It is encouraging that the Government has embarked on a task to rate Government hospitals based on their performance. However, while doing so, it should be mindful of using the P4P model which has been in vogue. learning from existing models across the world is the way forward
The Union Government, through the Niti Aayog, has begun the task of rating Government hospitals based on their performance. As a part of the exercise, 734 district hospitals will be rated and ranked on a range of parameters that will help incentivise performance. The move comes in the wake of growing realisation that public health institutes do not have a common benchmark for measuring efficiency, success and impact.
Some of the performance metrics to be used include infrastructure-related standards like the number of beds, ratio of doctors etc, while also using operational performance parameters like bed occupancy and infection rates amongst others.
The Government’s efforts are welcome as it will help benchmark performance and align it with appraisals and budgetary outlays for each public health institution. Essentially, the Government seems to be moving towards a Pay for Performance (also known as P4P) regime for public institutions in the years ahead. P4P has been in vogue across the world with Governments looking to better quantify performance and have justifiable metrics while allocating outlays.
Having said that, the Government should be mindful of the learnings in healthcare that P4P has given over the years. The influential New England Journal of Medicine, in an article concluded, “Studies indicate limited evidence that P4P works”. Similar results have been reported with other ‘output focused’ performance measures for health institutes which cited over-use, unnecessary tests and interventions and falsification of records as distressing outcomes of such a system.
Other systems of performance measurement from the world over have given multiple possible solutions. One such solution emerged from the Affordable Care Act 2010 (or Obamacare) in the United States. As part the Government’s drive to reduce healthcare costs, increase coverage and improve health and well-being, the Accountable Care Organisation (ACO) came into existence. UK-based King’s Fund describes ACO’s as institutions or collaborations that “involve a provider/s that collaborate to meet the needs of a defined population”.
ACO’s are allocated budgets under a works contract which specifies outcomes and other objectives that help improve the overall health status of a predefined population. Through this model, hospitals, clinics, mental and social care services have come together to offer comprehensive preventive and curative medicine to populations under their watch. ACO’s are mandated to reduce the risk of hospitalisations, reduce unnecessary hospital use, conduct surveillance and better understand health risks of the population manage people with long-term condition and conduct screenings.
The United States, which followed faintly similar structures through the Health Maintenance Organisation (HMO) and Preferred Provider Organisation (PPO) regimes, seem to have performed better through the ACO model. In essence, ACOs help Governments allocate budgets for providers (in this case Government health institutes and their partners) to ensure health and well-being of a pre-defined population. Such a system marks a departure from an output or outcome led approach towards a holistic health management strategy.
The ACO model is not limited to the United States. Similar models have been experimented in countries like Germany and the Netherlands. The journal Health Policy highlights a similar model called Gesundes Kinzigtal (‘Healthy Kinzigtal’) model in Southwest Germany, which covers 31,000 people for full range of care.
In the Netherlands, health insurers are negotiating bundled payments for a care group for chronic conditions such as heart disease and diabetes. Similarly, the Canterbury Health System in New Zealand claims to have saved patients more than a million days of waiting for treatment in just four clinical areas in recent years through an assured care system. The Canterbury model moved away from the in-vogue ‘price/volume’ schedule for determining budgets to value-based schedules. This helped their system make a surplus of NZ eight million dollars as a result.
These examples of varied systems from across the world, from the highly privatised US system to the single payer New Zealand system to the mixed social insurance model of Germany have all shown benefits through the adoption of accountability-based performance metrics. Such a model in India would need a radical departure from the current practice of budgeting and resource allocation.
Given the constraints on the Union Budget, any higher outlay for health, though much needed, seems to be improbable at the moment. Additionally, the capacity of the health system to absorb funds itself needs further maturing and fortification. Pitched with this is the need to increase access to care and ensuring adequate coverage to the rising threat of non-communicable diseases in our country.
Given these challenges, a system that ensures coverage, manages the healthcare needs of a specific population and is paid on the well-being of this population is one worth trying. The healthcare needs of our country need a unique Indian solution. learning from existent models and finding the Indian way is the way forward.
(The writer is general manager, Operation and Public Affairs, Indraprastha Apollo Hospitals. He can be reached at dr.karanthakur@gmail.com)
