Harmonizing Healthcare Financing for Health Equity: Case Studies of Cross-subsidization in Thai Public Hospitals 2015.6.6
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The document presents a study on cross-subsidization in Thai public hospitals, exploring how financial practices may lead to health service support disparities among different patient groups. It outlines the methodologies used, including qualitative and quantitative analyses of costs across healthcare schemes, revealing issues of reimbursement, costs, and hospital management responses. The findings suggest that healthcare financing policies are inadequate and highlight the need for harmonization to promote equity in access to services.
Harmonizing Healthcare Financing for Health Equity: Case Studies of Cross-subsidization in Thai Public Hospitals 2015.6.6
- 1. Harmonizing Healthcare Financing for Health Equity: Case Studies of Cross-subsidization in Thai Public Hospitals Asst. Prof. Borwornsom Leerapan, MD PhD JCMS2015: Health Equity Through Innovation and Collaboration June 6th, 2015 Pix source: Jirapat Mobkhuntod “Treatment of human equality” (PMAC 2015 World Art Contest, 9-13 years old)
- 2. Special thanks to: Ø Phatta Kirdruang, PhD Ø Thaworn Sakulpanich, MD, MSc. Ø Patchanee Thamwanna Ø Utoomporn Wongsin Ø Nutnitima Changprajuck Ø Health Insurance System Research Office (HISRO) & Health System Research Institute (HSRI)
- 3. ① Concept of cross-subsidization – Who cross-subsidies what to whom? ② Case studies of Cross-subsidization in Thai Public Hospitals – Study objectives, methods, results ③ Implications for policy and practice – What’s next for researchers & policymakers? Presentation Outline Pix source: online.wsj.com
- 4. Financing of Thai Healthcare Systems CSMBS SSS UCS Motor Vehicle Victim Protection Law Private Health Insurance Feature State/Employer welfare Compulsory heath insurance with state subsidies State welfare Compulsory heath insurance for vehicle owners Voluntary health insurance Targeted groups of beneficiaries Civil servants, state enterprise employees and dependents Employees in private sector and temporary employees in public sector Thai citizens without the coverage of CSMBS & SSS Victims of vehicle accidents General public Source of financing Govt. budget Tri-party (Employee, employer and govt. budget) Govt. budget Vehicle owners Household Method of payment to health facilities Fee-for-service Capitation and Fee-for-service Capitation and Fee-for-service Fee-for-service Fee-for-service Major problems Rapidly and constantly rising costs Covering while being employed only Inadequate budget Redundant eligibility and slow disbursement Redundant eligibility and slow disbursement Source: Adapted from Wibulpolprasert et al. (2011). Thailand Health Profile 2008-2010.
- 5. CGD (CSMBS), NHSO (UCS) Taxes Payers Employer-based private health insurance Individual & Employer’s private health insurance (Voluntary) Hospitals Medical Specialists Generalists & PCPs Patients paying out-of-pocket Ambulatory Facilities Payment Mechanisms: Salary, Fee-for-Service, Global Budget, Capitation, DRGs, etc. Financing of Thai Healthcare Systems Providers in Public & Private Sector Commercial Insurance Companies Social Security Office (SSS) Motor vehicle’s owners (Mandatory by the Motor Vehicle Victim Protection Law)
- 6. Study Rationale: High Expenditures? Figure source: Benjaporn (2007) 14 With respect to expenditure per patient, this study can merely consider the average in- patient expenditure, because of data limitations. According to data from the electronic payment system, the average in-patient expenditure in 2003-2006 increased over time as shown in graph 2.6. Graph 2.4: CSMBS expenditure during the fiscal years 1996-2007 Source: The Comptroller General’s Department and the Government Fiscal Management Information System (GFMIS) Note: 1 Euro = 49.4450 Baht, as of January 8, 2008 4,826 5,625 5,866 6,206 7,007 8,123 9,509 11,350 13,905 16,943 21,896 30,833 8,761 9,877 10,574 9,048 10,050 11,058 10,967 11,335 12,138 12,437 15,109 15,649 13,587 15,502 16,440 15,253 17,058 19,181 20,476 22,686 26,043 29,380 37,004 46,481 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 MillionBaht Year CSMBS Expenditure in the fiscal years 1996-2007 Out-patient In-patient Total Ø Common assumptions of what causes increasing healthcare expenditures of CSMBS: • Overuse of NED drug? • Overuse of brand-named drugs? • Limited EBM practices? • Corruption in healthcare sector? Ø Cross-‐subsidiza,on can be a missing piece!
- 7. Study Rationale: Cross-subsidy? Figure source: www.be2hand.com; www.imdb.com; workwithbrianandfelicia.com Ø “Do hospitals use payments of a type of health services to subsidize or support financing of other services?” • If so, how?, at which level?, at what degree?
- 8. Literature Review Ø Concepts of “cross-subsidization” or “cost-shifting” from developed countries such as the U.S. (Morrisey 1994, Cutler 1998, Dranove 1988, Feldman et al. 1998, Frakt 2010 & 2011). Ø Such theorectical concepts might not be applicable in Thailand’s healthcare systems, especially that Thai public hospitals do not have the “ability to set prices” by themselves. Ø There was no empirical study of cross-subsidization in the contexts of Thai healthcare systems.
- 9. Study Objectives 1. To explore motivations and existing practices of the administrators of Thai public hospitals that potentially can lead to cross-subsidization (“to use payments of a type of health services to support financing of other services”). 2. To demonstrate an empirical evidence related to cross- subsidization at the hospital level, including the cost difference and the difference of excess of revenues over expenses among health schemes.
- 10. Methodology: Research Design Ø No existing empirical studies of cross-subsidization in the contexts of Thai healthcare system. Ø Theoretical concepts developed in countries like the U.S. might not be applicable in Thailand. Ø Mixed-‐methods research (MMR) with the concurrent embedded research design (Creswell et al., 2009). Source: Creswell (2009). Research design: Qualitative, quantitative, and mixed methods approaches. 3rrd ed. Ø Primarily, the QUAL analysis. Ø The QUAN analysis is used to compliment the QUAL analysis.
- 11. Methodology: Source of Data Ø Data was based on three selected public hospitals: Ø Two medical centers with 1,000 and 1,134 beds Ø One teaching hospital with 1,378 beds. Ø Hospitals were purposefully selected, based on the accessibility to the hospital administrators and the availability of the datasets of unit cost, claims, and reimbursement.
- 12. Methodology: Data Collection Ø Qualitative data: Ø Semi-structure interviews and focus-group interviews. Ø 30 key informants who are responsible for the administration of the three hospitals. Ø Verbatim was transcribed and analyzed using ATLAS.ti 7. Ø Quantitative data: Ø Secondary data of inpatient care, collected at the patient level, from the two medical centers. Ø Unit-cost, charge, reimbursement, patient’s health scheme, DRG codes, and basic demographic characteristics. Ø Analysis was conducted using Stata 12.
- 13. Qualitative Analysis Ø Constructivist grounded theory (Chamaz, 2005; 2006) Ø Coding process (Strauss & Corbin 1990)
- 14. Ø Analyze the cost differences across health schemes Ø By using descriptive statistics and a regression analysis. Ø Compare the differences among charge, cost, reimbursement, particularly ‘reimbursement-cost’ and ‘reimbursement-to-cost ratio’: Ø Across health schemes Ø Across MDC groups Ø Across Age groups Quantitative Analysis
- 15. Ø 13 sub-themes, categorized into 4 emerging themes. Qualitative Findings Sub-themes Themes Varied understanding of cross-subsidization, Unclear financing for non-healthcare missions No mutual understanding or attitudes toward concepts and practices of cross-subsidization Inadequate reimbursement, Non-performing loan, Unequal negotiation power Obstacles facing management due to policies of the payers Conflicting roles between quality & equity-focus and efficiency-focus, Limited information to manage prices and cost Obstacles facing management due to organizational limitations To be missions-driven organization, To focus more on efficiency than revenues, To do public funds raising, To control the volume of certain groups of patients when feasible, To advocate changes of the payer’s policies Organizational responses to policies of the payers
- 16. #1 No Mutual Understanding or Attitudes
- 17. #1 No Mutual Understanding or Attitudes
- 18. #2 Obstacles of Financial Management
- 19. #2 Obstacles of Financial Management
- 20. #3 Responses Directly to Payer’s Policy
- 21. Quantitative Findings #1: Cost Differences across Health Schemes “Total Cost Across Health Schemes” 0 10,00020,00030,000 meanoftotalcost CSMBS SSS UC Cash Source: Center hospital #1 Ø The average costs per visit vary across health schemes, where CSMBS patients have the highest cost. Ø After controlling for age, gender, disease, LOS, the regression analysis confirms that the patient’s health scheme has a significant impact on the unit cost of health services.
- 22. Quantitative Findings #2: Profit or Loss across Health Schemes “Difference between Reimbursement and Cost” (by Health Scheme) -10,000-5,000 05,000 meanofreimb_cost_diff csmbs sss uc foreign cash Others Source: Center hospital #2 Ø Assume that charge equals reimbursement for foreign, OOP, and ‘others’ groups. Ø Reimbursement (or charge) is much lower than the cost for UC and foreign patients. Ø Insufficient reimbursement Ø Hospital’s burden to take care of patients without health insurance or rights (e.g. foreign patients)
- 23. “Difference between Reimbursement and Cost” (by DRG-MDC) -30,000-20,000-10,000 0 10,000 meanofreimb_cost_diff 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 28 Source: Center hospital #1 Ø The hospital receives reimbursement more than the cost for only 5 MDC groups. Ø Some major diagnostic categories create a large deficit for the hospital. MDC 5 = Diseases & disorders of the circulatory system MDC 22 = Burns Quantitative Findings #2: Profit or Loss across Health Schemes
- 24. Quantitative Findings #2: Profit or Loss across Health Schemes “Difference between Reimbursement and Cost” (by Health Scheme and Age group) -5,000 05,00010,000 <20 21-30 31-40 41-50 51-60 61-70 71+ mean of reimb_cost_diff_CS mean of reimb_cost_diff_SS mean of reimb_cost_diff_UC mean of reimb_cost_diff_cash Source: Center hospital #1 Ø ‘Reimbursement-Cost’ is generally positive for CSMBS, and the difference is large for elder patients. Ø This difference is negatives for almost all age groups for UC patients.
- 25. • Given our limited datasets, we found no direct evidence that suggests hospitals cost-shift by increasing prices charged to out-of-pocket payment (OPP) patients to compensate for the loss. • Yet, patterns of decision-making of hospital administrators related to cross-subsidization were found. • Therefore, financing policies of one health scheme also impact other patients groups within the hospitals. What Do Findings Tell Us?
- 26. Mental Models of Hospital Administrators
- 27. Implications for Policy and Practice Ø To policymakers: • Demonstrates an empirical evidence of that current healthcare financing of hospitals still inappropriate/inadequate. • Suggests that payments from particular payers potentially can be used as a “buffer” for hospitals, potentially leading to “passive cross-subsidization” and inequity issues of healthcare access. • Suggests the needs to “harmonize” healthcare financing in a more efficient and equitable fashion.
- 28. Q & A borwornsom.lee@mahidol.ac.th Pix source: online.wsj.com