Watch the seventh lecture from 8 lectures course running under the title „Innovation for better healthcare” at University for modern Slovakia. In this lecture, Peter Pažitný and Tomáš Szalay talk about a partnership network, innovation in payment mechanisms and innovative project of managed health care “Plan MEDIPARTNER”, which started in Slovakia in 2012. The lecture video includes English subtitles. Transcript together with the all schemas can be found under the video.
We have learned that:
All these claims are being merged in the Plan MEDIPARTNER, the first real health insurance product in Slovakia.
Plan MEDIPARTNER is a modern health insurance product, which integrates the partnership network of healthcare providers with a motivation program for the insured. We will talk about the benefits of the clients in the last lecture. Today we will focus on the partnership network of healthcare providers and innovation in payment mechanisms.
Healthcare providers are not grouped according to ownership, but based on their common interest:
Partnership network obtains two benefits:
Source: Klient PRO SK and the Dôvera health insurance company
Demand direction must be beneficial both for healthcare providers within the partnership as well as for the insured:
From savings. Savings are being made based on a comparison of costs in the region, i.e. group of insured of the health insurance company Dôvera from Košice and the region, which are not part of the Plan MEDIPARTNER (so called Reference group of insured of the Plan).
That means, savings are not calculated by finding out if the costs of the group of insured of the Plan MEDIPARTNER between the current and the previous quarter were lower, but finding out if the costs in the same quarter for the group of insured in the Plan MEDIPARTNER are lower than of those, who are not members of the Plan.
In order to make this comparison precise, three conditions have to be fulfilled:
General practitioners, who are members of the Plan MEDIPARTNER, take over some of the functions of the health insurance company. They take over the responsibility for part of the costs that are meant for healthcare services provided. With other words, they start to bear the risk, which under normal circumstances bears the health insurance company.
Healthcare providers in the Plan MEDIPARTNER are responsible for the costs of the group of the insured of the Plan MEDIPARTNER. The responsibility is divided between two funds:
Source: Klient PRO SK and Dôvera Health Insurance Company
If they were not participating in the Plan, their income would be dependable from the number of insured in the providers‘ card register multiplied by the monthly capitation unit, disregarding how good or bad are the patients treated or how much they cost the health insurance company.
Costs for the insured are ten times higher than the benefit for the general practitioner. The main idea of the Plan MEDIPARTNER is therefore: to provide doctors the responsibility for the costs on medicines, laboratory treatments, specialists’s visits or hospitalization. And if they manage to achieve some savings – by fulfilling all lega artis procedures, i.e. in compliance with modern clinical knowledge – they receive part of the savings reimbursed as an additional reward to the capitation.
Therefore, general practitioners get a virtual financial fund at their disposal, out of which the treatment of their patients is paid. The amount of the sources in the fund is calculated based on the morbidity of their capitated patients. Doctors with a sicker group of insured have therefore more resources at their disposal than doctors with healthier insured.
Doctors in the Plan bear the risk for situations, when costs for their group of insured will be for some reason too high. They are protected for such risks by dividing risk among each other, i.e. among more doctors. They create a solidarity group. Based on experiences, if a group of doctors takes care of more than 20.000 insured, accidental fluctuations cannot destabilize costs for these insured for more than 0.5 percent.
General practitioners cannot influence all costs. If they took over the responsibility for all costs, some costs – so called catastrophic, such as a hospitalization of patients after a serious accident at the intensive care unit for one month – could ruin them. Ultimately, the responsibility for catastrophic costs is the responsibility of the health insurance company.
General practitioners in the Plan within the VAS Fund bear only a limited risk – for instance for medicines, which are not bound on a specialist, in case of specialized ambulatory care they only bear the costs for treatments up to 15 € per visit, in case of hospitalization up to 120 € per case and 30 € for each day spent at the hospital. Then a stop-loss situation occurs – additional costs are borne by the Fund of the Plan, in which two hospitals are grouped. If the risks were too high for them as well, it would be taken over by the health insurance company.
Contracted capitation for doctors in the Plan MEDIPARTNER is increased by 30%. However, doctors do not get these 30% reimbursed immediately. This reimbursement is conditioned by achieving savings – whether the group achieves savings is evaluated continuously, but in the accounting it is finalized only once a year.
Until then, resources for this increased capitation are accumulated, which is called in the Plan MEDIPARTNER as withholdings. These resources are stored like in a notary subsidy, detained until the year-end closing.
And so it is even more complicated, the withholdings do not contain only the resources for the additional 30% of capitation, but 35% of the capitation. Thus, the doctor enters the Plan in a way that he/she receives 5% less resources than until now. In the worse situation, doctors in the Plan would receive less than those doctors, who are not part of the Plan. However, the threat of not receiving the 5% of capitation forces him/her to activity.
A similar experience has been discovered in the 70s by two economists Amos Tversky and Daniel Kahneman. They called it „loss aversion“, meaning „fear of loss“. People have a conscious resistance towards losses, which is higher than satisfaction made by profits. The behavioral economist Dan Ariely writes about such and other psychological phenomenon influencing economics in a very interesting way, whose book „Predictably Irrational“, I highly recommend you.
How to find out that doctors achieved savings? By comparing costs for insured capitated for doctors who are members of the Plan and insured capitated for doctors, who are not members of the Plan. The sickness of the insured is of course taken into consideration, so that comparable units are compared. And the important thing is that the reference sample of doctors – those, who are not members of the Plan – is chosen from the same region, so that regional epidemiological specifications are taken into consideration.
If costs for an average insured in the Plan MEDIPARTNER are lower than in the reference group, the group achieved savings and the withholdings are paid to the doctors. Other resources are divided based on merits – i.e. according to, which doctor contributed to the result of the group mostly.
If savings are higher than the amount of withholdings, doctors get a claim for bonus capitation. This makes one third of the additional savings. One third is received by the health insurance company and one third serves for securing costs in the next accounting period of the Plan.
Disclaimer: Peter Pažitný, Tomáš Szalay, Angelika Szalayová and Tomáš Macháček are owners of Klient PRO SK, which administers the Plan MEDIPARTNER in a partnership with the Dôvera Health Insurance Company.