seems thatColumbia spends around the same level of GDP on health care. See: ‘‘The Colom-bian Social Security System on Health Care,’’ Social Security System on Health CareReform, pp. 1 ff, (undated.) 12. 12.

13. Milosavljevic, Nikola, ‘‘Loci Minorum Resistentiae In The Fight AgainstMass Noncommunical Diseases,’’ Novi Sad, May 3, 1998, pp. 1-4.

14. Humphreys, Brian, ‘‘Elite Clinics Open to Russia’s Common Folk,’’ The SanFrancisco Chronicle, June 4, 1998, pp. A10 ff.

15. Goldman, Robert L., ‘‘Developing Private Health Care in Macedonia,’’Health Marketing Quarterly, Vol. 14(1) 1996, pp. 99 ff.

16. Ibid, p. 692.17. Pearson, Steven D., James E. Sabin & Ezekiel J. Emanuel, ‘‘Ethical Guide-

lines for Physician Compensation Bases on Capitation,’’ The New England Journalof Medicine, Volume 339, Number 10, September 3, 1998, pp. 689 ff.

18. Nelson, Laurence J., H. Westley Clark, Robert L. Goldman & Jean E. Schore,‘‘Taking the Train to a World of Strangers: Health Care Marketing and Ethics,’’ Hast-ings Center Report. September/October, 1989, pp. 38-9.

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