The best way of paying people for healthcare
It is extraordindary how little innovation there has been in how operators are paid to deliver healthcare. The current system is appallingly wasteful and open to gaming on a massive scale.
It is only in the last decade that most of Europe has moved from paying hospitals by the day for patients to diagnostic related groups where they are paid per proceedure. Ireland has yet to move to DRGs and Switzerland only made the move this spring.
It is not as if DRGs is a good system. It encourages hospitals to do more stuff and it doesn’t reward quality. Whilst hospitals with high failure rates may be identified and penalised all too often where complications arise hospitals are simply paid more money to carry out more complex operations – often at much higher margins. There is plenty of anecdotal evidence of gaming on a massive scale, particularly by the private sector.
German hospitals, for instance, are loath to move high paying inpatient proceedures to an outpatient ambulatory setting precisely because the rates are so much lower.
The arrival of a new bundled service system in Sweden where operators are penalised for poor quality by having to fix complications themselves is to be welcomed. For the private sector it may slash margins. But it should also grow the market. In Sweden less efficient public sector operators have retreated from the sector. Private operators in Stockholm have grown their share of the market from 30% to 60% in three years. There are lessons here for the French government in how it should work with the private sector.
We would like to see more innovation. Why not guarantees for dental treatment, for instance? Ideally, we should move to the ancient Chinese model where doctors were paid when patients were well and not when they were sick.
We would welcome your thoughts on this story. Email your views to Max Hotopf or call 0207 183 3779.
