Want to write for InnoHEALTH? send us your article at  magazine@innovatiocuris.com

Healthcare is a troubled industry. There is no known health service system that would work to the satisfaction of all major stakeholders, patients, providers, and payers. No matter the amounts spent, nothing is ever enough.

The resource problem looks different in the rich and in the developing world. In affluent countries demand is relentlessly driven by new technologies and cures, ageing populations, life-style –related problems and the medicalization of trivial ailments. Islands of undercare dot a sea of overcare. In the developing world the situation is the reverse.

Machine Learning in Claims Processing

All responsible governments have noticed that the situation is unsustainable. In Finland gross health service expenses have doubled since the year 2000 outpacing economic growth by several percentage points. Health and welfare has become the cuckold that kicks other public tasks, such as infrastructure, education and defense out of the nest.

The obvious counter-measure is to increase productivity. According to a recent study by Aalto University, there is ample room for that. If all districts in the country, after adjusting for local variations in population and morbidity, would perform at the level of the national average, one billion euro could be saved out of a total expenditure of eighteen billion. If all would perform at the level of the best, no innovations required, the savings could be three billions.

Bringing the Concept of Patient Experience & Standards to India

Such regional variation is puzzling in a health system that is to ninety percent tax financed and centrally regulated. Neither the government, nor the professions have been able to implement standardized best practices. There is a strong case for Lean healthcare.

Raw improvement of everything, however, may be a dull weapon. There are several interesting patterns that are not visible to the naked eye. A data –driven helicopter perspective is needed. There are areas where improvement would be especially welcome, and not only in the shape of smooth processes but better structures and allocations.

Nasal Spray for Treating Depression

Curiously, there can be simultaneous overspending and undercare. A common observation is that healthcare expenditure follows the Pareto distribution or the 20/80 rule: one fifth of the population spends four fifths of the resources. In a recent study, The Nordic Healthcare Group (NHG), a consultancy, studied the health expenses in a medium-sized city. The distribution was sharper than the traditional Pareto. Ten percent consumed seventy percent. There was a hard core of high spenders, a few hundred individuals that consumed more than half of the total municipal health and welfare budget. They could be divided into three categories: expensive somatic cases such as premature and massive trauma; elderly multi-morbidity patients in around-the-clock care; and the sad combination of substance abuse and mental disorder. With the possible exception of the first group, these people did not get value for the money. Their quality of life was overall bad.

This happens in a welfare society that has for decades mobilized the full force of the state and committed massive resources to universal access and equality of care. Still there some people are simultaneously overserved and undercared.

Epilepsy is the Fourth Most Common Neurological Disorder

Growth has been fastest in the extremes of the care spectrum. The most technically advanced specialist care spends like there were no tomorrow. The low end of home and community care is not that expensive per unit, but the number of cases increases dramatically. In Finland between the years 2000 and 2014 expenditure for specialist care doubled, long-term care for the elderly and handicapped grew 160%, while primary care have had to do with a paltry 60% increase. The trouble is in the middle.

Since WHO’s Alma Ata declaration in 1978 every policymaker has paid lip service to the strengthening of primary care. Therapies should be administered at the lowest sufficient level to save the specialized resources to those that truly need them. It is better to treat diseases early than to allow time to turn them into complications. Despite the best of intentions, quite the opposite is happening. A relatively weakened primary care feeds growing numbers of increasingly sick people to hospitals.

Innovative Biomarkers for Early Diagnosis and Treatment of Life

It is common knowledge that free markets do not work in healthcare. The relative weights of primary and secondary care, however are powerfully market driven. Consider two hypothetical doctors. A is an accomplished neurosurgeon, who successfully saves lives by removing brain tumors. B is a general practitioner, whose working day is an endless stream of small infections, minor trauma, and unspecified pain. As a patient, taxpayer, or regulator, how much would you be willing to pay for a day’s work to A and to B?

The answer is obvious. Medical students, investors and decision makers have long since decided to follow the money. In the Nordic countries center-left governments have traditionally been suspicious, if not openly hostile to markets in healthcare. Still, and despite all the Alma Ata –rhetoric, they have been incapable of stemming this particular market mechanism.

Exclusive Interview with India’s National Cybersecurity Coordinator

This points to a broader problem. It appears that even in publicly financed and administered systems, public sector provision is not under public sector control. The government did not call for rampant cost-inflation. No politician has demanded queues and increasing socio-economic health inequality. Still it happens.

The Norwegian political scientist Stein Ringen has eloquently described this phenomenon in his book A Nation of Devils. Politicians may think they are in charge. As a matter of fact they don’t do things, they just issue statements, make decisions and allocate money. Before anything real happens on the ground, the issue has to travel through a lengthy chain of civil servants and administrators, who have every opportunity to turn gold into lead.

It is well known that a core issue in health policy is the information asymmetry between patients and doctors. A similar, perhaps even more devastating asymmetry is between politicians and professionals. For this reason planned economies have never worked as planned.

If markets don’t work and command-and-control is hopeless, something else needs to be done. The answer is to be sought from the design of quasi-markets. While greed is and has always been pervasive, nothing controls the greed of a seller as efficiently as the greed of a buyer.

Discover Clinical Research in Sweden

The current center-right Finnish Government has realized the problem and initiated a sweeping reform. While the initiative sill has to run the gauntlet of entrenched interest groups and parliamentary opposition the basic principles are clear.

For a nation to contain health expenditures at a sustainable level without endangering public health, some or all of the following mechanisms must be put at work:

– Care should be initiated at the right time; not too early, not too late.

– Care should be administered at the lowest sufficient level; primary and secondary care must take joint responsibility of care pathways.

– The care of very expensive multi-morbidity cases must be integrated to include somatic, psychiatric and social care.

– The overall productivity and quality of care processes and administration must be improved following the principles of Lean healthcare.

– Care should, when possible, be evidence –based not to do useless interventions.

– Increasing health literacy and the awareness of life-style related diseases should reduce demand.

The core issue is how to design a system that can put to work all or some of these mechanisms. There are no simple solutions. Policy makers have two levers at their disposal, information and money.

The information should be about value. As Michael Porter and other proponents of the Value –based Healthcare movement have suggested, value is the relation between health outcomes and the money spent, measured at the patient level over a full cycle of care. To develop accurate and comparable measures of health outcomes is a formidable task that is currently undertaken by several research and development initiatives around the world.

Addressing Unmet Needs in India’s Health System

If such information were available, policy makers could design health finance systems that could align the interests of patients, payers and providers.

In Finland some of the central policy proposals are, first, a single-payer system. The state collects all money and distributes them to regional authorities.

Second, all caregivers should be organized as limited liability companies with standardized accounting and reporting. While most of the money will still flow from the taxpayers, every caregiver would get its income following the same rules and be subject to the same outcome measures. The current public providers who would loose their privileges and be forced to compete, obviously, will furiously resist.

Journey of Building an AI Product in a Clinical Establishment

Third, to allow patient choice and strengthen primary care, a finance system based on capitation is proposed. Each citizen should register with a health- and welfare center, which would then receive a fixed annual per capita remuneration from the government.

The amount of the capitation money, and the corresponding variety of services that it should cover, are hotly debated. At the low end, the amount could be calculated based on the average annual spend of the healthy adult population, which currently is in the range of 250 €. At the high end it could include just everything and be about 3 500 €, which is the total per capita expenditure. In the latter case the primary care centers would get full control of all financial flows. On the behalf of patients they would purchase clinical interventions from specialist hospitals as needed, essentially taking the role of an insurer. There would be several problems with such drastic measures, so there will probably be a compromise allowing some part of the specialist care to be financed on a fee-for-service –basis by the regions.

Ten recommendations for Digital Health Interventions

While capitation –based finance provides strong incentives to primary care; there are some known pitfalls. Since the income comes by registered citizen and the costs come from the resources needed to provide service, there is a temptation to engage in skimming, i.e. lure healthy individuals to register while denying service from those with pre-existing conditions. This can be tackled by legislation that prohibits denying anybody from registering as well as kicking anybody off the list. There would still be the risk of undercare and cost-shifting, i.e. costly patients are referred to specialist care, and to be paid directly by the government.

The design of a quasi-market with regulated competition and patient choice requires accurate and publicly available information on value: the relation between outcomes and euros spent at each care organization. Therefore the key task for researchers and policy makers is to develop and experiment with information systems that could do this.

WHO’s First Guideline to Digital Health Interventions

For health policy makers in India and other rapidly developing countries this may sound like a rich-man’s problem. Indeed it is. The message, however, should be that money will not solve a nations health problems. The pit has no bottom. Health systems emerge slowly and are difficult to change. Latecomers can always have the privilege to learn from other’s mistakes and make a mighty leap to the front.

About the author

Paul Lillrank has been Professor of Quality and Service Management at Aalto University since 1994. He has served as the Head of the Department of Industrial Engineering and Management and been Academic Dean of the school’s MBA program. He received a Ph.D. in Social and Political Sciences at Helsinki University in 1988 after spending six years as a post-graduate student in Japan where he researched quality management in Japanese industry. He is a pioneer in introducing industrial management methods to the study of healthcare service production. He has been visiting professor at the University of Tokyo, and teaches regularly at the Indian Institute of Technology, Kharagpur.

Author shares, how community based healthcare insurance is the key for last mile healthcare affordability.

All over India, the level of out-of-pocket spending is around 70% of total health expenditure and only 17% of the population is covered for health insurance in India. Further 40% of the hospitalized individuals borrow money or sell assets to cover the cost of their healthcare and nearly 39 million people are pushed into poverty because of ill-health (Balarajan, Selvaraj and Subramanian 2011). Thus, health expenditure is one of the major causes of poverty in India. The government’s effort of increasing public funding for health is laudable, but, needless to mention, it puts enormous burden on the public funds. Therefore, it is imperative to explore and innovate alternative options. The sentiment of ‘innovation’, of finding newer and cost-effective ways towards development, is echoed by the honorable Prime Minister of India himself.

Following the same line of thought, our intervention aims to innovate in the space of Community Based Health Insurance (CBHI). While CBHI schemes are increasingly being implemented across the world to combat health-related vulnerabilities (Lahkar and Sundaram-Stukel 2010), however they have their own set of challenges:

1. Demand-side issues of low insurance awareness and a limited understanding of the risks faced by prospective clients, and

2. Supply-side issues of insurance packages that do not address the relevant risks, or are perceived to be too costly.

The model of the Micro Insurance Academy (MIA) is unique and innovative in addressing the challenges standing in the way of broader uptake of insurance. Our model is based on an in-depth study of the community needs and an analysis of factors, which would make CBHI schemes successful. We observe, analyze and quantify the problems from the point of view of the Base of the Pyramid (BoP)communities, taking them from a state of ‘no risk management solution’ to a state of owning and managing a fund catering to their health risks. Our program draws strength from resources available within the poor communities: strong social bonding, unity, and willingness to help each other in the face of adversity and their time and skills. The core principle of our work is studying the community’s socio-economic environment and rules-in-place through action-oriented research and a method of end-to-end ‘community involvement’.

Key innovative features of our work –

1. Customized solutions: We work with local partner organizations and existing grass-root groups like Self-Help Groups (SHGs), harnessing rather than inventing communities. MIA identifies the needs of the community through a baseline and involves the community through consultative workshops. The information and inputs gained through these interactions with the community are used to determine the priority risks and calculate premium options based on the community’s willingness to pay. To ensure complete ownership from the community and affect uptake, MIA facilitates guided sessions of ‘consensus building’ amongst the community members to reach and finalize a single benefits package.

2. Insurance awareness and education: MIA uses innovative and engaging communication tools, developed locally with the community, to spread awareness about the value of insurance.

3. Trusted governance: The scheme is governed and managed locally by unanimously selected community members. These members are trained to hold office for the scheme and manage and run it at a local level. The community owns the funds collected through the premium.

4. Voluntary and contributory participation: Participation in the scheme is voluntary and entails a contribution from the participants. Through information, education, local governance and community participation, the community members are able to take informed decisions of contributing and trusting the scheme. Therefore, this is probably a model, first of its kind, where poor communities contribute to the premium in full, without any subsidy.

5. Inclusion:This scheme is open for membership to all age groups. 57% of the enrolled members in CBHI schemesare women, and 89% of the enrolled members identify themselves as “scheduled caste/scheduled tribe” (SC/ST) (that are normally of a lower socio-economic status).

6. Women as change agents:InMIA’s CBHI model, the membership of a household in the scheme is only possible, if the SHG female member joins; she can bring other family members into membership. As the scheme is implemented through SHGs, women are the center of discussions, deliberations and consensus building exercises in choosing the benefits package. Furthermore, office bearers governing the scheme are usually women. The other strategic decision enhancing gender equality in our project relates to how the insurance is priced, and in reimbursing actual costs to those that incurred them. In calculating frequency and severity of risk for the purpose of setting premiums, we do not distinguish by gender; rather, we obtain a uniform price (for males and females, young or old) per benefit type. We apply true “community rating”, reflecting that the overall cost of all types of benefits is divided equally by all members. This is different from the commercial insurance practice to differentiate premiums by age and gender. The claims are paid to the person that submitted them, in cash if necessary, so women (that may not have a bank account) can receive payouts directly, just like men-folk.

7. Sustainability:This means that after the initial handholding, the community has the will, the capacity and the resources to operate the scheme on its own. The purpose of the handholding period is to communicate the value of risk pooling for the community, giving them the structure of governance which is trustworthy, and seeing the scheme start operations that can lead up to a stage when it can continue with its own financial resources. Towards this end,MIA’s implementation model ensures social and financial sustainability. We calculated an estimate of the ability of the CBHI MIA has been supporting in Banke, Nepal, to continue to operate sustainably even after MIA withdraws from providing support.The results demonstrate that our CBHI scheme can operate sustainably with its premium income, even without subsidies, after 5-7 years of implementation and handholding support.

Consensus building exercise and choosing of benefit packages

Premium collection and enrollment

Impact

The overall impact relates to the effect of being insured in a scheme over a long period of time. MIA has been at the forefront of developing a theoretical and conceptual framework on how to measure the impact of CBHI. A baseline is conducted before the start of a project to be able to compare the results and assess impact after the intervention. Some of the key findings from our impact assessment research are:/p>

• Better financial protection through high claim ratio across our schemes (50%-85%)

• Reduced borrowing with interest to fund healthcare costs

• Improved financial position

• Improved access to healthcare and improved health-seeking behavior. Being covered by the schemes, the members are less hesitant to approach doctors and hospitals. Furthermore, trained scheme officials advise and encourage proper treatment.

• High renewal rates 40-80%, [MIA-MIS]

• Women empowerment – In 2015/16, we reached 1,252 SHGs or 12,500 women through our trainings in project areas of Bihar and Maharashtra and251 SRGs (Self reliant groups) or 34343 women in Nepal.

In conclusion, it is worth noting that through our schemes we have demonstrated that communitiesare able to manage ‘insurance businesses’ after a certain level of training and capacity development. Enabling communities to be self-reliant and taking collective action to resolve their issues locally has more value than making them being dependent on external support and subsidies.

MIA CBHI implementation sites:

Kalahandi district, Odisha; Muzaffarpur and Vaishali districts, Bihar (ongoing); Beed district, Maharashtra (ongoing); Rajnandgaon district, Chhattisgarh; Banke and Dhading districts, Nepal; Kanpur Dehat and Pratapgarh districts, Uttar Pradesh.

Want to write for InnoHEALTH? send us your article at  magazine@innovatiocuris.com

Connect with InnovatioCuris on: 
Facebook: https://www.facebook.com/InnovatioCuris
Twitter: https://twitter.com/innovatiocuris
Linkedin: https://www.linkedin.com/groups/7043791
Stay update about IC by visiting: www.innovatiocuris.com

Connect with InnoHEALTH 2017 on: 
Facebook: https://www.facebook.com/innohealth2017
Twitter: https://twitter.com/innhealth2017
Linkedin: https://www.linkedin.com/groups/7043791
Stay update about the conference by visiting: www.innohealth.in