international research project on financing quality in health care

International Research Project on Financing Quality in Health Care

Welcome and IntroductionAnnual Meeting

Hannover, February 9-10, 2012Project Leader

Prof. dr hab. Tomasz Hermanowski

DAY 1 (Thursday, February 9th, 2012)

Time Title Speaker Open to Project Partners, EC, Advisory Board, Experts Panel and Invited Guests

9:30-11:30 working breakfast

12:00-13:00 Welcome lunch

13:00 – 14:30 Introduction 13:00 – 13:10 Welcome Project Leader: Tomasz Hermanowski 13:10 – 13:30 German healthcare system at a glance WP6 Leader: Volker E. Amelung 13:30-14:00 Integrated care and payment systems in

Germany Keynote speaker: Dr. Elisabeth Siegmund-Schulze (KKH-Allianz; sickness fund)

14:00-14:30 UK experience with the Quality and Outcomes Framework

Keynote speaker: John Hutton

Agenda – Day 1

Restricted to Project Partners, EC, Advisory Board, Experts Panel 14:30 – 16:30 Theoretical Work Packages - summaries and workshops

14:30 – 14.45 InterQuality Project Overview State-of-the art and beyond (summary of previous work, research directions, plan for further work )

Project Leader: Tomasz Hermanowski

14:45 – 15:15 WP1 – Incentives status and Work Plan WP1 Leader: Robert Berenson 15:15-16:00 Workshop on development of

consensus criteria for evaluating financial models attributes

Moderator: Robert Berenson

16:00– 16:30 WP2 – Value/Benefits status and Work Plan WP2 :Anna Zawada/Krzysztof Rogalski

16:30 – 17:15 Workshop on measuring outcomes and link between outputs and outcomes Moderator: Giacomo Pignataro

17:15-17:30 Coffee break 17:30– 18:15 Project Management- Q&A 17:30 – 17:45 Key issues in WPs reporting Project Manager: Jakub Rutkowski 17:45 – 18:15 Financial aspects of WP reports, actual

use of resources in IQ project Financial Manager: Michał Skrzek

18:15-18.30 General Assembly 19:00-21:00 Official Dinner

Dinner Speaker: Prof. Dr. Matthias P. Schönermark (CEO SKC Consulting; Professor for Management at the Hannover Medical School):

Doctors perspective on payment systems

Agenda – Day 1

DAY 2 (Friday, February 10th, 2012)

Time Title Speaker Restricted to Project Partners, EC, Advisory Board, Experts Panel

9:00 – 10:00 Work Packages 1&2 Reviews

9.00 – 9:30 WP 1 Review&Work Plan suggestions WP 1 Reporter: Christian Kronborg

9:30 – 10:00 WP 2 Review&Work Plan suggestions WP 2 Reporter: Patrick Romano

10: 00 – 12:30 Empirical Work Packages research plans & collaborative work 10:00 – 10:30 WP 3 – Pharmaceutical Care WP 3 Leader: Marcin Czech 10:30 – 11:00 WP 4 – Hospital Care WP 4 Leader: Giacomo Pignataro 11:00 -11:30 WP 5 – Outpatient, Home Care WP 5 Leader: John Hutton 11:30-12:00 WP 6 – Integrated Care WP 6 Leader: Volker Amelung 12:00- 12:30 WP 7 - Dissemination WP 7 Leader: Liuska Sanna 12:30-12:45 Wrap-up and closing remarks by Project Leader: Tomasz Hermanowski 12:45-13:45 Lunch

Agenda – Day 2

Institutional Context• Euro-DRG Project concluded that quality was not adversely

affected by the introduction of DRG-based hospital payment in most European countries.

• The impact of DRG on quality of care depends on the country-specific design features of the systems and institutional context

Diagnosis-Related Groups in Europe, Busse R., Geissler A., Quentin W., Wiley M., eds., , European Observatory of Health Systems and Policies, Open University Press, Berkshire, 2011, p. 155

CQUIN experience• Few countries explicitly adjust DRG-based hospital payments

on the basis of information regarding quality in hospitals. • One exception is England, where the Commissioning for

Quality and Innovation (CQUIN) framework allows purchasers to link a moderate proportion of hospitals' income (that is, 1.5 per cent in 2010/2011) to the achievement of locally negotiated quality goals.

• Therefore, the we have invited prof. John Hutton to deliver a keynote presentation on UK experience with the Quality and Outcomes Framework

Integrated Care• Another patient-based alternative for integrating quality into

DRG-based hospital payment systems is to extend the treatment episode for which payment is granted; by including outpatient visits, readmissions, and so on.

• For example, Dutch DRG system covers the whole spectrum of inpatient and outpatient care provided at hospitals, relating to a specific diagnosis, from the first specialist visit to the end of the care process and including inpatient days, outpatient visits, laboratory services, medical imagining services, medications, medical materials, surgical procedures, etc

• The second Keynote Speaker: Dr. Elisabeth Siegmund-Schulze from KKH-Allianz; sickness fund will tell us about German experience with Integrated care and payment systems

German healthcare• The first Keynote Speaker and our Host: prof. Volker Amelung

will provide an overview of changing German healthcare system

• On behalf of all Annual Meeing guests and attendees I would like to thank all three Keynote Speakers for accepting our invitations, in spite of the short notice and little time to prepare presentatios

• Importance of the subjects and their competence makes me feel we are in the right place and in the right time to start the Annual Meeting with an overview of the burning issues, directly relevant for the InterQuality Project

Thank you!

[email protected]


Project OverviewState-of-the art

and beyondAnnual Meeting

Hannover, February 9-10, 2012Project Leader

Prof. dr hab. Tomasz Hermanowski

WP1 ReviewsWP1 Chapter Reviewer

Hospitals Giacomo Pignataro, Christian Kronborg done

Non-hospital facilities John Hutton, Christian Kronborg done

Integrated Care Axel Muehlbacher done

Physicians Christian Kronborg, CPME done

Literature review Christian Kronborg done

Executive Summary Denis Scanlon pending

Typology Christian Kronborg done

Provider Payment Systems TBD vacant

WP2 ReviewsWP2 Chapter Reviewer

Quality Christian Kronborg done

Outcomes John Hutton pending

Risk Adjustment Axel Muehlbacher done

Costs Christian Kronborg done

Efficiency Giacomo Pignataro done

Equity John Hutton pending

Data Base TBD vacant

Scope of InterQuality Research Project

• to investigate the effects of different financing models and incentives on the quality, effectiveness and equity of acess to:– Outpatient care – Hospital care– Pharmaceutical care

• To establish the feasibility of collaborative practice models, involving physicians, hospitals and pharmacy-service providers in the context of implementing integrated care and innovative P4P financig models

WP1 – 2; Incentives, Values/Benefits

The first two work packages will provide detailed theoretical background:

• WP 1 will discuss into the effects of financial and non-financial incentives of reimbursement systems based on the neoclassical economics principal-agent theory

• WP 2 will assess the benefits of reimbursement incentives in the light of their effects on the quality of care

WP1 – 2; Intermediate Reports

• The objective of IQ Project is to identify and recommend to EU Member States most effective P4P models.

• If the results are not yet conclusive, we should ask ourselves why and what should be our next steps:– Re-visit thoretical assumptions ( Principal-Agency Theory,

Transaction Costs Analysis)– Analyse the impact of country institutional settings and

availability of quality information– Narrow-down on selected therapeutic areas or case-studies:

diabetes, cardio-vascular diseases, oncology?

Methods• New Institutional Economics (Olivier Williamson, Nobel

prize 2009) – Agency (Principal-Agent) Theory– Transaction costs analysis

• Use of Patient Reported Oucomes data to assess healthcare quality and efficiency:– English NHS PROMs programme,– Reimbursement for providers linked to PROMs performance,

via local incentive contracts (‘CQUIN’ payments)– If the purpose of a health system is to improve health, not just

to produce healthcare services - than PROMs are essential!

Methods• Market regulators inability to observe agents private information

is perhaps most evident in the case of physicians or pharmacists, expected to act as patient’s agents in some health care systems, like Germany or UK.

• This may explain why US Government prefers to use as agents, managing Medicare drug benefit, Prescription Drug Plans, whose business model is far more transparent and easier to observe.

Adoption of a Cost-Saving Innovation: Germany, UK and Simvastatin, in: England and Germany in Europe – What Lessons Can We Learn from Each Other? McGuire,T., Bauhoff S. Klusen, N., Verheyen, F. and Wagner, C. (eds.). Beiträge zum Gesundheitsmanagement 32: p.11-26

WP1 Objectives• To perform a comprehensive literature review to explore what is

known about the impact of payment incentives on quality of clinical care and related concepts including: patient experience with care, ethnic and racial disparities, and costs of care to society and individuals.

• To develop criteria for desirable payment models for ambulatory care, inpatient hospital care and integrated acute care.

• Using the criteria, develop generic and country-specific payment models for ambulatory care, inpatient hospital care and integrated care. These models would serve as templates for subsequent work products

WP1 TasksTask 1.1. Literature and methodology review, definitions development

Task 1.2. Input from collaborative partners (13 Person-Months FTE) analysis of perceived strengths and weaknesses of current and proposed models. Partners will provide UI with results of review of literature perceived as relevant to country specific health care system issues

Task 1.3. Comparative analysis of incentives and payment models. Summary of perceived strengths and weaknesses of about a dozen payment models will be developed, fed back to the partners and revised. Areas of consensus and disagreement will be identified, country-specific considerations that make particular payment approaches desirable or problematic will be identified by UI

Task 1.4. Criteria Development. Based upon task 1.2 & 1.3 consensus process to develop specific criteria (or attributes) would be used for evaluating current and proposed payment models. UI will develop consensus criteria, others would review and comment

WP1 Deliverables

Internal deliverables:D 1.1.1 An extensive literature review on financial and non-financial incentives

that affect provider behaviorD 1.1.2 A catalogue of criteria related to quality, cost, efficiency, administrative

feasibility and other important considerations as a basis for evaluating specific payment models that are or could be implemented

Should be sent to European Commission at month 18 as: D 1.1 Project Methodology Guidelines; Part 1: Guidelines for further project

activities on comparative evaluation of quality, economic and equity issues in healthcare systems: 1. catalogue of definitions related to quality, equity, costs, and administrative feasibility for evaluating specific payment models, set on the base of extensive literature review on financial and non-financial incentives

Collaborative Work• The first objective of the Hannover meeting should be to start

the review and appraisal process of alternative payment incentives to drive quality improvement and foster better use of health care resources

• Specific literature in languages other than English may be requested . WP1 may perform disquisitive studies, not just comparative studies of payment models.

• Tasks 1.2. , 1.3., 1.4. should be completed by Partners by May 31, 2012

Collaborative Work• The effect of DRGs on hospital quality is not straightforward

(Davis & Rhodes, 1988; Farrar et al., 2009). • On the one hand, because DRGs provide a concise and

meaningful measure of hospital activity and thus facilitate monitoring and comparisons of hospital quality, they could contribute to better quality of care. In addition, cost-reduction incentives of DRG-based hospital payment systems could lead to increased efforts to improve quality, if quality contributes to reduced costs. For example, improved coordination between hospitals, out patient providers and long-term care facilities would reduce costs but could also contribute to better quality of care.

Collaborative Work• However, on the other hand, and this has been a reason for

continuous concern (Rogers et al., 1990), hospitals may be tempted to reduce costs by reducing quality, if DRG-based payments do not depend on quality. For example, because DRGs do not specify which services must be provided when treating a specific patient, hospitals can 'skimp' quality by avoiding certain diagnostic tests, disregarding hygiene standards, or by lowering staffing ratios per bed

Innovation’s effect on cost and quality

DQuality-decreasing and

cost-increasing innovation

AQuality-increasing and

Cost-increasing innovation

CQuality-decreasing andCost-saving innvation

BQuality-increasing andCost-saving innovation

Effect of innovationon quality

Effect of innovation on cost +

+

0

-

-

Institutional Context• Euro-DRG Project concluded that quality was not adversely

affected by the introduction of DRG-based hospital payment in most European countries.

• The impact of DRG on quality of care depends on the country-specific design features of the systems and institutional context

• The effect of DRG-based hospital payments on quality of care might be different in Europe from that in the United States because :– DRG-based hospital payment systems in most countries did not

replace fee-tor-service systems (as was the case in the United States) but rather global budgets, which were already partly adjusted for activity measured in cases or bed days

– much stronger public sector presence in the provision of health care in Europe than in the United States.

Institutional Context• Few countries explicitly adjust DRG-based hospital payments

on the basis of information regarding quality in hospitals. • One exception is England, where the Commissioning for

Quality and Innovation (CQUIN) framework allows purchasers to link a moderate proportion of hospitals' income (that is, 1.5 per cent in 2010/2011) to the achievement of locally negotiated quality goals.

• In the Netherlands, insurers can negotiate with hospitals regarding price, volume and quality of care for about 30 per cent of Dutch DRGs. However, insurers and hospitals negotiate predominantly on price and volume, while quality plays only a minor role in the negotiation process

Institutional Context

• Instead of adjusting DRG-based hospital payment for quality, most countries reward quality improvements through specific budgets that are independent from DRG-based hospital payments

• The problem is that in many European countries information on quality in hospitals is still insufficient

Institutional Context• However, data quality (at least in terms of diagnoses and

procedures) have improved considerably following the introduction of DRGs in many countries

• If these data are found to provide valid and reliable indicators for the quality of care, it is likely that there will be increased efforts to use such data also for payment purposes, called pay for-performance (P4P)

• Implementation of P4P in Europe depends on E-healh progress

Diagnosis-Related Groups in Europe, Busse R., Geissler A., Quentin W., Wiley M., eds., , European Observatory of Health Systems and Policies, Open University Press, Berkshire, 2011, p. 155

Collaborative Work• Penalizing or rewarding hospitals based on their diagnosis

coding could heighten the risks of 'gaming' or coding manipulation (Iezzoni, 2009).

• Another patient-based alternative for integrating quality into DRG-based hospital payment systems is to extend the treatment episode for which payment is granted; by including outpatient visits, readmissions, and so on.

• Dutch DRG system covers the whole spectrum of inpatient and outpatient care provided at hospitals, relating to a specific diagnosis from the first specialist visit to the end of the care process (treatment completed) and including inpatient days, outpatient visits, laboratory services, medical imagin services, medications, medical materials, (surgical) procedures, etc

Collaborative Work• Consequently, as long as a patient is treated for the same

condition, the hospital does not receive an extra payment. However, the Dutch system does not provide incentives to reduce postoperative infections or readmission rates, since these are coded as new DBCs.

• It is possible to have a system which combines different approaches, for example quality adjustments at the patient level with a global payment adjustment for quality at the hospital level.

• The essential prerequisite for quality-based payment adjustments to the hospital payment system is the availability of information on the quality of care.

Collaborative Work• Several countries have increased their efforts to collect quality

information:BOS-Federal Office for Quality Assurance or AQUA-Institute for Applied Quality Improvment in Germany (Busse et al., 2009), COMPAQH in France) but routinely available information cm patient outcomes is still scarce.

• The importance of having better information regarding the quality of care is evidenced by the existence of specific financial incentives to hospitals for reporting quality information.

• Medicare encourages hospitals to participate in public reporting of quality information. Those hospitals that do not report on 10 measures of quality (defined by the Hospital Quality Alliance) receive a 0.4 per cent reduction in their DRG prices.

Collaborative Work• In Germany hospitals are financially penalized if they report

quality information for less than 80 per cent of treated cases (Busse et al., 2009)

• The pertinence of using the act of reporting quality data as a proxy for quality of care delivery is questionable, but - when data are available - hospitals can also be offered positive incentives for their effort or extra payments can be made for stimulating innovative approaches to improving quality and patient safety

Collaborative Input Structure• Overview of health care institutions and the role of payment

methods in the country• Development and updates of payment methods• Country cost-accounting system• Availability of quality information• Methods to integrate medical technology innovations

assessment • Summary of oulook in terms of future development and

reforms

Collaborative Work• Two key words

– Division of labor – Teamwork

Remaining Collaborative Work• One of the objectives of this Conference

should be to investigate the feasibillity of focusing Project’s research on a particular therapeutic area (diabetes?oncology?)

• Participants are kindly asked to contribute proposals and ideas for a hypothetical case study to test the attributes of desirable payment models

Collaborative Work

WP2 Objectives

WP 2 will solve methodological challenges raised by analysis of patient-level data in international comparative research. All Consortium partners will contribute with input on data availability and particular challenges in their countries. Main objectives are to develop consensus and guidelines on:

• common terminology and conceptual framework for costs and outcomes measurement

• methods of measuring costs• methods of evaluating economic efficiency, based on NICE guidelines for health

technology evaluation and IQWIG efficiency frontier, including guidelines for measuring patient-relevant outcomes

• methods of measuring quality and equity of healthcare• methods of statistical analysis across countries, differentiating between

country and policy effects

WP2 Tasks

• Task 2.1. Literature and methodology review, definition development

• Task 2.2. Input from collaborative partners (15 Person-Months). Review of literature perceived as relevant to country specific health care system issues

• Task 2.3. Comparative analysis of value/benefits measurement. Perceived strengths and weaknesses of methodology for cost and outcome of care measurement will be developed, fed back to the members and revised. Areas of both consensus and disagreement will be identified

• Task 2.4. Methodology of statistical analysis across countries & Data Base

WP2 Deliverables

Internal deliverables:D 2.1.1. Guidelines for further project activities on comparative analysis of

healthcare quality evaluation, economic evaluation of health technology and equity in healthcare systems

D 2.1.2. Guidelines for further project activities on statistical analysis across countries, differentiation between country and policy effects in different data sets, taking into consideration data availability and respecting confidentiality requirements: adaptation of multilevel analysis

Should be sent to European Commission at month 12 as:D 2.1 Project Methodology Guidelines; Part 2 & 3: Guidelines for further project

activities on comparative evaluation of quality, economic and equity issues in healthcare systems: 2. catalogue of definitions related to quality, equity, costs, and economic evaluation as well as comparative value/benefit analysis; 3. methodology of statistical analysis across countries.

Collaborative Work• The second objective of this Conference is to initiate

Partners review of literature, regarding value/benefits measurement, perceived as relevant to country specific health care system issues and to start comparative analysis of value/benefits measurement.

• Tasks 2.2. and 2.3., should be completed by Partners by November 30, 2011.

Remaining Collaborative Work• One of the objectives of this Conference

should be to investigate the feasibillity of focusing Project’s research on a particular therapeutic area (diabetes?oncology?)

• Participants are kindly asked to contribute proposals and ideas for a hypothetical case study to test the attributes of desirable payment models

Integrated Care of Diabetic Foot Ulcer Case Study

• Due to rising prevalence and the high rate of complications diabetes becomes an increasing burden for health care systems all over the world

• Lower extremity ulcers are increasing a problem among patients with diabetes. Especially late complications of diabetes are shown to increase the total costs for diabetes care from 50% to more than 700%


• Intervention directed towards preventing the development or deterioration of foot ulcers in diabetic patients may reduce the frequency of lower extremity amputations by approximately 50% to 85%.

• There is also evidence that intensified and early treatment of ulcers is able to reduce the amputation rate by up to 80%


• Treatment cost of diabetic foot may be extremely high, due to prolong healing and intensive care

• However, costs to society of amputations are even higher, due to the prolonged hospitalization, rehabilitation, home care and social services for the people with a disability due to amputation.

• There is a need to established cost-effectiveness of intensified and early treatment of foot ulcers in diabetic population. It’s crucial to estimate not only direct but also indirect costs of diabetic foot ulcer

• In order to do that economic model could be build, based on utilities values for diabetic patients with foot ulcers or/and lower extremity amputations due to foot ulcers


Thank you!

[email protected]


Wrap-up and closing remarks

Annual MeetingHannover, February 9-10, 2012

Project LeaderProf. dr hab. Tomasz Hermanowski

WP1 Deliverables

Internal deliverables:D 1.1.1 An extensive literature review on financial and non-financial incentives

that affect provider behaviorD 1.1.2 A catalogue of criteria related to quality, cost, efficiency, administrative

feasibility and other important considerations as a basis for evaluating specific payment models that are or could be implemented

Should be sent to European Commission at month 18 as: D 1.1 Project Methodology Guidelines; Part 1: Guidelines for further project

activities on comparative evaluation of quality, economic and equity issues in healthcare systems: 1. catalogue of definitions related to quality, equity, costs, and administrative feasibility for evaluating specific payment models, set on the base of extensive literature review on financial and non-financial incentives

WP2 Deliverables

Internal deliverables:D 2.1.1. Guidelines for further project activities on comparative analysis of

healthcare quality evaluation, economic evaluation of health technology and equity in healthcare systems

D 2.1.2. Guidelines for further project activities on statistical analysis across countries, differentiation between country and policy effects in different data sets, taking into consideration data availability and respecting confidentiality requirements: adaptation of multilevel analysis

Should be sent to European Commission at month 12 as:D 2.1 Project Methodology Guidelines; Part 2 & 3: Guidelines for further project

activities on comparative evaluation of quality, economic and equity issues in healthcare systems: 2. catalogue of definitions related to quality, equity, costs, and economic evaluation as well as comparative value/benefit analysis; 3. methodology of statistical analysis across countries.

Deliverables format

• publishable summary, shall be of a suitable quality to enable direct publication without any additional editing

• According to EC, deliverable should not exceed 50-100 pages.

• Deliverable format has been already proposed by EPF

[M0+M18] 31st May 2012 – periodic report [M18+M36] 30th November 2013 - final report

Important dates

• All Partners, Advisory Board and Expert Panel Members, involved in Collaborative Work for WP1 and WP2, are invited to join Executive Board Management Meeting, organized by UniCT to monitor Project’s progress. The 2-day meeting will be held in Italy, in the May 2012, instead of June, 2012

• May 31, 2012 - end of Project’s first phase, 18 months report to EU

• June 1, 2012 – start of empirical research phase

Thank you!

[email protected]

international research project on financing quality in health care

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