The role of primary health care incontrolling the cost of specialist
health carePeter C. Smith
Emeritus Professor of Health Policy
Imperial College Business School
peter.smith@imperial.ac.uk

Contents
 Primary care and general practitioners
 Disease management
 Role of incentives in primary care
 Two primary care policies– Fundholding budgets for general practice– Pay-for performance in primary care

Primary care
 Fundamental role in:– Coordinating care
– Health promotion and disease prevention– Prescribing and drug monitoring– Minor specialist treatments– Gatekeeping Also, potential role in:– Promoting efficiency– Cost control (especially unnecessary use of
secondary care)

Primary care in the UK Average general practice serves a population 7,000 with 4.7
general practitioners (GPs)– Most are small businesses with a contractual relationship with the
NHS– Funded by a mix of capitation payments and fee-for-service– Some freedom in employing staff and organizing services

 About 20% of income through pay-for-performance (see later) All non-emergency referrals for specialist care must be
authorized by the GP
 Fundamental role in the administration of the NHS– Implementing national and local policy.
– Primary care physicians play a leading role in local ‘clinicalcommissioning groups’

The role of incentives
 Indirect incentives– Performance reporting– Reputation– Payment mechanism
 Budget responsibility

 Direct incentives– Pay for service (eg vaccination)– ‘Pay for performance’

Disease management
 GP disease management of chronic conditions– monitoring (for example, cholesterol levels forpatients with coronary heart disease)– secondary preventive medicine (for example antiplatelet therapy for stroke patients, influenza
immunization for vulnerable groups)– lifestyle advice for smokers or the obese.

 Intended to improve the health of individual
patients with chronic conditions and reduce
unnecessary specialist costs.

7

Coordination Problems in the Past Two Years,
by Number of Chronic Conditions
Percent experienced any of threecoordination problems*

No chronic conditions
2 or more chronic conditions

50

42

42
38

26

31

29

25

28 29

23

23
19

19

32

29

26 27

25

17

32 31

19
13

0
AUS

CAN

FR

GER

NETH

NZ

NOR

SWE

* Test results/records not available at time of appointment, received conflicting informationfrom different health professionals, and/or doctors ordered test that had already been done.
7
Source: 2010 Commonwealth Fund International Health Policy Survey in Eleven Countries.

Unnecessary use of secondary care
 Examples from hospital inpatient use for:– Asthma– Chronic obstructive pulmonary disease (COPD)– Diabetes

SWIZ

UK

US

ASTHMAAll hospital admissions with a principal diagnosis code of asthma (excluding day cases)
Age-sex standardised rate per 100 000 adult population 2011 (or nearest year)

0

20

40

60

80

100

120

140

160

Slovak Republic
United States
Korea
New Zealand
Hungary
PolandAustralia
FinlandIsraelUnited Kingdom
Austria
Iceland
Spain
Slovenia
Belgium
Czech Republic
IrelandFranceDenmarkJapan
Netherlands
Switzerland
NorwayLuxembourg
SwedenChile
Germany
PortugalMexicoCanadaItaly

Source: OECD Health Statistics 2014

Chronic obstructive pulmonary disease (COPD)
All hospital admissions with a principal diagnosis code of COPD (excluding day cases)
Age-sex standardised rate per 100 000 population 2011

0

50

100

150

200

250

300

350

400

Hungary
Ireland
New ZealandAustria
Australia
Denmark
IcelandIsraelUnited Kingdom
United States
Korea
Belgium
Germany
Spain
NorwayPolandCanadaSlovak Republic
SwedenNetherlands
Luxembourg
Chile
Czech Republic
Finland
Slovenia
MexicoFranceSwitzerland
Italy
PortugalJapan

Source: OECD Health Statistics 2014

DIABETES
All admissions with principal diagnosis code of uncontrolled diabetes, without
mention of a short-term or long-term complication (excluding day cases)
Age-sex standardised rate per 100 000 adult population 2011 (or nearest year)

0
AustriaJapan
Korea
Hungary
MexicoPolandDenmark
FinlandGermany
SwedenChile
Belgium
NorwayCzech Republic
Spain
Ireland
Switzerland
United Kingdom
United States
Iceland
Italy
Portugal
CanadaIsraelNew ZealandAustralia

Source: OECD Health Statistics 2014

50

100

150

200

DIABETES:
prevalence and adult hospital admission rates
Standardized hospital admissions

200

180

AUT
JPN

160
140

HUN

120

KOR

100

MEX

80
POL
SWE

60

40
20

ISL

0
-

2

4

DNK

GER
CHL
NOR
CZE
ESP
GBR CHE
USA
ITA
CAN
ISR
AUS NZL

6

8

10

12

14

Standardized prevalence age 0-79, 2013

Source: OECD Health Statistics 2014 and International Diabetes Federation 2014

Quality of disease management
and hospital costs
 Examined link between incentivized performance inchronic disease management and hospital costs
 Asthma; chronic heart disease; chronic kidney disease;
COPD; dementia; diabetes; hypertension; hypothyroidism;
mental health; stroke.

 Only clear link is between improved GP performanceand reduced hospital costs for stroke patients.
 Annual expenditure reduced by £130m (0.2% of all
hospital costs), mainly in emergency admissions
 Saved approximately 7,000 deaths per annum

Dusheiko, M., Gravelle, H., Martin, S., Rice, N. and Smith, P. (2011), “Does disease
management reduce hospital costs? Evidence from English primary care”, Journal of Health
Economics, 30, 919-932.

Two policies aimed at improving
health system efficiency
 Gatekeeping budgets– GP fundholding Pay-for-performance (P4P)– Quality and outcomes framework

POLICY 1: FUNDHOLDING

Gatekeeping in primary care
 Citizens register with a general practitioner(GP)– Compulsory, or incentives such as reduced
insurance premiums

 Access to (non-emergency) specialist care only
through referral by GP– Compulsory, or incentives such as a patient fee fordirect access to specialist Strength of incentives and compulsion varies
greatly between systems of gate-keepingOECD Survey of Health System
Characteristics 2012

Source: http://www.oecd.org/els/health-systems/organisation-health-care-delivery.htm

Fundholding General practitioners were given an annual budget
with which they were expected to purchase certain
secondary health services for their patients– Includes routine (‘chargeable’) non-emergency surgery (about 37% of
all hospital episodes)– Excludes ‘non-chargeable’ elective procedures (more complex, about
16% of all episodes)– Excludes emergency admissions (about 46% of episodes)

 Participation of GPs voluntary Introduced in 1991, abolished in 1998
 About 50% of patients covered by a fundholder by1998
 Budgetary surplus could be retained by the practicefor ‘extra services for patients’ (not personal gain) Weak sanctions for overspending.

A natural experiment:
the abolition of fundholding An opportunity to observe the impact of the end of apolicy on fundholders vs non-fundholders
 Two years either side of abolition Difficult to disentangle selection effect from incentive
effect Difference-in-difference econometric techniques Results: fundholders made 4.9% less use of the relevant
non-emergency hospital treatments than their nonfundholding counterparts, a difference that quickly
disappeared after abolition.
Fundholding: conclusions.01

Differences between fundholder and non-fundholder
admission rates for chargeable, non-chargeable andemergency admissions
0

Proportionate difference

Voluntary gatekeeper budget-holding secured material reductions in referrals,
even with very modest incentives– Approximately 5% of referrals; 50% of GPs; 25% of hospital costs. This implies
annual savings of 0.6% of all hospital expenditure.

-.08 -.07 -.06 -.05 -.04 -.03 -.02 -.01

1997/98

Dusheiko, M., Gravelle, H., Jacobs, R., Smith, P. (2006), “The effect of budgets
on doctor behaviour: evidence from a natural experiment”, Journal of Health
Economics, 25, 449-478.

Earlier fundholders secured larger reductions than later fundholders:– More scope?
– More enthusiasm?
– Learning behaviour?

Fundholding regime had no effect on emergency admission rates for FHs

Fundholders secured distinct waiting time advantages:– At expense of non-fundholders?
– To benefit of non-fundholders?

1998/99

1999/00

2000/01Fundholders’ patients were less satisfied than their non-fundholding
counterpartsNo evidence of unmeasured health costs of fundholding.

Financial year

noncharge
chargeable

emergePOLICY 2: PAY-FOR-PERFORMANCE(QUALITY AND OUTCOMES
FRAMEWORK)

Paying for performance inhealthcare, August 2014
 Cashin, C., Chi, Y., Smith, P.,
Borowitz, M. and Thomson,
S. (eds)
 Paying for performance inhealthcare: implications forhealth system performanceand accountability
 Maidenhead: Open
University Press.

What should be rewarded?
 Structure– Provision of service– Accreditation– Information provision Process– Adherence to guidelines Outcomes– Early cancer diagnosis– Biomedical status– Avoidable admissions– Health status

P4P programs and measures in OECD countries.
Source: Borowitz, Cashin, Chi, Smith, and Thompson (2014) for European Observatory and OECD

Some examples
 France Contract for Improved Individual
Practice Germany Disease Management Programme Australia Practice Incentive Programme UK Quality and Outcomes Framework

P4P: the quality and outcomesframework (QOF)
 Seeks to incentivize actions associated with high quality careand reduced need for specialist care
 Implemented 2004, with a major emphasis on clinical quality
 Measurement uses about 150 performance indicators,
yielding a points score for each general practice Up to 20% of income determined by quality incentives
 Major reliance on self-reporting (with external audit)
 No control group, so evaluation difficult.
Smith, P. and York, N. (2004), “Quality incentives: the case of UK generalpractitioners”, Health Affairs, 23(3), 112-118.

GP Contract:
Indicators and points at risk㻭㼞㼑㼍㻌㼛㼒㻌㼜㼞㼍㼏㼠㼕㼏㼑㻌㻼㻵㼟㻌 㻼㼛㼕㼚㼠㼟㻌㻯㼘㼕㼚㼕㼏㼍㼘㻌㻻㼞㼓㼍㼚㼕㼦㼍㼠㼕㼛㼚㼍㼘㻌

㻣㻢㻌
㻡㻢㻌

㻭㼐㼐㼕㼠㼕㼛㼚㼍㼘㻌㼟㼑㼞㼢㼕㼏㼑㼟㻌

㻝㻜㻌

㻟㻢㻌

㻼㼍㼠㼕㼑㼚㼠㻌㼑㼤㼜㼑㼞㼕㼑㼚㼏㼑㻌

㻠㻌

㻝㻜㻜㻌

㻴㼛㼘㼕㼟㼠㼕㼏㻌㼏㼍㼞㼑㻌㻔㼎㼍㼘㼍㼚㼏㼑㼐㻌㼏㼘㼕㼚㼕㼏㼍㼘㻌㼏㼍㼞㼑㻕㻌㻽㼡㼍㼘㼕㼠㼥㻌㼜㼍㼥㼙㼑㼚㼠㼟㻌㻔㼎㼍㼘㼍㼚㼏㼑㼐㻌㼝㼡㼍㼘㼕㼠㼥㻕㻌

㻙㻌
㻙㻌

㻝㻜㻜㻌
㻟㻜㻌

㻭㼏㼏㼑㼟㼟㻌㼎㼛㼚㼡㼟㻌㻹㼍㼤㼕㼙㼡㼙㻌

㻡㻡㻜㻌
㻝㻤㻠㻌

㻙㻌

㻡㻜㻌

㻝㻠㻢㻌

㻝㻜㻡㻜㻌

GP Contract: Clinical indicators㻰㼛㼙㼍㼕㼚㻌

㻼㻵㼟㻌 㻼㼛㼕㼚㼠㼟㻌㻯㻴㻰㻌㼕㼚㼏㼘㼡㼐㼕㼚㼓㻌㻸㼂㻰㻌㼑㼠㼏㻌㻿㼠㼞㼛㼗㼑㻌㼛㼞㻌㼠㼞㼍㼚㼟㼕㼑㼚㼠㻌㼕㼟㼏㼔㼍㼑㼙㼕㼏㻌㼍㼠㼠㼍㼏㼗㻌㻯㼍㼚㼏㼑㼞㻌
㻴㼥㼜㼛㼠㼔㼥㼞㼛㼕㼐㼕㼟㼙㻌㻰㼕㼍㼎㼑㼠㼑㼟㻌㻴㼥㼜㼑㼞㼠㼑㼚㼟㼕㼛㼚㻌㻌㻹㼑㼚㼠㼍㼘㻌㼔㼑㼍㼘㼠㼔㻌㻭㼟㼠㼔㼙㼍㻌
㻯㻻㻼㻰㻌㻱㼜㼕㼘㼑㼜㼟㼥㻌㻯㼘㼕㼚㼕㼏㼍㼘㻌㼙㼍㼤㼕㼙㼡㼙㻌

㻝㻡㻌
㻝㻜㻌
㻞㻌
㻞㻌
㻝㻤㻌
㻡㻌
㻡㻌
㻣㻌
㻤㻌
㻠㻌
㻣㻢㻌

㻝㻞㻝㻌
㻟㻝㻌
㻝㻞㻌
㻤㻌
㻥㻥㻌
㻝㻜㻡㻌
㻠㻝㻌
㻣㻞㻌
㻠㻡㻌
㻝㻢㻌
㻡㻡㻜㻌

Hypertension:indicators, scale and points at risk
5HFRUGVMin

Threshold indicator BP5

Max Points㻮㻼㻌㻝㻚㻌㼀㼔㼑㻌㼜㼞㼍㼏㼠㼕㼏㼑㻌㼏㼍㼚㻌㼜㼞㼛㼐㼡㼏㼑㻌㼍㻌㼞㼑㼓㼕㼟㼠㼑㼞㻌㼛㼒㻌㼜㼍㼠㼕㼑㼚㼠㼟㻌㼣㼕㼠㼔㻌㼑㼟㼠㼍㼎㼘㼕㼟㼔㼑㼐㻌㼔㼥㼜㼑㼞㼠㼑㼚㼟㼕㼛㼚

9

Pointsearned56'LDJQRVLVDQGLQLWLDOPDQDJHPHQW㻮㻼㻌㻞㻚㼀㼔㼑㻌㼜㼑㼞㼏㼑㼚㼠㼍㼓㼑㻌㼛㼒㻌㼜㼍㼠㼕㼑㼚㼠㼟㻌㼣㼕㼠㼔㻌㼔㼥㼜㼑㼞㼠㼑㼚㼟㼕㼛㼚㻌㼣㼔㼛㼟㼑㻌㼚㼛㼠㼑㼟㻌㼞㼑㼏㼛㼞㼐㻌㼟㼙㼛㼗㼕㼚㼓㻌㼟㼠㼍㼠㼡㼟㻌㼍㼠㻌㼘㼑㼍㼟㼠㻌㼛㼚㼏㼑㻌㻌

25

90

10

㻮㻼㻌㻟㻚㼀㼔㼑㻌㻑㻌㼛㼒㻌㼜㼍㼠㼕㼑㼚㼠㼟㻌㼣㼕㼠㼔㻌㼔㼥㼜㼑㼞㼠㼑㼚㼟㼕㼛㼚㻌㼣㼔㼛㻌㼟㼙㼛㼗㼑㻘㻌㼣㼔㼛㼟㼑㻌㼚㼛㼠㼑㼟㻌㼏㼛㼚㼠㼍㼕㼚㻌㼍㻌㼞㼑㼏㼛㼞㼐㻌㼠㼔㼍㼠㻌㼟㼙㼛㼗㼕㼚㼓㻌㼏㼑㼟㼟㼍㼠㼕㼛㼚㻌㼍㼐㼢㼕㼏㼑㻌㼔㼍㼟㻌㼎㼑㼑㼚㻌㼛㼒㼒㼑㼞㼑㼐㻌㼍㼠㻌㼘㼑㼍㼟㼠㻌㼛㼚㼏㼑㻌㻌

25

90

10

㻮㻼㻌㻠㻚㼀㼔㼑㻌㻑㻌㼛㼒㻌㼜㼍㼠㼕㼑㼚㼠㼟㻌㼣㼕㼠㼔㻌㼔㼥㼜㼑㼞㼠㼑㼚㼟㼕㼛㼚㻌㼕㼚㻌㼣㼔㼕㼏㼔㻌㼠㼔㼑㼞㼑㻌㼕㼟㻌㼍㻌㼞㼑㼏㼛㼞㼐㻌㼛㼒㻌㼠㼔㼑㻌㼎㼘㼛㼛㼐㻌㼜㼞㼑㼟㼟㼡㼞㼑㻌㼕㼚㻌㼠㼔㼑㻌㼜㼍㼟㼠㻌㻥㻌㼙㼛㼚㼠㼔㼟㻌㻌

25

90

20

㻮㻼㻌㻡㻚㻌㼀㼔㼑㻌㻑㻌㼛㼒㻌㼜㼍㼠㼕㼑㼚㼠㼟㻌㼣㼕㼠㼔㻌㼔㼥㼜㼑㼞㼠㼑㼚㼟㼕㼛㼚㻌㼕㼚㻌㼣㼔㼛㼙㻌㼠㼔㼑㻌㼘㼍㼟㼠㻌㼎㼘㼛㼛㼐㻌㼜㼞㼑㼟㼟㼡㼞㼑㻌㻔㼕㼚㻌㼘㼍㼟㼠㻌㻥㻌㼙㼛㼚㼠㼔㼟㻕㻌㼕㼟㻌㻝㻡㻜㻛㻥㻜㻌㼛㼞㻌㼘㼑㼟㼟㻌㻌

25

70

56

39.2

2QJRLQJ0DQDJHPHQW
20

Achievement in England

9.7

5.1

STROKE8
HBP4
HBP5

20
10
0

Apr-01

3.7

STROKE6CHD
STROKE
HBP

Source: NHS Information Centre http://www.qof.ic.nhs.uk/

Apr-06

2.6

CHD8

Apr-05Practicesachieving fullmarks (%)

CHD6

70
60
50
40
30

Oct-0595.5 96.8 95.4 93.7 94.7 96.9 96.1
2.4

2012
/13

Apr-04

96.2

1.3

2011
/12

Oct-04

91.3

1.0

2010
/11

Apr-03

Average points
score (%)

2.0

2009
/10

Oct-03

2006/07

Apr-02

2005
/06

QOF

100
90
80

Oct-02

2004
/05

7.5

2008
/09

100

Achievement %Trends in six QOF indicators 2001-2006

Oct-01

2007
/08

70
55

(55-20)/(70-20) x 56 = 39.2

Coronary heart disease
StrokeHypertension

Copyright © 2007 QRESEARCH (Version 12) and The Information Centre for health and social care.

Trends in real GP earnings 1999-2013(Converted ‘000 JPY; constant 2012 prices)
25,00020,00015,00010,000

5,000

0
1999

Summary of findings to date– 䇺Quality’ was improving rapidly before the QOF was introduced– The QOF may have led to a further small, but possibly transient,increase in quality– Evidence limited on the impact on health outcomes– In general, the targets seem to have been set at too low a level– The rewards associated with the QOF appear to have been excessive– Only modest evidence that ‘unmeasured’ quality is suffering relative
to measured quality– Evidence of some small amount of ‘gaming’ to achieve improved
scores– Side-benefits of QOF include:






computerization;better information flow;
more informed patients;
better focus for GPs;
more informed debate on what GPs should do.

2001

2003

2005

2007

2009

2011

2013

P4P design issues
 Scope of scheme– Comprehensive (QOF)– Piecemeal Power and size of incentives– Use of thresholds in QOF

 How difficult should performance targets be?
– Too easy in QOF

 Risk adjustment for disadvantaged populations– Exception reporting Avoidance of gaming and other adverse outcomes– Information systems– Audit

P4P: current thinking
 Results of most experiments have been modest
 Some concern with gaming and other distortions
 However, P4P has resulted in improved data, better
IT, improved accountability
 Design of schemes is complex and in need of carefulconsideration
 Provider payment mechanism is nevertheless a
crucial area for more general future experimentation.

Concluding comments
 Primary care highly variable:– Between countries– Within countries

 Primary care a key area for securing cost control and quality
improvement, but evidence to date has been inconclusive– Need better designed and larger scale experiments– Evaluation needs to be improved, including use of microsimulation tomodel long term consequences Prerequisites for success:– Aligned payment mechanisms– Relevant information resources and audit– High quality governance– Clinical leadership and engagement– Monitoring and evaluation

Comments on Prof. Smith’spresentation on “the role ofprimary health care in controllingthe cost of specialist health care”
Masako Ii, PhD
School of International Public Policy
Hitotsubashi University
masako@econ.hit-u.ac.jp
Tokyo Symposium

My comments
 OECD health data
 In the UK, essential data on primary care areavailable
 Evaluation of two policies aimed at improving
health system efficiencies
Fundholding andQOF (Quality and Outcomes Framework) Lessons for Japan

28 September 2014

Caution not to misinterpretthe OECD health data
Examples Health care expenditure Hospital inpatient use for± Chronic obstructive pulmonary disease (COPD)± Diabetes

Total Health Expenditure per GDP (%)
Capital formation
Current expenditure

US

Japan

UK

Number of 䠟䠰 scan and Hospital䠄per 1 million population䠅

Slide10: ;KWͿ All hospital admissions with aprincipal diagnosis code of COPD
 The number of Japanese patients for COPD
(0.22 million) must be very underestimated as
COPD is rarely diagnosed at primary care level
in Japan. This number, 0.22 million, in theOECD data is the number of patients mostly at
tertiary level consulted by pulmonologists. It
was estimated in 2001 that in Japan nearly 5.3
million are suffering from COPD without being
consulted professionally.

Slide11: ;ŝĂďĞƚĞƐͿAll admissions with principal
diagnosis code of uncontrolled diabetes, without
mention of a short-term or long-term complication

䇾Educational Hospitalization”
Patients stay in hospital only for the purposeof education of diabetes.

Policy 1: Fundholdings
Estimate the effect of fundholding using a DID methodology on
4-year panel of English general practice(=family medicine)
before and after the abolition of fundholding.
Consider the various effects of budgetary regimes
such as transitional effects:
1. After the end of fundholing in April 1999 ex-fundholding
practices were allowed to keep their accumulated
fundholding surpluses to be spent over the following 4 years.
Thus even in the last 2 years of fundholding fundholders still
had an incentive to reduce elective admissions toaccumulate surplus.
2. The anticipated end of fundholding gave fundholders an
incentive to delay referrals so that the patient would be
admitted in the post-fundhodling period at the much lower
post-fundholding price.
Dusheiko, M., Gravelle, H., Jacobs, R., Smith, P. (2006), “The effect of budgets on doctor
behaviour: evidence from a natural experiment”, Journal of Health Economics, 25, 449-478.

ZĞƐƵůƚ:Fundholders made 4.9% less use of the relevant
non-emergency hospital treatments than their
non-fundholding counterparts, a difference thatquickly disappeared after abolition.
Fundholding: Participation of GPs is voluntaryPrimary Care Trust: Participation of GPs is
mandatory

Policy 2: Quality and Outcomes
Framework (QOF)
Examine whether better primary care management of
10 chronic diseases is associated with reduced
hospital costs, applying cross-sectional and panel
data methods to a dataset of 5 million patients in
8000 English general practices.

Dusheiko, M., Gravelle, H., Martin, S., Rice, N. and Smith, P. (2011),“Does disease management reduce hospital costs? Evidence fromEnglish primary care”, Journal of Health Economics, 30, 919-932.

Strength of register system
Essential health care data are available (Slide 31)
For example,
1. The % of patients with hypertension in which there isa record of the blood pressure in the past 9 months
2. The % of patients with hypertension in whom the lastblood pressure (in last 9 months) is 150/90 or less

Slide 18: Register with a primary care physician or clinic?

Slide 30: 10 domains -> 2013/14: 30 domains withmore than 100 indicators
examples of newly added domains are:- depression- learning disability- osteoporosis(secondary prevention of fragility fractures)

Examples of indicators
Depression: The percentage of patients aged 18 or overwith a new diagnosis of depression in the preceding 1
April to 31 March, who have had a bio-psychosocial
assessment by the point of diagnosis
Learning disability: The contractor establishes andmaintains a register of patients aged 18 or over withlearning disabilities
Osteoporosis: Aged 50 or over and who have not attained
the age of 75 with a record of a fragility fracture on orafter 1 April 2012 and a diagnosis of osteoporosis
confirmed on DXA scan

One of the conclusions: Primary care a key area
for securing cost control and quality
improvement, but evidence to date has been
inconclusive.

However, “Quality” had been improving rapidly even
before the QOF was introduced (slide 34)

“Quality” was improving rapidly before
the QOF was introduced (slide 34)
In 1999 Clinical Evidence was launched in the UK.
*CE is a compendium of the best available evidence on theeffects of common clinical interventions, which has facilitatedevidence-based practice at the point of care.

In Japan some criticize dependence on evidence
or guidelines leads to “defensive medicine”
Only better IT will improve the quality?

Strengths of UK primary care system The data available for those who do not cometo clinics (or hospitals)
 Essential health care data are available for thewhole population

Administrative claims data FY2013

“Papancolcas, Sylus, and Smith(2013)“An analysis of survey data fromeleven countries finds that ‘satisfaction
with health system performancemeans many things”, Health Affairs
Survey respondents’ perception of overall healthsystem performance, Affordability of care,effectiveness of care,

Overall opinion

Overall opinion

Lessons from the UK experiences Promote standardized managements of chronic
diseases (such as hypertension and diabetes) at
primary care level.
 Construct a database to show the profile ofprimary care.
 Evaluate quality and efficiency based ontreatment outcome of chronic diseases.
 Finally in Japan, staring in 2017, the national
accreditation system for 19 medical and surgical
speciality training programs, including family
medicine/general practice, will start.

Primary care
 Fundamental pillar of the UK National Health Service.
The UK has a strong system for training GPs (generalpractitioners/family doctors) as key players to provide
continuous, comprehensive, person-centered care in
the community.
 In Japan, there still exists a strong voice that no formal
training in primary care is necessary and primary careshould be provided by each specialist. Many Japanesebelieve that quality of patient care is much better if
patients see several specialists rather than one primarycare doctor.

International Symposium on Integration and Coordination ofLong-term Care for the Elderly
Tokyo 28.9.2014<Kd/dKZ/dŚĞ^ĞƌǀŝĐĞ/ŶƚĞŐƌĂƚŽƌDŽĚĞůĨŽƌ,ŽŵĞĂƌĞ
Paul Lillrank
Professor
Department of Industrial Engineering and Management
School of Science, Aalto University
Chairman of the Board
Nordic Healthcare Group, Co.Ltd.

© Paul Lillrank 2014

KOTITORI PUBLICATIONS© Paul Lillrank 2014

© Paul Lillrank 2014

SOURCING IS A PROFESSION
With large manufacturers the cost of sourced components and services can be
up to 90% of the value of production.
ÆSourcing requires specific competence
Strategic sourcing:-Make-or-buy -descisions: contract governance-Development of partnership, co-evolution, co-specialization-Service Level Agreements (SLA), revenue models
Procurement:-Evaluation of performance against SLA-Total cost of ownership, price, terms of trade-Quality and improvement
Purchasing-Daily routines
Vendor Management Organization (VMO)- Internal or external organisation or team to prepare and manage sourcing.

© Paul Lillrank 2014

KOTITORI – THE LOGIC
1. High cost of institutional care Æ Home care
2. Municipal service production is costly Æ Use private providers
3. Using one large service corporation include risk of rent seeking throughlocal monopoly Æ Employ several small local providers
4. Public-private contracting requires cumbersome competitive tenders
Æ Use a service integrator as a Vendor Management Organization (VMO)

Service provider

Public-private
contract© Paul Lillrank 2014

Public-private
contract

Private-private
contractTHE INTEGRATOR’S SERVICE PROPOSITION

THE LOCATION

Easy access

Increased service quality

 One-point-shopping for all
services Services at right time in rightplace Private services made available



Increased productivity, less cost

Reduces the City’s need to coordinate

Synergies between providers
Transfer of best practices
between providers
 Individualized deals between
producer and integrator enables
lower price The City arranges only one
competitive bidding for the
Integrator.
 Less transaction costs
 Increases privately purchased
services© Paul Lillrank 20147

© Paul Lillrank 2014Competition between service
providers
Clear service level agreements
Mutual learning between public
and private, domestic andoverseas providers.

THE EVOLUTION OF OUTSOURCING

1. In-House Production

2. Oursourcing

Aministrative fiat

Principal

Contract

Producer

End
Use
r

3. Outsourcing with VMO

ContracttPrincipal

Producer(s)4. VMO as Integrator

VMO
Contractt

VMO

Principal

User
InterfaceCo
Contract(s)Contract(s)Principal

Producer(s)

End
Use
r

Outcomemonitoring© Paul Lillrank 2014

THE KOTITORI MODEL

City as
Producer
Eligible forcare paidby theCity

ContracttPrincipal

CaseManager
anag
End
d
Users

Not
eligible forcare paidby theCity

Voucher

Learning andbenchmarking

PrivateProducer(s)Productivity
rodu
d ctivityti
improvement

Out-of-Pocketofpayment with tax
subsidies© Paul Lillrank 2014

End
Use
r

End
EEn
n
nd
d
Use
r

Producer(s)PKotitori Guidance to Diferent Services,
2013
No service needed
17

12
Public service
Public and private

11
27

PrivateOther / voluntary

20

13© Paul Lillrank 2014

No changes (oldcustomers)

TAMPERE KOTITORI MODEL

City as purchaser

ROLES AND RESPONSIBILITIES






Customer & family

 Sets service criteria andquality standards
 Approves care plans Financing for publicly funded
service

Care andService Plan Purchaser and end user
 Set objectives
 Funds part of service

Purchase private services
through one channel

Combine private and 3rd
sector services with public
servicesImproves quality assuranceUses private initiatives andexperiences to improve
services produced by the City.

Kotitori

Contract + SLA

 Customer advice andguidance Create and manage
producer network
 Develops the city’s own
service production
Contract + SLACity of
TamperePrincipal: Contract with the Integrator
Sets criteria for granting services and service levels
Formal descisions on care plans
Runs own service production

 Chief service producer
 Advice and support customers and their families
 Guidance for customers belonging to the Kotitori catchment (Care and service
plans + service process coordination)
 Consultant, adviser
 Manages tendering and competitive bidding for services funded by the City,
monitors quality
 Consulting for the City’s own service production
 Develops and manages the private service network 15 service producers of various size produces the services funded by the City
(vouchers) as subcontractors to the Integrator.
 About 100 providers of privately funded services, paid by customers.

Producer(s)Service Providers
 12 providers for services funded by the City: home care (400 customers);
meal service; security; grocery shopping; cleaning.
 100 + private and 3.rd sector service providers.

SLA = Service Level Agreement; service definition, quality requirements, incentives

11© Paul Lillrank 201412

© Paul Lillrank 2014

PERFORMANCE MEASUREMENT IN HEALTHCARE
Finance

4. Outcome –based
effectiveness

RESOURCES
3. Allocative
effectiveness variety access cost2. Economic
efficiency
 cost / output unit
 episode cost life cycle cost

OUTCOME
What happens to apatient
Situation

GOALS

PRODUCTIONOUTPUT
What is done
to a patient

Healthpolicies© Paul Lillrank 2014

1. Technical
Efficiency / Productivity outputs (volume) per production unit capacity utilization rate (direct vs.
indirect labor)

Intervention

Placebo /RandomHealthbehavior

VALUE
What patients /constituents
perceiveHOME CARE PERFORMANCE METRIC

Operative indicators
Access

Productivity

Outcomes

>75 customers per >75 population
Hours/ customer
Visits/ customer, average duration
Hours/ costomer correlation withpopulation density

Sick leaves of personnel %Direct caregivers’ capacity
utilization / direct care time % of
total timeMorning rush in relation to rest ofday.

Customers’ days in inpatient
hospital care
Customers’ referrals to specialists
Customer visits to outpatient care
Moves to heavier care forms /institutional care
Cases of death

Improvement potential in economic terms
per area / service type per customer© Paul Lillrank 2014

USE OF HOME CARE CAPACITY PER HOUR OF THE
DAY
Back-Office Time

Estimated Transit

Front-Office Time

7000

Caregiver Capacity
6000

Time (h)

5000

4000

3000

2000

1000

0
7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

Hour of the Day2012 Johan Groop Theory of Constraints in Field Service: Factors Limiting Productivity in Home Care Operations.
Doctoral Dissertations 47/2012. Available at: http://lib.tkk.fi/Diss/2012/isbn9789526045948/© Paul Lillrank 2014

KOTITORI PERFORMANCE (2012)

Cost EUR / year (2012)*
Total cost for eglible elderly(about 360 persons)

3,2M€

Integrator fee

0,9M€

^Ƶŵ

ϰ͕ϭDΦ

Cost savings EUR / year
Directs costs ofhome care for +75
yr olds / person

Kotitori –managed producers 1287 €City production
1958 €+1,6M€

Case management
per case

Kotitori 813 €
City
553 €

-0,1M€

Outcomeeffectiveness**

For kotitori less movement to institutional care,less use of specialist care.
More short-term hospital care.

+0,4M€

Sum

Improvement

City production capacity utilization (technicalefficiency) 45%Æ52%+2,6M€

Less support
services

Security service customers paid by the city1531Æ1193+0,1M€In December 2013 55%

16+1,9M€

Sum+2,7M€^ƵŵƚŽƚĂůнϰ͕ϲDΦ* Not included support services** Outcome effectiveness calculated from 2011-2012 figures per home care customer.

© Paul Lillrank 2014

Kotitori – Estimate of Economic Effects

Economic effect (MEUR, %)

Area

Issue

Kotitori
catchment area
2 831 +75 yrs
oldCustomer guidanceCompared to averages of whole
City’s cost for +75 yrs old in 2013

Regular home care
Use of specialist care
Short-term inpatient hospital care
Sum MEUR
Sum € per +75 year old

City of
Tampere17 464 +75
yrs old

Improvement activities in City production; higher
capacity utilization rate (direct labor hours / totallabor hours)
Home care support services (2009-2013)
Sum MEUR
Sum € per +75 year old© Paul Lillrank 2014

SUMMARY OF ACCOMPLISHED BENEFITSWith Kotitori Assistance, City Home Care Productivity Has
Increased Twenty Percent

 Cost of service for the Kotitori catchment group is significantly lower per
customer than in City production.
 City production capacity utilization 45 Æ 50%
 Better outcomes for Kototori, compared to City
– 29% less moves from home to heavy / institutional care
– 30% lower cost for specialist care
– 15% less utilization of inpatient hospital care
– 14% fewer visits to emergency care

 600 customers per year are directeed to private producers.

Tampereen kaupungin oman kotihoidon lähi- ja kodinhoitajien asiakastuntien osuus
kokonaistyöajasta
1. dataanalyysi

Resurssoinnin
Teams,
työryhmät
resourcing

Ratkaisujen
Implemen
Käyttöönotto-tationRatkaisujen
Testing
pilotointi

Incentive
Kannustinmallin
systemkehittäminen

Incentive
Kannustinmallin
systemkäyttöönotto

development

implementation

EsimiesTraining forvalmennuksetmanagers

Kalevanulkoistus
56%

55%

54%

53%

Direct labor /52%
Customer
service hours 50%
as % of total 48%
hours

52%

52%

51%
50%

51%

50%

49%
48%

46%

45%
44%

44%
42%
40%
Syksy 2008

= Kotitorin
Kotitoritukema
kehityshanke
supported

18© Paul Lillrank 2014

© Paul Lillrank 2014

Kevät 2009

Syksy 2009

Kevät 2010

Syksy 2010

= Kotihoidon resurssimäärää
Added resources
lisäävä toimenpide

Kevät 2011

Syksy 2011

Kevät 2012

Syksy 2012

Kevät 2013

Syksy 2014

Joulu 2014

THE USABILITY OF THE SERVICE INTEGRATOR MODELThe Service Integrator model applies especially when:– Custormers already are, or have the risk to become heavy user of services.
– Customer needs help in selecting and coordinating services; and the service bundle includes
several different types of services.
– There is a need to support and encourage the use of privately funded or third sector
services.
– There are several service producers; competitive bidding and contracting would imply asubstantial administrative burden to the City.
– There is a neet to increase cooperation and mutual learning between private and public
service providers.

The Service Integrator model could be expanded from home care to other related
services– Day care / activities for elderly, short-term hospital care, medical service provided at home,
physiotherapy & rehabilitation;– Psychiatric care, care for substance abusers– Care for handicapped and vulnerable children.

20© Paul Lillrank 2014

WHERE FROM HERE?

Performance measurement
 Distinguish output and outcome metrics
 Better definition and quantification of outcomes – individualization?
 Tie incentives to outcomes.
Clarify the differences between integration and coordination
 Integrated (multi-perspective) care plans Coordinated processes.
Develop the service provider networks
 Administrative support for small entrepreneurs
 Franchising© Paul Lillrank 2014

KOTITORI SERVICE SOLUTIONSAppendixƵƐƚŽŵĞƌĂĚǀŝƐĞĂŶĚŐƵŝĚĂŶĐĞ
Advice about all servicesfor elderly(whole city)Customer guidance
andpreparation of care plan(for cathment
area)








ƌĞĂƚĞĂŶĚŵĂŶĂŐĞƐĞƌǀŝĐĞƉƌŽĚƵĐĞƌŶĞƚǁŽƌŬ
Competitive biddingQuality assurance of private
Management
producers’ network






,ŽŵĞĐĂƌĞŝŵƉƌŽǀĞŵĞŶƚMeasure productivity
and
outcome effectivenessManage improivement

teams



Information technology
consulting&development





23

© Paul Lillrank 2014

© Paul Lillrank 201424

WHAT IS A WELL-FUNCTIONING MARKET?

KOTITORI CONTRIBUTES TO IMPROVEMENT

Appendix25

Appendix
AREA

CHALLENGES

WHAT TO DO

Medication

 Medication consumes a lot of staff time Comprehensice evaluation of medication

 Manual administration often leads to Automatc dosage (dosett) Customers’ emotional response – are they satisfied?
 Expectations - exåeriences Care is co-production: customers have their responsibilities

quality issues
 Compounded effects of medication not Customers’ behavioral response – will they stay with us?

followed.

 “Repurchase with premium is the ultimate proof of customer satisfaction”

 Variety of available services

City internalbenchmarking

 Large differences between areas and Productivity comparisons between areasteams Difficult to identyfy best practices due toincompatible data

and teams
 Best practice description, analysis anddissemination

 Is demand and supply in balance?

Resourcing

 Inbalaces between areas
 Direct labor time not reported
 Staff plan and monitor work shifts
themselves

 Measurement and follow-up of work hours

 Are pirces and profits reasonable?

 Current reporting system gives little

 Develop reporting system for teamleaders

information about resources, capacity
utilization, and allocation.

and staff, focus on productivity andoutcomes.

 Does supply variety meet demand variety?
 Capacity utilization? Queues?

 Rsource allocation between aReas

 High profit: increased supply. Low profit: improvement and consolidation.

 Resourcing models per team

 Is the market liquid?
 Enough buyers and sellers. Flexibility

Monitoring andreporting Are customers sufficiently informed and capable to choose?
 Availability of comparative information?

 Regionality Sufficient regional coverage?

© Paul Lillrank 2014

© Paul Lillrank 2014

Discussion of Dr. Lillrank’s presentation&
Relevance to the Japanese System

September 28 2014
Michiko Moriyama, RN, Ph.D (Hiroshima University)
Hiroyuki Kawaguchi, Ph.D (Seijo University)
1

OutlineϨ. Characteristics of the KOTITORI Model
ϩ. Population Health Management (Super
Care Management/Advanced CareManagement) Model at Osaki-Kamishima
Ϫ. Disease Management Model at Kure City
ϫ. Future implementation in Japanese
Healthcare Policy
DM = Population-based management (resource allocation based on costeffectiveness)
CM = Individual-based management from the view point of DM, achieving the CM2target is the key to successϨ. Characteristics of the KOTITORI model
Private and independent positioned home caremanagement system described as a “Service Integrator

Model”

Free from conflict of interest between service providers
and service purchasers
One stop shopping function for end users (residents)
Advantage of being able to mutually select & contract withbest care providers from a variety of providers
Strengthened care management/competency ensured byworking as a team composed of both nursing & social
work
Focused on quality improvement/control & data utilization
Guaranteed accountability to the community (residents)
Need for IT and systems to collect data
Cost containment & improved productivity in home careϨ. Characteristics ofthe KOTITORI model in Finland

3

4

Consensus regarding issues in the Japanese
Healthcare system
Care managers are not independent from care providers(care managers work for the care providers)
9 Potential problem of “double agent” exists
9 1st Principal (residents) — Agent (care manager)
9 2nd Principal (service provider) — Agent (care manager)
Service selection bias may exist — providing services
from within an organization
Supplier induced demand may exist — Services areprovided for the economic benefit of the provider
Lack of accountability to explain the necessity ofservices provided to customers & lack of quality
improvement cycle (PDCA)
Quality differences between RN (nurse) care managers
and non-RN care managers
Care planning without disease management, especiallyafter discharge from hospital, if CM is non-RN
5ϩ. The Integrated Care Management Model
based on the Concept of Population-Based HealthManagement at Osaki-Kamishima-Super Care Manager Model(Advanced Care Management)

Overview of Osaki-Kamishima

Hiroshima
Prefecture

A remote island designated by law
Population 8,200 (40% decrease from 1985)- aged 65 and over: 3,616 䠄42.8䠂䠅
Total deaths: 165 (2012) Medical facilities
53.1%
Nursing homes
15.8%
Home
7.9%
5 Medical clinics
1 Home visit nurses station
1 Home help service station
1 Integrated Care Management Center + 3 Care Management Centers

Application of the concept of Population Health Management

ϩ. Super Care Management ModelAll residents approached by Population Health Management
Analyze health check-up data (metabolic screening exam)and medical claims data, plus physicians’ referralÎ residents stratified into 4 health risk groups
Super (advanced) care management to 1st level (highest) and2nd level population groups
Disease management to 3rd level group
Advanced Care Management: based on medical claims data frequent hospitalization, high (top level) medical costs,
unnecessary hospitalization, complicated healthcare needs
Super Care Manager’s function & quality= Advanced Practice Nurse + Advanced Case Manager
Public Health Nurses at Municipal Government collaborate
with outsourced nurses
8

Health Check-up Data
Medical Claims Data
Referral from Family Physicians

All community residents

Cost & Quality Control by
Municipal Government(Health Insurer)

Risk
Assessment^ƚƌĂƚŝĨŝĐĂƚŝŽŶďǇŚĞĂůƚŚƌŝƐŬƐEnd-of-Life
Care

Complication
Management

Treatmentof Diseases

High
Risks

Low Risks

Preventionof Deterioration

Disease Management
Care Management& Coordination

Healthy

HealthPromotion

Approach to
reduce health risks

Prevention of Deterioration to High-level Care
Disease Prevention Programs
Prevention of Social isolation — Network Building

End-of-life care

Chronic Care Disease Management Programs

Integrated
Community Care
SystemEnd-of- Fostering Caring Partners
Life Care Integrated Care Conference
Advance Care Planningat HomeAdvance Directive

Fostering Super CareManagers
Medical= Advanced Social Community
Monitoring
Nurses(Comprehensive & Advanced
Care Management)

Telenursing &Telemonitoring(continuous
observation)

DiseaseManagement
Health Promotion& Disease Prevention(Metabolic Screening Test
& Health Education)

Self-Management
Education Programs

Project Framework
Medical Assoc.

ŚƌŽŶŝĐĂƌĞDĂŶĂŐĞŵĞŶƚĞŶƚĞƌPromotion Committee

Service Providers

Municipal Gov.

Community Gp
Hiroshima Uni.
Com. Care Center

Advanced Care Management/
Quality Management (HealthOutsource Data Monitoring)/

Disease Management
Support Collaboration
Between Family Physicians &Specialists

Analysis of Health Data
Stratification

Municipal Gov.

NursesWƌŽǀŝĚŝŶŐWƌŽŐƌĂŵƐ/ƐŽůĂƚŝŽŶWƌĞǀĞŶƚŝŽŶEĞƚǁŽƌŬŽŵŵƵŶŝƚǇŶĞƚǁŽƌŬƐZĞƐŝĚĞŶƚƐ&ĂŵŝůǇWŚǇƐŝĐŝĂŶƐ,ĞĂůƚŚDŽŶŝƚŽƌŝŶŐ/ŶƚĞŐƌĂƚĞĚŽŵŵƵŶŝƚǇĂƌĞĞŶƚĞƌ

Dying at homeEnd-of-life careEƵƌƐŝŶŐ,ŽŵĞƐͬ>ŽŶŐͲƚĞƌŵĂƌĞŽŵŵƵŶŝƚǇDĞĚŝĐĂůWĂƚŚǁĂǇƐ;ŶĞƚǁŽƌŬŝŶŐͿŽŵŵƵŶŝƚǇZĞŚĂďŝůŝƚĂƚŝŽŶ,ŽƐƉŝƚĂůƐΘ^ƉĞĐŝĂůŝƐƚƐŽĨĨƚŚĞŝƐůĂŶĚ

Introduction of Advance Care Planning to Communities

ϩ. Super Care Management Model
Common Points in the KOTITORI model and the Super
Care Management Model#1 Independent CM Organization
эReal advocate for clients (address double agent risk)*
эEliminate care plan bias (curbing induced demand)#2 Advanced Quality (specialized quality: medical
professionals + knowledge of social resources䠅эnot only referral but also coordination andmanagement of allocated services㻌 эplus advanced assessment䠄especially DM)
Strength in Japan: Public Health Nurse system:well-prepared Municipal level long-term care infrastructure

Community
Education

Municipal
Government
Community
Announcement

How has your health been in recent days?

Advance
Care
Planning

Write AD

Advance
Directive
DNAR*Blomqvist (1991) “The doctors as double argent” J of HE
12

Order

Life Design Notebook
Including Advance Directive

Ϫ. Disease Management by Municipal
Government National Health Insurance
Health Insurer-Driven Tertiary Prevention- Dialysis prevention program forpatients with diabetic nephropathy

14
http://www.sangeniin.or.jp/

ᵩᶓᶐᶃᴾᵡᶇᶒᶗᵊᴾᵦᶇᶐᶍᶑᶆᶇᶋᵿᴾᵮᶐᶃᶄᶃᶁᶒᶓᶐᶃᴾ

Dialysis prevention program-Diabetic nephropathy disease management programKure City

Hiroshima
Prefecture

䞉Population㻌 䠎䠐䠎,䠎䠑䠎 䠄March 2012)㻌 aged over 䠒䠑: 䠓䠎,䠏䠏䠓䠄about 䠏䠌䠂䠅

䞉National Health Insured㻌 䠑䠑,䠍䠌䠑 䠄about 䠎䠏䠂䠅

Disease Management Company(DPP Health Partners, Co. Ltd.)

National Health Insurance
Select insured persons
diagnosed with diabetic
nephropathy
from Medical Claims data

Collaboration withPrimary Physicians(Kure Medical Association)

Disease Management Nurses

Nurse-led self-management skills acquisition
program (Disease Management Program)(6 months intervention)

Report㻌 aged over 䠒䠑: 䠎䠑,䠎䠏䠌䠄about 䠐䠒䠂䠅ĺMedical expenditure (2012) : 27 billion yen

Insured Person
Agreement to participate

16ᵲᶐᶃᶌᶂᴾᶇᶌᴾᶒᶆᶃᴾᶒᶍᶒᵿᶊᴾᶌᶓᶋᶀᶃᶐᴾᶍᶄᴾᶇᶌᶑᶓᶐᶃᶂᴾᶎᵿᶒᶇᶃᶌᶒᶑᴾᶕᶆᶍᴾᶐᶃᶏᶓᶇᶐᶃᶂᴾᶂᶇᵿᶊᶗᶑᶇᶑᴾ

Ϫ. Disease Management (DM) by Medical
Insurer䠄ே䠅

DM intervention significantly decreased the number of
insured persons who required dialysis (Medical effect is significant);
however, the effect on medical expenditure has not been
proven [Cannot conduct completely controlled trials. Intervention in 300 of 1300
(diabetic nephrology; about 20,000 had diabetes)]¾ HbA1c significantly decreased (diabetes improved)¾ eGFR (renal function) maintained¾ In the intervention group, no one required dialysis

¾
¾
¾
¾

decreased䟿

㻝㻤㻜
㻝㻢㻜

䠍䠑䠐

䠍䠑䠏

On-going⥅⥆
New dialysis
᪂つ

䠍䠑䠒
䠍䠏䠐

㻝㻠㻜

䠍䠎䠐

㻝㻞㻜
㻝㻜㻜
㻤㻜

Overseas: DM medical effects & cost effectivenesswas examined㻢㻜

Sidorov et al (2002) Diabetes CareNight et al (2005) The Ame J of Managed Care
Bruin et al (2011) Health Policy
Villagra and Ahmed (2014) Health Affairs

㻞㻜

㻝㻞㻥

㻝㻞㻤

㻝㻟㻜
㻝㻝㻠㻌

㻝㻜㻤㻌

㻠㻜

㻜

㻞㻡

㻞㻡

㻞㻢

㻞㻜

㻝㻢

2008
㻴㻞㻜ᖺᗘ

2009
㻴㻞㻝ᖺᗘ

2010
㻴㻞㻞ᖺᗘ

2011
㻴㻞㻟ᖺᗘ

2012
㻴㻞㻠ᖺᗘ

17
ͤ㻌 㞟ィ᮲௳䠖ேᕤ㏱ᯒ䜢䠎䛛᭶௨ୖ⥅⥆䛧䠈㞟ィᖺᗘᮎ䛻㈨᱁䜢᭷䛩䜛⪅䚹

18

Ϫ. Disease Management (DM) by Medical
Insurer
Differences between the KOTITORI model and the
Medical Insurer’s DM model (Kure model)
The KOTIORI model is a model of long-term careĺcan be applied to multiple complications & symptoms
in the elderlyĺSimilar to the Integrated Community Care System inJapanĺgood for LTC & Social Care Collaboration (not acute)
Kure model = DM Model by the insurerĺTarget population is high risk with diagnosed disease䠉Proper economic incentives for the “insurer” about
cost containment and for “insured” about maintaining
QOL㻌 㻌 ĺbut competition for patients among doctors under thefee-for-service payment system (free access ) could be
an obstacle
19

Need to Strengthen Functions of the Integrated
Care System in Japanϫ. Future implementation to
Healthcare Policies in Japan
Toward Integration of Care in the Settings ofChronic Stage Medical Care/Long-Term Careof the Elderly
20

9 Combination of Super Care Management (Advanced CM) 䠇regular CM
9 Need to discuss preparing Independent (free from conflict ofinterest) Advanced CM Organizations(1) Municipal Governments outsource Advanced CM to
Independent Organizations(2) Require Advanced Specialists [have to be in the medical(nursing) profession with knowledge of social resources]
9 Regular CM may focus on coordination, referral among careproviders, and care management of low risk clients
9 Municipal Governments need to activate & collaborate withsocial resources in the community
9 Municipalities outsource assessment of needs to Super CM
and outsource Quality Management/QI to Independent
21
Integrators

Discussion on Positioning of the DM & CCM
in the Japanese Health Care System
9 Integrated Community Care System is discussed as a
Chronic Care Model (CCM). It will improve quality of delivery
systems
9 Financially, risk of “soft budget” problems may exist(1) Based on social insurance system with tax-based subsidy(2) Poor or no risk equalization among social insurers andconsequently ambitious financial risk for insurers[ (3) Double agent risk of Regular Care Manager ]9 Widespread introduction of DM would contribute to budgetarycontrol for LTC cost
9 Social insurer with “fine risk adjustment” would have proper
incentive to perform DM and evaluate results by DM(1) Insurer has information for stratification of risk groups(2) DM would be effective in reducing expenses
22(3) DM will improve or maintain QOL of insured

Long-term Care in the Netherlands:
Towards Managed Competition?
Presentation at the International Symposium on “Integration and
Coordination of Long-term Care for the Elderly” (Tokyo, 2014).

Richard van Kleef
Erasmus University Rotterdam
vankleef@bmg.eur.nl

Outline

Dutch social health insurance scheme *Health Insurance Act (2006) for short-term care (i.e. <1 year)
 Coverage: e.g. primary care, hospital care and pharmaceutical care
 Financing: mandatory insurance for the entire population
Purchasers of care: insurers that are competing and bear financial risk
Delivery of care: healthcare providers that are competingTotal costs: almost 40 billion Euro per year (about 6.5% of GDP)

Exceptional Medical Expenses Act (1968) for long-term care (i.e. >1 year)

 Coverage: e.g. elderly care and care for mentally and physically disabled Financing: mandatory insurance for the entire population
Purchasers of care: entities that are NOT competing and bear NO financial risk
Delivery of care: healthcare providers that are competingTotal costs: almost 30 billion Euro per year (about 5% of GDP)

* For details see: Kleef, R.C. van. (2012). "Managed competition in the Dutch health care system:
Preconditions and experiences so far", Public Policy Review, 8: 171-190.

1.

Dutch social health insurance scheme in a nutshell

2.

Managed competition: what has been achieved?

3.

Managed competition: what has NOT been achieved?

4.

Preconditions for Managed competition

5.

Managed competition: an appropriate model for LTC?

6.

What are the alternatives?

Current procedures for long term care
Patient’s eligibility for LTC is assessed by an independent
Care Assessment Centre (CIZ)

Bottlenecks regarding long-term care±

No incentives for efficiency for purchasers of care (due toNO competition and NO financial risk)±

Incentives for undesirable substitution (e.g. from Health
Insurance Act to Exceptional Medical Expenses Act)±

Lack of opportunities for integration and coordination of
long-term care (LTC) and short-term care (STC)±

Different office desks / windows for LTC and STC±

Strong dependence on institutional care±

Health care benefits are not well targeted±

Increasing utilization due to aging of the population

Delivery in kind

Cash benefit

Care purchased by
one of 32 regionalpurchasing offices(who are notcompeting and bearno financial risk)(75% of costs of“delivery in kind”)
Care purchased bypatient him/herself

Dutch policy / political debate on LTC

Managed competition±

Consumers have a periodic choice among healthinsurers Æ competition among health insurers±

Insurers may selectively contract with providers
Æ competition among providers of care±

Government establishes certain rules toguarantee public objectives (e.g. universal
access to healthcare, risk solidarity and income
solidarity) Æ not a free market±

Yes/no transfer of (elements of) LTC to the Health
Insurance Act (i.e. to the Managed competition regime)?

±

Per 2015 district nursing (4 billion Euro) will betransferred to the Health Insurance Act already.

±A crucial question however is: “Is Managed competition
an appropriate model for LTC?”

Efficiency incentives via:

Universal access and solidarity via:

(With efficiency incentives I mean incentives tocontinuously improve quality and/or reduce costs.)±

Mandate to buy individual health insurance±

Broad coverage±

Open enrolment & community rating per health plan±

Subsidies for low- and middle income people±

Risk equalization±±

Standard benefit package: described in terms offunctions of care. This means that – while types ofcare in the benefit package are determined by thegovernment – the insurer is free to decide where,by whom and how the care is delivered.
Free consumer choice of insurer / health plan.

Managed competition: what has been achieved?
According to recent research “Evaluation of Dutch Health Care
Scheme” (Van Kleef, Schut and Van de Ven, 2014):

Purchasers of healthcare (i.e. insurers) are
increasingly successful in maintaining costs:±

Since 2008: reduction of (increase in) prices forpharmaceutical care and hospital care±

Since 2012: reduction of (increase in) volumes for
hospital care due to budget-contracts

Annual growth of healthcare expenses underthe Health Insurance Act (%)

Managed competition: what has NOT been achieved?
According to recent research “Evaluation of Dutch Health Care
Scheme” (Van Kleef, Schut and Van de Ven, 2014):
Purchasers of health care insurers are not (yet) successful inimproving/stimulating quality of care due to:±Insufficient incentives to improve quality of care±Insufficient instruments to stimulate quality of care

NB: These insufficient incentives and instruments are aconsequence of the fact that crucial preconditions forManaged competition have not been fulfilled (yet)To what extent are preconditions for MC fulfilled?
According to recent research “Evaluation of Dutch Health Care
Scheme” (Van Kleef, Schut and Van de Ven, 2014):

Evaluation of Risk Equalization Model of 2014
According to recent research “Evaluation of Dutch Health Care
Scheme” (Van Kleef, Schut and Van de Ven, 2014):
Subgroup based on health survey
information from the prior year

Estimatedsize inpopulation

Predictable
loss perperson peryear in euro’s-331

At least one chronic condition

31.5%

Worst score physical health (SF-12) c

18.9%

-670

Contact with medical specialist in last 12 months

37.8%

-326

Hospitalization in last 12 months

6.5%

-571

Use of physiotherapy in last 12 months

21.8%

-328

Use of prescribed drugs in last 14 days

35.7%

-186

Precondition

2006

2009

2014

1. Risk solidarity without incentives for risk selection
xRisk solidarity
xSufficient risk equalizationxNo incentives for risk selection

*****
**
**

*****
**
**

*****
***
**

2. Transparency and consumer information
xHealth insurance products
xHealthcare products

**
*

***
*

***
**

3. Appropriate incentives for cost containment
xConsumers
xHealth insurers
xHealthcare providers

**
**
*

**
***
*

***
****
**

4. Sufficient freedom of choice for consumers

***

***

***

To what extent are preconditions for MC fulfilled?
According to recent research “Evaluation of Dutch Health Care
Scheme” (Van Kleef, Schut and Van de Ven, 2014):

What is needed to reap the fruits of MC for

short-term care (Health Insurance Act)?
According to Van Kleef et al. (2014) the most urgent measures are:

Reducing incentives for risk selection (preferably by improving
the risk equalization system)
Improving transparency of quality of healthcare products (bydeveloping practical sets of quality indicators)
Improving efficiency incentives for healthcare providers (e.g.
by developing practical outcome-based payment schemes)
Applying more stringent anti-trust policy

Precondition

2006

2009

2014

5. Contestable markets
xHealth insurers
xHealthcare providers

***
*

***
**

***
***

***

6. Sufficient contracting freedom***

7. Effective anti-trust policy

***

***

**

8. No possibilities for free-riding

**

**

***

9. Sufficient supervision of quality

***

***

***

10. Guaranteed access to healthcare

***

***

****

Can MC be a successful model for LTC?

Sufficient risk equalization for LTC?
In general, risk equalization for LTC is (far) more
complicated than for short-term care since:±Relatively small group of users…
±… with relatively high costs…
±… that are relatively predictable…
±… by variables, however, that are inappropriate forserving as risk adjusters in risk equalization.
If sufficient risk equalization for LTC is not possible,
what will be the motive for insurers to invest in thequality and service levels of LTC?

±

ALL PREVIOUS PRECONDITIONES AND
BOTTLENECKS ALSO HOLD FOR LTC!

±

In addition there are fundamental issues:
1.

Is it possible to organize sufficient risk
equalization for LTC?

2.

Are users of LTC able to vote by foot?

3.

Are non-users interested in LTC?

Moreover
The risk equalization model for short termcare leads to a predictable loss of about 400
euro per person per year for individuals who
used LTC in the previous year ** Source: Tweede Kamer (2012) Herziening zorgstelsel. Brief regering;
Risicoverevening, 29689(380), Bijlage 157337.

So, what will be the motive for insurers to invest in thequality and service levels of LTC?

Can users of LTC vote by feet?
How about people suffering from dementia?
How about people suffering from drug addiction?
How about the mentally disabled?

How about people suffering from psychiatric diseases?
If not, what will be the motive for insurers to invest in thequality and service levels of LTC?

Are non-users interested in LTC?
For the vast majority of the population the probability of
LTC-use (in the near future) is relatively low.

This raises the question whether this majority will beinterested in (quality and service level of) LTC whenchoosing their health plan.
If not, what will be the motive for insurers to invest in thequality and service levels of LTC?

What are the alternatives?
Next to the transfer of LTC to the Health Insurance Act,two alternative options are considered:

1.Transfer of LTC from central to local governments.
2.Maintaining LTC in Exceptional Medical Expenses Act

Transfer of LTC to local governments
Advantages (compared to alternatives):
Integration with other (LTC-related) local services
No risk selection problems
Voting by foot not necessary (instead: democratic process)Disadvantages (compared to alternatives):
Integration with short-term care more difficult
Potential regional differences in quality/service
Less freedom of choice for patients

Crucial requirements:
Risk equalization for municipalities
Municipalities must be equipped for this “new” task

Recent experiences withdecentralization
Decentralization of “home help” in 2007 has reduced costsBecause of non-earmarked budgets, municipalities bearfinancial risk on home help.
The resulting spur in competition has helped reducing the
average price of an hour of home help by more than 20%
Overall municipalities saved 150 million out of 1.2 billion.

Effects on quality of care are not really clear
Source: OECD Economic Surveys: The Netherlands (2012)

Maintaining LTC in Exceptional Medical Expenses Act
Advantages (compared to alternatives):
Voting by foot not necessaryBasically, same quality/services for allRisk equalization not necessaryNo risk selection problems
Disadvantages: see slide 5 “Bottlenecks regarding LTC”
When LTC is maintained in Exceptional Medical Expenses
Act payment reforms are needed to avoid current bottlenecks.
An interesting direction could be “pay-for-performance”.

Less fundamental changes
1. Separating financing of “care” and “housing” (in effect)
 The Netherlands have been quite unique infinancing not only “care” from the LTC budget, butalso “housing costs” for institutionalized patients
2. From cash benefits to vouchers (proposed)
 To avoid problems of “inappropriate use”
3. Health savings accounts (proposed)

Lessons from the Netherlands
 For short term care (i.e. <1 year) Managed competition
has reduced healthcare costs (growth), but has NOT yet
been effective in improving/stimulating quality of care.
 Crucial preconditions must be fulfilled for successful
application of the Managed competition model Fulfillment of some of these requirements is far more
complicated for LTC than for STC
 However, also alternatives (i.e. decentralization andmaintaining LTC in EMEA) are not without disadvantages

 So the key question in the Dutch debate on LTC seems to
be: “Who should be the purchaser of care?”7KHORQJWHUPFDUH /7& RIWKH
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38.8

40.0

39.4

39.9

27.0

27.2

37.7
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35.0

33.4
31.6
30.3
29.1

30.0
26.8
25.0

26.2

27.0

27.0

26.9

24.3
23.0

22.0
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20.0

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17.9

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13.5

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11.5

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5.0

10.4

9.4

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15.2

4.0

4.4

4.9

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2015

2020

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LTC

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:KDWLVWKH/7&RIWKH1HWKHUODQGV" 㼃㼔㼛㻌㼍㼟㼟㼑㼟㼟㻌㼠㼔㼑㻌㼚㼑㼑㼐㼟㻌㼛㼒㻌㼏㼍㼞㼑㻫㻌㻌㻌㻯㼍㼞㼑㻌㼍㼟㼟㼑㼟㼟㼙㼑㼚㼠㻌㻯㼑㼚㼠㼑㼞㻔㻯㻵㼆㻕㻧㻌㼠㼔㼕㼟㻌㼕㼟㻌㼍㼚㻌㼍㼓㼑㼚㼏㼥㻌㼛㼒㻌㼠㼔㼑㻌㼏㼑㼚㼠㼞㼍㼘㻌㼓㼛㼢㼑㼞㼚㼙㼑㼚㼠㻚㻌㻴㼛㼣㻌㼕㼟㻌㼠㼔㼑㻌㼒㼍㼕㼞㼚㼑㼟㼟㻌㼛㼒㻌㼍㼟㼟㼑㼟㼟㼙㼑㼚㼠㻌㼓㼡㼍㼞㼍㼚㼠㼑㼑㼐㻫㻌㻌㻌 㻮㼑㼚㼑㼒㼕㼠㼟㻌㻌㼎㼛㼠㼔㻌㼕㼚㻙㼗㼕㼚㼐㻌㼍㼚㼐㻌㼏㼍㼟㼔㻧㻌㼏㼍㼟㼔㻌㼎㼑㼚㼑㼒㼕㼠㼟㻌㼕㼟㻌㻣㻡㻑㻌㼛㼒㻌㼠㼔㼑㻌㼕㼚㻙㼗㼕㼚㼐㻌㼏㼍㼟㼑㻌㻌 㻼㼑㼞㼟㼛㼚㼍㼘㻌㼏㼍㼞㼑㻌㼎㼡㼐㼓㼑㼠㼟㻌㻌㻌㻌㻌㻌㻌㻌㼍㼚㻌㼛㼜㼠㼕㼛㼚㻌㼠㼛㻌㼎㼡㼥㻌㼟㼑㼞㼢㼕㼏㼑㼟㻌㼛㼒㻌㼏㼛㼚㼟㼡㼙㼑㼞㼟䇻㻌㼛㼣㼚㻌㼏㼔㼛㼕㼏㼑㻌㼕㼚㼟㼠㼑㼍㼐㻌㻌㻌㻌㻌㻌㻌㻌㼛㼒㻌㼏㼛㼚㼠㼞㼍㼏㼠㼑㼐㻌㼟㼑㼞㼢㼕㼏㼑㼟㻌㼛㼒㻌㼠㼔㼑㻌㻸㼀㻯㻧㻌㻌㼑㼚㼏㼛㼡㼞㼍㼓㼑㼐㻌㼠㼔㼑㻌㼡㼟㼑㻌㼛㼒㻌㻌㻌㻌㻌㻌㻌㻌㻌㼕㼚㼒㼛㼞㼙㼍㼘㻌㻔㼔㼛㼙㼑㻌㼏㼍㼞㼑㻕㻌㼏㼍㼞㼑㻌㼍㼟㻌㼍㼚㻌㼍㼘㼠㼑㼞㼚㼍㼠㼕㼢㼑㻌㼛㼒㻌㼒㼛㼞㼙㼍㼘㻌㻔㼕㼚㼟㼠㼕㼠㼡㼠㼕㼛㼚㼍㼘㻕㻌㻌㻌㻌㻌㻌㻌㼏㼍㼞㼑㻧㻌㻌㼍㼘㼟㼛㻌㼟㼡㼎㼟㼠㼕㼠㼡㼠㼑㼐㻌㼜㼍㼕㼐㻌㼕㼚㼒㼛㼞㼙㼍㼘㻌㼟㼑㼞㼢㼕㼏㼑㼟㻌㼒㼛㼞㻌㼡㼚㼜㼍㼕㼐㻌㻔㼑㻚㼓㻚㻘㻌㻌㻌㻌㻌㻌㼒㼍㼙㼕㼘㼥㻕㻌㼟㼑㼞㼢㼕㼏㼑㼟㻌㻌㻌 㻢㻌:KDWDUHWKHSUREOHPV" 㻴㼕㼓㼔㻌㼏㼛㼟㼠㼟㻌㼛㼒㻌㼠㼔㼑㻌㻸㼀㻯㻌㻌㼎㼡㼠㻌㼣㼔㼥㻌㼕㼟㻌㼠㼔㼕㼟㻌㼠㼔㼑㻌㼏㼍㼟㼑㻌㼕㼚㻌㼠㼔㼑㻌㻺㼑㼠㼔㼑㼞㼘㼍㼚㼐㼟㻫㻌㻌㻌㻌㻌㻌㼐㼡㼑㻌㼠㼛㻌㼠㼔㼑㻌㼑㼤㼜㼍㼚㼟㼕㼛㼚㻌㼛㼒㻌㼟㼑㼞㼢㼕㼏㼑㼟㻘㻌㼜㼑㼞㼟㼛㼚㼍㼘㻌㼎㼡㼐㼓㼑㼠㼟㻘㻌㼕㼚㼟㼠㼕㼠㼡㼠㼕㼛㼚㼍㼘㻌㼏㼍㼞㼑㻫㻌㻌㻌 㻌㻯㼛㼟㼠㼟㻌㼍㼞㼑㻌㼚㼛㼠㻌㼞㼕㼓㼔㼠㼘㼥㻌㼜㼑㼞㼏㼑㼕㼢㼑㼐㻌㼎㼥㻌㼑㼕㼠㼔㼑㼞㻌㼙㼡㼚㼕㼏㼕㼜㼍㼘㼕㼠㼕㼑㼟㻌㼛㼞㻌㻌㻌㼕㼚㼟㼡㼞㼑㼞㼟㻧㻌㼙㼡㼚㼕㼏㼕㼜㼍㼘㼕㼠㼕㼑㼟㻌㼛㼜㼑㼞㼍㼠㼑㻛㼛㼒㼒㼑㼞㻌㼟㼑㼞㼢㼕㼏㼑㼟㻌㼒㼞㼛㼙㻌㼠㼔㼑㻌㻌㻌㼎㼡㼐㼓㼑㼠㻌㼓㼕㼢㼑㼚㻌㼎㼥㻌㼠㼔㼑㻌㼏㼑㼚㼠㼞㼍㼘㻌㼓㼛㼢㼑㼞㼚㼙㼑㼚㼠㻘㻌㼍㼚㼐㻌㼠㼑㼚㼐㻌㼠㼛㻌㻌㻌㼜㼍㼟㼟㻌㼑㼤㼜㼑㼚㼟㼕㼢㼑㻌㼜㼍㼠㼕㼑㼚㼠㼟㻌㼠㼛㻌㻭㼃㻮㼆㻌㻌㻌㻌㻌㻌㻌㻸㼕㼗㼑㼣㼕㼟㼑㻌㼞㼑㼓㼕㼛㼚㼍㼘㻌㼜㼡㼞㼏㼔㼍㼟㼑㼞㼟㻌㼔㼍㼢㼑㻌㼚㼛㻌㼟㼠㼞㼛㼚㼓㻌㼕㼚㼏㼑㼚㼠㼕㼢㼑㼟㻌㼠㼛㻌㻌㼙㼕㼚㼕㼙㼕㼦㼑㻌㼏㼛㼟㼠㼟㻚㻌㻌 㻌㻯㼍㼞㼑㻙㼚㼑㼑㼐㻌㼍㼟㼟㼑㼟㼟㼙㼑㼚㼠㻌㻌㻺㼛㼠㻌㼟㼠㼞㼕㼏㼠㼘㼥㻌㼍㼟㼟㼑㼟㼟㼑㼐㻘㻌㼍㼚㼐㻌㼠㼔㼛㼟㼑㻌㼣㼔㼛㻌㼍㼞㼑㻌㼚㼛㼠㻌㼑㼘㼕㼓㼕㼎㼘㼑㻌㼙㼍㼥㻌㼔㼍㼢㼑㻌㼍㼏㼏㼑㼟㼟㻌㼠㼛㻌㼠㼔㼑㻌㻸㼀㻯㻌㻌㻌㻌㻌㻌㻖㻌㻶㼍㼜㼍㼚㼑㼟㼑㻌㻸㼀㻯㻌㼕㼚㼟㼡㼞㼍㼚㼏㼑㻌㼒㼕㼞㼟㼠㻌㼠㼑㼟㼠㼟㻌㼠㼔㼑㻌㼑㼘㼕㼓㼕㼎㼕㼘㼕㼠㼥㻌㼍㼚㼐㻌㼟㼑㼏㼛㼚㼐㼘㼥㻌㼏㼘㼍㼟㼟㼕㼒㼥㻌㼏㼘㼕㼑㼚㼠㼟㻌㻌㻌㻌㻌㻌㻌㻌㼍㼏㼏㼛㼞㼐㼕㼚㼓㻌㼠㼛㻌㼠㼔㼑㻌㼚㼑㼏㼑㼟㼟㼕㼠㼥㻌㻛㼚㼍㼠㼡㼞㼑㻌㼛㼒㻌㼏㼍㼞㼑㻌㻌㻌 㻌㻯㼍㼟㼔㻌㼎㼑㼚㼑㼒㼕㼠㼟㻌㻌㼕㼚㼏㼞㼑㼍㼟㼑㼐㻌㼢㼑㼞㼥㻌㼟㼔㼍㼞㼜㼘㼥㻌㻌㻌㻌㻌㻌㻌㻌㻖㻌㼍㼚㻌㼕㼐㼑㼍㻌㼛㼒㻌㼞㼑㼒㼛㼞㼙㻫㻦㻌㻌㼙㼍㼗㼑㻌㼕㼠㻌㼍㼢㼍㼕㼘㼍㼎㼘㼑㻌㼛㼚㼘㼥㻌㼠㼛㻌㼕㼚㼟㼠㼕㼠㼡㼠㼕㼛㼚㼍㼘㻌㼏㼍㼞㼑㻌㼞㼑㼏㼑㼕㼢㼑㼞㼟㻌㻣㻌:KDWWRGRZLWKWKH/7&" 㻌㻯㼛㼟㼠㼟㻌㼔㼍㼟㻌㼠㼛㻌㼎㼑㻌㼜㼑㼞㼏㼑㼕㼢㼑㼐㻌㼏㼛㼞㼞㼑㼏㼠㼘㼥㻌㼎㼥㻌㼕㼚㼟㼡㼞㼑㼞㼟㻌㼍㼚㼐㻌㼙㼡㼚㼕㼏㼕㼜㼍㼘㼕㼠㼕㼑㼟㻌㻌㻌㻼㼍㼏㼗㼍㼓㼑㻌㼛㼒㻌㼞㼑㼒㼛㼞㼙㻌㼛㼒㻌㼠㼔㼑㻌㻸㼀㻯㻦㻌㻻㻱㻯㻰㻌㻱㼏㼛㼚㼛㼙㼕㼏㻌㻿㼡㼞㼢㼑㼥㻌㼛㼒㻌㼠㼔㼑㻌㻺㼑㼠㼔㼑㼞㼘㼍㼚㼐㼟㻘㻌㻞㻜㻝㻞㻌㻌㻌䞉㻌㻾㼑㼔㼍㼎㼕㼘㼕㼠㼍㼠㼕㼛㼚㻌㼏㼍㼞㼑㻌㼕㼟㻌㼠㼍㼗㼑㼚㻌㼏㼍㼞㼑㻌㼛㼒㻌㼎㼥㻌㼠㼔㼑㻌㼔㼑㼍㼘㼠㼔㻌㼕㼚㼟㼡㼞㼍㼚㼏㼑㻌㻌䞉㻌㻻㼠㼔㼑㼞㻌㼕㼚㼟㼠㼕㼠㼡㼠㼕㼛㼚㼍㼘㻌㼏㼍㼞㼑㻌㼍㼚㼐㻌㼜㼑㼞㼟㼛㼚㼍㼘㻛㼚㼡㼞㼟㼕㼚㼓㻌㼏㼍㼞㼑㻌㼍㼞㼑㻌㻌 㻌 㻌 㻌㼙㼍㼚㼍㼓㼑㼐㻌㼎㼥㻌㼕㼚㼐㼕㼢㼕㼐㼡㼍㼘㻌㼔㼑㼍㼘㼠㼔㻌㼕㼚㼟㼡㼞㼑㼞㼟㻌㼕㼚㼟㼠㼑㼍㼐㻌㼛㼒㻌㼞㼑㼓㼕㼛㼚㼍㼘㻌㻌㻌㻌㻌㻌㻌㻌㻌㻌㼜㼡㼞㼏㼔㼍㼟㼑㼞㼟㻘㻌㻌㻌㻌㻌㻌㻌㻌䞉㻌㻴㼛㼙㼑㻌㼏㼍㼞㼑㻌㻔㼍㼟㼟㼕㼟㼠㼍㼚㼏㼑㻌㼚㼡㼞㼟㼕㼚㼓㻌㼏㼍㼞㼑㻌㼍㼚㼐㻌㼏㼍㼞㼑㻌㼒㼛㼞㻌㼥㼛㼡㼚㼓㻌㻌㻌㻌㻌㻌㻌㻌㼣㼕㼠㼔㻌㼘㼕㼓㼔㼠㻌㼙㼑㼚㼠㼍㼘㻌㼔㼍㼚㼐㼕㼏㼍㼜㻕㻌㻌㼣㼕㼘㼘㻌㼎㼑㻌㼐㼑㼏㼑㼚㼠㼞㼍㼘㼕㼦㼑㼐㻌㼠㼛㻌㻌㻌㻌㻌㻌㻌㼙㼡㼚㼕㼏㼕㼜㼍㼘㼕㼠㼕㼑㼟㻚㻌㻌 㻌㻱㼚㼔㼍㼚㼏㼕㼚㼓㻌㼠㼔㼑㻌㼏㼔㼛㼕㼏㼑㻌㼛㼒㻌㼕㼚㼐㼕㼢㼕㼐㼡㼍㼘㼟㻛㻌㼏㼘㼕㼑㼚㼠㼟㻌㻌㻌㻌㻌䇾㻌㼞㼑㼜㼘㼍㼏㼑㼙㼑㼚㼠㻌㼛㼒㻌㼜㼞㼛㼢㼕㼐㼑㼞㻙㼎㼍㼟㼑㼐㻌㼎㼡㼐㼓㼑㼠㼕㼚㼓㻌㼎㼥㻌㼏㼘㼕㼑㼚㼠㻙㼎㼍㼟㼑㼐㻌㼎㼡㼐㼓㼑㼠㼕㼚㼓䇿㻌㻔㻿㼔㼡㼠㻌㼍㼚㼐㻌㼢㼍㼚㻌㼐㼑㼚㻌㻮㼑㼞㼓㻘㻌㻞㻜㻝㻜㻕㻧㻌㻌㼟㼕㼙㼜㼘㼥㻌㼜㼡㼠㻘㻌㼕㼚㼠㼞㼛㼐㼡㼏㼕㼚㼓㻌㼍㻌㼢㼛㼡㼏㼔㼑㼞㻌㼠㼥㼜㼑㻌㼕㼚㼐㼕㼢㼕㼐㼡㼍㼘㻌㼜㼡㼞㼏㼔㼍㼟㼑㻌㼛㼒㻌㼟㼑㼞㼢㼕㼏㼑㼟㻫㻌㻌 㻤㻌

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E\0DGHORQ.URQHPDQ` 㼀㼔㼑㻌㻞㻜㻝㻡㻌㼞㼑㼒㼛㼞㼙㻌㼛㼒㻌㻸㼀㻯㻌㻌㻌
9 㻺㼛㼚㻙㼞㼑㼟㼕㼐㼑㼚㼠㼕㼍㼘㻌㼏㼍㼞㼑㻌㻔㼏㼍㼞㼑㻌㼍㼠㻌㼔㼛㼙㼑㻕㻦㻌㼔㼛㼙㼑㻌㼔㼑㼘㼜㻘㻌㼠㼞㼍㼚㼟㼜㼛㼞㼠㼍㼠㼕㼛㼚㻌㼟㼡㼜㼜㼛㼞㼠㻌㼍㼚㼐㻌㼔㼛㼡㼟㼑㻌㼍㼐㼖㼡㼟㼠㼙㼑㼚㼠㼟㻫㻌㼍㼞㼑㻌㼠㼞㼍㼚㼟㼒㼑㼞㼞㼑㼐㻌㼠㼛㻌㼙㼡㼚㼕㼏㼕㼜㼍㼘㼕㼠㼕㼑㼟㻌㼍㼚㼐㻌㼍㼐㼐㼑㼐㻌㼠㼛㻌㻿㼛㼏㼕㼍㼘㻌㻿㼡㼜㼜㼛㼞㼠㻌㻭㼏㼠㻌㻔㼃㼙㼛㻕㻌
9 㻌㻴㼛㼙㼑㻌㼚㼡㼞㼟㼕㼚㼓㻌㼘㼕㼗㼑㻌㼜㼞㼕㼙㼍㼞㼥㻌㼏㼍㼞㼑㻌㼛㼒㻌㻳㻼㼟㻌㼣㼕㼘㼘㻌㼎㼑㻌㼕㼚㼏㼘㼡㼐㼑㼐㻌㼕㼚㻌㻴㼑㼍㼘㼠㼔㻌㻵㼚㼟㼡㼞㼍㼚㼏㼑㻌㻭㼏㼠㻌㻌㻌㻌䇾㼔㼛㼙㼑㻌㼚㼡㼞㼟㼑㼟㻌㼏㼛㼙㼎㼕㼚㼑㻌㼠㼔㼑㼕㼞㻌㼙㼑㼐㼕㼏㼍㼘㻌㼠㼍㼟㼗㼟㻌㼣㼕㼠㼔㻌㼕㼙㼜㼞㼛㼢㼕㼚㼓㻌㻌㻌㻌㻌㼠㼔㼑㻌㼏㼛㼔㼑㼟㼕㼛㼚㻌㼎㼑㼠㼣㼑㼑㼚㻌㼜㼞㼑㼢㼑㼚㼠㼕㼛㼚㻘㻌㼏㼍㼞㼑㻘㻌㼣㼑㼘㼘㻙㼎㼑㼕㼚㼓㻌㼍㼚㼐㻌㻌㻌㻌㻌㼔㼛㼡㼟㼕㼚㼓䇿㻌
9 㻾㼑㼟㼕㼐㼑㼚㼠㼕㼍㼘㻌㻸㼀㻯㻦㻌㻌㼣㼕㼘㼘㻌㼎㼑㻌㼜㼞㼛㼢㼕㼐㼑㼐㻌㼡㼚㼐㼑㼞㻌㼠㼔㼑㻌㼚㼑㼣㻌㻸㼀㻯㻌㻭㼏㼠㻌㻔㼃㼘㼦㻕㻘㻌㼣㼔㼕㼏㼔㻌㼞㼑㼜㼘㼍㼏㼑㼟㻌㼠㼔㼑㻌㻭㼃㻮㼆㻌㻌㻌 㻥㻌

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:KHUHGRHVWKH'XWFK/7&JR" 㻌㻯㼛㼙㼜㼍㼞㼕㼚㼓㻌㼠㼔㼑㻌㻰㼡㼠㼏㼔㻌㻸㼀㻯㻌㼣㼕㼠㼔㻌㻺㼛㼞㼐㼕㼏㻘㻌㻳㼑㼞㼙㼍㼚㻌㼍㼚㼐㻌㻶㼍㼜㼍㼚㼑㼟㼑㻌㻸㼀㻯㻌㻌㻌㻌㻌㻺㼛㼞㼐㼕㼏㻌㼏㼍㼟㼑㻦㻌㻌㼔㼑㼍㼘㼠㼔㻌㼏㼍㼞㼑㻌㼍㼚㼐㻌㻸㼀㻯㻌㼍㼞㼑㻌㼞㼑㼟㼜㼑㼏㼠㼕㼢㼑㼘㼥㻌㼛㼒㼒㼑㼞㼑㼐㻌㻌㻌㻌㻌㻌㼍㼚㼐㻌㼙㼍㼚㼍㼓㼑㼐㻌㼎㼥㻌㼜㼞㼛㼢㼕㼚㼏㼑㼟㻌㼍㼚㼐㻌㼙㼡㼚㼕㼏㼕㼜㼍㼘㼕㼠㼕㼑㼟㻧㻌㼍㼚㼐㻌㼠㼔㼑㻌㻌㻌㻌㻌㼏㼛㼟㼠㼟㻌㼍㼞㼑㻌㼜㼍㼕㼐㻌㼎㼥㻌㼠㼍㼤㼑㼟㻘㻌㼞㼑㼟㼡㼘㼠㼕㼚㼓㻌㼕㼚㻌㼟㼑㼞㼢㼕㼏㼑㻙㼞㼍㼠㼕㼛㼚㼕㼚㼓㻌㻌㻌㻌㻌㻳㼑㼞㼙㼍㼚㻌㼏㼍㼟㼑㻦㻌㼔㼑㼍㼘㼠㼔㻌㼏㼍㼞㼑㻌㼍㼚㼐㻌㻸㼀㻯㻌㼍㼞㼑㻌㼎㼛㼠㼔㻌㼛㼒㼒㼑㼞㼑㼐㻌㼎㼥㻌㻌㻌㻌㻌㼟㼛㼏㼕㼍㼘㻌㼕㼚㼟㼡㼞㼍㼚㼏㼑㼟㻧㻌㼟㼑㼞㼢㼕㼏㼑㼟㻌㼍㼞㼑㻌㼎㼍㼟㼕㼏㼍㼘㼘㼥㻌㼜㼞㼛㼢㼕㼐㼑㼐㻌㼡㼜㻌㼠㼛㻌㻌㻌㻌㻌㼠㼔㼑㻌㼘㼑㼢㼑㼘㻛㼝㼡㼍㼚㼠㼕㼠㼥㻌㼠㼔㼍㼠㻌㼏㼍㼚㻌㼎㼑㻌㼜㼍㼕㼐㻌㼎㼥㻌㼕㼚㼟㼡㼞㼍㼚㼏㼑㻌㻌㻌㻌㻌㻌㼜㼞㼑㼙㼕㼡㼙㼟㻌㻌㻌㻌㻌㻌㻶㼍㼜㼍㼚㼑㼟㼑㻌㼏㼍㼟㼑㻦㻌㼑㼤㻙㼜㼛㼟㼠㻌㻔㼚㼛㼚㻌㼞㼕㼟㼗㻙㼍㼐㼖㼡㼟㼠㼑㼐㻕㻌㼍㼚㼐㻌㼔㼥㼎㼞㼕㼐㻌㼒㼕㼚㼍㼚㼏㼕㼚㼓㻌㼛㼒㻌㻌㻌㻌㻌㻌㻌㻌㼔㼑㼍㼘㼠㼔㻌㼏㼍㼞㼑㻌㼍㼚㼐㻌㻸㼀㻯㻌㼎㼥㻌㼕㼚㼟㼡㼞㼍㼚㼏㼑㻌㼜㼞㼑㼙㼕㼡㼙㼟㻌㼍㼚㼐㻌㼠㼍㼤㼑㼟㻧㻌㻌㻌㻌㻌㻌㻌㻌㻌㼔㼑㼍㼘㼠㼔㻙㼏㼍㼞㼑㻌㼏㼛㼟㼠㼟㻌㼍㼞㼑㻌㼏㼛㼚㼠㼞㼛㼘㼘㼑㼐㻌㼎㼥㻌㼓㼛㼢㼑㼞㼚㼙㼑㼚㼠㻙㼟㼑㼠㻌㼜㼞㼕㼏㼑㼟㻌㼍㼚㼐㻌㻌㻌㻌㻌㻌㻌㻌㻸㼀㻯㻌㼏㼛㼟㼠㼟㻌㼍㼞㼑㻌㼟㼛㼡㼓㼔㼠㻌㼠㼛㻌㼎㼑㻌㼏㼛㼚㼠㼞㼛㼘㼘㼑㼐㻌㼎㼥㻌㼘㼕㼙㼕㼠㼕㼚㼓㻌㼠㼔㼑㻌㼟㼡㼜㼜㼘㼥㻌㼛㼒㻌㻌㻝㻜㻌㻌㻌㻌㻌㻌㻌㼒㼛㼞㼙㼍㼘㻛㼕㼚㼟㼠㼕㼠㼡㼠㼕㼛㼚㼍㼘㻌㼏㼍㼞㼑㻌

:KHUHGRHVWKH'XWFK/7&JR"㻵㼚㻌㼏㼛㼙㼜㼍㼞㼕㼟㼛㼚㻌㼛㼒㻌㼠㼔㼑㻌㼠㼔㼞㼑㼑㻌㼏㼍㼟㼑㼟㻘㻌㻌㼣㼔㼑㼞㼑㻌㼐㼛㼑㼟㻌㼠㼔㼑㻌㻰㼡㼠㼏㼔㻌㻸㼀㻯㻌㼣㼍㼚㼠㻌㼠㼛㻌㼓㼛㻫㻌㻌
¾ 㼃㼍㼚㼠㻌㼠㼛㻌㼟㼠㼍㼥㻌㼟㼛㼏㼕㼍㼘㻌㼕㼚㼟㼡㼞㼍㼚㼏㼑㻌㼜㼞㼕㼚㼏㼕㼜㼘㼑㻌㼍㼚㼐㻌㼠㼛㻌㼕㼚㼠㼞㼛㼐㼡㼏㼑㻌㻌㻌㻌㻌㻌㼏㼛㼚㼟㼡㼙㼑㼞㻛㻌㼏㼘㼕㼑㼚㼠㼟㻌㼏㼔㼛㼕㼏㼑㼟㻌㼍㼚㼐㻌㼠㼔㼑㻌㼏㼛㼙㼜㼑㼠㼕㼠㼕㼛㼚㻌㼍㼙㼛㼚㼓㻌㻌㻌㻌㻌㼕㼚㼟㼡㼞㼑㼞㼟㻫㻌㻌㻭㼞㼑㻌㼠㼔㼑㼟㼑㻌㼡㼚㼕㼝㼡㼑㻌㼒㼑㼍㼠㼡㼞㼑㼟㻌㼛㼒㻌㼠㼔㼑㻌㻰㼡㼠㼏㼔㻌㼣㼍㼥㻫㻌㻌㻌㻌㻌㻌㻵㼒㻌㼑㼘㼟㼑㻘㻌㼣㼔㼍㼠㻌㼍㼞㼑㻌㼠㼔㼑㼥㻫㻌㻌
¾ 㻿㼔㼛㼡㼘㼐㻌㼏㼡㼞㼍㼠㼕㼢㼑㻌㼟㼑㼞㼢㼕㼏㼑㼟㻌㻔㼔㼑㼍㼘㼠㼔㻌㼏㼍㼞㼑㻕㻌㼍㼚㼐㻌㻸㼀㻯㻌㼟㼑㼞㼢㼕㼏㼑㼟㻌㻔㼑㻚㼓㻘㻌㼚㼡㼞㼟㼕㼚㼓㻌㼏㼍㼞㼑㻌㼒㼛㼞㻌㼠㼔㼑㻌㼛㼘㼐㻕㻌㼎㼑㻌㼕㼚㼠㼑㼓㼞㼍㼠㼑㼐㻌㼛㼞㻌㼟㼑㼜㼍㼞㼍㼠㼑㼐㻫㻌㻌㻌㻭㼞㼑㻌㼏㼡㼞㼍㼠㼕㼢㼑㻌㼟㼑㼞㼢㼕㼏㼑㼟㻌㼙㼕㼚㼕㼙㼕㼦㼑㼐㻌㼕㼚㻌㼠㼔㼑㻌㻸㼀㻯㻘㻫㻌㻹㼛㼞㼑㻌㼠㼑㼏㼔㼚㼕㼏㼍㼘㼘㼥㻘㻌㼐㼛㼑㼟㻌㻸㼀㻯㻌㻌㼙㼑㼍㼚㻌㼟㼑㼜㼍㼞㼍㼠㼑㼐㻘㻌㼠㼔㼑㼞㼑㼒㼛㼞㼑㻌㼐㼕㼒㼒㼑㼞㼑㼚㼠㻘㻌㼟㼑㼞㼢㼕㼏㼑㼟㻌㼒㼞㼛㼙㻌㼔㼑㼍㼘㼠㼔㻌㼏㼍㼞㼑㻫㻌㻌㻝㻝㻌

:KHUHGRHVWKH'XWFK/7&JR"` 㻴㼛㼣㻌㼍㼞㼑㻌㼠㼔㼑㻌㼜㼛㼛㼞㻌㼕㼚㻌㼠㼔㼑㻌㻰㼡㼠㼏㼔㻌㼟㼛㼏㼕㼍㼘㻌㼕㼚㼟㼡㼞㼍㼚㼏㼑㻌㼠㼍㼗㼑㼚㻌㼏㼍㼞㼑㻌㼛㼒㻫㻌㻌㻌㻌㻌㼀㼔㼑㻌㻺㼑㼠㼔㼑㼞㼘㼍㼚㼐㼟䇻㼟㻌㻸㼀㻯㻌㼕㼟㻌㼎㼍㼟㼑㼐㻌㼕㼚㻌㼜㼞㼕㼚㼏㼕㼜㼍㼘㻌㼛㼚㻌㼟㼛㼏㼕㼍㼘㻌㼕㼚㼟㼡㼞㼍㼚㼏㼑㻌㼍㼚㼐㻌㼡㼚㼕㼢㼑㼞㼟㼍㼘㻘㻌㼠㼔㼍㼠㻌㼕㼟㻘㻌㼑㼢㼑㼞㼥㻌㼜㼑㼞㼟㼛㼚㻌㼛㼒㻌㼠㼔㼑㻌㼏㼛㼡㼚㼠㼥㻌㼕㼟㻌㼑㼚㼠㼕㼠㼘㼑㼐㻌㼠㼛㻌㼞㼑㼏㼑㼕㼢㼑㻌㼠㼔㼑㻌㻸㼀㻯㻌㼟㼑㼞㼢㼕㼏㼑㼟㻚㻌㻴㼛㼣㻌㼠㼔㼑㻌㼜㼛㼛㼞㻘㻌㼑㼟㼜㼑㼏㼕㼍㼘㼘㼥㻌㼜㼛㼛㼞㻌㼛㼘㼐㻌㼜㼑㼛㼜㼘㼑㻘㻌㼍㼞㼑㻌㼙㼍㼚㼍㼓㼑㼐㻌㼠㼛㻌㼎㼑㻌㼕㼚㻌㼠㼔㼑㻌㼕㼚㼟㼡㼞㼍㼚㼏㼑㻚㻌㻌㻌㻌㻌㻌㻌㻌㻌㼀㼔㼑㼥㻌㼜㼍㼥㻌㼕㼚㼟㼡㼞㼍㼚㼏㼑㻌㼜㼞㼑㼙㼕㼡㼙㼟㻌㼎㼥㻌㼜㼍㼥㼞㼛㼘㼘㻌㼠㼍㼤㻌㼍㼏㼏㼛㼞㼐㼕㼚㼓㻌㼠㼛㻌㼠㼔㼑㼕㼞㻌㼕㼚㼏㼛㼙㼑㻚㻌㻭㼚㼐㻌㼍㼞㼑㻌㼠㼔㼑㼥㻌㼞㼑㼒㼡㼚㼐㼑㼐㻌㼍㻌㼜㼍㼞㼠㻌㼛㼞㻌㼒㼡㼘㼘㻌㼛㼒㻌㼠㼔㼑㼕㼞㻌㼜㼍㼥㼞㼛㼘㼘㻌㼠㼍㼤㻌㼍㼚㼐㻌㼕㼚㼏㼛㼙㼑㻌㼠㼍㼤㻌㼣㼔㼑㼚㻌㼠㼔㼑㼕㼞㻌㼕㼚㼏㼛㼙㼑㻌㼕㼟㻌㼎㼑㼘㼛㼣㻌㼟㼛㼙㼑㻌㼠㼔㼞㼑㼟㼔㼛㼘㼐㻫㻌㻿㼛㻌㼟㼛㼙㼑㻌㼜㼛㼛㼞㻌㼜㼑㼛㼜㼘㼑㻌㼑㼢㼑㼚㼠㼡㼍㼘㼘㼥㻌㼍㼞㼑㻌㼠㼛㼠㼍㼘㼘㼥㻌㼑㼤㼑㼙㼜㼠㼑㼐㻌㼒㼞㼛㼙㻌㼜㼞㼑㼙㼕㼡㼙㼟㻫㻌㻌㻌㻌㻌㼃㼔㼍㼠㻌㼍㼞㼑㻌㼠㼔㼑㻌㼠㼞㼑㼍㼠㼙㼑㼚㼠㼟㻌㼛㼒㻌㼛㼡㼠㻙㼛㼒㻌㼜㼛㼏㼗㼑㼠㻌㼜㼍㼞㼠㻌㼛㼒㻌㼜㼍㼥㼙㼑㼚㼠㻫㻌㻵㼟㻌㼠㼔㼑㼞㼑㻌㼟㼛㼙㼑㻌㼣㼍㼥㻌㼛㼒㻌㼑㼤㼑㼙㼜㼠㼕㼛㼚㻫㻌
㻌㻌㻌

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