Transfer of geriatric LTC hospitalisation to SFs

• Abstract
• Purpose of health policy or idea
• Characteristics of this policy
• Political and economic background
• Purpose and process analysis
• Expected outcome
• References

Abstract

Transferring responsibility for geriatric LTC hospitalisation from the Ministry of Health to the Sick Funds, is expected to promote continuity and quality of care, increase access and equity & improve efficiency in use of resources. Increased resources through tax-based funding will partly replace co-payments, decreasing the financial burden on families in time of need. This policy change will also free the Ministry of Health from service provision and strengthen its regulatory role.

Purpose of health policy or idea

The purpose of transferring responsibility for geriatric Long-Term-Care (LTC) hospitalisation from the Ministry of Health (MOH) to the Sick Funds (SFs) is to improve continuity and quality of care for the elderly,  increase access and equity and improve the efficiency of the system. This structural change is expected also to provide incentives for prevention (primary, secondary and tertiary) and rehabilitation. Additional funds, obtained through a tax increase, will partly replace co-payments thus decreasing the financial burden on families in time of need. Another objective is to resolve the current conflicting role of the Ministry of Health (MOH) as both service provider and regulator, and strengthen its regulatory role. 

The instrument for this reform is legislation, by which this service would be added to the National Health Insurance (NHI) mandatory benefits package. The budgetary sources would be an increase in health tax, in addition to the current MOH funds. Thus the SFs would be provided with increased funding for this service, to cover possible increased demand as well as decreased co-payment. By this reform, not only will it be the legal duty of the SFs to provide this service, but they will have incentives to provide efficient care, since the remuneration is not earmarked. Thus, money saved through prevention and rehabilitation could be used for other purposes. This is also a source of concern, since there might be an incentive to under-provide care and direct the funds for services to the young and healthy, in order to attract this population group. 

Another concern regarding the proposed change is increased demand for the service, beyond the budgetary resources, due to improved access; this demand may also be fuelled by LTC bed availability and interests of the private sector.

Main points

Main objectives

The purpose of transferring responsibility for geriatric LTC hospitalisation from the MOH to the Sick Funds (SFs) is to improve continuity and quality of care for the elderly and improve the efficiency of the system, both in health management and in the use of resources.  Universal entitlement to these services promotes equity. Increased resources through additional tax based funding will decrease the financial burden on families in time of need.  Another objective is to resolve the conflicting role of the Ministry of Health (MOH) as both service provider and regulator, and strengthen its regulatory role.

Characteristics:  

1. adding this service to the mandatory health basket provided by the SFs and defined by the National Health Insurance Law, and transferring the current funds allocated to the MOH for this service - to the SFs;  
2. increasing the health tax from 4.8% of income to 5.1%  thus increasing the SFs' budget frame;  
3. changing the capitation parameters (by age group) for SF budget allocation - to reflect the expected additional expenses for the elderly population;
4. defining operative regulations (e.g. collection of copayments; waiting times, contracts between SFs and geriatric LTC hospitals)

Type of incentives

The policy includes incentives to provide efficient care, since the remuneration is not earmarked for geriatric hospitalization, and money saved can be used for other purposes. This is also a source of concern, since the SFs may also have an incentive to under-provide care for the elderly, and direct the funds to services for the young and healthy, in order to attract this population group. Assuming the financial incentives for the SFs to decrease nursing home placement are directed to provision of efficient care - it is expected that prevention of disease and disability would be improved, quality improvement of curative care would be encouraged, and rehabilitation would be increased. This may also provide an incentive for improving human resources training and capacity, both in community health care and in acute and sub-acute hospital care. Geriatric hospitals may have an incentive to reduce quality of care if they will be pressured by the SFs to lower prices.

Groups affected

Sick Funds Will be responsible for additional services; however it is unknown whether the additional budget will be sufficient, and whether they will have the know-how and willingness for internal change in service provision, MOH ? Will assume a supervisory role rather than (the current) service provision role; will have to contend with reduced budget and power, Insurance companies ? may loose LTC insurance buyers if the service is added to the NHI mandatory basket of services

Innovationsgrad	traditionell		innovativ
Kontroversität	unumstritten		kontrovers
Strukturelle Wirkung	marginal		fundamental
Medienpräsenz	sehr gering		sehr hoch
Übertragbarkeit	sehr systemabhängig		systemneutral

Innovation - the policy paper is innovative in the Israeli context since it includes, for the first time, a suggestion for increasing the health tax to provide universal entitlement to this service.

Controversy - controversial especially regarding the effect on quality of care. The incentives for the SFs are equivocal and a regulatory framework has not yet been established by the MOH. Another controversial aspect is the expected rise in demand for geriatric hospitalization, which may lead to deficits in the SF budgets despite the increased funding.

Structural impact - fundamental. The MOH will be relieved of the responsibility for service provision; the SFs would have to reorganize to provide these services (contract with hospitals, supervise quality, collect co payments etc.). Geriatric hospitals will also need to reorganize towards contracting with SFs, who are unknown new purchasers of their services and who may supervise them more closely than the Ministry of Health. 

Visibility - low, the media did not debate this proposal.

Transferability - rather low, since this specific policy is highly related to the structure of the Israeli health care system. However, in many other countries LTC is not incorporated in health insurance, thus some components of policy change are transferable.

Political and economic background

This policy is aimed at implementing a section of the 1994 NHI law which  states that within 3 years (i.e. by 1998) the responsibility for geriatric LTC hospitalization will be transferred from the MOH to the SFs. However, to date, this section has not been implemented.

Change based on an overall national health policy statement

Statement Title: 1994 National Health Insurance Law

Purpose and process analysis

Current Process Stages

	Idee	Pilotprojekt	Strategiepapier	Gesetzgebung	Umsetzung	Evaluation	Veränderung/Richtungswechsel
Implemented in this survey?

Origins of health policy idea

Transferring responsibility for geriatric hospitalization from the MOH to the SFs was first recommended by the Netanyahu committee in 1990. In 1995 transfer of responsibility to the SFs was included in the NHI law (to be implemented within 3 years).

Since then the issue has been under debate. In 2000 a professional committee was set up to examine options for re-organization of LTC services for the elderly. The committee included experts from the MOH, Ministry of Finance, Ministry of Welfare, National Insurance Institute, Sick Funds, leading geriatric physicians and the Brookdale Research Institute. The committee recommended not to transfer the responsibility for geriatric LTC hospitalization to the SFs. The issue was further discussed in a workshop of senior decision makers and researchers in 2002 (the "Dead Sea Conference"). The recommendations of the working group were to transfer the responsibility to the SFs with additional funding. They recommended adding 1.2-1.9 billion Shekels to the SF budgets from social tax sources (thus to approximately double the current budget), employing a new specific nursing-home tax. This proposal was debated at the  parliamentry committee for health and welfare in 2002, and one of the main concerns raised was it's possible effect on increased demand and costs of care. The discussion concluded with a request from the chairman to the MOH MOF and SFs to examine alternative options which could reduce  the waiting lists for MOH-subsidized LTC.

In 2005 The director general of the MOH appointed an internal committee to propose a policy for transferring responsibility for geriatric hospitalization to the SFs. The committee submitted the policy paper and a draft of an amendment to the NHI law as described in this report. The policy paper was presented to the Director General and senior management of the Ministry of Health who supported the idea. Two subsequent meetings were held with the Minister of Health who also supported the idea. He wanted to include the legislation in the yearly budget reconciliation bill that the Ministry of Finance issues. However the Ministry of Finance opposed the policy proposal and to date the change in legislation has not been pursued.

Initiators of idea/main actors

• Regierung

• Leistungserbringer

• Kostenträger

• Patienten, Verbraucher

• Wissenschaft

• Privatwirtschaft, privater Sektor

Approach of idea

The approach of the idea is described as:
renewed: Comment: The idea was first proposed in the 1990 commission of inquiry report, and included in the NHI law.

Stakeholder positions

Ministry of Health (MOH) - initiated the policy idea. Within the ministry, both the Geriatric Division and the Economic Division support the idea, because of its potential to improve continuity of care and efficient use of resources in the health care system. The MOH also sees the advantages of resolving the conflicting role of the ministry as both regulator and provider of services. However there is some concern that the SFs would limit access to nursing home care,  and redirect funds to other (more powerful) insured population groups and/or employ these funds to attract lower risk populations from other SFs. There may be a decrease in quality of care provided by Geriatric LTC hospitals, due to price decreases (the SFs, who do not have legislated responsibilities for quality control, may be willing to compromise quality in order to obtain cost saving).

In addition, regulatory power of the MOH is expected to decrease when it is dissociated from purchasing (financial) pressure, and thus would no longer be in control of the market.  

Ministry of Finance (MOF) - Oppose the idea. MOF is concerned that entitlement by law will increase demand, and consequently increase government expenses. They also oppose the proposed increase in the health tax - as it opposes the current efforts to decrease taxation.

Sick funds (SFs) - They are concerned that the additional budget for LTC would not cover the actual expenses, for several reasons: under-budgeting, inaccurate projections of costs, difficulty in collecting co-payments, inadequate mechanism for updating the LTC budget, an increase in the public demand due to improved access (which may be fuelled by LTC bed availability and interests of the private sector).

Health professionals (geriatricians) - support the idea because it is expected to improve continuity and quality of care.

Geriatric hospitals - Are concerned about market instability and also that change in payer (SFs instead of MOH) may lead to pressures to decrease prices (and cost) of nursing home care.

Private insurance companies - Oppose the idea. If geriatric LTC hospitalization is included in the mandatory benefits package, the demand for private LTC insurance is expected to fall. Today, about 50% of the population have LTC insurance, which is an incredibly high proportion compared to other countries.

Public - although haven't voiced their opinion, they are expected to support the policy since it will provide universal entitlement to these services and decrease the financial burden on the families. However, some may oppose the proposed 0.5% of tax increase.

Actors and positions

Regierung
Ministry of Health	sehr unterstützend		stark dagegen
Ministry of Finance	sehr unterstützend		stark dagegen
Leistungserbringer
Geriatric hospitals	sehr unterstützend		stark dagegen
Kostenträger
Sick Funds	sehr unterstützend		stark dagegen
Patienten, Verbraucher
General Public	sehr unterstützend		stark dagegen
Wissenschaft
Geriatricians	sehr unterstützend		stark dagegen
Privatwirtschaft, privater Sektor
Insurance companies	sehr unterstützend		stark dagegen

Influences in policy making and legislation

The policy paper is expected to lead to legislation - an amendment of the NHI law that adds geriatric hospitalization to the health basket provided by the SFs, defines an increase in the health tax, an increase in the SF budgetary frame, a mechnism for updating the budget frame (for changes in prices, demography and technological developments); and a change in the parameters of the capitation formula (for allocating funds to the SFs).  

However, in order to implment this reform in the organization of LTC services and pass the legislation, massive political support is needed. To date, given the opposition of the MOF the legislation process has not begun.

Legislative outcome

n/a

Actors and influence

Regierung
Ministry of Health	sehr groß		kein
Ministry of Finance	sehr groß		kein
Leistungserbringer
Geriatric hospitals	sehr groß		kein
Kostenträger
Sick Funds	sehr groß		kein
Patienten, Verbraucher
General Public	sehr groß		kein
Wissenschaft
Geriatricians	sehr groß		kein
Privatwirtschaft, privater Sektor
Insurance companies	sehr groß		kein

Positions and Influences at a glance

Adoption and implementation

The implementation process has not yet begun. In addition to the legislation described above, the MOH needs to develop regulatory tools that are necessary for implementation. These include defining co-payment rates as well as a mechanism for collecting it; definition of entitlement for geriatric LTC hospitalization, reasonable waiting times, choice among LTC providers etc.

Monitoring and evaluation

If implemented, the Ministry of Health will want this reform to be evaluated.

Expected outcome

If implemented, this policy is expected to improve continuity of care and reduce the fragmentation of services for the elderly. It is also expected to reduce the financial burden on families of patients who need geriatric hospitalization, Currently, the MOH mainly subsidizes the LTC hospitalization for the lower income groups, though persons with higher income can also apply and will pay a higher copayment. Thus the wait list for geriatric LTC hospitalization depends on budget constraints and often becomes lengthy. Transfer to the SFs will also increase equity in the system.

Another expected benefit is freeing the Ministry of Health from service provision and strengthening its regulatory role.    

There is an incentive for improving prevention to prevent disease and disability so as to decrease the use of nursing homes. The financial incentives for decreasing nursing home placement, are expected to encourage quality improvement of SF curative care, prevention and rehabilitation. However, it is uncertain whether the quality of care will indeed improve, since the budget is not earmarked, thus there is a risk funds may be used by the SFs for other services (targeted to "attractive" population groups such as the young and healthy). In addition, the SFs' ability to provide high quality care also depends on the update of their budget over time, to reflect changes in hospitalization prices, number of elderly etc.

Quality of care within geriatric LTC hospitals would also depend on the contracts SFs would have with geriatric hospitals and to what extent they would prioritize  quality over cost considerations when choosing providers.

Impact of this policy

Qualität	kaum Einfluss		starker Einfluss
Gerechtigkeit	System weniger gerecht		System gerechter
Kosteneffizienz	sehr gering		sehr hoch

Quality - mixed, improvement expected in continuity of care. SFs may also develop community facilities which will provide high-quality care instead of hospitalization. However, SFs may try to save costs by refraining from hospitalization even if needed, or may give priority to cost considerations when contracting with LTC facilities.

Equity - expected to improve since the legislation will provide universal entitlement to geriatric hospitalization through the SFs.

Cost efficiency - SFs may provide more cost-effective care by developing community services as a substitute for geriatric hospitalization. However, there is concern that they may use additional resources allocated for LTC (but not earmarked) for other purposes.

References

Sources of Information

• Ministry of health policy paper on transferring geriatric hospitalization from the Ministry of Health to the Sick Funds under National Health Insurance, March 2005 (Hebrew)
• Summary of Dead Sea Conference working group on geriatric hospitalization, June 2002 (Hebrew)
• Summary of discussion and recommendations of a professional committee on reorganization of services for the elderly, presented to the Minister of Health and the Minister of Welfare, June 2000 (Hebrew)
• Clarfield AM, Bergman H, Kane R. Fragmentation of care for frail older people--an international problem. Experience from three countries: Israel, Canada, and the United States. J Am Geriatr Soc. 2001 Dec;49(12):1714-21. 
•  Parliamentry committee for health and welfare protocol no. 454 28 Jaunuary 2002  (Hebrew)

Author/s and/or contributors to this survey

Revital Gross, Myers-JDC-Brookdale, Iris Rasooly, Ministry of Health, Gabi Bennun Ministry of Health

Empfohlene Zitierweise für diesen Online-Artikel:

Revital Gross, Myers-JDC-Brookdale, Iris Rasooly, Ministry of Health, Gabi Bennun Ministry of Health. "Transfer of geriatric LTC hospitalisation to SFs". Health Policy Monitor, October 2005. Available at http://www.hpm.org/survey/is/a6/4