thomas nebling department of strategic contract- and healthcare-management,
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New financial institutions in German Statutory Health Insurance (SHI): are they consistent with its overall goal?. Thomas Nebling Department of Strategic Contract- and Healthcare-Management, Techniker Krankenkasse, Hamburg, Germany EHMA Annual Conference 2008 – „The Politics of Health“. - PowerPoint PPT PresentationTRANSCRIPT
New financial institutions in German Statutory Health Insurance (SHI): are they consistent with its overall goal?
Thomas NeblingDepartment of Strategic Contract- and Healthcare-Management, Techniker Krankenkasse, Hamburg, Germany
EHMA Annual Conference 2008 – „The Politics of Health“
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Agenda
1 Some basic facts about German SHI
2 How do sickness funds invest in health?
3 New financial institutions in German SHI
4 Conclusions
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The overall goal of SHI is defined in § 1 Social Code Book V as
"to maintain, recover or improve people's health"
1 Some basic facts about German SHIOverall goal
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SHI is covered by about 210 sickness funds
Sickness funds are public bodies with self-government
Competition in SHI-market as insurants can choose freely
1 Some basic facts about German SHIOrganization
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Financing based on income of SHI-members
Each sickness fund raises its own individual contribution rate (average at 14.0 per cent)
Contribution covered by both employer and employee each with 50 per cent
Members pay additional contribution rate of 0.9 per cent
1 Some basic facts about German SHI Financing Old World until 31.12.2008
6
Agenda
1 Some basic facts about German SHI
2 How do sickness funds invest in health?
3 New financial institutions in German SHI
4 Conclusions
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2 How do sickness funds invest in health? Investments in health (intangible assets)
A Bgood state of health low morbidity level poor state of health
high morbidity level
Moving from (B) to (A) (Improving state of health / Reduction of morbidity level) Outcome
= intangible asset
In economics, assets are generally everything that generates return/gain/value in future
Assumption: the higher this intangible asset, the better the profit margin for the sickness fund (= return on investment, ROI)
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2 How do sickness funds invest in health? System theoretical model of the healthcare system
InputThroughput
StructuresProcesses
Technologies
in Healthcare
Output Outcome
Result
Effect
Individual healthcare management contracts
Individual disease management programmes
State of health
Quality of life
Resources of sickness fund
Intangible asset
Investments
Management of investments
Surgeries
Prescribed drugs
etc.
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Agenda
1 Some basic facts about German SHI
2 How do sickness funds invest in health?
3 New financial institutions in German SHI
4 Conclusions
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4 New financial institutions in German SHICentral Health Fund
Central Health Fund
Employers Employees State/Taxes
government-fixed central contribution rate
Sickness fund A Sickness fund B Sickness fund C
morbidity-adjusted, per capita lump sums (capitation payment)
New World beginning 2009
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4 New financial institutions in German SHIMorbidity-adjusted financing
Woman, age 62 520 EUR
Woman, age 62 520 EUR
Drug prescription2,400 EUR
Inpatient treatment300 EUR
Total:3,220 EUR
healthy sick
Example
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4 New financial institutions in German SHICentral Health Fund
Central Health Fund
Employers Employees State/Taxes
government-fixed central contribution rate
Sickness fund A Sickness fund B Sickness fund C
morbidity-adjusted, per capita lump sums (capitation payment)
capitation = expenditure
capitation > expenditurerepayment to members
capitation < expenditureadditional premium by members
New World beginning 2009
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4 New financial institutions in German SHIExternal effects
Sickness fundIntangible Asset
(= Reduction of morbidity level)
Investment
(based on individual contracts/DMP)
Return on Investment
(Central Health Fund pays less to sickness fund)
Central Health Fund
SHI-System
External Effect
(improving financial position of central health fund)
Potential Loss
(Sickness fund receives less payments from central health fund)
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4 New financial institutions in German SHIFinancial effects of investing in health
Woman, age 62 520 EUR
Woman, age 62 520 EUR
Drug prescription2,400 EUR
Inpatient treatment300 EUR
healthy sick
Woman, age 62 520 EUR
healthy
Investing in prevention:Avoiding diseases
Investing in cure:Making people healthy again
Not getting additional 2,700 EUR
Loss of additional 2,700 EUR
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Sickness funds get paid according to the status quo of morbidity level
No consideration of improvement of morbidity or state of health
No consideration of efforts needed for improving health
Calculation of capitation payment with average SHI-data inhibits individual financing of investemts
4 New financial institutions in German SHIResults for investing in health
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Agenda
1 Some basic facts about German SHI
2 How do sickness funds invest in health?
3 New financial institutions in German SHI
4 Conclusions
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Successful investments in maintaining, recovering or improving health result in lower payments from the central health fund
New financial institutions pay for status quo of high morbidity levels, not taking into account enormous efforts needed to maintain, recover or improve health
Very doubtful, if that‘s the right incentive to follow the overall goal of SHI
ROI can be expected to be very low or even impossible
There should be financial institutions established, rewarding investments in health: the more the morbidity level of insurees decreases, the more payments a sickness fund should receive and not the other way round
5 Conclusions
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Back-up...
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Example:
Salary: 2,000 EUR x 14.0 per cent = 280 EUR 50 per cent = 140 EUR
Additional contribution: 2,000 EUR x 0.9 per cent = 18 EUR
Contribution employer: 140 EUR
Contribution employee: 140 EUR + 18 EUR = 158 EUR
1 Some basic facts about German SHI Financing
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1 Some basic facts about German SHI Financing Old World until 31.12.2008
Financial compensation (risk-structure adjustment)
Compensation criteria: age, sex, income
Comparrison of defined basic premium (BP) with real financial power (FP)
Sickness funds with BP < FP pay compensation to sickness funds with BP > FP