29th June 2018

W.Stacey, AmCham CZ: "We need a system driven by incentives that fulfill our goal, which is to have the highest number of days in our lives without illness, injury or rehabilitation."

The Czech population is aging. An older population requires more health care; an older population also reduces the ratio of employees (who contribute health care taxes) to the total number of users of health care. Most experts predict that the gap between costs of the system and its funds will continue to widen. This gap is one of the greatest threats to a stable economy. Yet, we have not been able to solve this problem, because a political myth prevents us from seeing the system clearly.

In expert debates, the health care system is divided into payors (the insurance companies), providers (hospitals), suppliers and patients. Yet, insurance companies really are not the payors. Companies are. Individual citizens are. Insurance companies are distributors. In most health care systems, companies and individuals pay into the system, and the insurance companies, the hospitals, and the doctors decide what they need and what they get without any requirement to report how well they are delivering it. 

In other words, what is missing in most health care systems is the ability of the people who pay for the system to determine whether they are getting what they want from that system. What companies and people want is the best health care for the least possible amount of money. Since that is not explicitly set as the goal of the system, and since incentives are not established that would reward all the parts of the system to achieve that objective, all the other parts of the system seek to maximize their benefit (revenue) while minimizing the revenue of everyone else. Ultimately, that set of incentives increases costs with very little direct connection to the quality of care citizens receive. 

We need a system driven by incentives that fulfill our goal, which is to have the highest number of days in our lives without illness, injury or rehabilitation. This is a basic description of the statistic Healthy Life Years. 

The previous government committed to improving Healthy Life Years. It did not, however, change the incentives in the system. To achieve this, we need incentives that promote quality. Could, for instance, insurance companies be allowed to offer voluntary, supplemental insurance to people who wish to have a higher level of care? If a patient wanted to purchase more expensive technology, could the insurance company cover the procedure while the individual paid for the technology? Could hospitals agree on contracts with medical device companies which paid only when the promised outcome was achieved? 

Once we focus on providing as much health as possible for each crown of revenue into the system, the chances for improving performance and saving money increase exponentially. The debate about health care should start with setting a simple goal: improve the ratio of healthy life years over the average annual expenditure per patient. Then we should try to find ways to reward insurance companies, hospitals, clinics, doctors, nurses, and suppliers for improving that ratio. 

 

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Summary in Czech for Hospodářské noviny is attached:

 

Author: Weston Stacey, Executive Director of the American Chamber of Commerce in the Czech Republic

Members of the American Chamber of Commerce in the Czech Republic