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. |
| Colombia: General System of Social Security in Health |
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EPSs and EPSSs are free to establish payment levels and payment mechanisms for services that they purchase from providers. Both entities have used the fee schedules, adjusted for inflation, developed by the pre-reform public health plans as ceilings for price negotiations. As of 2008, provider associations were forcefully seeking the establishment of price floors by the MPS. Read full sectionEPSs and EPSSs are free to establish payment levels and payment mechanisms for services that they purchase from providers. Both entities have used the fee schedules, adjusted for inflation, developed by the pre-reform public health plans as ceilings for price negotiations. As of 2008, provider associations were forcefully seeking the establishment of price floors by the MPS. There are two payment mechanisms common to both EPSs and EPSSs. In general, preventive and primary care services are contracted on a capitation basis. Most specialist and hospital care, however, is paid for either on a fee-for-service basis or by a services package. The CR and SR enrollees must also pay copayments, which vary according to an individual’s income. CR copayments are charged according to salary income. Enrollees with salaries lower than 2 minimum monthly salaries (mms) have a maximum copayment of USD46.70 annually. The maximum copayment for enrollees with incomes in the range of 2-5 mms is USD 195.20 annually. Finally, enrollees with incomes greater than 5 mms have a maximum copayment of USD390.30 annually. SR copayments are set according to SISBEN category. The poorest enrollees, who are classified in category 1, pay co copayments. On the opposite end of the scale, enrollees classified in category 3 pay 10% of the service value. General System of Social Security in HealthProvider payment mechanisms Provider Payment Mechanisms: Fee-for-service, Capitation EPSs and EPSSs are free to establish payment levels and payment mechanisms for services that they purchase from providers. Both entities have used the fee schedules, adjusted for inflation, developed by the pre-reform public health plans as ceilings for price negotiations. As of 2008, provider associations were forcefully seeking the establishment of price floors by the MPS. There are two payment mechanisms common to both EPSs and EPSSs. In general, preventive and primary care services are contracted on a capitation basis. Most specialist and hospital care, however, is paid for either on a fee-for-service basis or by a services package. The CR and SR enrollees must also pay copayments, which vary according to an individual’s income. CR copayments are charged according to salary income. Enrollees with salaries lower than 2 minimum monthly salaries (mms) have a maximum copayment of USD46.70 annually. The maximum copayment for enrollees with incomes in the range of 2-5 mms is USD 195.20 annually. Finally, enrollees with incomes greater than 5 mms have a maximum copayment of USD390.30 annually. SR copayments are set according to SISBEN category. The poorest enrollees, who are classified in category 1, pay co copayments. On the opposite end of the scale, enrollees classified in category 3 pay 10% of the service value. |
| Chile: National Health Fund (FONASA) |
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FONASA transfers money to public health care providers through fee-for-service mechanisms for certain services and groups of services that are assigned a fixed value. The remainder of resources for health care services and facility maintenance in the public sector is transferred based on historical budgets, which tend to be antiquated and therefore undervalued. In terms of transfer mechanisms, FONASA funds are not transferred directly to the individual health care providers. Read full sectionFONASA transfers money to public health care providers through fee-for-service mechanisms for certain services and groups of services that are assigned a fixed value. The remainder of resources for health care services and facility maintenance in the public sector is transferred based on historical budgets, which tend to be antiquated and therefore undervalued. In terms of transfer mechanisms, FONASA funds are not transferred directly to the individual health care providers. Rather, funds are transferred to the regional health entity (under the purview of the MOH) for the geographical region where the provider is located. The regional health entity pools the funds for all public health care providers in the area and then is charged with determining the budget of each provider. FONASA also transfers funds prospectively to the regional health entities for primary care facilities through capitation mechanisms. These funds are based on a region’s health care needs and its disease burden. FONASA and the ISAPREs transfer funds to private providers on a retrospective fee-for-service basis. Private providers always receive funds through fee-for-service mechanisms, and they have no ceiling on income, regardless of whether the source of the funds is FONASA or an ISAPRE. National Health Fund (FONASA)Provider payment mechanisms Provider Payment Mechanisms: Fee-for-service, Capitation FONASA transfers money to public health care providers through fee-for-service mechanisms for certain services and groups of services that are assigned a fixed value. The remainder of resources for health care services and facility maintenance in the public sector is transferred based on historical budgets, which tend to be antiquated and therefore undervalued. In terms of transfer mechanisms, FONASA funds are not transferred directly to the individual health care providers. Rather, funds are transferred to the regional health entity (under the purview of the MOH) for the geographical region where the provider is located. The regional health entity pools the funds for all public health care providers in the area and then is charged with determining the budget of each provider. FONASA also transfers funds prospectively to the regional health entities for primary care facilities through capitation mechanisms. These funds are based on a region’s health care needs and its disease burden. FONASA and the ISAPREs transfer funds to private providers on a retrospective fee-for-service basis. Private providers always receive funds through fee-for-service mechanisms, and they have no ceiling on income, regardless of whether the source of the funds is FONASA or an ISAPRE. |
| Mexico: Seguro Popular |
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The interventions included in the CAUSES are paid for by capitation. Meanwhile, the interventions carried out under the FPGC are paid for on a per-case basis. The payment mechanism for contracts with private providers is vague. The reform stated that health services should be provided by state health secretariats in accordance with the state of residence of the insured family or by other public health institutions that have contracted with the state health secretariats. After the passage of the law, however, the executive branch issued a by-law that introduced the option of contracting with the private sector. The problem with this by-law is that it does not specify the form that payments to private sector will take. Thus, such payments take place on an ad-hoc, non-systematic basis. Read full sectionThe interventions included in the CAUSES are paid for by capitation. Meanwhile, the interventions carried out under the FPGC are paid for on a per-case basis. The payment mechanism for contracts with private providers is vague. The reform stated that health services should be provided by state health secretariats in accordance with the state of residence of the insured family or by other public health institutions that have contracted with the state health secretariats. After the passage of the law, however, the executive branch issued a by-law that introduced the option of contracting with the private sector. The problem with this by-law is that it does not specify the form that payments to private sector will take. Thus, such payments take place on an ad-hoc, non-systematic basis. Seguro PopularProvider payment mechanisms Provider Payment Mechanisms: Fee-for-service, Capitation, Diagnosis-Related Groups The interventions included in the CAUSES are paid for by capitation. Meanwhile, the interventions carried out under the FPGC are paid for on a per-case basis. The payment mechanism for contracts with private providers is vague. The reform stated that health services should be provided by state health secretariats in accordance with the state of residence of the insured family or by other public health institutions that have contracted with the state health secretariats. After the passage of the law, however, the executive branch issued a by-law that introduced the option of contracting with the private sector. The problem with this by-law is that it does not specify the form that payments to private sector will take. Thus, such payments take place on an ad-hoc, non-systematic basis. |