The Danish Health System Karsten Vrangbæk University of Copenhagen Political Science

The Danish Health System A short overview of the Danish health system Decentralization and coordination Performance and cross regional variation

Who is covered? Coverage is universal. All those registered as resident in Denmark are entitled to health care that is largely free at the point of use.

What is covered? Services: The publicly-financed health system covers all primary and specialist (hospital) services based on medical assessment of need. Cost sharing: There are very few cost-sharing arrangements for publicly-covered services. Cost sharing applies to dental care for those aged 18 and over, to outpatient drugs and to personal aids such as glasses (but not hearing aids, which are free). Out of pocket payments (including cost sharing) account for about 14% of total health expenditure (World Health Organization 2007).

How are revenues generated? Publicly-financed health care: Since 2007 the central government through a centrally-collected tax set at 8% of taxable income and earmarked for health The central government allocates this revenue to 5 regions (80%) and 98 municipalities (20%) using a risk-adjusted capitation formula and some activity- based payment. Public expenditure accounts for around 82% of total health expenditure. Voluntary private health insurance growing fast!

How is the delivery system organised? Five regions are responsible for providing hospital care and own and run hospitals and prenatal care centres. The regions also finance general practitioners, specialists, physiotherapists, dentists and pharmaceuticals. The 98 municipalities are responsible for public health, school dental care, rehabilitation outside hospitals

How is the delivery system organised? Physicians: Self-employed general practitioners act as gatekeepers to secondary care and are paid via a combination of capitation (30%) and fee for service. Hospital physicians are employed by the regions and paid a salary. Non-hospital based specialists are paid on a fee for service basis. Hospitals: Almost all hospitals are publicly owned (99% of hospital beds are public). They are paid via fixed budgets (determined through soft contracts with the regions) and some fee for service.

How was decentralisation introduced in the Danish health care system? Decentralized democratic management of welfare services has been a feature of the Danish system for many years. A major reform in 1970 reduced the number of counties to 14 and established the counties as the main public authority within health care. The counties took ownership of almost all hospitals and became responsible for financing and providing health care.

How was decentralisation introduced in the Danish health care system? In 2007, a major structural reform introduced 5 regions to replace the 13 counties. The 271 municipalites were amalgamated into 98. The regions retained the responsibility for providing hospital and outpatient care for citizens, but importantly lost the right to issue taxes, as financing was centralized to the state level.

Decentralization and its limits The regions are responsible for delivering health services, within national framework legislation, national guidelines and national agreements e.g. between medical professionals and the Association of Regions.

Decentralization and its limits National legislation: Establishes the duties for the Regions in providing health care.  Free choice of public and some private hospitals upon referral  Access to a range of private facilities in Denmark and abroad when waiting times exceed 1 month.  Fees for choice patients travelling to other regions and private providers are paid according to nationally set DRG prices. -> Both types of choice reduce the scope for regional level deviation e.g. on waiting times and quality

Decentralization and its limits Planning, guidelines and recommendations:  Developed by the National Board of Health but in collaboration with medical societies and regions  The National Board of health is also in charge of general supervision and supervision of medical personnel  The NBoH houses units for Health Technology Assessment and development of reference programs  A comprehensive “Danish Program for Quality Assessment” is currently being implemented.

Decentralization and its limits Planning, guidelines and recommendations:  A comprehensive “Danish Program for Quality Assessment” is currently being implemented.  The program combines organizational self- assessment with mandatory accreditation based on nationally developed standards.  Hospital level results will be published on the internet. And will replace the current publication of waiting time and quality indicators (sundhedskvalitet.dk)

Decentralization and its limits National agreements:  Annual agreements between the regions/municipalities and the government specify expenditure levels and average tax levels (for municipalites). - The agreements also serve as an arena for negotiating new policy initiatives  National agreements between the Association of Regions and medical professions determine salaries and working conditions (for hospital doctors) and fees for the publicly funded contacts to GPs and practicing specialists.

Decentralization and its limits Some regional and hospital level variation can be observed in spite of these coordination mechanisms, and the focus on geographical equity in the structural reform

Regional differences in hospital productivity Source: Ministry of Health and Prevention 2007

Regional differences in contacts to general practice Source: Region Zealand

Hospital Variation in Use of Secondary Preventive Medicine After Discharge for First Acute Myocardial Infarction During Rasmussen S, Abildstrom SZ, Rasmussen JN, Gislason GH, Schramm TK, Folke F, Køber L, Torp-Pedersen C, Madsen M, Medical Care 2008 Jan;46(1):70-77

Strengths, weaknesses, opportunities and threats  Expenditure control is good  Significant activity and productivity increases in recent years  Short hospital stays and high degree of conversion to ambulatory care  Waiting times reduced (one month guarantee in place)  Administrative costs considered to be low  Patient satisfaction ratings are among the highest in Europe.  Choice and flexibility  Implementation of “cancer packages” OECD Economic Survey for Danmark 2007, Ministry of Health Benchmarking reports

Health Care Expenditure per Capita 2005, USD PPP

Satisfaction: population reporting the quality of the following are fairly or very good Source: Euro-barometer, 2007.

Affordability of health-care: percentage of persons reporting the following are not very or not at all affordable Source: Euro-barometer, 2007.

Strengths, weaknesses, opportunities and threats  Life expectancy relatively poor (but improving)  Scope for quality improvement in some treatment areas -> Life style issues rather than health system performance per se?

Strengths, weaknesses, opportunities and threats

Opportunities and threats  Life style (prevention and health promotion)  Coordinated care (patient pathways),  Ageing population (implications for both funding and demands for health care),  More demand for chronic care  Changing family structure  Rapid growth in voluntary health insurance and private care delivery (threat to solidarity in the long run?)  Reaping the benefits of the new regional structure: Infrastructure investments and cost control  Internationalization, EU and cross border health care  Implementation of “Quality Assessment Program”