Futures Group and the World Bank Institute
in collaboration with
Abt Associates, O’Hanlon Health Consulting,
University of California at San Francisco and Tropical Health LLP
JANUARY 2014
MARKETS FOR HEALTH
SESSION 6:
Market Interventions
for Services: Quality
Dominic Montagu
Futures Group and the World Bank Institute
in collaboration with
Abt Associates, O’Hanlon Health Consulting, University of California at San Francisco and Tropical Health LLP
OVERVIEW
DEFINITION
EXPERIENCE – hospitals
EXPERIENCE – clinics
MARKET THEORY
POLICY IMPLICATIONS
MARKETS FOR HEALTH
Contradictory Evidence on Private Sector Quality
“There is a growing body
of evidence that the care
provided in the private
sector is often of low
technical quality…in
terms of quality of
diagnosis and correct
prescription of
medications”
“Both in terms of
thoroughness of
diagnosis and doctorpatient communication,
the quality of care
appears to be much
higher in the private than
in the public sector.”
- Bhatia and Cleland, 2004
-Patouillard, 2007
MARKETS FOR HEALTH
Patient Demand leads to
unnecessary treatment
Provider profit seeking leads to
unnecessary treatment
More Market vs. More Structure
MORE
STRUCTURE
Cost Containment
Equitable
Distribution
Financial protection
Structuring &
Market Forces
Have Opposite
Potential
Strengths and
Weaknesses
MORE
MARKET
Access
Responsiveness
Productivity/Efficiency
Growth/ Investment
Service Quality and M4H
Market Failure
• Quality is at the core of the
‘information asymmetry’ in
health: consumers cannot,
alone, assess quality.
Partnerships
Related
Services
Subsidy
Information
R&D
Purchase
Quality
Assurance
•
Regulatory failure (low barriers
to entry) mean unqualified
providers are common
•
Restrictions on supply can
prevent new health workforce
entrant
•
The result:
Invest
Infrastructure
Providers
S
Healthcare
D
Consumers
Regulations
Informal rules
& norms
Standards
 Improper diagnosis
 Improper treatment
 Unnecessary treatment
Laws
Rules
•
The conclusion:
 Assuring quality requires
external, ongoing, intervention
 Supply planning often needs to
be more dynamic
OVERVIEW
DEFINITION
EXPERIENCE – hospitals
EXPERIENCE – clinics
MARKET THEORY
POLICY IMPLICATIONS
MARKETS FOR HEALTH
What is service quality?
How is it measured?
How is it enforced?
For Hospitals
For Clinics
For Specialties
blood banks,
laboratories, dialysis
centers, etc
What is quality?
The Corporate Definition
• Product specification and standard
• Conformance to requirement
• Fitness for use
• Zero defect
• Customer satisfaction
• Ability to satisfy needs
Adapted from Elizabeth Bradley
What is quality?
The Reproductive Health Definition
Judith Bruce, 1990
What is quality?
The HRSA and IOM Definition
Resources
(Structure)
Activities
(Processes)
• People
• What is done
• Infrastructure
• How it is done
• Materials (i.e.
vaccine)
• Information
• Technology
•
Results
(Outcomes)
Health Resources and Service Administration (2013)
• Health services
delivered
• Change in health
behavior
• Change in health
status
• Patient satisfaction
Institute of Medicine (2013)
Components of quality
Structure
•
Donabedian, 1980; 1988
Processes
Outcomes
Service Quality and M4H
Measuring Quality
Drug Dispensing
Partnerships
– Structure
Related
Services
Subsidy
Information
R&D
•
•
Purchase
– Process
Quality
Assurance
Invest
Infrastructure
Providers
S
Healthcare
D
Compounds
Storage
Consumers
•
•
•
Rx appropriate to Dx
Proper Rx
Proper use
Medical Services
– Structure
Regulations
Informal rules
& norms
Standards
Laws
Rules
•
•
•
Infrastructure
Personnel
Supplies
– Process
•
•
•
•
Sterilization
Decision making
Authority
Dx Rx Tx
– Outcomes
•
•
Morbidity
Mortality
OVERVIEW
DEFINITION
EXPERIENCE – hospitals
EXPERIENCE – clinics
MARKET THEORY
POLICY IMPLICATIONS
MARKETS FOR HEALTH
Hospital Quality - Structure
Inputs
• Staff, doctors, specialists
• Nurses
• Medicines
Facilities
• Utilities
• Equipment
• Care environment
Hospital Quality - Process
Care
– Patient care and support processes
– Management and improvement –
identifying, learning from, correcting
errors
Patient experience (Perceptions)
– Waiting times, Information
– Responsiveness
Hospital Quality - Outcome
Mortality
• Overall vs. Disease-specific
• In-hospital vs. 30-day
• Crude rate vs. Adjusted rate
Morbidity
• Disease outcomes, e.g. Cure rate
• Adverse events, e.g. Infection rate
Quality of Life (QOL)
High Quality vs. Low Quality Hospitals
High-quality hospitals
•
•
•
•
•
•
•
•
•
•
More competent staff
Better equipped
Fewer process errors
Well managed
Short waiting
Satisfied patients
Better health outcome
Higher revenue/surplus
More efficient ?
More expensive ?
Low-quality hospitals
•
•
•
•
•
•
•
•
•
•
Fewer competent staff
Poorer equipped
More process errors
Poorly managed
Long waiting
Dissatisfied patients
Poor health outcome
Poorer financial outlook
Less efficient ?
Cheaper ?
Quality ≠ Cost (empirical)
Fleming (1989)
Cost
B
A
F
C
E
C1
D
Q1
Q2
Q3
Quality
OVERVIEW
DEFINITION
EXPERIENCE – hospitals
EXPERIENCE – clinics
MARKET THEORY
POLICY IMPLICATIONS
MARKETS FOR HEALTH
Measuring Primary Care Quality
Managing Quality
Information
Physician Scorecards
Payment-linked Incentives
Independent inquiry report on the quality of GPs. Kings Fund. 2011
Peer Reviews
Usually in hospitals; nearly always in-house
Professional Organization Reviews
Voluntary; often due to perceived failings of peer-review
e.g. ACOG Voluntary Review of Quality of Care Program. Lichtmacher A. 2008
Market Forces
MORE STRUCTURE
Acute
Inpatient
(Hospital)
Diagnostics,
Elective
Surgery,
Specialist
Services
Primary
Care;
Pharmacy
Production
&
Distributio
n
Retail, OTC
Pharmacy
MORE MARKET
Revealed Preferences: Women do
know and seek quality
Kruk et al. 2009
So…
As the market will not provide
alone, we need to measure these
non-visible aspects of private
primary care
LMIC: Clinic Quality Measurement
Method
Quality Elements Measured
Physical infrastructure
• Clean and well- maintained
Facility observation
Complete checklist to confirm presence of
and compliance with standards
• amenities (e.g. water, electricity)
Supplies
• Essential medication • Essential equipment
MEASURING
CLINIC STRUCTURE &
ORGANIZATION
Standards and Procedures
• referral process
• Patient Safety
• Infection Prevention
Staff interview
Interview staff and providers about
procedures and practices
Service availability
•range of services
•accessibility
•(e.g. hours, wait time)
•affordability
Supplies
• Essential medication
record review
assess clinic records to determine clinic
practice
Standards and Procedures
• referral process
• Patient Safety
• Infection Prevention
MARKETS FOR HEALTH
LMIC: Clinic Quality Measurement
Method
Quality Elements Measured
Provider actual Practice
• Health history
• Physical exam
• Diagnosis
• Treatment
Mystery clients
actors trained to interact with a provider as if they
were a real patient
interpersonal Skill
•Effective Communication
• Respect and courtesy
• Confidentiality
MEASURING
STAFF AND PROVIDER
PRACTICE
Provider actual Practice
direct observation
Observe providers’ interactions with real patients
• Health History
• Physical Exam
• Diagnosis
• Treatment
interpersonal Skill
• respect and courtesy
• Confidentiality
Provider technical capacity
Vignettes
• Knowledge
• Skill
assess providers’ diagnosis and treatment of
hypothetical patient
Provider actual Practice
• Diagnosis
• Treatment
MARKETS FOR HEALTH
LMIC: Clinic Quality Measurement
Method
Quality Elements Measured
Satisfaction with Provider
•Treatment by staff
•and providers (respect, emotional support)
•understand health information
exit interview
Interview clients as they leave the clinic
•Satisfaction with Service availability
• Medications available
• Cost
• Wait times
MEASURING
CLIENT EXPERIENCE &
SATISFACTION
•Satisfaction with Facility
• Physical environment
• amenities
•Provider interpersonal Skill
community interview
Interview residents of your clinic’s catchment
area
Effective
•Communication
• respect and courtesy
•Confidentiality
MARKETS FOR HEALTH
All good but…
Who will undertake this measurement?
• Government oversight
– Little experience, even in OECD
• In part because of low relative risk
• In part because of high number of primary care
providers (eg: 32,000 in UK) and cost of surveillance
• Self regulation
– Requires active professional bodies
MARKETS FOR HEALTH
OVERVIEW
DEFINITION
EXPERIENCE – hospitals
EXPERIENCE – clinics
MARKET THEORY
POLICY IMPLICATIONS
MARKETS FOR HEALTH
Physician Behavior in a market
Theory: Physician-induced demand: The greater the number of
physicians, the greater the amount of care provided, and the higher
the price
• Dual function of physicians:
– Physician provides both information/advice (diagnosis) and
– Treatment
– Physician have financial incentive to distort diagnostic information to
provide more care and provide those services that gives higher
margins to physicians, especially when their income is directly
related to the amount and type of services they provide (e.g., fee-forservice payment)
• A Parable by Victor Fuchs
Hospital Behavior in a market
Theory: Quantity-Quality Maximizer
• Hospital utility is determined by quantity of output (e.g.,
number
of
patients)
and
quality
of
output
• Potential bias toward high quality services, excessive capital
investment
in
equipment
and
facilities
• Utility of administrators and physicians from quality: prestige
from modern technology and facilities
Newhouse, 1970
Hospital Behavior in a market
Theory: Profit Maximizer
• Physician chooses the optimal amount and type of input (capital,
physician labor, non-physician labor) to maximize his/her income
• Hospitals are dominated by medical professionals and operate as
‘physicians'’ collectives’
Pauly and Redisch, 1973
Competition in Hospitals
• In other industries, competition among producers leads to the
increase in output and decrease in price: increased efficiency
• In the hospital industry, increase in the number of (private)
hospitals often results in the increase in health care costs and
price
– Hospitals compete to increase quality of care
– Hospitals compete on tangible aspects of quality (e.g. technology)
OVERVIEW
DEFINITION
EXPERIENCE – hospitals
EXPERIENCE – clinics
MARKET THEORY
POLICY IMPLICATIONS
MARKETS FOR HEALTH
The market alone…
• Will delivery competition on perceived quality
• External agents (government, 3rd party
purchasers, professional bodies, accreditation
agencies) must assure non-visible quality
MARKETS FOR HEALTH
Service Quality and M4H
Partnerships
Related
Services
Subsidy
Information
R&D
Purchase
Quality
Assurance
Invest
Infrastructure
Providers
S
Healthcare
D
Consumers
Regulations
Informal rules
& norms
Standards
Laws
Rules
Rules
Supporting Function
Rules
• Licensure
• Quality Certification
Licensure
• Process by which a government
authority grants permission to an
individual practitioner or health care
organization to operate or to engage
in an occupation or profession
Licensure
• Ensure minimum standards, set at a
minimal level to ensure an environment
with minimal risk to health and safety
• Generally focus on structural aspects:
Inputs and Facilities
• Rely upon (periodic) inspection
Certification
• Passing standards
• Often physician professional bodies
• For hospitals usually local government
• Hospitals collect and submit information
demonstrating achievement of standards
• Usually coupled with audit or site visit
• Focus on specific areas or functions
• Likely to be process focused
Supporting Functions
• External Quality Assurance
External Quality Assurance
• Evolved from manufacturing sectors
• Objective assessment by external
reviewers or auditors
• Published standards
• Optimal rather than Minimal
• Mainly focus on process
• Require hospitals to monitor “results” or
“performance”
External Quality Assurance
• ISO series (International Organization
for Standardization)
• Generic standards
– Process-focused
• Management system
• Professional evaluators
– Examples commonly applied:
• ISO-9000, ISO-14000, ISO- 15189
External Quality Assurance
• Accreditation
– Standards specific for health care providers, e.g.
hospital
• Process-focused
• Health issues, e.g. patient safety, health
promotion, clinical governance
– Management system and CQI
– Both professional and peer evaluators
– National vs. International
Experience with Hospital Accreditation
Three common models
Country
Accrediting
Body
Standards
Format
Types of
Standards
Step-Wise
Approach
United
States
Joint Commission
on Accreditation of
Health Care
Organizations
Functional
Outcomes
No
Canada
Canadian Council
on Health Services
Accreditation
Functional +
Departmental
Structure,
Process, and
Outcomes
Yes
Australia
Australian Council
on Healthcare
Standards
Departmental
Structure and
Process
No
Experience with Hospital Accreditation
Voluntary vs. Mandatory Accreditation
– May be required for participating in public health
insurance schemes, e.g. USA
– Mandatory in some countries, e.g. France, (Licensure
effect)
Accreditation in middle-income countries
– International : ISO, JCI
– Grown quickly in SEA: Medical hub, high-end market
– National (Grown during 1990s and early 2000s)
– Thailand, Malaysia, South Africa
– Malaysia and Thailand both received govt and external subsidy over
a number of years during creation. Both adapted Australian system
– Both, e.g. Thailand
Experience with Hospital Accreditation
Why National Accreditation has had limited success
– Difficult to create:
• Political will
– Support from national health care purchasers
• Multi-year process to develop
– Participation from professionals, as well as authorities
– Development of standards, surveyors
– Hospital improvement
• Limited membership will limit value / importance
• May be expensive
– Scale of operation determine cost-benefit between International vs.
National programs
Summary
• Licensure – necessary minimum to enter market
• Certification – necessary minimum to remain in market
• Often carried out by professional bodies
• Accreditation or other EQA – benchmarked quality
ranking
• should be broadly applied to both public and private hospitals
• International accreditation schemes useful, but expensive
• National accreditation programs difficult to create
– A lead-institution is required, with long-term commitment and political approval or backing,
including from large health care purchasers
Service Quality and M4H
Partnerships
Related
Services
• Stronger Rules
Subsidy
Information
R&D
Purchase
Quality
Assurance
Invest
Infrastructure
Providers
S
Healthcare
D
Consumers
Regulations
• Strengthened support
systems
– professional organization
certification
– 3rd part accreditation
Informal rules
& norms
Standards
Laws
Rules
• Financial incentives for
compliance
How can donors support service
quality?
• Support development/refinement of governmental
registration standards
• Learning from neighboring countries
• Partnership
• Engage professional associations and support to take on selfregulatory role
 Fund standard development
 Engage and assure ‘presence at the table’
• Provide support to for development of hospital
accreditation institutions
• Technical assistance (esp. or contract negotiations)
• Seed funding for governmental accreditation-linked-incentives to
facilities