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TheBeveridgePlanUK:NationalHealthServicesBillof1946BasedonaplanbyeconomistWilliamBeveridgefocusedonsharedsacrificeandnationalsolidarityBeveridgeModelhasthreedefiningfeaturesUniversal,single-payerinsurancePublichealthcareprovisionFreecare
ThethreedefiningfeaturesUniversal,singlepayerinsurance:Allcitizensreceiveinsurancefromgovernment,financedbytaxesandnotpremiumsPublichealthcareprovision:
HospitalandclinicsrunbythegovernmentFreecare CareprovidedforfreeatgovernmenthospitalsFreeatthepointofcareSomeexceptionsforprescriptionsdrugs,eyecare,anddentistryAimoftheBeveridgemodelHealthcareisagoodprovidedbythegovernmentandpaidforwithtaxrevenueLikepublicschools,libraries,andparksAllocationofhealthcarebasedonneedandnotabilitytopayEliminatespricerationingPromotesequityCountrieswiththeBeveridgemodelBeveridgeblueprintadoptedinCommonwealthandScandinaviancountriesUK–Canada–Australiaetc.Sweden–Norwayetc.VariationsinimplementationCanadianhospitalsnominallyprivatebuteffectivelygovernmentrunSomecost-sharinginSwedenAustraliaalsohasaprivatehospitalsector…amongothersRationinghealthcarewithoutpricesEveryhealthcaresystemfacestwofundamentalquestions:howmuchhealthcareshouldbeproduced?whoshouldgetit?PrivatemarketsusepricestoanswerthesequestionsScarceresourcesgotothosewillingandabletopaythemostforthem(pricerationing)Withpricerationing,pooraredisadvantagedIfnotpricerationing,thenwhat?HealthcareisfreeinBeveridgesystemssomustbeanotherwayofrationingcareSomestrategiesinclude:QueuingGatekeepingLimitingcoveragethroughhealthtechnologyassessmentQueuesandgatekeepersWhydoqueuesarise?BecauseBeveridgegovernmentsmandatefree(orvery-lowcost)careDemandcanbehighInprivatemarkets,physicianandnursesalariesincreasesothatsupplymatchesdemandInBeveridgesystems,salariessetbygovernmentsomarketcannotequilibrateHighdemandandlowsupplyresultsinqueuesCostofqueuesAsaresultoflongqueues,1990:medianwaittimesforEnglishpatientswas5monthsMorethan50%ofpatientshadtowaitlongerthanayear!TherecouldbepatientsdesperatelyneedingquickcarebutnotreceivingitLongwaittimesaverypoliticallysensitiveissueManyreformssincethenfocusedonreducinglongwaittimesBenefitsofqueuesQueuesmaylimitmoralhazardE.g.longwaittimesdeterpeoplewhodonotactuallyneedthecostlyprocedureIna1980smailsurveyofpatientswaitingfororthopedicsurgeryatoneUKhospital,only48%ofthe757peoplestillwantedthesurgeryUnlikepricerationing,queuestreattherichandpoorequallyPromotestheequitygoalofBeveridgesystemsAmodelofqueuesSupposetherearetwotypesofpatients:U-patients:
thoseforwhomthesurgerywouldbeveryusefulW-patients:thoseforwhomthesurgerywouldonlybemarginallyusefulLetUp
representpoorpatientsforwhomsurgerywouldbeusefulAmodelofqueuesBecauseoffirst-comefirst-serve,low-benefitW-patientsreceivetreatmentbeforehigh-benefitU-patientsInefficiencyarisesbecausecareisfreeforeveryoneW-patientsdonotinternalizecostsofcaresojoinqueueanyway
PricerationingSupposeinsteadthatpatientshadtopayanout-of-pocketfeefortreatmentThisreducesthequeuingproblembecauseW-patientswouldneversignupfortreatmentButpricerationingalsoremovesUp-patients–oneswhoneedtreatmentbutcannotafforditGatekeepingNeedanalternativetopricerationingtoseparateWandUpatientsInmostBeveridgesystems,allpatientsmustfirstvisitageneralpractitioner(GP)beforetheycanseeaspecialistGPsactasgatekeepers:OnlypatientstheydeemasneedingcaremaythenvisitaspecialistEstimatingthewelfarelossfromqueuesIfgatekeepersareeffective,thenqueueslooklike:Ifso,longqueuesmeanlotsofpeopleneedingcaredonotreceiveitquicklyPotentiallyhugewelfarelossfromlongqueuesWanttoestimatehowlargethewelfarelossisEstimatingthewelfarelossfromqueuesThreestrategies:#1:Hypotheticalquestionsabouthowmuchpatientswouldbewillingtopaytoreceivecarenow#2:Calculatewelfarelossfrompatientwillingnesstopayextraforprivatecare#3:CalculatewelfarelossfrompatientwillingnesstotraveltofartherhospitalstoreceivequickercareAllthreemethodsfindfornon-urgentprocedures,amonthreductioninwaitingtimeisonlywortharound$200Thislowestimateremainsapuzzlecomparedtotheattentionlongwaitingtimesreceive!QueuereductionpoliciesIncreasedusedofgatekeepersStrictereligibilitythresholdsforcarePrioritizingpatientssonotjustfirst-comefirst-serveHiremoredoctorsandbuildmorehospitalsHighersalariesformedicalstaffOutsourcecaretoprivateprovidersDecreasedemandIncreasesupplyToreducequeuing,eitherdecreasedemandorincreasesupplyQueuereductionpoliciesEachreductionstrategyinvolvessometradeoffbetweenequity,health,andwealthGovernmentstypicallyadoptacombinationofthesetacticsandapplythemtodifferentdegreesDifferinglevelsofsuccessinreducingwaitingtimesacrosscountriesEx:UKsuccessfulinreachingitswaitingtimetargetsbutwaitingtimeshavegrownsubstantiallyineveryprovinceinCanadabetween1993and2010HealthtechnologyassessmentHealthtechnologyassessment(HTA)HTAmoreacentralissueinBeveridgecountriesbecause:Governmentpaysforhealthcare,soHTAplaysalargeroleincostcontainmentGovernmentdelivershealthcare,soHTAdetermineswhichservicesareavailableandwhichservicesarenotPatientsmayhavetogoabroadtoaccessservicesdeniedcoveragebyHTAHTAdecisionscanbeverycontroversialbecausetheycandeterminewhogetstreatmentandwhodoesnotRiseofcentralizedHTACentralizedHTAarosefortwoprimaryreasonsCostcontainmentPreviously,HTAdoneregionallywhichledtodisparatemenuswithinthesamecountryHTAonlybecameformalizedonanationalscaleacrosstheBeveridgeworldinthe1980sand1990sEx:In1999NICEwasestablishedintheUnitedKingdom.Asof2005,itsguidancebecamebindingforallprovidersinEnglandandWalesSimilarsystemsinplaceacrossBeveridgenations;insomecasescentralHTA’srecommendationsnon-bindingProvidercompetitioninBeveridgesystemsAppealofcompetitionManyoftheproblemsfacedbyBeveridgesystems(longqueues,centralizedHTA)notfoundincountrieswithprivatesystemsHence,manyBeveridgesystemshavetriedtoexperimentwithelementsofcompetitionwhilesimultaneouslypreservingsolidarityUneasinesswithprivatemarketsWhydon’tBeveridgecountrieswantingcompetitionmaintainbothprivateandpublichospitalsectors?TrueforsomecountrieslikeAustraliabutnotmostFearthatparallelsystemwillunderminesolidarityPotentialfortwo-tiersystemwhererichpatientsgotoprivatesystemandpoorerstuckinpublicsystemIfprivatesectorpaysbetter,betterdoctorsleavepublicsector,furtherunderminingsolidarityHospitalbudgets(pre-1991)Before1991,UKhospitalsreceivedannualbudgetsfromgovernmentEachyear’sbudgetdeterminedfromlastyear’scostadjustedforgrowthandinflationSonoincentiveforindividualhospitalstooperatemoreefficientlyNofinancialincentivetoreducecostsortoreducewaitingtimes1991UKInternalMarketReformsReformsaimedatgivingpublichospitalssomeincentivetoreducecostsandlowerwaitingtimesInsteadofannualbudgets,hospitalshadtovieagainstotherregionalhospitalsforcontractsfromagovernmentbuyerBuyersgavecontractstohospitalsonbasisofcosts,service,andwaitingtimesEmpiricalquestionwhetherreformssucceeded1991UKInternalMarketReformsSomeevidencethatwaitingtimesdecreasedafterreformsHowever,Propperetal.(2008)noticethathospitaldataonmortalityandoutcomesnotwidelyavailableBuyerscouldnotjudgehospitalsonservicesrendered,onlycostsandwaitingtimesIncentiveforhospitalstoskimponqualityinordertolowercosts“racetothebottom”
UK2002-08ReformsFrom2002to2008,threelargereformsinjectingcompetition:Movehospitalsawayfromglobalbudgetstoa“paymentbyresults”(PbR)systemAllowpatientsfreedomtochoosebetweenprovidersGivehospitaladministratorsgreaterautonomyinmanaginghospitals.Unlikepreviousreforms,thesereformssetuniformpricesforallhospitalsHospitalscancompeteonlyonquality,notprice1.Movingawayfromglobalbudgets“PaymentbyResults”(PbR)systemcompensateshospitalsbasedon#ofproceduresconductedratherthanfixedannualbudgetCompensationaccordingtoHealthResourceGroups(HRGs)HRGsarerelatedservicesandproceduresGovernmentsetsreimbursementforeachproceduredependingonitsHRGdesignationandpatientagePbRsystemmaybackfireifreimbursementratesaresetimproperly2.OpeninguppatientchoicePreviously,patientsassignedtohospitalbyresidentiallocation,sonowayforhospitalsto“compete”forpatientsIn2006,GPsrequiredtoofferpatientschoiceofmultiplehospitalsinUKIn2008,patientsfreetochooseanyhospitalnationwide3.IncreasingmanagerialautonomyPreviously,muchofhospitaladministratorcontrolconstrainedbygovernmentThe20
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