The High Performance Health System Dov Chernichovsky, Ph.D. Ben-Gurion University of the Negev, Israel

June 21, 2006Dov Chernichovsky - Draft2 Objectives of Presentation  Articulate goals and objectives of the health care system  Examine (some) performance indicators  Identify structural features of health systems associated with actual and potentially good performance

June 21, 2006Dov Chernichovsky - Draft3 Background “ The Emerging Paradigm in Health Systems ” Study -- Funded by the Commonwealth Fund -- of the health systems of eight developed nations: Australia, Canada, Germany, France, Israel, The Netherlands, the U.K. and the U.S. Audience: U.S. policy makers Approach: technocratic, to the extent possible

June 21, 2006Dov Chernichovsky - Draft4 Goals & Objectives of Society Regarding the Healthcare System  Invest in health, balancing between spending on medical care and on other means to enhance health  Objectives: (Health) Equity Cost containment Efficient production of quality medical care Client satisfaction

June 21, 2006Dov Chernichovsky - Draft5 Health – Life Expectancy (data sources in full paper) Life Expectancy at birth in 2003 (years) Country Difference Between Genders Total Population MaleFemale Australia ´ ¹ 77.2´ ¹ 82.1´ ¹ Canada France Germany Israel Netherlands United Kingdom ´ ¹ 74.5´ ¹ 79.9´ ¹ United States

June 21, 2006Dov Chernichovsky - Draft6 Equity – Instrumental Rationale  Equitable distribution of medical resources can improve average health  Protection of household non-medical consumption from ‘ catastrophic ’ medical spending

June 21, 2006Dov Chernichovsky - Draft7 Equity - Equitability of Funding Resources Source of Funding Country Score Private expenditureSocial security General Revenues (higher, more equitable) % of Total Health Spending % of Total Health Spending % of Total Health Spending Australia Canada France Germany Israel Netherlands United Kingdom United States

June 21, 2006Dov Chernichovsky - Draft8 Cost Containment – (Instr.) Rationale  Helps protect household income and spending  Contributes to lower production costs, competitiveness, and employment

June 21, 2006Dov Chernichovsky - Draft9 Cost Containment (a) -Relative Price Increases in Medical Care

June 21, 2006Dov Chernichovsky - Draft10 Cost Containment (b) – Real (General Price Index) Per Capita Growth in Health Spending

June 21, 2006Dov Chernichovsky - Draft11 Production Efficiency - Rationale  More resources for quality care and other uses

June 21, 2006Dov Chernichovsky - Draft12 Production Efficiency – Spending Spending Per Capita (US$) Expenditure as a % of GDP Country 2699´ ¹ 9.3´ ¹ Australia 3001 e9.9 eCanada 2903 e10.1 eFrance Germany Israel Netherlands 2231´ ¹ 7.7´ ¹ United Kingdom United States

June 21, 2006Dov Chernichovsky - Draft13 Client Satisfaction – Client Desire for Reform % Responding about Required Reform Country Total Reform Substantial ReformMinimal Reform Australia Canada.. France.. Germany Israel.. The Netherlands United Kingdom United States

June 21, 2006Dov Chernichovsky - Draft14 Preliminary Conclusions  Systems in-between the U.K. and U.S.A do better in balancing health system goals  They are more relevant to the U.S.A., anyhow

June 21, 2006Dov Chernichovsky - Draft15 Principles for Success  Universal entitlement  Centralized funding of care -- not necessarily by the state budget -- for Equity Cost containment  Competition and choice – not necessarily in private markets -- for Efficient production of quality care Client satisfaction

June 21, 2006Dov Chernichovsky - Draft16 Apparently Successful Dual Internal Market Structure State Funding Pool, Real or Virtual Regulation Contracting Purchasing First Market Second Market Non-state Fund holding, OMCC Institutions: Sickness Funds, HMOs, etc. Providers

June 21, 2006Dov Chernichovsky - Draft17 Reform Directions K P Z A Fully Centralized Competitive Out of Pocket, Private Transitional Economies General Revenues, Fully Public Transitional poor nations The U.S & poor nations ← Funding → ↑ OMCC & Provision ↓ Europe

June 21, 2006Dov Chernichovsky - Draft18 Basic Features of Dual Internal Market  Enables multiple Lines of accountabilitymultiple Lines of accountability  Enables pluralism and choice in Form of entitlementorm of entitlement Content of entitlement Enables client empowerment vis a vis state, on the one hand, and providers, on the other

June 21, 2006Dov Chernichovsky - Draft19 Multiple Lines of Accountability OMCC Institution Providers Fundraising & Allocation Finance Accountability OMCC Institutions 2

June 21, 2006Dov Chernichovsky - Draft20 Multiple Forms of Care Primary care OMCC Primary care OMCC Model DModel C Professional care and hospitalization OMCC Primary Care Primary care Professional care and hospitalization Model AModel B OMCC Primary Care Professional care and hospitalization

June 21, 2006Dov Chernichovsky - Draft21 Multiple Content of Entitlement Expansion of Entitlement Private entitlement and finance Discretionary public entitlement, financed by a pre-set portion of public-based finance Core public entitlement – common to all groups

Key Function & Institution Organization and Management of Care Consumption (OMCC) / Competing Budget Holder

June 21, 2006Dov Chernichovsky - Draft23 Basic References  Chernichovsky, D “ Health System Reforms in Industrialized Economies; An Emerging Paradigm ”. The Milbank Quarterly Vol. 73, no. 3:  Chernichovsky, D “ Pluralism, Choice, and the Sate in the Emerging Paradigm in Health Systems. ” The Milbank Quarterly. Vol. 80, No.1:5-40.

June 21, 2006Dov Chernichovsky - Draft24 Thanks