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Healthcare Legislation
By Sam Vaknin, Thu Dec 8th
Healthcare legislation in countries in transition, emergingeconomic, and developing countries should permit - and useeconomic incentives to encourage - a structural reform of thesector, including its partial privatization. Private health insurance plans - including franchises ofoverseas insurance plans - should be allowed, subject torigorous procedures of inspection and to satisfying financialand governance requirements. Such competition is bound to shakethe inefficient and corrupt state Health Fund and reshape it. Procurement of medicines - should be transferred to anautonomous central purchasing agency. Both this body and itstenders will be supervised by a public committee aided byoutside auditors. (Article continued below)
The Approved List of Medicines - will be recomposed to includegeneric drugs whenever possible and to exclude expensive brandswhere generics exist. This should be a requirement in the law. To maintain their license to practice medicine, medical stuff -from nurses to doctors - would be required to acquire continuingeducation and to publish in peer reviewed papers. To preventnepotism and corruption in appointments of doctors to jobs inclinics and hospitals, all positions from ward doctor upwardswill be subject to periodic review and open, public tenders. The law should explicitly allow for the following arrangementswith the private sector for the provision of healthcare: Service Contract (Dominican Republic) The government pays private entities - including doctors - toperform specific healthcare tasks, or to provide specifichealthcare services under a contract. The private serviceproviders can make use of state-owned facilities, if they wish -or operate from their own premises. Payments by the government are usually based on capitation (afixed fee for a list of services to be provided to a singlepatient in a given period, payable even if the services were notconsumed) adjusted for the patients' demographic data andreimbursement for fee-for-service items. Management Contract (Cambodia) The government pays private entities to manage and operatepublic health care facilities, like clinics, or hospitals. Lease (Romania since 1994) Private entities - including doctors - pay the government a lumpsum or monthly fees to use specific state-owned equipment,state-employed manpower, clinics, or complete public health carefacilities. The private entity is entitled to all revenues from itsoperations but also bears all commercial risks, is responsiblefor management and operations and liable for malpractice andaccidents. The state is still responsible to make capital investments inthe leased facility or equipment - but maintenance costs areborne by the private entity. Concession and Build-Operate-Transfer (BOT) (Costa Rica) Concession is exactly like a lease arrangement (see above) withone exception: the private entity is responsible for capitalinvestment. In return, the contract period is extended and canbe voided only with a considerable pre-advice. In BOT (Build-Operate-Transfer) and ROT(Rehabilitate-Operate-Transfer) the capital investment involvesthe construction or renovation/upgrade of new healthcarefacilities. The private entity uses the constructed facility toprovide services. After a prescribed period of time has elapsed,ownership is transferred to the government. Divestiture and Build-Own-Operate (BOO) (Texas, USA) The law should permit the outright sale of state- owned healthcare facilities to a qualified private entity. Another possibility is a BOO scheme, in which the private entitycontractually undertakes to add facilities, improve services,purchase equipment, or all three. Free entry The law should allow qualified private providers to operatefreely. Though regulated, these private firms will have no otherrelationship with the state. Such entities would have to be licensed, certified, overseen,and accredited for expertise, safety, hygiene, maintenance,track record, liability insurance, and so on. The state may choose to encourage such providers to locate inspecific regions, to cater to poor clients, or to providespecific healthcare tasks or services by offering taxincentives, free training, access to public facilities, etc. Franchising (Kenya, Pakistan, Philippines) A private firm (franchisee) acquires a license from and sharesprofits with the franchisor (a domestic, or, more often, foreignfirm). The franchisee uses the brand name, trademarks, marketingmaterials, management techniques, designs, media access, accessto approved suppliers at bulk (discounted) prices, and trainingoffered by the franchisor. The franchisor monitors theperformance and quality of service of the franchisee. This model works mainly in preventive care, family planning, andreproductive health. The World Bank ("Public Policy for the Private Sector", Notenumber 263, dated June 2003): "Franchisers in the health sector, often supported byinternational donors and nongovernmental organizations (NGOs),establish protocols, provide training for health workers,certify those who qualify, monitor the performance offranchisees, and provide bulk procurement and brand marketing." Hospital Management (See separate document) The law should allow: I. Colocation of private wing within or beside public hospital II. Outsourcing non-clinical support services III. Outsourcing clinical support services IV. Outsourcing specialized clinical services V. Private management of public hospital VI. Private financing, construction, and leaseback of new publichospital VII. Private financing, construction, and operation of newpublic hospital VIII. Sale of public hospital as going concern IX. Sale of public hospital for alternative use X. Consolidation of redundant public healthcare facilities bymerging them or closing down some of them Private Sector Healthcare Monitoring and Regulatory Agency The law should provide for the establishment of an agency tomonitor and regulate private sector healthcare provision:compliance with contracts, servicing the indigent and theuninsured, imposing sanctions or "step-in" rights, and disputeresolution. Voucher System (Nicaragua) The law should allow for experimenting with novel payment andresource allocation techniques, such as vouchers distributed toneedy populations and guaranteeing free basic service packagesprovided by a limited list of clinics or other healthcarefacilities. Such schemes can also be managed by the privatesector. Medical Savings Accounts (Singapore) Contributions by employers and employees accumulate over timeand are used, tax-free, to pay for hospital expenses in publicand private hospitals, national supplementary health insurancepremiums, special procedures (including abroad), and expensiveoutpatient treatment and drugs for the saver and his immediatefamily. Consumer Organizations The law should encourage the formation of consumer organizationsin the healthcare field (such as buyers' clubs or HealthMaintenance Organizations-HMOs). These groups will shop and tender for the best, most reasonablypriced, and most efficient healthcare services for their members. Devolution Responsibility for the provision of some types of healthcareservices and the allocation of inputs should be devolved tolocal authorities (municipalities). Performance and Payments The central authority should impose minimum performance targetsin performance agreements on all healthcare facilities, bothpublic and private. All payments - wages included - will be tiedto these targets and their attainment. Payment options should include: Capitation - A fixed fee for a list of services to be providedto a single patient in a given period, payable even if theservices were not consumed, adjusted for the patients'demographic data and reimbursement for fee-for-service items. Diagnosis Related Group (DRG) Resource-based Relative Value (RBRV)
About the author:Sam Vaknin ( http://samvak.tripod.com ) is the author ofMalignant Self Love - Narcissism Revisited and After the Rain -How the West Lost the East. He served as a columnist for CentralEurope Review, PopMatters, and eBookWeb , and Bellaonline, andas a United Press International (UPI) Senior BusinessCorrespondent. He is the the editor of mental health and CentralEast Europe categories in The Open Directory and Suite101. | 