The Joint Learning Network for Universal Health Coverage systematically documents the reforms of its member countries and other countries that have expanded health coverage through demand-side financing. The case studies contained in these pages are brief, comparative and modular in nature, describing the key highlights and technical features of each program.
Compare various dimensions of country reform efforts using our interactive tool.
| Program | Provider Payment Mechanisms | Provider payment mechanisms |
|---|---|---|
| Vietnam: Compulsory and Voluntary Health Insurance Schemes |
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Although there has been some innovation in provider reimbursement over the past few years, fee-for-service (FFS) remains the dominant payment mechanism. Rates are set by the fee schedule, and have remained unchanged since the schedule was created in 1995. Read full sectionAlthough there has been some innovation in provider reimbursement over the past few years, fee-for-service (FFS) remains the dominant payment mechanism. Rates are set by the fee schedule, and have remained unchanged since the schedule was created in 1995. In light of concerns that FFS payments encourage providers to treat patients more than is clinically necessary, the Vietnamese government has begun exploring alternative methods of payment. Additionally, an incentive-based structure for providers has been put in place that has tied provider payment to the financial performance of the facility. The FFS rates were created by an interministerial commission consisting of representatives from MoH, the Ministry of Finance (MoF), the Ministry of Labor, War Invalids, and Social Affairs (MOLISA) and the State Price Commission (SPC). The fees in the schedule are a mixture of per-item charges and per diem rates, with ranges for each type, and variations according to the type of hospital (higher class hospitals being able to charge more). With the exception of the addition of 1,022 new procedures in 2006, fees have been unchanged since the major initiative of 1995, not even to adjust for inflation. However, the government plans to update the fee schedule to reflect current rates. Note that drugs prices are not regulated by VSS (though they are monitored), and providers have the scope, in practice, to levy unofficial charges. The New Health Insurance Law 2008 provides for several different provider payment methods, including FFS, capitation, diagnostic-related group (DRG) or other modes of payment. Innovation in provider payment remains a top priority for reforms to improve the health insurance system. Beyond fees, Vietnam has an incentive structure for providers tied to the financial performance of their facility. Under Decree 33/1995, providers had limited ability to retain a portion (30%) of gross revenues from user fees. However, under this system, opportunities for incentive payments are highly variable based on the facility and the population they serve, and this structure had high potential for creating further imbalances in the system. This incentive structure has since been replaced by Decrees 10/2002 and 43/2006, which allow hospitals greater discretion over financial operations, management of human resources, organization of services, and choices of services offered. By providing greater autonomy to facilities over the management of their costs and revenues, the government hopes to better align the incentives of providers (hospital staff) with the overall financial performance of the health facility. Contracting between VSS and a health care provider is normally done for providers who operate as a separate legal entity. In effect, these are limited to provincial, central, and district level hospitals. Commune Health Centers (CHC) and inter-commune polyclinics can provide services to insured members but they are supervised by District Health Centers (DHC) and hence they do not possess a legal entity status to operate a bank account. VSS therefore cannot contract directly with them but must coordinate commune level health service provision under the supervision of the DHCs. With regard to quality control, the VSS plays little to no role in overseeing the quality of care. They serve primarily as the bill-payer and general orchestrator of the system. There are currently no clinical guidelines enforced by the MoH or VSS, and there is no credible quality assurance mechanism. Providers are largely free to treat patients as they choose. Compulsory and Voluntary Health Insurance SchemesProvider payment mechanisms Provider Payment Mechanisms: Fee-for-service Although there has been some innovation in provider reimbursement over the past few years, fee-for-service (FFS) remains the dominant payment mechanism. Rates are set by the fee schedule, and have remained unchanged since the schedule was created in 1995. In light of concerns that FFS payments encourage providers to treat patients more than is clinically necessary, the Vietnamese government has begun exploring alternative methods of payment. Additionally, an incentive-based structure for providers has been put in place that has tied provider payment to the financial performance of the facility. The FFS rates were created by an interministerial commission consisting of representatives from MoH, the Ministry of Finance (MoF), the Ministry of Labor, War Invalids, and Social Affairs (MOLISA) and the State Price Commission (SPC). The fees in the schedule are a mixture of per-item charges and per diem rates, with ranges for each type, and variations according to the type of hospital (higher class hospitals being able to charge more). With the exception of the addition of 1,022 new procedures in 2006, fees have been unchanged since the major initiative of 1995, not even to adjust for inflation. However, the government plans to update the fee schedule to reflect current rates. Note that drugs prices are not regulated by VSS (though they are monitored), and providers have the scope, in practice, to levy unofficial charges. The New Health Insurance Law 2008 provides for several different provider payment methods, including FFS, capitation, diagnostic-related group (DRG) or other modes of payment. Innovation in provider payment remains a top priority for reforms to improve the health insurance system. Beyond fees, Vietnam has an incentive structure for providers tied to the financial performance of their facility. Under Decree 33/1995, providers had limited ability to retain a portion (30%) of gross revenues from user fees. However, under this system, opportunities for incentive payments are highly variable based on the facility and the population they serve, and this structure had high potential for creating further imbalances in the system. This incentive structure has since been replaced by Decrees 10/2002 and 43/2006, which allow hospitals greater discretion over financial operations, management of human resources, organization of services, and choices of services offered. By providing greater autonomy to facilities over the management of their costs and revenues, the government hopes to better align the incentives of providers (hospital staff) with the overall financial performance of the health facility. Contracting between VSS and a health care provider is normally done for providers who operate as a separate legal entity. In effect, these are limited to provincial, central, and district level hospitals. Commune Health Centers (CHC) and inter-commune polyclinics can provide services to insured members but they are supervised by District Health Centers (DHC) and hence they do not possess a legal entity status to operate a bank account. VSS therefore cannot contract directly with them but must coordinate commune level health service provision under the supervision of the DHCs. With regard to quality control, the VSS plays little to no role in overseeing the quality of care. They serve primarily as the bill-payer and general orchestrator of the system. There are currently no clinical guidelines enforced by the MoH or VSS, and there is no credible quality assurance mechanism. Providers are largely free to treat patients as they choose. |
| Estonia: Estonian Health Insurance Fund |
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The EHIF negotiates capped cost and volume contracts with hospitals at the start of each year. These contracts contain provisions on service quality and access, as well as an extended cost and volume section. The contracting process begins with a needs assessment based on historical data regarding health service utilization along with existing waiting times. The EHIF does not have to contract with all providers. Still most of the services are purchased from hospital master plan hospitals with which EHIF has contracts. A small amount of funds go to selective contracting which provides private providers the opportunity to get some health insurance funding. These private providers, however, tend to be primarily funded through OOP payments. A large part of the standard contract conditions are negotiated with the Hospital Association, but there are also financial appendices that are negotiated with each provider individually. Contracts are monitored quarterly using the Management Information System. Read full sectionThe EHIF negotiates capped cost and volume contracts with hospitals at the start of each year. These contracts contain provisions on service quality and access, as well as an extended cost and volume section. The contracting process begins with a needs assessment based on historical data regarding health service utilization along with existing waiting times. The EHIF does not have to contract with all providers. Still most of the services are purchased from hospital master plan hospitals with which EHIF has contracts. A small amount of funds go to selective contracting which provides private providers the opportunity to get some health insurance funding. These private providers, however, tend to be primarily funded through OOP payments. A large part of the standard contract conditions are negotiated with the Hospital Association, but there are also financial appendices that are negotiated with each provider individually. Contracts are monitored quarterly using the Management Information System.
Actual payment methods and prices are regulated in a single government health service list that lies outside of the contract negotiation process and which is updated at least once per year. All providers are paid the same prices. The list includes over 2,000 different items and a range of different payment methods. Outpatient care is normally paid on a fee-for-service basis and inpatient care is paid with a mix of fee-for-service, per diem, and diagnosis-related group (DRG) methods. Primary care family physicians are paid through per capita payments that are adjusted based on the age of the patients. If a family physician has fewer than 1,200 patients, he will still receive a capitation payment for 1,200 patients in order to cover fixed costs. Family physicians can also receive additional fee-for-service payments up to 32% of the capitation amount received. Contracts for family medicine are agreed to between the EHIF and the Estonian Association of Family Doctors. The financial stipulations of the contracts with particular family doctors are reviewed every quarter in order to align with changes in the number of patients on the practice list. Specialist care is also compensated using different types of payment methods depending on the services provided. These methods include fee-for-service, visit fees, per diem, diagnosis-related group, and case-based complex pricing. Since the 1990s, there has been a gradual move away from fee-for service toward case-based payments.
Estonian Health Insurance FundProvider payment mechanisms Provider Payment Mechanisms: Fee-for-service, Capitation, Diagnosis-Related Groups The EHIF negotiates capped cost and volume contracts with hospitals at the start of each year. These contracts contain provisions on service quality and access, as well as an extended cost and volume section. The contracting process begins with a needs assessment based on historical data regarding health service utilization along with existing waiting times. The EHIF does not have to contract with all providers. Still most of the services are purchased from hospital master plan hospitals with which EHIF has contracts. A small amount of funds go to selective contracting which provides private providers the opportunity to get some health insurance funding. These private providers, however, tend to be primarily funded through OOP payments. A large part of the standard contract conditions are negotiated with the Hospital Association, but there are also financial appendices that are negotiated with each provider individually. Contracts are monitored quarterly using the Management Information System.
Actual payment methods and prices are regulated in a single government health service list that lies outside of the contract negotiation process and which is updated at least once per year. All providers are paid the same prices. The list includes over 2,000 different items and a range of different payment methods. Outpatient care is normally paid on a fee-for-service basis and inpatient care is paid with a mix of fee-for-service, per diem, and diagnosis-related group (DRG) methods. Primary care family physicians are paid through per capita payments that are adjusted based on the age of the patients. If a family physician has fewer than 1,200 patients, he will still receive a capitation payment for 1,200 patients in order to cover fixed costs. Family physicians can also receive additional fee-for-service payments up to 32% of the capitation amount received. Contracts for family medicine are agreed to between the EHIF and the Estonian Association of Family Doctors. The financial stipulations of the contracts with particular family doctors are reviewed every quarter in order to align with changes in the number of patients on the practice list. Specialist care is also compensated using different types of payment methods depending on the services provided. These methods include fee-for-service, visit fees, per diem, diagnosis-related group, and case-based complex pricing. Since the 1990s, there has been a gradual move away from fee-for service toward case-based payments.
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| : Taiwan: National Health Insurance |
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Providers obtain their revenues from 3 sources: 1) payments by the NHI; 2) patient user fees and co-payments; and 3) proceeds from the sale of products and services not covered by the NHI. The government acts as the single-payer system with a uniform payment schedule that has effectively controlled the cost shifting that occurred frequently before the implementation of NHI. Read full sectionProviders obtain their revenues from 3 sources: 1) payments by the NHI; 2) patient user fees and co-payments; and 3) proceeds from the sale of products and services not covered by the NHI. The government acts as the single-payer system with a uniform payment schedule that has effectively controlled the cost shifting that occurred frequently before the implementation of NHI. Initially, NHI providers were paid on a fee-for-service basis, however providers were able to make sizable profits by overprescribing medications and ordering unnecessary procedures, leading to quickly rising per person expenditures. Hospitals in Taiwan reward their staff physicians individually for bringing in revenue, known as a “professional fee,” further encouraging physician-induced over-prescription. The Bureau of National Health Insurance (BNHI) estimates that overuse and misuse of health care may constitute up to a third of BNHI’s expenditures. Facing the need for cost containment, BNHI introduced a reasonable volume standard for outpatient visits coupled with a sliding fee schedule for visits above the volume standard, which discouraged supply-induced demand and reduced the number of visits per person. BNHI also reduced the high profit margin that clinics and hospitals can obtain from dispensing drugs by reducing the reimbursement rates for drugs, using reference pricing, and encouraging the use of generic drugs. The NHI experimented with different payment systems, such as diagnosis-related groups (DRGs) for hospitals, primary care capitation for certain population groups, and even performance-based payments. DRGs were phased in for the 50 most common diseases and treatments, which effectively reduced the average length-of-stay in hospitals. The ultimate cost control measure, however, has been the imposition of global budgets for hospital outpatient and inpatient services in 2002. This remains highly controversial because global budgeting incorporates an aggregate fixed sum budget imposed on all hospitals in Taiwan collectively, creating a zero-sum game in which the players cannot effectively police one another. Reimbursement contracts are negotiated with health care providers on a fee-for-service basis with a uniform pay schedule. A deflation mechanism engages once a service quota is reached, resulting in declining reimbursement rates. Under the global budget payment system, the NHI Medical Expenditure Negotiation Committee convenes and negotiates overall caps on total medical payments based on a set of equations and indicators prior to the beginning of a fiscal year. Along with the implementation of global budgets, the NHI took several measures to control the demand for selected types of health care, such as increasing copayments for high users of drugs and outpatient services. The global budget payment system with these measures has been successful in containing the annual growth in the health insurance system's expenditures with spending growth leveling out at below 5% a year since it was fully implemented in July 2002. National Health InsuranceProvider payment mechanisms Provider Payment Mechanisms: Fee-for-service, Diagnosis-Related Groups, Global budgets Providers obtain their revenues from 3 sources: 1) payments by the NHI; 2) patient user fees and co-payments; and 3) proceeds from the sale of products and services not covered by the NHI. The government acts as the single-payer system with a uniform payment schedule that has effectively controlled the cost shifting that occurred frequently before the implementation of NHI. Initially, NHI providers were paid on a fee-for-service basis, however providers were able to make sizable profits by overprescribing medications and ordering unnecessary procedures, leading to quickly rising per person expenditures. Hospitals in Taiwan reward their staff physicians individually for bringing in revenue, known as a “professional fee,” further encouraging physician-induced over-prescription. The Bureau of National Health Insurance (BNHI) estimates that overuse and misuse of health care may constitute up to a third of BNHI’s expenditures. Facing the need for cost containment, BNHI introduced a reasonable volume standard for outpatient visits coupled with a sliding fee schedule for visits above the volume standard, which discouraged supply-induced demand and reduced the number of visits per person. BNHI also reduced the high profit margin that clinics and hospitals can obtain from dispensing drugs by reducing the reimbursement rates for drugs, using reference pricing, and encouraging the use of generic drugs. The NHI experimented with different payment systems, such as diagnosis-related groups (DRGs) for hospitals, primary care capitation for certain population groups, and even performance-based payments. DRGs were phased in for the 50 most common diseases and treatments, which effectively reduced the average length-of-stay in hospitals. The ultimate cost control measure, however, has been the imposition of global budgets for hospital outpatient and inpatient services in 2002. This remains highly controversial because global budgeting incorporates an aggregate fixed sum budget imposed on all hospitals in Taiwan collectively, creating a zero-sum game in which the players cannot effectively police one another. Reimbursement contracts are negotiated with health care providers on a fee-for-service basis with a uniform pay schedule. A deflation mechanism engages once a service quota is reached, resulting in declining reimbursement rates. Under the global budget payment system, the NHI Medical Expenditure Negotiation Committee convenes and negotiates overall caps on total medical payments based on a set of equations and indicators prior to the beginning of a fiscal year. Along with the implementation of global budgets, the NHI took several measures to control the demand for selected types of health care, such as increasing copayments for high users of drugs and outpatient services. The global budget payment system with these measures has been successful in containing the annual growth in the health insurance system's expenditures with spending growth leveling out at below 5% a year since it was fully implemented in July 2002. |
| Nigeria: National Health Insurance System |
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Patients are allowed to choose their primary provider from the list of accredited facilities, which includes both public and private providers. The provider network is used for access and secondary referrals, which acts to control costs and maintain viability of the system. Provider payment mechanisms are primarily determined by the National Health Insurance System (NHIS) Governing Council. Read full sectionPatients are allowed to choose their primary provider from the list of accredited facilities, which includes both public and private providers. The provider network is used for access and secondary referrals, which acts to control costs and maintain viability of the system. Provider payment mechanisms are primarily determined by the National Health Insurance System (NHIS) Governing Council. For private insurers, this is determined between HMOs and Providers, with oversight from the central government, and referral to specialist care follows guidelines that are managed accordingly. Decree 35 determined that the only lawful payment systems to be included in NHIS are capitation, fee-for-service, per diem, or case payment. A capitation system is the predominant form of provider payment used to pay primary healthcare facilities, while secondary and tertiary healthcare facilities are paid by fee for service and per diem. National Health Insurance SystemProvider payment mechanisms Provider Payment Mechanisms: Fee-for-service, Capitation Patients are allowed to choose their primary provider from the list of accredited facilities, which includes both public and private providers. The provider network is used for access and secondary referrals, which acts to control costs and maintain viability of the system. Provider payment mechanisms are primarily determined by the National Health Insurance System (NHIS) Governing Council. For private insurers, this is determined between HMOs and Providers, with oversight from the central government, and referral to specialist care follows guidelines that are managed accordingly. Decree 35 determined that the only lawful payment systems to be included in NHIS are capitation, fee-for-service, per diem, or case payment. A capitation system is the predominant form of provider payment used to pay primary healthcare facilities, while secondary and tertiary healthcare facilities are paid by fee for service and per diem. |
| Thailand: Universal Coverage Scheme |
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UCS uses capitation as the main provider payment mechanism. Initially, providers were given the option of receiving reimbursements based on either total capitation or capitation for outpatient services and DRG for inpatient services at the provincial level. However, due to the disincentive of paying providers for high-cost care and delays in case referrals, UCS began using a single payment system in 2003. Read full sectionUCS uses capitation as the main provider payment mechanism. Initially, providers were given the option of receiving reimbursements based on either total capitation or capitation for outpatient services and DRG for inpatient services at the provincial level. However, due to the disincentive of paying providers for high-cost care and delays in case referrals, UCS began using a single payment system in 2003. The current payment mechanism for UCS is a mixed system of risk-adjusted capitation for primary care, a DRG-based capped global budget, and fixed rate fees for some services. It should be noted that health promotion and prevention services for all Thai citizens are paid by the UCS. Universal Coverage SchemeProvider payment mechanisms Provider Payment Mechanisms: Capitation UCS uses capitation as the main provider payment mechanism. Initially, providers were given the option of receiving reimbursements based on either total capitation or capitation for outpatient services and DRG for inpatient services at the provincial level. However, due to the disincentive of paying providers for high-cost care and delays in case referrals, UCS began using a single payment system in 2003. The current payment mechanism for UCS is a mixed system of risk-adjusted capitation for primary care, a DRG-based capped global budget, and fixed rate fees for some services. It should be noted that health promotion and prevention services for all Thai citizens are paid by the UCS. |
