Is there Link between Cost per Patient and State
Level Funding in Healthcare?
Petra Kokko, Director
FCG Consulting Ltd (Finland)
19th of May 2016
Nordic Casemix Conference
Reykjavik
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Agenda:
The Finnish Social and Healthcare Reform
Funding model in Finland
Patient Grouping development in Finland
Value-Based Healthcare Theory
Conclusion
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Social Welfare and Healthcare Reform in Finland
• The structure of healthcare and social welfare services will be
reformed.
• This means that:
• Responsibility for providing public healthcare and social services
will be assigned to autonomous regions that are larger than
municipalities. Healthcare and social services will be brought together
at all levels to form customer-oriented entities, and basic public
services will be strengthened.
• The existing multisource financing will be simplified and
customers will have more freedom of choice in the services.
• The objective is to reduce inequities in wellbeing and health
between people, and to manage costs.
• The reform will help to bridge a large part of the sustainability gap in
general government finances. The Government's aim is to save 3
billion EUR through the reforms in the branch of government of the
Ministry of Social Affairs and Health.
• Besides structural reforms, the steering and operating models in
healthcare and social welfare will be thoroughly modernised.
http://alueuudistus.fi/soteuudistus/tavoitteet
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The Key Money Flows in Social and Health Care
Funding
Use of Funding
Funding source
Way of Funding
Institution
Households
State taxation
Consumers
Municipal
taxation
Employees
Mandatory
insurance fees
Insured
Companies
Employers
Employers
Optional
insurance fees
Insured
State
Municipality
The Social
Insurance
Institution
-Kela
Insurance
Corporations
Public
elderly care
Private
elderly care
Medication
care
Social
welfare for
the disabled
Child welfare
Employers
dues
Employers
Customer fees
and
reimbursement
Households
Source: Institution of Health and Welfare Reports 22/2014.
Private
Healthcare
Rehabilitati
on
Employers
Total expenditure
25,8 billion euros
Public
Healthcare
Adult social
work
Other social
services
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Primary Care Diagnosis Related Groups (pDRG)
• A casemix system, developed during 2008-2010 together with
9 municipalities
• identifies the "products" that the patient has received in
primary care
• Compatible with NordDRG
• Is based on episodes of care
• Episode definition: All contacts with care system for one
and the same problem
• Each health problem is dealt separately
• One patient could have several episodes at the same time
• Includes 49 groups
• Is based on International Classification of Primary Care
second edition (ICPC2)
• ICD10- classification can be also used (mapping needed)
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Primary Care Diagnosis Related Groups (pDRG)
• Is Hosted by Local and Regional Authorities and
implemented by FCG Consulting Ltd
• Includes both patient classification and cost accounting
logics
• Requires Cost per Patient (CPP) cost accounting in order to
calculate the weights for the productivity indicators and to
evaluate the grouping system
• For the evaluation average cost of each pDRG group is
calculated from the CPP –data
• intermediate costs are allocated to the visits
• pDRG is based on basic principle that:
• each group has low cost variation which has to be evaluated
yearly basis
• each group is clinically meaningful
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DRG CPP (cost per patient) Accounting model
Petra Kokko
Expenses by episodes
Episode A
Episode B
Episode C
Episode D
Building Episodes
Expenses by DRG contacts
DRG contact A
DRG contact B
DRG contact C
DRG contact
DRG –grouping for realized contacts
Expenses by patients and visits
Patient A visit 1
Patient B visit 1
Patient A visit 2
Patient C visit 1
Expenses by intermediate products
Visits
Laboratory test
Imaging test
Cost accounting for intermediate products
Expenses by accounts
Personnel
Material
Laboratory
Other
Petra Kokko
Funding and Production
Funding allocation principles
Funding
REGIONAL EPISODES
(Episode patient grouping system)
Production:
Economy and
operational
management
OUTPATIENT CARE
Specialized
HC
NordDRG
Primary HC
pDRG
Mouth HC
dDRG
Social care
?
INPATIENT CARE
PRIMARY CODING (ICD-10, NSCP, ICPC2, FUNCTIONALITY)
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Examples
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PROVIDING THE SERVICES
Specialized
healthcare
services funding
Outpatient Clinic
services funding
Mouth
healthcare
services
funding
REGIONAL EPISODES
PATIENT 1: Diabetes
SPECIALIZED
HEALTHCARE
PRIMARY
HEALTHCARE
MOUTH
HEALTHCARE
SERVICES
PRODUCED AND
COSTS/
NordDRG
SERVICES
PRODUCED AND
COSTS/
pDRG
SERVICES
PRODUCED AND
COSTS/
dDRG
PATIENT 2: Depression
PRODUCING
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Porter’s theory Value-based Healthcare
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Value Based Healthcare
Source: Value-based healthcare seminar, 5.4.2016 Helsinki
Petra Kokko
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Source: Value-based healthcare seminar, 5.4.2016 Helsinki
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Source: Value-based healthcare seminar, 5.4.2016 Helsinki
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Conclusions
• Funding and cost accounting information are
linked weakly
• State level funding is not patient centered
information. It is organization or service area
centered information.
• We are moving towards patient centered
information on production level = bundled
description of health services
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Thank You!
[email protected]
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