The Denia Project: Concession for integrated HC

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

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Abstract

The "Denia Project" is a private health insurance development formula, through a collaboration with the public sector, operating the integrated care business in the Denia region in Valencia, Spain (160.000 inhabitants) based on an innovative per-capita insurance model. The 15-year-concession includes investments to improve health services and the management of integrated primary and specialised care in the region. The concessionaire must invest more than 96,6 mio ?.

Purpose of health policy or idea

The Denia model is not an isolated experience: it is part of a map of changes in the organisation of the public health service system in the Valencia Region (The Valencia Model). This change is characterised by the following issues:

1. There is a strong component of integral management decentralisation in all the Health areas of the Valencia Region, which will no longer be controlled by a unique manager.
2. A capitation financing system is implemented in all the health areas.
3. An invoicing system is introduced between health areas in order to pay for the transferred patients.
4. There will be 15-17 areas directly managed by the Public Administration and 3 areas with the management ceded to private health care companies.
5. For the patient, this model means: 

• Health Systems are public, of universal access, with the same portfolio of services as the SNS.
• Freedom of movement in the whole public health system for the patients from Denia Area (without gate keeping).
• Scheduled clients can come to Denia Area from other areas, with previous authorisation of the Commission (with gate keeping).

Main points

Main objectives

The Denia model is based on the temporary cession, from the Public Administration to a private health company, of  both the management of all public health facilities of a certain geographic area and the insurance of all public health benefits of the population with rights of this area.

This is a mixed model with a big part of health service provision and a part of insurance system for all included benefits:

1. The temporary cession of the public health facilities (provision part) includes both the management, organization and operating of public health buildings. The range of competences involves all levels of care: Primary Care, Specialized Care, Hospitals, Emergencies, Home care and Compulsory Health Prevention Programs. It includes a public tender defined Investment Plan, including total invested amount and its assignment.
2. The guaranty of the health benefits (insurance part) is based on an insurance done by the adjudicated company. The premiums are paid by the Public Administration for all population included in the tender by a per capita payment (411 € for the year 2004). It means that health services received from this population outside of the designated health area but in the framework of the National Health System, must be paid by the adjudicated company. This insurance component is the reason why the two previous public tenders have been adjudicated to health insurers: Adeslas in Alcira, and Asisa in Torrevieja. This situation allows the per capita payment to be considered as health premiums, because is the same financial system as in MUFACE for the funding of the public servants.

The funding of the public covered health services has two main ways:

1. A per capita payment for a certain area resident population with rights for public health assistance.
2. A fee for service payment done by means of a balance system between the incomes of the services done by the adjudicated company to public insured people coming from other parts of the country (other regions of Valencia, the rest of Spain and European citizens with European health card), and the expenses of the services done to people included in the capitative payment but done in other geographic areas.

The operation of the facilities gives additional incomes to the concessionaire.

In this model the Public Administration has included up to now two important security factors:

1. A limitation of the IRR to 7.5%. The reason for this security factor is to fix a politically "reasonable" benefit for the management of the public health services.
2. Technical and financial solvency of the project adjudicated company,  demanding that the proposal should always be from a health management experienced company (health insurer or hospital service provider).

These requirements are explained by the obligation of the Public Administration to guaranty the right for Health protection for all citizens, included in the Spanish Constitution, article 43rd. In the case of this tender it is especially important because the management of all public health care services for the area (area number 12 of Valencia Region) is totally given to a third party. For this reason the Administration looks for solvent companies who want to orient themselves towards public health care services management. These services are characterized by having a high turn over, stable customers, a State guaranty, a low risk level, long lasting time and a lower operating rate.

Type of incentives

For the Public Health Care Administration:

• Transforming infrastructure investment into a current cost.
• Reducing the cost of health care (efficiency margin of 20%).
• Transferring the financial risk of health care services.
• Transferring the operational risk of health care services.
• Keeping definition, steering and control in the public health system.
• Having just one interlocutor in the management and investment of the health provision.

This model allows the Regional Government to extend and strenghten the public healthcare resources network without incuring in larger public debt and, at the same time, offering private healthcare standards (no waiting lists, single room, etc.) in public healthcare services.

Furthermore, all the new and remodeled building and infrastructures will revert to the Regional Government once the concession period finishes. 

Groups affected

Regional Government, Insurance companies, Insurance companies

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

 This is the only iniciative that deeply faces the challenges that present healthcare services raise. The created model allows a stable and long term collaboration between public and private sector in order to try to solve the main problems that the present system brings up: not enough financing, management ineficiencies and customers perceived quality.

Political and economic background

 There was a favourable political situation in Spain to the introduction of this formula (concession to a private insurance company to operate healthcare services): Partido Popular (right-wing party) was governing both in national and regional government.

Marina Salud (Denia's adjudicatary company) is a daughter company held by DKV Seguros, a private health insurer, and Ribera Salud, a firm belonging to a savings bank. The concession constitutes the third initiative of the Valencia Government after Alcira (1997) and Torrevieja (2001), and it is expected to open a new, transparent and stable collaboration model between public and private health sectors in Spain. Nevertheless this is the first time the Regional Government of Valencia considers comprehensive care as the main object of a public tender.

Purpose and process analysis

Current Process Stages

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

Origins of health policy idea

The implementation of the integrated health care model has had three stages:

1st stage - Concession of Specialised Care: it was the first step and it began in 1997 with the concession of the specialised care of Area 10 (Alzira) for a period of 10 years. This first experience showed the need to incorporate the management of primary care and the convenience in increasing the concession period to 15 years, extendable for 5 more years.

2nd stage - Concession of the Integrated Health Care (primary and specialised). It was done in 2002 in the concessions of the Areas 20 (Torrevieja) and Area 10 (Alzira). In this case the concession of the specialised care was rendered previously to the Public Administration for the redefinition of the model.

Both in the case of Alzira as in the case of Torrevieja, the concession was given in a health area with no hospital. Because of that the concessionary company had to build the hospital and get it working.

3rd stage - Concession of the Integrated Health Care in a health area with a previous hospital. This is the situation of Area 12 (Denia). The fact that a hospital does exist previously gives a different dimension to the project and being a successful experience, would be a great backing to the feasibility of the model validity as a way of transformation of public health service organisations from models of bureaucratic public management towards models of company suppliers of health care services.    

Initiators of idea/main actors

• Regierung

• Leistungserbringer

• Privatwirtschaft, privater Sektor

Approach of idea

The approach of the idea is described as:
new:

Innovation or pilot project

Stakeholder positions

 Stakeholders positions for the model are:

•  Valencia Government, promoter of the idea.
•  Local governments from the affected cities which see in this model a way to improve their healthcare infrastructures and service quality. Paradoxically this is not the position of Denia city council, probably due to an oposed ideology against the "public service - private management" model.
•  Present management team of the Health Area.

Main opposition comes from:

• Civil servants trade union representatives.
• Human Resources board in the Health Area.  

Actors and positions

Regierung
Health Regional Minister	sehr unterstützend		stark dagegen
Local government (Mayor)	sehr unterstützend		stark dagegen
Leistungserbringer
Health insurance company	sehr unterstützend		stark dagegen
Privatwirtschaft, privater Sektor
Trade union	sehr unterstützend		stark dagegen

Influences in policy making and legislation

This model has been developed within Ley 14/94 (ACT) of new management in the Spanish National Health Service.    

Legislative outcome

n/a

Actors and influence

Regierung
Health Regional Minister	sehr groß		kein
Local government (Mayor)	sehr groß		kein
Leistungserbringer
Health insurance company	sehr groß		kein
Privatwirtschaft, privater Sektor
Trade union	sehr groß		kein

Positions and Influences at a glance

Adoption and implementation

Local government and trade union representatives colaboration will be required. Relationship with the media and all the comunication issues will also be critical.

Review mechanisms

Abschlussevaluation (extern)

Dimensions of evaluation

Prozess, Ergebnis

Expected outcome

 Some of the aims and effects of this formula related to healthcare services access and delivery are the following:

• To carry out the needed investments to renovate and update the healthcare resources in the area (new hospital, renovation of the present hospital and renovation of the present ambulatory care center).
• Same access and rights as within the rest of public resources;
• Private healthcare sector facilities and quality of service (no waiting lists, single rooms in hospital care, etc.);
• More efficient management of public funds and resources (more flexible HHRR policy, investments, ...).

Impact of this policy

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

References

Author/s and/or contributors to this survey

Dr. Fidel Campoy

Empfohlene Zitierweise für diesen Online-Artikel:

Dr. Fidel Campoy. "The Denia Project: Concession for integrated HC". Health Policy Monitor, September 2005. Available at http://www.hpm.org/survey/es/b6/3