Budget-makers and health care systems

Budget Process and Execution: A Case Study on the Underperformance of the Peruvian Health System, 2000-2021

INTRODUCTION

Health system financing for emerging economies with aging populations and changing epidemiological profiles is an increasing challenge. Peru, as one of the countries with the highest economic growth in this century, provides a good example for analyzing the impact of the budgeting process and the budget execution on the performance of a health system. This article aims to answer how policies and processes are the root causes of the performance gap of the Peruvian health system.

METHODS

We used a case study methodology composed of 17 semistructured interviews with senior national and regional actors conducted between the end of 2021 and the beginning of 2022. Participants were selected with a combination of purposive, convenience, and snowball sampling until reaching saturation at 14 interviews. Participants' answers were grouped according to the topics explored, enabling comparisons and identification of themes.

RESULTS

The responses revealed that 4 interconnected influences affect the Peruvian health system. Political instability affects the sustainable development of health policies. The fiscal cycle limits the public health expenditure to a low 3% of the gross domestic product. The budget cycle is based on the low motivation of the Ministry of Health (MOH) to establish a proper budgeting process. The execution cycle represents the results of chronic underinvestment with a lack of professionals, equipment, and data affecting the access to care expressed by a high out-of-pocket share in health expenditure.

CONCLUSION

To escape these cycles, the MOH needs to be able to argue in economic terms for the prioritization of health, showing the economic rationale for investment in health. Taxes need to finance the additional investment within the available fiscal space. The rigidity of the budget law needs to be adapted, and a technical budget that is oriented to the current and future health priorities needs to be elaborated.

Budgetary targets as cost-containment measure in the Swiss healthcare system? Lessons from abroad

Growing healthcare expenditure is a major concern for policy makers and calls for effective cost containment measures. For the decentralized Swiss healthcare system, ranking second among OECD countries in healthcare spending, a group of experts has proposed budgetary targets as key measure. In order to substantiate this proposal, we review the literature and analyse experiences with budgetary targets in comparable social health insurance systems, such as Germany and the Netherlands. Budgetary targets raise the cost responsibility and prompt providers to give greater weight to cost-benefit considerations. Our analysis suggests that the involvement of all principal healthcare players and clear decision-making and negotiating structures are key to successful implementation. Risks of rationing, lower quality incentives or conservation of structures have to be countered with taking into account age-related morbidity and medical progress when setting the budgetary targets. Accompanying measures such as incentive-compatible remuneration schemes and quality monitoring are of paramount importance.

Lessons for the United States From Single-Payer Systems

US political debates often refer to the experience of "single-payer" systems such as those of Canada and the United Kingdom. We argue that single payer is not a very useful category in comparative health policy analysis but that the experiences of countries such as Canada, the United Kingdom, Spain, Sweden, and Australia provide useful lessons. In creating universal tax-financed systems, they teach the importance of strong, unified governments at critical junctures-most notably democratization. The United States seems politically hospitable to creating such a system.The process of creation, however, highlights the malleability of interests in the health care system, the opportunities for creative coalition building, and the problems caused by linking health care finance and reform. In maintaining these systems, keeping the middle class supportive is crucial to avoiding universal health care that is essentially a program for the poor.For a technical term from the 1970s, "single-payer health care" has proved to have remarkable political power and persistence. We argue it is not a very useful term but the lessons from such systems can be valuable for those contemplating movement toward universal health coverage in the United States.

Fiscal rules, powerful levers for controlling the health budget? Evidence from 32 OECD countries

BACKGROUND

Publicly funded healthcare forms an intricate part of government spending in most Organisation for Economic Co-operation and Development (OECD) countries, because of its reliance on entitlements and dedicated revenue streams. The impact of budgetary rules and procedures on publicly funded health care might thus be different from other spending categories. In this study we focus on the potential of fiscal rules to contain these costs and their design features.

METHODS

We assess the relationship between fiscal rules and the level of public health care expenditure of 32 (OECD) countries between 1985 and 2014. Our dataset consists of health care expenditure data of the OECD and data on fiscal rules of the International Monetary Fund (IMF) for that same period. Through a multivariate regression analysis, we estimate the association between fiscal rules and its subcategories and inflation adjusted public health care expenditure. We control for population, Gross Domestic Product (GDP), debt and whether countries received an IMF bailout for the specific period. In all our regressions we include country and year fixed effects.

RESULTS

The presence of a fiscal rule on average is associated with a 3 % reduction of public health care expenditure. Supranational balanced budget rules are associated with some 8 % lower expenditure. Health service provision-oriented countries with more passive purchasing structures seem less capable of containing costs through fiscal rules. Fiscal rules demonstrate lagged effectiveness; the potential for expenditure reduction increases after one and two years of fiscal rule implementation. Finally, we find evidence that fiscal frameworks that incorporate multi-year expenditure ceilings show additional potential for cost control.

CONCLUSIONS

Our study shows that there seems a clear relationship between the potential of fiscal rules and budgeting health expenses. Using fiscal rules to contain the level of health care expenditure can thus be a necessary precondition for successful strategies for cost control.

The influence of fiscal rules on healthcare policy in the United States and the Netherlands

Governments use fiscal rules to put a framework and limits on how budgetary challenges are addressed, but the rules themselves are still an understudied area among health policy scholars. For a long time, healthcare held a somewhat separate status because of the reliance on entitlements and dedicated revenue streams. However, the combined forces of advocates for integral decision-making, central budget control and the increasing costs might shift healthcare towards budgetary frameworks that currently apply to other spending categories. In this paper, we study fiscal rules that the US and the Netherlands have adopted since 2010 and their impact on healthcare policy. Our analysis shows that fiscal rules can have an impact on the rationing of healthcare. In the studied timeframe, the rules seem to have more impact on budget outcomes than on the budget process itself. In addition, the convergence of fiscal and program policy objectives seems to be better accomplished in a budgetary system that applies enforceable budget ceilings. Budgeting for health entitlements requires a comprehensive and tailor-made approach and the composition of traditional rules might not fully answer to the complexities of healthcare policy. This paper aims to contribute to that debate and the way we think about healthcare budgeting. Copyright © 2016 John Wiley & Sons, Ltd.

The New Political Economy of Health Care in the European Union

We argue that the political economy of health care in the European Union is being changed by the creation of a substantial new apparatus of European fiscal governance. A series of treaties and legal changes since 2008 have given the European Union new powers and duties to enforce budgetary austerity in the member states, and this apparatus of fiscal governance has already extended to include detailed and sometimes coercive policy recommendations to member states about the governance of their health care systems. We map the structures of this new fiscal governance and the way it purports to affect health care decision making.

Artificial Neural Networks and risk stratification models in Emergency Departments: The policy maker's perspective

The primary goal of Emergency Department (ED) physicians is to discriminate between individuals at low risk, who can be safely discharged, and patients at high risk, who require prompt hospitalization. The problem of correctly classifying patients is an issue involving not only clinical but also managerial aspects, since reducing the rate of admission of patients to EDs could dramatically cut costs. Nevertheless, a trade-off might arise due to the need to find a balance between economic interests and the health conditions of patients. This work considers patients in EDs after a syncope event and presents a comparative analysis between two models: a multivariate logistic regression model, as proposed by the scientific community to stratify the expected risk of severe outcomes in the short and long run, and Artificial Neural Networks (ANNs), an innovative model. The analysis highlights differences in correct classification of severe outcomes at 10 days (98.30% vs. 94.07%) and 1 year (97.67% vs. 96.40%), pointing to the superiority of Neural Networks. According to the results, there is also a significant superiority of ANNs in terms of false negatives both at 10 days (3.70% vs. 5.93%) and at 1 year (2.33% vs. 10.07%). However, considering the false positives, the adoption of ANNs would cause an increase in hospital costs, highlighting the potential trade-off which policy makers might face.

European hospital reforms in times of crisis: aligning cost containment needs with plans for structural redesign?

Hospitals have become a focal point for health care reform strategies in many European countries during the current financial crisis. It has been called for both, short-term reforms to reduce costs and long-term changes to improve the performance in the long run. On the basis of a literature and document analysis this study analyses how EU member states align short-term and long-term pressures for hospital reforms in times of the financial crisis and assesses the EU's influence on the national reform agenda. The results reveal that there has been an emphasis on cost containment measures rather than embarking on structural redesign of the hospital sector and its position within the broader health care system. The EU influences hospital reform efforts through its enhanced economic framework governance which determines key aspects of the financial context for hospitals in some countries. In addition, the EU health policy agenda which increasingly addresses health system questions stimulates the process of structural hospital reforms by knowledge generation, policy advice and financial incentives. We conclude that successful reforms in such a period would arguably need to address both the organisational and financing sides to hospital care. Moreover, critical to structural reform is a widely held acknowledgement of shortfalls in the current system and belief that new models of hospital care can deliver solutions to overcome these deficits. Advancing the structural redesign of the hospital sector while pressured to contain cost in the short-term is not an easy task and only slowly emerging in Europe.