This presentation by Mads Bager HOFFMANN was made at the 3rd Joint DELSA/GOV Health Meeting, Paris 24-25 April 2014. Find out more at www.oecd.org/gov/budgeting/3rdmeetingdelsagovnetworkfiscalsustainabilityofhealthsystems2014.htm

1. Decentralized governance of
the Danish health care system
Mads Bager Hoffmann

2. • A public health care system
• Equal and free access for all citizens
• 85 pct. is financed through general taxes
o 15 pct. is out of pocket payments
• Decentralized organization
THE DANISH HEALTH CARE SYSTEM

3. Expenditure on health and life expectancy
68
70
72
74
76
78
80
82
84
Switzerland
Italy
Iceland
Australia
Israel
Netherlands
Austria
UnitedKingdom
Greece
Portugal
Finland
OECD
Denmark
Chile
Poland
SlovakRepublic
Turkey
Life expectancy, 2011
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
UnitedStates
Switzerland
Canada
Danmark
Austria
Portugal
Spain
Iceland
Norway
Finland
Slovenia
Israel
CzechRepublic
Korea
Luxemburg
Total expenditure on health as
a share of GDP, 2011

4. POLITICAL & ADMINISTRATIVE LEVELS
• National level: One parliament and government / minister
• Regional level (executive): 5 regions / regional councils
• Local level (executive): 98 municipalities / municipal councils
Reform of the structure of local govenment in 2007:
• From 13 councils to 5 regions
• From 271 small municipalities and 13

5. NATIONAL RESPONSIBILITIES
Regulating, coordinating and advising functions of the decentralized
providers of health care services
• Determining national health policies
• Adopting legislation
• Setting overall framework of the economy
• General planning within the health sector
• Defining guidelines
• Performing control

6. REGIONAL RESPONSIBILITIES
• Hospital and psychiatric treatment
• Primary health care / public health care scheme
• General Practitioners (family doctors)
• Private practicing specialists
• Adults dental services
• Physiotherapy

7. MUNICIPAL RESPONSIBILITIES
• Preventive care and health promotion
• Rehabilitation outside hospital
• Treatment of alcohol and drug abuse
• Child nursing
• Child dental services and special dental care
• School health care
• Home nursing

8. SOMATIC HOSPITALS
1998 2011
Public somatic hospitals 79 53
Beds 19,700 18,303
Discharges 996,000 1,316,000
Average stay 5.8 4.8 (2009)
Out patient visits 4,900,000 7,036,000

9. FINANCING OF HEALTH CARE
STATE
MUNICIPALITIES
REGIONS
BLOCK GRANT
BLOCK GRANT
(75 percent)
Activity related contribution
(5 percent)
Co-financing
(20 percent)
Collect
direct taxes
Collects
direct taxes

10. Municipalities
State
Hospitals
GP excl. medicine
Medicine grants
Regions
Municipalities (4,4 bill euro) State (0.2 bill euro)
Hospitals (9.9 bill euro) GP excl. Medicine (2.0 bill euro)
Medicine grants (0.9 bill euro)
FINANCING OF HEALTH CARE PUBLIC
EXPENDITURE ON HEALTH

11. • Principle since 1970, municipalities and regions (decentralised
public services)
• ‘Equal partners’
• Combining budgetcontrol with local flexibility
• Avoid detailed regulations: risk of neglect of responsibility and
displacement of focus
BUDGET COORPORATION

12. Planned Realised
• Figure shows annual real
growth in public health
expenditure, 1993-2010
• Difficult to control public health
expenditure across
governments
PUBLIC HEALTH EXPENDITURE
ACROSS GOVERNMENTS

13. Goals
• To support the credibility of the fiscal policies
• To strengthen the governance of public expenditures
• To make sure that overall costs do not exceed the passed budget
Content
• The overall expense ceilings are passed by parliament for a period of 4 years
• 3 separate expense ceilings for state, regions and municipalities
Sanctions
• Implemented if budget/actual costs exceeds agreed target
NEW BUDGET-LAW

14. STRENGTHS IN CONTROLLING
HEALTH CARE COSTS
• General practitioners as gate keepers
• Municipal co-financing of regional health care
• Yearly budget-agreement between government and
regions
• Visitation guidelines

15. • Negotiations every year with regions and municipalities
• Fixed total level of spending, separate budgetceilings for service
and investments
• Policy targets to be met including a 2 pct. productivity target
• New analyses - e.g. on activity trends
• Output monitoring based on last years activity target as negotiated
• Key: delivering on ceilings and targets!
BUDGET AGREEMENTS

16. • Rewarding quantity, not quality
• Lack of priority
• Lack of exchange of knowledge and best practices
between regions
• The right to get diagnosed within a month
CHALLENGES IN CONTROLLING
HEALTH CARE COSTS

17. Incentive structure in the health care sector
• More and better health at the same ressource level
• Right now the incentives are too focussed on quantity
• Stimulate coordination and continuity in treatment
within and between sectors in the health care system
• Map and spread best pratice

18. PRODUCTIVITY IN THE REGIONS
1.4
-3.2
4.2
5.6
5.3
1.4
-4.0
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
2007 2008 2009 2010 2011 2012
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
Hovedstaden
Sjælland
Syddanmark
Midtjylland
Nordjylland
Denmarkintotal
Annual growth in productivity in
public hospitals, pct., 2007-2012 Productivity by region, 2012

19. • Transparency reform:
o Better care and quality, more value for money
o Transparency and better use of data
o Development of quality indicators
o Development of a patient related cost database
o Better use of indicators and data at local level
TRANSPARANCY REFORM – BETTER
USE OF DATA

20. Improving the health
of the population
Improving
quality per
patient
Fewer
costs per
patient
Why?
Better practice and
knowledge sharing –
what works?
Relevant and better
documentation
Data should be shared
and used – also across
sectors
TRIPPLE AIM

21. Thank you for your attention!