Santé et Services sociaux Québec.
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Brief analytical summaries or syntheses #34

Baskets of services: Comparative analysis of management mechanisms

Summary

Managing the basket of healthcare services promises efficiency gains by rationalizing decisions around coverage and care. This literature review by Joanne Castonguay at CIRANO examines how the basket of services is managed in a sample of OECD countries. The exercise enabled the author to make a number of observations, compare Québec’s management of the basket of services to that in other countries and suggest ways to improve current practices.

Background

The sustainability of universal health systems is a concern in all OECD countries. The rapid growth in demand for health care and the difficulty in achieving commensurate increases in financing are pushing governments to rethink not only how health systems are organized, but also the way in which funds are allocated. One of the most important cost drivers is technological progress. Medicine is evolving rapidly and with it come new services, medications and technologies to be covered by our public health systems. As these systems are defined very broadly, everything “medically necessary” is covered. The result is that these systems, which covered a fairly limited number of services when they were first created, have grown to the point that they are now almost infinite. What is more, outdated interventions that have been proven ineffective remain used and insured, and other interventions that have no benefit to patients are added. Because the budgets allocated to health care are not infinitely expandable, it is appropriate to examine whether there are ways of managing the “basket of services” covered by public health plans and limiting it without compromising the public health program’s essential goals.

Analysis and results

Management of the basket of services seeks to bring about efficiency gains by rationalizing decisions around the coverage and delivery of care. Medications and technologies included on the list of publicly insured services would have demonstrated efficiency and effectiveness, and the same logic would be applied to health services. Some services now covered by the public insurance plan in Québec would be removed if their inclusion had to be supported by rational evaluation. A plan that actively manages the list of insured services would encourage evidence-based practice and bring improvements in efficiency and quality. In other words, better allocation of healthcare spending would bring a better return on investment.

Conclusion

The growth in healthcare spending is a concern in all countries with universal healthcare systems. While cost increases have a number of causes, the expansion of possibilities is an important factor. There are a multitude of treatments available today to treat conditions that were untreatable as recently as a decade ago. Bone marrow transplantation to treat blood cancers is just one example. This evolution means that healthcare systems that began with a limited number of interventions now cover a much greater number of services per patient. However, some of these innovations replace outdated interventions and others have failed to prove their effectiveness. Is it possible to ensure that the services covered by universal health plans do indeed bring better results? Is it possible to improve the return on investment through better management of the basket of insured services?

Implications and recommendations

This exercise led to the following observations:

  • Countries that are most evolved in terms of managing their basket of services are those where health insurance is financed largely through social insurance plans managed by representatives of employers and workers, otherwise know as the “Bismarckian” model (Germany, France, Belgium, The Netherlands, etc.). In these systems, insurers publish a list of services that insured persons have a right to expect and have reimbursed. There is often a very detailed price list for insured services.
  • Most OECD countries have developed a structure to assess health technologies and inform decision-making around the coverage of new medications, equipment and medical acts. Evaluation also comes into play for clinical practice. However, this last component, which is more recent, is not incorporated into decision-making in Austria, Finland, Greece, Ireland, Italy, Luxemburg, the United Kingdom, Sweden, Turkey or Canada. Insured practices, medications and technologies are not all supported by cost-effectiveness analysis. Some countries, such as the United Kingdom, added responsibility for reviewing outdated practices that have been replaced by newer technologies to the mission of the institutions responsible for managing the basket of services. Despite the interest in evidence-base medicine, the American Institute of Medicine (IOM, 2009) estimates that only half of all care delivered in the United States has been proven effective. The IOM also finds that even when recommendations for best practices are available, these are not always respected. Other studies arrive at similar conclusions, whether in the United States (Rand Institute), or in France.
  • Institutional mechanisms in the various health systems have a significant impact on the effectiveness of assessment bodies in controlling the service offer and on whether recommendations are followed. The Netherlands, followed closely by the United Kingdom, ranks first among the countries studied in the application of institutional mechanisms aimed at controlling health care costs. Germany, France and Denmark come in second place. The current health insurance plan in Quebec has few of the institutional characteristics that would facilitate the adoption of recommendations made by assessment bodies. The implementation of INESSS is a small step in the right direction. However, because the Minister of Health is not obliged to follow INESSS recommendations nor justify a decision not to adopt them, the efficiency and effectiveness gains will be limited to medications included on the Quebec formulary. As well, modes of physician remuneration and hospital financing in Quenec do not encourage the adoption of best practices.
  • Adherence to evidence-based treatments for atherosclerosis and hypertension and in the prevention of obesity would bring efficiency gains. 

Source

Baskets of services: comparative analysis of the management mechanisms