Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698060539211.pdf (Liberia)
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 21.5.2016 Page 1 Petra Kokko Agenda: The Finnish Social and Healthcare Reform Funding model in Finland Patient Grouping development in Finland Value-Based Healthcare Theory Conclusion 21.5.2016 Page 2 Social Welfare and Healthcare Reform in Finland Petra Kokko • 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 21.5.2016 Page 3 The Key Money Flows in Social and Health Care Petra Kokko Funding source Way of Funding Funding Institution Households Consumers Employees Companies Employers Total expenditure 25,8 billion euros State taxation State Municipal taxation Mandatory insurance fees Insured Employers Optional insurance fees Insured Employers Employers dues Customer fees and reimbursement Municipality The Social Insurance Institution -Kela Insurance Corporations Employers Households Source: Institution of Health and Welfare Reports 22/2014.
Use of Funding Public Healthcare Private Healthcare Public elderly care Private elderly care Medication care Rehabilitati on Social welfare for the disabled Child welfare Adult social work Other social services 21.5.2016 Page 4 Primary Care Diagnosis Related Groups (pDRG) Petra Kokko • 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) 21.5.2016 Page 5 Petra Kokko 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 21.5.2016 Page 6 DRG CPP (cost per patient) Accounting model Petra Kokko Expenses by episodes Episode A Episode B Episode C Episode D Expenses by DRG contacts Building Episodes DRG contact A DRG contact B DRG contact C DRG contact Expenses by patients and visits DRG –grouping for realized contacts 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 Expenses by accounts Cost accounting for intermediate products Personnel Material Laboratory Other
 Funding and Production Petra Kokko Funding Funding allocation principles REGIONAL EPISODES (Episode patient grouping system) OUTPATIENT CARE Production: Economy and operational management Specialized HC NordDRG Primary HC pDRG Mouth HC dDRG Social care ?
INPATIENT CARE PRIMARY CODING (ICD-10, NSCP, ICPC2, FUNCTIONALITY) 21.5.2016 Page 8 Examples Petra Kokko PROVIDING THE SERVICES Specialized healthcare services funding Outpatient Clinic services funding Mouth healthcare services funding REGIONAL EPISODES PATIENT 1: Diabetes SPECIALIZED HEALTHCARE SERVICES PRODUCED AND COSTS/ NordDRG PRIMARY HEALTHCARE SERVICES PRODUCED AND COSTS/ pDRG MOUTH HEALTHCARE SERVICES PRODUCED AND COSTS/ dDRG PATIENT 2: Depression PRODUCING 21.5.2016 Page 9 Porter’s theory Value-based Healthcare Petra Kokko 21.5.2016 Page 10 Value Based Healthcare Petra Kokko Source: Value-based healthcare seminar, 5.4.2016 Helsinki 21.5.2016 Page 11 Petra Kokko Source: Value-based healthcare seminar, 5.4.2016 Helsinki 21.5.2016 Page 12 Petra Kokko Source: Value-based healthcare seminar, 5.4.2016 Helsinki 21.5.2016 Page 13 Conclusions Petra Kokko • 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 21.5.2016 Page 14 Thank You!

petra.kokko@fcg.fi 21.5.2016 Page 15