1. Financial alignment
Next step forward to disease management in the
Netherlands: functional pricing for chronic conditions
Evelien van der Vinne , Wageningen, The Netherlands
Abstract: This article describes financial alignment of chronical health care in
the Netherlands. The article starts with a description of the Dutch health care
system and the development of disease management. More specifically,
vertical integration, the role of the general practitioner and financial alignment
are discussed. In The Netherlands, in 2009, functional pricing; an outpatient
DRG for a chronic disease has been proposed as a new finance mechanism for
primary chronical care. This is a next step forward to stimulate disease
management in the Netherlands.
Other countries used other strategies to develop financial alignment for disease
management because they’ve different health care systems. So there’s no one-
size-fits-all solution, but general lessons, on the macro level, can be learned.
Comparison with other finance mechanisms provides insight into a countries
own system and reform plans but provides also interesting options for future
directions for other countries.
This article studies the USA and Japan, and the United Kingdom, France and
Germany on the role for general practitioners and financial alignment. This
article supports that the most promising strategies, on the macro level, for
1

2. redesigning health care systems to a ‘disease management system’can be
found in financial alignment for providers and payers.
Introduction
ational policy makers across the world increasingly recognise that chronic
conditions and diseases are one of the most important challenges that health
systems face. The World Health Organisation (WHO) has identified chronic
conditions to be the leading cause of morbidity and mortality by 2020 and, if not
successfully managed, they will become the most expensive problem for health care
systems (Mathers and Loncar, 2005).
N
According to the WHO definition, chronic conditions are health problems that
require continuous comprehensive and complex management over a period of years
or decades(WHO, 2003). Moreover, these conditions require coordinated input from
a wide range of multidisciplinary health professionals. New models of providing
integrated health care were being introduced in Europe and the USA in response to
the fragmented health care (Congressional Budget Office (CBO), 2008). The models
are as diverse as the healthcare systems are, but they share the focus on patients
needs and cost reduction. After all chronic patients’ needs are the same all over the
world, corresponding to the St. Vincent declaration for Diabetes, Gold for COPD etc.
Most countries developed new models inspired by the concept ‘Disease
Management’. According to the Disease Management Association of America
(DMAA, 2008), disease management is “a system of coordinated healthcare
interventions and communications for populations with conditions in which patient
self-care efforts are significant.” It focuses on the management of chronically ill
patients, with the goal of slowing progression of disease and avoiding costly
hospitalizations and delaying complications. The key components of Disease
Management are e.g. prevention of exacerbations and complications/comorbidity
utilizing evidence-based practice guidelines and patient empowerment strategies,
evaluation of outcomes and collaborative practice models to include physicians and
support-service providers. These valuable components can be used in every country,
whether they’ve a tax-based or insurance based system (Thomson et al., 2009; WHO,
2008, Boerma, 2006).
The mission for the 21 century is to align care to vertical integrated chains. This
vertical integration requires a more dominant role for professionals in primary care
because substitution of expensive inpatient care for outpatient care and
rearrangement of tasks over multi-providerdisciplins, will be organized (Starfield,
2009). The WHO (2008) encouraged all countries to orient their health care systems
toward strengthened primary care. National health care systems with strong primary
care infrastructures have healthier populations, fewer health-related disparities and
lower overall costs for health care (Starfield et al., 2005; Kringos et al., 2010). Such
reforms are only successful if they‘re enforced by the right financial incentives
(Starfield et al., 2002; Gleave, 2009).
In The Netherlands, minister Klink of Department Public Health, Wellness and
Sports(PHWS) has proposed a new finance mechanism for outpatient, primary
2

3. chronical care i.e. functional pricing; outpatient DRG’s for chronic diseases. This is a
next step forward to disease management in the Netherlands.
Other countries used other strategies because they’ve different health care systems.
Comparison with other (vertical/primary care)systems and (finance)mechanisms
provides insight into a countries own system and reform plans but provides also
interesting options for future directions for other countries.
Chapter 1 describes The Dutch health care system with the development of disease
management, vertical integration, role for general practitioners and functional
pricing.
Chapter 2 describes the lessons from the east and west; the USA and Japan by the
sections: role for general practitioners and functional pricing. Chapter 3 gives the
lessons from Europe: United Kingdom, France and Germany. The last chapter (4)
summarizes the article and gives insights for future directions.
Dominant role of General Practitioners
eneral practitioners have a central position in Dutch health care, they’re the
gatekeepers and referrers for medical physicians and hospitals. So patients
have first to contact their GP to access other care disciplines, including
specialist medical disciplines plus nursing disciplines. Gatekeeping is a significant
issue and been seen as the cornerstone of health care system as a whole, especially in
chronic disease care (Saltman et al., 2006; Health Council of the Netherlands, 2004).
This gatekeeper role has evolved to include prevention, coordination and continuity
of care, using a populational approach in correlation with the grouping together of
several health professionals. Multidisciplinary provider groups establish now in
primary care as a form of vertical integration.
G
In the Netherlands, a few examples of vertical ties between insurers and GPs are
known to exist. In The Hague, GPs negotiated a collective insurance policy (with a
collective discount) with an insurer on behalf of their roughly 60,000 patients: 25
GPs from four different practices concluded through a foundation an agreement with
insurer Agis. In addition to collective discounts, there are examples where insurers
have (co-)funded GP practices. In Groningen and in Arnhem, healthcare insurer
Menzis fully owns healthcare centres through a foundation. The GPs and other
healthcare providers are working there as employees of Menzis. Menzis has also
reached an agreement with all 27 GPs in Houten, a small Dutch city, to give up their
independent practices and come to work in five medical centres starting from 2009.
These centres are partly financed by Menzis. Menzis, who does not have a large
market share in Houten and surroundings, offers a collective basic insurance policy
with a 50 euro discount to all inhabitants of Houten who sign up. GPs accept patients
from other insurers and provide treatments to them. Nevertheless, Menzis’ insurance
policy becomes relatively more attractive because of collective discounts as well as
some extras for policyholders (fit tests, weight programmes). This agreement
resembles a deal in Tiel, where Menzis also co-finances a health centre since 2007.
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4. In Tiel and surroundings however, Menzis had a rather strong position, already
serving many consumers, so this strategy was to bind enrolees.
But no all initiatives were successful. For example, insurer Zilveren Kruis opened a
healthcare centre in Maarsenbroek years ago but did not attract sufficient
policyholders and had to close. The extent to which foreclosure can occur depends
on the competitive situation in a local market for GP services and on the type of
contracts between insurers and GPs (collective or individual).
What is functional pricing?
ayment mechanisms in healthcare sector have a strong influence on the
behaviour of health providers. They give incentives to increase or decrease the
number of patients (capitation), visits (salary or fee-for-service), procedures
(fee for services), referrals to hospitals etc. To foster outpatient care while inpatient
care is restricted, payment mechanisms should be combined (WHO, 2008). It is the
combination of financial incentives and flows, e.g. financial alignment, that will
stimulate providers to deliver integrated chronical care. Therefore financial
alignment is the capstone of disease management.
P
Since healthcare reform in the Netherlands(2006), all general practitioners receive a
fixed amount(capitation) per registered enrolee in their practice and additional a
fixed fee per ‘doctor visit’(fee for service). In 2012 experiments will be started with
pay for performance where the GP sets a price for health care, by functional pricing.
In most of the cases the GP, as main contractor and représentant of the
multidisciplinary provider group, sets a price for the complete outpatient health care
for chronic conditions and negotiate with the insurer on price and tasks. Price will be
linked to healthcare tasks (what) in stead of type provider (who). This gives
providers free space to reorganize and reshuffle tasks over health professionals.
Those functional prices per chronic condition will be called Chain Diagnoses
Treatment Combination (CDTC), comparable to ‘Diagnoses Related Groups’ (DRG),
but DRG’s are for inpatient care and CDTC’s are for outpatient care.
CDTC form a new additional payment mechanism to reimburse health care costs of
general practitioners and other health care professionals in outpatient care, like
practice assistant, nurse practitioners, dietician, physician. The provider group gets a
fixed regular amount from the health insurer for each member who is served. In this
case it concerns members with diabetes, heart failure , COPD and Vascular disease.
The payment covers all health care directly associated with the chronic disease and
based on medical guidelines and quality standards. The current payment (innovation
fee for service) will be ended.
The provider group is responsible for providing all the specified services as
described in the agreement, even if the costs exceed the price. The extent of the price
is the result of free negotiations between provider group (GP as subcontractor) and
insurer and therefore fixed for all members of the same provider group. Members
need to register with the GP.
The goal of this new payment mechanism is to stimulate aligned chronic care by
reshuffling tasks or substitution of care from inpatient to outpatient and from general
practitioner to nurse practitioner.
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5. Acting as one contractor will stimulate clinical leadership and robust management
structures. The premise is that the provider group will rearrange tasks as efficiently
as possible and align them in integrated and coordinated care continuums (PHWS ,
2008). At the same time the insurer is stimulated to negotiate for the best quality of
care for the lowest possible price. Klinks mission is to provide most valuable care for
patients, measured and demonstrated in (better) health outcomes per spended euro
like Porter en Olmsted Teisberg wrote in their book ‘Redefining Health Care’. The
experiment will be extended to other chronic diseases after proven success.
Patient Self-
Management
General
Practitioner Hospital Home care
Nursing
homes
Supplemental
insurance
AWBZ
Capitation
+
Functional
Pricing
DBC
Budget
related
to intensity
of care
Capitation
Premium Premium + Budget
related to mobidity
Disease
Management
Chain
Financial
Flow
Providers
Financial
Flow
Payers
Insurance
system Basic Insurance
Budget
related to
Number
inhabitans
Figure 1: Relation between disease management and financial flows.
In DM, the punch line is to align different payment systems of both providers and
payers to the health care/insurance continuum (see fig. 1). The crux is to calculate an
adjusted mean capitation for a Chain DRG which is linked to an (inpatient) DRG on
a way that substitution of health services performs. Gatekeeping, medical criteria can
be included in the CDTC, like reference to a physician by general physician if a
patient has a blood sugar > x or lung function<x. So there is a close interaction
between health care delivery-insurance-finance.
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6. Lessons from East and West
Lessons from the West: USA
The role of General practitioners
he primary-care doctor, in the USA, is a family physician(PCP), general
internist or general paediatrician and works as a gatekeeper in keeping people
out of emergency rooms and controlling health care costs. At Health
maintenance organisations (80 million) patients were required to gain permission
from their primary care physician to access laboratory, radiology, and specialty
services. Health maintenance organisations moved primary care to a central position
in health care, they expected primary care physicians to do far more for their patients
than before, yet they paid little more, if at all, for these additional tasks. Primary care
physicians were looking more and more like the "hamsters on a
treadmill"(Bodenheimer, 2003).
T
Many patients have difficulty obtaining an appointment with their primary care
practice.
Country-Comparison study (Bindman et al., 2007) showed patient-physician time in
the US is about half the average of New Zealand and one-third of Australia. The
authors suggest that such a severe shortfall impacts preventive care and management
of chronic conditions in the US and could explain why the US does not achieve
health outcomes that correspond to its higher level of investment in health care.
Another problem is the widespread frustration among physicians by increased
paperwork, difficulty receiving reimbursement and burdensome government
regulations. The American Academy of Family Physicians (2009) predicts that the
shortage of family doctors will reach 40.000 in the next 10 years. Because of this
bureaucracy the profession GP has become less attractive.
In a few US primary care practices a group of diverse physicians are working as a
team. Team care often means the doctor delegates routine tasks to other team
members (Bodenheimer, 2003). In some cases, each team might have one primary
care physician, two non-physician clinicians (nurse practitioners or physician
assistants), three nursing staff (nurses or medical assistants), and a receptionist. The
team is responsible for a panel of 5000 patients.
Other experiments are models where patients see their physicians in groups rather
than singly. John Scott, a Kaiser-Permanente primary care physician, gave his elderly
patients the option of seeing him in groups. The groups are not simply patient
education sessions; they include direct patient care.
None of the innovations being introduced into the United States works well without
the formation of primary care teams (Bodenheimer, 2003). The chronic care model
6

7. relies on medical assistants checking reminder systems and making sure that patients
receive the chronic and preventive services they need.
Lesson: Time reduction, bureaucracy in chronical care is not the answer but
delegation of tasks, creativity and teamwork provides efficiency.
Financial alignment
anaged care covers disease management programmes in a broad range of
care models. The two leading models are health maintenance
organizations (HMOs) and preferred provider organizations (PPOs)
(Enthoven and Tollen, 2004). HMOs are based on ‘vertical integration,’ while PPOs
favor ‘virtual integration.’ Vertical integration is associated with ‘closed systems,’
where hospitals, physician groups, and insurance companies are fully interrelated and
only members of the health plan can access the delivery system. HMO is an
insurance product that uses pre-paid capitated payment to a physician or group of
physicians (usually combined with a requirement that referral to a specialist is made
by a PCP) so they are often linked with group practice or independent practitioners
associations (IPAs). HMOs are often integrated systems, but can also maintain
collaborative arrangements with hospitals that are ‘outside’ the system. A PPO is a
‘virtually integrated system’ with a ‘provider network’ whereby an insurance
company has established a cooperative agreement with hospitals and physician
groups regarding payment levels and reimbursable health care services for
subscribers. Physicians and hospitals may treat patients from a number of health
insurance plans with a variety of agreements.
M
PPOs are another insurance product that is more likely to use negotiated fee-for-
service payments with a specified network of physicians/hospitals and so have much
weaker association (and control) with providers.
Managed Care Organisations(MCO) limited the financial commitment of payers by
paying clinicians a periodic fee per life covered and making them share the risk of
costs for excessive or expensive treatment. MCO payers may be employers, insurers,
the state, or, more rarely, individual clients. The MCOs’ economic incentives are
usually reinforced by a range of direct interventions. These typically include controls
on clinical autonomy, controls on patient choice and a degree of vertical integration.
Vertical integration may take a number of forms, varying from mergers between
primary and secondary care providers to contractual arrangements where specialist or
secondary care providers offer MCOs preferred partner arrangements, including
discounted fees. As a result of such restriction and standardization, patients
relinquish some freedom of choice.
Currently less exclusive forms of managed care such as PPOs, offering financial
incentives to subscribers for choosing certain healthcare providers, dominate
(Baranas and Bardey, 2006). The type of insurance in the form of managed care has
significantly lower transaction prices compared to fee-for-service insurance (Bardey
and Rochet, 2009; Altman et al., 2003; Sorensen, 2003; Melnick et al., 1992). PPO
plans receive a discount per treatment between 12-13% on the procedure. HMO
plans receive 18 to 23% discount compared to fee-for service (Brooks et al., 1997;
7

8. Cutler and Reber, 1998). That is the profit of vertical integration. Miller and Luft
(1997) conclude also that HMOs show a greater use of preventive services and the
same or more physician office visits per enrolee. But HMOs also tend to enrol
younger and healthier patients (Hirth et al., 2006; Newhouse, 1996).
Most plans include capitated payment for patient care, bear the financial risk, and
share the benefits of any reduction in use of resources (such as fewer admissions to
hospital) among employees or preferred providers, who are thus encouraged to work
towards the same broad mission (Wagner, 2004).
Lesson: HMO’s have stronger control on providers than PPO’s but PPO’s dominate
nowadays in the USA. Both types perform in cost reductions, better health outcomes
due to capitation payment and risk sharing.
Lessons from the East: Japan
The role of General Practitioner
n Japan, there is no profession “general physician” to gate keep for medical care
or for hospital stays. The Japanese can go to any specialist when and as often as
they like (Matsuda and Yamamoto, 2001).IIn 2007 the government announced further policy developments to clarify roles of
physicians with their own practice in the health care system(MHLW 2007). The
Medical Ethics Council in charge of qualification of physicians started to discuss a
proposal of forming a qualification for "general physician" who are able to give
consultations to patients with wide-range ill-health and to use available community
resources in continuity. Physicians in community are supposed not only to provide
continuous care, but also to collectively provide out-of-hour services, to make
referrals to hospital and other community health services, using a whole-person
approach (Committee for Health Care Delivery Organizations 2007). The committee
also pointed that a systematic training is necessary to raise "general physicians". A
similar idea has been developed by the Japanese Medical Association. But the idea is
concerned with continuity of care rather than with the payment system.
Japan’s Federation of National Health Organizations, an association of public health
insurers, recommends formulation of general physicians and developing a new
payment system to primary care physicians. A newly introduced payment system
where physicians receive a fixed amount of money per capita every month for
providing health services to out-patients with chronic conditions for whom the
physician make a long-term care plan have been so far unpopular among physicians
(Matsuda et al., 2007). Probably a look across the borders would affect their opinion.
Lesson: To ensure continuous care and canalize patients the profession GP is
significant.
8

9. Financial alignment
he biggest step in the Japanese system to come to financial alignment, was the
introduction of a new payment system for medical care. In April 2003, Japan
implemented a case-mix payment system, based on an original case
classification with 2552 groups (Diagnosis Procedure Combination: DPC), with
inpatients from 82 special functioning hospitals. This system contains two parts: 1.
per diem prospective payment for hospital's fee with a three-level step down
according to average length of stay for each diagnosis group, which is adjusted to
secure the previous year's remuneration in each hospital; 2. fee-for-service payment
for doctor's fee based on national fee schedule. The payment system reduced average
length of stay, but did not change inpatient expenditures and increased outpatient
expenditures. The in-hospital mortality rate, although un-adjusted, did not changed,
but the readmission rate increased mainly through an increase in planned, not
accidental, readmissions(Ikegami et al., 2004).
T
A financial alignment initiative which integrates the relation patient-doctor-insurer
was introduced in 2000. The Japanese Ministry of Health, Labour and Welfare
(MHLW) launched a policy known as National Health Promotion in the 21st
Century(Kenko 2012). The National Chronic Disease Prevention program is one of
the main DM-features. The rising costs, elderly population, chronic diseases drive
the development of this large-scale program. This Chronic Disease Program focuses
on lifestyle-related disease and metabolic syndrome with primary prevention (Sompo
Japan Research Institute, 2008).
According to the reform law(NHI Act, 2006) health insurers were required to provide
annual health checkups to all beneficiaries aged 40–74 years starting in April 2008
and give ‘health guidance’ to those who are found to be at risk of ‘metabolic
syndrome’ to change their unhealthy life-style or maintain good control of their
diseases. Japan’s NHI Act explicitly states that insurers ‘‘shall refuse reimbursement
if disease or injury are intentionally caused by the insured (article 116)’’, or ‘‘caused
by grave misconduct or negligence (article 117)’’ and ‘‘may withhold reimbursement
if the insured refuses to follow doctor’s directions (article 119)’’. Doctors are
required to report to the insurers when they find such patients (Practicing Rules,
article 10). These fine-printed disclaimers are necessary to prevent moral hazards and
protect the common interest of the insured population.
Japan has an undifferentiated delivery system for inpatient hospital care and long-
term care. Therefore most institutional care is provided in hospitals rather than in
nursing homes. The payment mechanism reflected and reinforced the
undifferentiated system. Elderly long-term patients were for a long time in the
hospital, keeping expensive beds occupied for acute patients.
For this reason, Long-term Care Insurance (LTCI) was introduced in April 2000 with
the aim to introduce insurance for home care and new coverage for nursing home
facilities and to curtail social hospitalization. Several attempts to reform the elderly
insurance were also made (Ikegami and Campbell, 1999). So Japan is differentiating
her system rather than integrating.
9

10. In April 2008, the Government implemented a new insurance scheme for the elderly
aged 75 and older, named 'Health Insurance for the Old-Old'(HIOO). In terms of
healthcare delivery, the act stipulates the reform of providing comprehensive
assessment, home care, palliative care, and integrated care as critical areas (MHLW,
2008). The new insurance scheme mainly aims at handling the growth of health
expenditure for the elderly in order to maintain affordable universal coverage of
health insurance (MHLW, 2008).
Lesson: DPC is an instrument (like DRG) to stimulate efficiency in hospital care.
HIOO and LTCT differentiate chronic care from acute care and segments to elderly.
DM performs in primary prevention with strict disclaimers for patient, doctor and
insurer.
10

11. Lessons from Europe
Lessons from the United Kingdom
The role of General practitioner
he UK has a system for funding primary care that is unique in the EU. In
1990 the fund holding scheme was introduced. General practitioner fund
holding was a form of integrated capitation, i.e. a system associated mainly
with Health Maintenance Organizations in the USA, under which the services
provided by various care providers or at various levels of the healthcare system are
paid for out of a single general budget. The UK’s fund holding scheme allowed
general practitioners to buy hospital care for their patients.
T
Primary care trusts have some big advantages over managed care organisations in
trying to improve chronic care. They have the benefit of national strategies,
implementation programmes, targets, and investment in the shape of national service
frameworks; financial incentives to improve care of people with chronic conditions
arising from the new general practice contract and generally low patient turnover.
But they also have potential disadvantages—minimal incentives to prompt constant
innovation and consumer focus or to harmonise the goals of managers and clinicians.
Stronger incentives will be needed to prompt more innovation. For example,
financial incentives could be introduced that prompted specialists and primary care
staff to work jointly to reduce the risk of inappropriate hospital admission. Another
example would be to create a joint budget across primary and secondary care for
people with chronic conditions, building on current experiments with multispecialty
teams like in the NL (Bodenheimer et al., 2002; Green et al., 2002, Curry et al.,
2008).
Lesson: Structures are important since improvements in the quality of care tend to
generate (measurable) benefits only in the long-term. Health professionals and
providers can only be effectively incentivised to improve chronic care, if a certain
‘continuity of care’ is ensured. Financial incentives are needed to prompt innovation.
11

12. Financial alignment
he Primary Care Act(1997) allowed NHS trusts (acute or community) to
employ the primary team directly, including the general practitioners, and
allowed the merger of budgets for general medical services and hospital and
community health services. In the United Kingdom, local vertical partnerships
between hospitals and community services and primary care have developed at the
interface between primary and secondary care.
T
With effect from April 2004, however, the UK has introduced the New General
Medical Services Contract. Under this contract, each general practice receives a basic
sum based on the size and make-up of its patient list, to cover the cost of providing
basic family doctor care. A practice can also qualify for additional payments if it
realises certain quality standards, measured by reference to a set of indicators relating
to medical treatment, practice organisation and patient-orientation. The quality
rewards make a substantial part of the funding (typically 30% of a general practice’s
income 2009) in addition to capitation and infrastructure payments. Performance is
measured using the Quality and Outcomes Framework (QOF) especially developed
to give GPs the incentive to improve their work practices The indicators of the QOF
concern the clinical domain ( mainly chronic conditions), “access" Directed
Enhanced Service (DES), patient experience domains and quality (clinical,
organisational and satisfaction) that must be completed for each practice.
Participation in the QOF is voluntary but since the standards are not very stretching,
practically all practices participate and get this money in addition. However, despite
the relatively undemanding targets required for payment, the QOF has led to
substantial improvements in the screening for risk factors in the community by
primary care(Nolte and McKee, 2008).
While some controversy exists about the impact of the programme, positive
outcomes with regard to quality of care, especially chronic care, have been identified
(Campbell et al., 2007).
Lesson: A separate financial incentive linked to chronical care is needed to stimulate
innovation and stretching targets are needed for continuing innovation.
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13. Lessons from France
General practitioners - Financial alignment
rance introduced a soft gate keeping model in 2005 giving general
practitioners new responsibilities in terms of better care coordination and
prevention. There were no financial changes in the way doctors are paid. After
three years, the reform did not achieve what was expected.
FSince the beginning of 2009, the National Health Insurance Fund offers "contracts to
improve individual practice" (CAPI, Contracts d'amélioration des pratiques
individuelles) to individual general practitioners working as "soft" gatekeepers
(médecin traitant) in order to improve their medical practice by providing financial
incentives. The contracts set common objectives to health care professionals with
respect to treatment and prescription patterns to be achieved over three years. These
objectives are based on the recommendations of the High Health Authority (HAS),
the National Institution for Health Products (AFSAPS) and the results of
international comparisons.
The objectives set in the contracts are inspired by global public health objectives
fixed by the parliament and currently cover three domains: prevention, prescription
practices, quality of care for patients with chronic diseases(diabetes, high blood
pressure).
Doctors who sign the contract accept to improve the prevention rates among their
patients, respect some treatment guidelines and increase generic prescription. On the
side of the health insurance fund, it promises to provide the data required to monitor
changes in their practice. Remuneration given to doctors will depend on their results
in terms of prescription and treatment. Those who do not fully achieve the objectives
set will be paid according to the progress made. The remuneration scheme is rather
complex, but it is announced that the maximum amount earned could be near 6000
euro’s a year, which makes an extra month of salary for the average GP.
The health insurance fund is planning to extent the contracts in the future to cover
other public health priorities such as improving the rate of treatment in line with
guidelines concerning moderate/severe depression and detection of osteoporosis.
The payment does not replace any other payment made (fee-for-service and a small
capitation payment already given to treat chronically ill patients) but adds on to it.
And there is no cost for the GPs who do not achieve the objectives (France Partner
Institute, 2009).
Lesson: Legal replacing financial incentives are needed to change doctor’s
behaviour.
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14. Lessons from Germany
The role of General Practitioner
hile it is now widely accepted that a strong primary care system can help
improve coordination and responsiveness in health care, primary care has
till 2004 not played this role in the German system. Primary care
physicians traditionally did not have a gatekeeper function. The introduction of the
so-called general practitioner programmes (Hausarztprogramme 2004) represents a
new form of health care. The GP is credited with a gate-keeping function (Höhne et
al., 2009). The aim of GP-centred care is to avoid expensive double check-ups and
specialist consultations which are not necessary from a medical point of view.
Optimisation and co-operation of people and institutions within the health care
system are also intended.
W
Lesson: Germany recognizes the GP with gate keeping function as an instrument for
efficiency.
Financial alignment
he crucial financial incentive for DM was the Act to Reform the Risk
Adjustment Scheme (2002) to address the redistribution of money among
sickness funds more directly (Greß et al., 2006). The new law aimed to
improve compensation for differences in the morbidity structure, to avoid “cream
skimming” among sickness funds and to give them an incentive to care for
chronically ill insured people. Insured people who join DMPs were labelled
“chronically ill” for the purpose of the RSC scheme, and spending is calculated
separately for them. Therefore, sickness funds with a high share of DMP participants
receive higher compensation from the scheme. It was hoped that this would provide a
stimulus for the sickness funds to try to attract chronically ill people (instead of
looking at them as “bad risks”). In January 2009, the existing compensation scheme
has been expanded to include morbidity-oriented factors, to improve care for patients
with chronic diseases.
T
The morbi-RSA entails a major reorganization of the financial flows between
sickness funds: almost half of the 168 billion euro pooled in the health fund will be
redistributed according to the new morbidity-based categories. As a consequence a
lot of chronic patient were pushed to a DM-program.
At the same time, the morbi-RSA is part of a wider health system reorganisation. In
addition (but regulated separately), remuneration of providers has become morbidity-
oriented as well; by means of diagnosis-related groups (DRGs) for hospitals (since
14

15. 2004) and standard service volumes for physicians in the ambulatory sector.
Increased morbidity-orientation grounds on the idea of structuring financial flows
according to medical criteria, in order to achieve a more patient-centred and a more
efficient health system (Schang, 2009).
Lesson: Structural legal financial flows (for payers) according to medical criteria
provides a more patient-centric health system and the top down way ensures fast
implementation
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16. Conclusion and future directions
n obvious point is that in Japan primary prevention is the centrally
component of DM and in the other countries secondary or tertiary
prevention, probably caused by the absence of general practitioners.
Obvious is that all the countries are busy to (re)form primary care and see a central
place for the gate keeping general practitioner in DM. However payment
mechanisms vary by countries. More and more multi-disciplinary provider groups
are formed to rearrange tasks to make chronic care efficient and complete.
A
The
Netherlands
USA Japan
United
Kingdom
France Germany
DMimpleme
n-tation
strategy
Bottom up, by
projects in DM
Via HMO and
PPO
Top down by
law Kenko
2012
Top down by
PCT’s
Bottom up by
projects
Top down by
law
Morbi -RSA
Healt care
system
Social health
insurance
scheme
publicly
financed
(50%)
Free market
with private
nsurers
Medicare +
Medicaid +
SCHIP
publicly
financed
Employe
Health
Insurance
(EHI) +
National
Health
Insurance
(NHI) for
unemployed
National
Health Service
(NHS) 87 %
publicly
financed
Social health
insurance
scheme
publicly
financed
Social health
insurance
scheme
publicly
financed
Full
coverage
chronical
care
Yes, universal
insurance
Insurance +
Medi-
care/Medicaid
Yes universal
insurance
Yes, NHS Yes, universal
insurance
Yes, universal
insurance
Payers Rsik
Adjudement
Scheme
Adjustment for
age, sex,
chroni-cally ill
(DKG/FKG)
no risk
adjustment
scheme
no risk
adjustment
scheme
Riskadjusted
capitation
formula for
PCT’s
Capitation
adjusted for
age and sex.
Adjustment for
chronically ill
(morbi-RSA)
Deductables
Chroniccaly
ill
health care
allowance for
chronically ill
Deductables
vary by
insurance
plans
Few co-
payments but
not for
chronically ill
Few co-
payments but
not for
chronically ill
Several Co-
payments but
not for
chronically ill
Several copay-
ments but
limited for
chronically ill
Primary
care 1
Hierachical
professional
Non-
Hierachical
No GP; Hierachical
professional
Non-
Hierachical
Non-
Hierachical
1
The hierarchical normative model: a health system organized around primary care and regulated by the State
(Spain/Catalonia, Finland and Sweden) The hierarchical professional model: the general practitioner as cornerstone to the
health system (United Kingdom, Netherlands, Australia and New Zealand) The non-hierarchical professional model: primary
care organised on the initiative of health professionals (Germany, Canada) Three types of approach to primary care can be
distinguished in the vast body of literature on the subject, essentially from Anglo-Saxon and Scandinavian sources. Their
common point is to deliver patients with a professional response during their first contact with the health system. Primary care
defined as a level of care. In this context, primary care is always presented as the base of the pyramid thus differentiating itself
from secondary and tertiary care. The secondary level refers to specialist medicine in the broad sense of the term (in town or in
hospital), and the tertiary level to high technology medicine (university hospitals). Primary care defined as a combination of
functions and activities. This combination can be broached either from the general characteristics imputed to primary care
(accessibility and first contact, continuity of care, comprehensiveness and coordination), or from the content and range of the
care supplied. From a services point of view, primary care is defined as ambulatory care directly accessible to patients. With a
generalist, community dimension, they are focused on individuals in their family and social context. Primary care defined as
health professionals providing services. In this context, the primary care sector is sometimes difficult to analyse because it
groups together several types of activity involving different types of health professional with different levels of training that are
not always comparable from one country to another: general practitioners, but also nursing staff, physiotherapists,
16

17. model
Gatekeeping
professional
model no
gatekeeping
no gatekeeping model
Gatekeeping
professional
model
Gatekeeping
for public
services
professional
model no/weak
gatekeeping
Payment GP Capitation +
FFS +
Functional
Finance
FFS FFS Capitation +
P4P by QOF
FFS FFS
Physicians
Hospitals
Salaried
DRG
FFS + P4P
(limited)DRG
FFS
DPC
Salaried
P4P
FFS
DRG
FFS + Salary
DRG
Long term
care
Exceptional
Medical
Expenses Act
AWBZ
separate
compulsory
universal
insurance
scheme
means-tested
programs,
which cover
only people
with
income and
assets below a
certain level.
Insurance old-
old
LTC social
insurance
(2000)
separate
compulsory
universal
insurance
scheme
NHS
means-tested
programs,
which cover
only people
with income
and assets
below a certain
level.
Hybrid
system , based
on General
revenue it has
steep income-
related
coinsurance
Yes old age
provisions in
long term care
in
separate
compulsory
universal
insurance
scheme
Table 1: International overview of financial flows
In the USA, NL DM established bottom up, while in Japan, Germany, UK DM
established top down by government intervention. In the USA DM is the most
developed, with a wide range of different models, specialised outcomes research and
Electronic patient record.
In Japan, UK, Germany and the Netherlands, guidelines are developed, tasks are
rearranged in different models but all on experimental basis. There’s no sufficient
outcome research to support the best way. France is the last on the DM-road, they’re
busy to formulate guidelines.
In the USA different strategies are used to embed DM, like HMO and PPO. PPO’s
tend to survive on road to vertical integration. In the NL several preferred providers
are marked but not selectively contracted. In the UK, local vertical partnership
established by the fundholding system and Primary Care Act, were the merger of
budgets was allowed.
So financial incentives are necessary to push DM. The case of Germany with the
Risk Adjustment Scheme supports this. In the Netherlands risk adjustment is a
feature of the managed competition market.
Every country has a sort of DRG-system to pay hospital care and chronically ill are
mostly excluded from deductibles. Physicians are paid different. Countries are
wrestling to get them paid by salary.
he next step is to start with functional pricing of primary chronical care
defined in CDTC and to link CDTC’s to the DRG’s by disease and to link
this to the risk adjustment system for payers to spread the risks over the
whole chain.
T
paediatricians, gynaecologists.
17

18. he last step is to examine how to adjust for the multitasking package (incl.
coordination) of provider groups and to implement covariates in the budget
adjustment scheme. Then a financial flowchart is born to stimulate Disease
Management.
T
18

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