Health Care System in the Industrialised Countries and the Role of Private Insurance

In some countries, health authorities set reference prices for some groups of drugs, above which the mechanism of co-payment by the patient becomes effective. In Germany, reference prices are set by a federal committee, while in the Netherlands they are the same as the European average. In order to control medication spending, in some countries – notably Germany, Spain, United Kingdom and Sweden – drug prices have been negotiated at a national level by governments and pharmaceutical companies.
The role of the primary care physician in cost containment focuses on monitoring access to secondary treatments and drug consumption. To be referred to specialist care or to be hospitalized, Dutch, British, Spanish and French citizens as of 2006, must first visit their primary care physician. However, although the use of primary care physicians as gatekeepers is considered effective to reduce healthcare consumption, not all countries grant the physician an authorization power.
In countries where the physician is a state employee, cost control is carried out through a collective wage bargaining (in Germany, for instance, medical services are reimbursed according to the fees negotiated yearly with the sickness funds) or through incentives based on remuneration, which can vary according to efficiency or at least to the quality of services provided. In Spain, general practitioners get paid by health centres according to the services provided and not to the number of patients treated.
The choice of employee physicians to move on to self employment grants ‘customised’ negotiations and a better link to the quantity and quality of the treatment provided (in the Netherlands, for instance, 90% of physicians are self employed).
In terms of hospital expenses, that account for 37% of the overall spending of the OECD countries, many approaches to cost containment have been adopted: monitoring of the service quantity through gatekeeping mechanisms (typically, the primary care physician), focus on efficiency through the management of hospitals by the private system, competitive negotiations for the services provided and budgeting policies. Cost-control mechanisms have not always produced the expected results. The setting of a maximum limit for the reimbursement of individual services, for instance, has led to an excessive number of prescriptions, aimed at offsetting the decrease of costs per unit with an increase in volumes.
In some countries, hospital costs are covered by a fixed daily allowance, not related to the treatment cost, but negotiated between the local government and the hospital authorities; in others, hospitals are paid according to a budget that is proportional to the daily hospitalization cost. The idea to relate reimbursement to the diagnosis (e.g. through Diagnosis Related Groups) has contributed to reduce the length of hospitalization, thereby avoiding costs not related to the medical treatment and considered unproductive from the viewpoint of therapeutic effectiveness.
In Sweden, where public hospitals are funded according to a budget based on historical costs, monitoring of the results obtained has recently been implemented to reduce the cost of the system. At the same time, competition options to purchase services are being tested, without prejudice to the quality of treatment and the equity of the service.
In the Netherlands, state funding depends on productivity, while Germany has introduced a private system to manage hospitals; in Spain, the idea of accountability is slowly getting off the ground and hospitals are becoming increasingly independent. In the Anglo-Saxon world (UK and USA) there has been a trend towards a (vertical) integration between health facilities, which across the Channel are managed directly by insurance companies; this is a typical feature also of the Spanish market, where the chief insurers can rely on their own hospitals and clinics, managed by physicians.
In the last few years, more and more focus has been placed on increasing efficiency through de-hospitalization, fewer beds and more home health care. From 1990 to 2003, France passed from 11.1 beds per one thousand inhabitants to 7.7, Spain from 5,4 to 3.8, the United States from 6.0 to 3.3, whereas from 1980 to 2002 Italy passed from 9.6 to 4.4 beds. De-hospitalization offers opportunities to insurance companies that can provide home health care services. This approach calls for the cooperation of public institutions, that should play different but integrated roles.

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