Provider-Payer Contractual Reorganization

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

Abstract

Since the mid-'90s, the relationship between public health insurance funds and health professionals has been deteriorating. Following strikes in 2000, the minister of health sought to renew dialogue with health professionals and sat up a panel of experts to renovate the contractual relationship between health insurance funds and health professionals.

Purpose of health policy or idea

The new contractual system currently under discussion has 3 levels.

• Level one is an Interprofessional Framework Agreement (Accord Cadre Interprofessionnel, ACIP) jointly signed by the National Interprofessional Union (Centre National des Professions de Santé) and the public health insurance funds.
• Level two is a series of National Agreements (Conventions) between each profession and the health insurance funds.
• Within these National Agreements, options will be open to individual health professionals who wish to join them on a voluntary basis.

The Interprofessional Framework Agreement, ACIP, is currently under discussion.

It will set, for a period of 5 years, the provisions that apply to all self-employed health professions and health insurance funds. These provisions will only bind the health professions for whom a representative union signed the ACIP (what would happen to professions who don't join has not yet been specified).

According to the currently negotiated draft, the professionals commit themselves:

• to undertaking projects that aim at improving the quality of care (for instance, creation of shared medical records) and at promoting the coordination of health professionals (multiprofessional case studies, creation of networks of care, etc.),
• to creating regional interprofessional commissions that will be involved in the monitoring of the geographic distribution of care (incentives to set up shop in under-serviced areas),
• to discussing and trying to harmonize the way some issues common to all professions are dealt with in the various professions' National Agreements: group practices, the status of locums, etc.,
• to developing the electronic transmission of information among health professionals and with the health insurance funds.

The health insurance funds agree:

• to participate in the costs incurred by the organization and the implementation of the contractual agreements,
• to provide each professional with an identified correspondent in the health insurance system for medical and administrative issues,
• to reduce the delays of payments when professionals are paid directly by the funds rather than by the patients (penalties are envisaged if the targets are not met).

The National Agreements (Conventions) are negotiated for a period of 5 years between each profession and the heath insurance funds. As before, if the funds and professionals fail to sign a National Agreement, minimal contractual regulations are defined unilaterally by the government.

The National Agreements fix:

• the tariffs for the health services,
• collective and individual commitments regarding the organization of care, the respect of guidelines, and changes in practice and activity.

Under the new system, the National Agreements organize two types of optional contracts that individual professionals are free to join or not:

Professional Practice Contracts"(PPC) Contrats de Bonne Pratique or Contrat de Pratique Professionnelle. These contracts set detailed commitments pertaining to the improvement of the practice itself, sometimes with an emphasis on a specific component of the professionals' activity. They must also set targets in terms of:

• evaluation of the professional's practice (compliance to guidelines),
• prescription practices and levels (where relevant),
• monitoring by the health insurance funds of the activity and prescription levels.

In return, the participating health professionals receive a lump-sum payment or a partial exemption of social contributions.

Such contracts have already been included in their National Agreements by dentists, nurses, midwives, speech therapists, orthoptists (who all receive 600€ a year if their detailed and profession specific objectives are met), as well as with the laboratories.

"Public Health Contracts" (PHC), Contrats de Santé Publique. These contracts specifically aim at promoting prevention or the coordination of care in return for lump-sum payments. The few examples negotiated by March 2003 include a contract for nurses involved in the treatment of diabetics 75 years old and older, and a contract for laboratories regarding the biological monitoring of patients treated with anticoagulant vitamin K based products. These professionals receive a lump-sum payment per patient treated according to the guidelines set in the PHC.

If professionals fail to comply with the specific commitments of the Professional Practice Contract or the Public Health Contract, no specific penalties are envisaged; the health insurance fund can however terminate the contract.

Targeted Agreements on Best Practices (Accord de Bon Usage des Soins, AcBUS):

The involvement of professionals in cost-containment takes the form of specific agreements which can be included in the National Agreements but can also be negotiated at a local level between regional unions of health insurance funds and professional unions. These AcBUS can also be signed if no National Agreement exists.

These collective agreements focus on specific actions that can be taken to reduce cost in a way that is deemed acceptable on clinical grounds by the professionals. In return, at the end of the contractual period, part of the resulting savings are supposed to be allocated to the health professionals.

This principle is best illustrated by an example. In 2002, GPs and the health insurance funds negotiated an agreement on home visits, which they collectively agree represent too large a part of their activity. Prior to the agreement, the fees charged for all home visits were the same (less than 20€ plus a distance-related indemnity). Under the new system, home visits are divided into two categories. Those that are deemed medically or socially necessary (according to criteria that are negotiated locally) are remunerated 30€, and reimbursed by the public health insurance funds on this basis (minus a co-payment). Those that are not necessary, are reimbursed on the basis of 20€ by health insurance funds but the physicians are free to charge more than that amount. The difference is paid by the patient.

The target of this AcBUS signed collectively by the GPs, is to decrease the total number of home visits in France by 5% during the first year. This objective is adjusted in a series of regional AcBUS that are more context-dependent and collectively aim at harmonizing the utilization of home visits which is highly variable across regions but only partly explained by health or environmental factors.

To date (March 2003), GPs have signed another national AcBUS on the use of streptotests, and two regional AcBUSs respectively on asthma and on the prescription of drugs of insufficient medical service rendered. Radiologists and paediatricians each signed one, as have nurses, dentists, orthoptists, speech therapists, mid-wives, and biologists.

Compared with the previous system where all relationships between the health insurance funds and each profession were negotiated in separate National Agreements, this system is more complex. The main innovations are:

• the interprofessional platform which creates room for negotiation among professions. This already marks a change in mentalities (a strong tradition of competition among professions, and the defence of categorial interests with little interest for the overall dynamic created),
• increased flexibility with the possibility of negotiating local or national contracts that individual professionals are free to join.

Main points

Main objectives

To revamp the contractual framework between all categories of self-employed health professionals and the public health insurance funds.

While fee-for-service remuneration will still constitute the bulk of professionals' income, provisions are made for marginal and optional lump-sum payments.

The prior cost-control mechanism of setting a yearly financial envelope for each profession and adjusting the fees if the target is not met, which was never fully implemented for some professions, has been abandoned.

The participation of self-employed professionals in cost control will take the form of focused and negotiated commitments (AcBUS) whose objective is to "optimise the utilisation of resources", and it is not yet clear what kind of penalties, if any, will be levelled if the professionals fail to meet the targets.

Groups affected

The professionals concerned are: physicians, dentists, mid-wives, nurses, speech therapists, podologists, physiotherapists, orthoptists, medical transportation providers, and laboratories' directors.

Degree of Innovation	traditional		innovative
Degree of Controversy	consensual		highly controversial
Structural or Systemic Impact	marginal		fundamental
Public Visibility	very low		very high
Transferability	strongly system-dependent		system-neutral

Political and economic background

Since the mid-'90s, the relationship between public health insurance funds and health professionals has been deteriorating. After a long period of price control, health professionals' dissatisfaction increased with the introduction of sector-level expenditure targets voted by the parliament. These targets were supposed to be enforced by penalties such as the lowering of fees. While this cost-control policy was implemented for some professions, physicians, by far the most organized and powerful group, never accepted it. Specialists have not signed a National Agreement with the health insurance funds since 1996, and all professionals remained fiercely opposed to both the principle and the practice of a restrictive cap set on expenditure ex ante.

Following physicians' protests and strikes at the end of 2000, the Social Affairs' Minister, Elisabeth Guigou, sought to renew dialogue with professionals and set up a panel of experts whose mandate was to organize a large consultation process and propose a reform to renovate the contractual relationship between health insurance funds and health professionals.

The renovation was initiated in 2001 and is still under way.

Some professionals' demands for fee increases were satisfied in the few months prior to the presidential election and this encouraged professionals to press further demands.

Since 2002, the new government has granted additional fee increases. The public health insurance system deficit is soaring and is clearly not sustainable. Many analysts believe that after an era of supply-side oriented cost control mechanism, the new policy will be demand-oriented.

Purpose and process analysis

Current Process Stages

	Idea	Pilot	Policy Paper	Legislation	Implementation	Evaluation	Change
Implemented in this survey?

Origins of health policy idea

The 3-level contractual system was proposed in the report published in July 2001 by the panel of experts appointed by Elisabeth Guigou.

Stakeholder positions

Negotiations have been slowed by all professions' desire to bargain for fee increases in the process. Physicians were also on strike over the organization of out-of-hours care for several months.

The overall process is still under way and, of all health professionals, physicians remain the most reluctant to support it.

As theirs is the profession with most leverage and given their traditionally dominant position in the hierarchy of health professions, they show little interest in the interprofessional component of the overall agreement. In fact, they chose to block the negotiation of the ACIP until a National Agreement was signed for them. A preliminary draft for their own National Agreement was signed at the beginning of 2003 and the negotiation of the ACIP resumed recently. Physicians' unions are also wary of the possibility of drafting optional contract which, in their opinion, paves the way towards "selective contracting" by the health insurance funds. Some also object that the lump-sum payments these contracts are based on go against one of the fundamental principles of independent medical practice: the payment on a fee-for-service basis. Finally some unions want to go back to the old system of a single National Agreement for all physicians rather than separate ones for GPs and specialists.

During the recent conflicts, many organizations were created, which are distinctly unlike the traditional medical union establishment. Theirs positions are often quite radical. While dialogue has resumed at the central level, the situation remains very tense.

According to tradition (and the law), negotiations should have taken place between the professionals and the health insurance funds, which is supposed to be independent and ultimately responsible for the balancing of its budget. However, given the tensions between these actors, the government joined in the process. Professionals also understand that the State ultimately holds the purse strings and on several occasions chose to bypass the funds and negotiate directly with the Minister of Health.

Influences in policy making and legislation

The parliament legally established the new contractual framework when it passed the 2002 Social Security Funding Act. This first text was ruled illegal by the courts because it had not been formally negotiated by the two chambers of the parliament before it was voted.

The Act was re-approved by the parliament in March 2002.

A series of codicils were added to the existing National Agreements of some professions (nurses, optometrists, generalists, etc.) in order to introduce the AcBUS negotiated at the national level, the Public Health Contracts and Professional Practice Agreements. All these texts were voted by the Parliament.

The Interprofessional Framework Agreement (ACIP) should be discussed in the spring of 2003, as well as either a new National Agreement for all physicians or one for specialists. The March 2002 decree set December 2002 as a deadline to conclude all agreements; it was later postponed to the end of March 2003 and observers have little hope that everything will be ready by then.

Adoption and implementation

The public health insurance funds, the government and all professionals will be involved in the implementation process. The regional agencies will be granted greater responsibilities; many decisions will be made and monitored at the regional level: the drafting of local contracts or local versions of national contract, and their evaluation.

The governments agreeing to fee increases was and will be the key to the success of this policy's drafting.

Monitoring and evaluation

As stated earlier, the various AcBUSs, PPCs and PHCs include evaluation mechanisms. Whether the evaluation of the compliance to the PPCs or PHCs, and negotiation over the sharing of AcBUSs benefits will be consensual is difficult to evaluate.

Expected outcome

Resuming dialogue with health professionals was a clear objective of this policy, and while the situation remains tense, progress has been made.

The chances of this policy of achieving its more "lateral" objectives are variable:

• It is difficult to anticipate whether the ACIP will spur genuine dialogue between the professions. A weakness of the French health care system lies in the lack of coordination and continuity of care provided by often isolated professionals, and while things improve slowly over time, whether the ACIP will impulse new steps remains to be seen.
• The success of the optional contract is also difficult to anticipate, each professional will have to make his own assessment between the constraints and the reward.
• The AcBUS represent an effort to curb expenditure but their scope and hence potential impact are limited. No penalties are planned if the objectives not met. They might help absorb some obvious inefficiencies but are unlikely to have a long lasting impact on health expenditure.

This policy will undoubtedly increase the public health insurance deficit (and it already has). While the government clearly released the pressure on health professionals, it will have to find a solution. In order to comply with EU public deficits constraints, one way out is to limit the scope of public health insurance. A group of experts is currently working on proposals for a reform of health insurance and its report, to be released in March, is expected to take tentative steps in that direction.

References

Author/s and/or contributors to this survey

Agnès Couffinhal, Dominique Polton

Suggested citation for this online article

Agnès Couffinhal, Dominique Polton. "Provider-Payer Contractual Reorganization". Health Policy Monitor, April 2003. Available at http://www.hpm.org/survey/fr/a1/5