Ten years since the decision was taken to overhaul our health system, Charlie Charalambous looks at what has been achieved so far
WHEN the House of Representatives resumes work this week, one of its main items of business will be to discuss a mammoth bill which details how to start implementing the new National Health System (NHS).
The current public health system, established during the colonial period, is generally regarded as having failed to keep pace with the realities of a modern healthcare system required to serve a growing and ageing population. Given the common perception that the most up-to-date medical treatment can only be provided on demand by the private healthcare sector domestically and abroad, the public system tends to be used predominantly by civil servants and their dependants, pensioners and low-income patients who cannot afford the private option.
The political decision was therefore taken some ten years ago to carry out a fundamental reform of the existing system, with the aim of creating an equitable and genuinely universal primary healthcare system which would be economically viable and would guarantee the provision of the highest possible quality of service.
Planning and implementing Cyprus’ new NHS is the responsibility of the Health Insurance Organisation (HIO), a public body consisting of representatives from the government, employers’ associations and trade unions, which was set up under a law passed in 2001.
The HIO has prepared a strategic plan with the assistance of consulting firm McKinsey & Co. which describes all the steps necessary for implementing the NHS, including the transition from the existing health system. A detailed “road-map” of defined and specific tasks has been drawn up based on the implementation strategy plan, which the HIO is in the process of addressing.
HIO President Kyriacos Christofi described to the Sunday Mail what has been done so far, and some of the areas which are still under discussion.
Christofi said that, from the outset, given the scale of the task, the urgent need and the huge amount of finance that a wholly new system would require, it was decided early on that rather than aiming to meet demand by building new public facilities, the new system will be based on the public-private partnership (PPP) model, with healthcare services being procured from both the public and private sectors.
In practice, this will mean that patients will have the freedom to use whichever approved healthcare service provider (doctor, clinic, hospital, emergency health services, lab, pharmacist, etc) they prefer. The patient may also opt to travel abroad for treatment, which will be easier to do when the new EU directive on cross-border healthcare comes into force (see sidebar). In this case, travel and accommodation will not be covered, and the cost of treatment will only be covered at the rate applicable in Cyprus – any amount over that rate will be payable by the patient. If the specific treatment is not available in Cyprus, then the current system will continue, whereby a patient pays for treatment abroad and is then reimbursed by the state.
Patients will also have access to a new service provider category of “family doctor” – following the GP model in the UK – which will allow for uniform standards of practice and a system for referring patients to specialist doctors, both domestically and overseas.
The provision of medication will operate on the same basis as now. A “white list” of approved drugs for each requirement is being worked out, including costs which relate to the price of generic drugs. Christofi said: “If a patient prefers a branded drug, then he/she will have to pay the difference between its price and that of the generic drug.”
The other main characteristics of the proposed new system relate to how it will be paid for.
Money will go into the system in the form of a Health Insurance Fund made up of compulsory contributions – an initial target-figure of €950 million per year is being talked about. Under the current (2001) law, employees would contribute 9.1 per cent of earnings, made up of 2.0 per cent from their own pocket plus 2.55 per cent from the employer and 4.55 per cent from the state. The self-employed would pay 3.55 per cent of their declared total earnings (including income from rent, shares, etc), to which the state will add 4.55 per cent.
The basis for pensioners’ contributions is more complicated, and would depend on income: those with an income up to €513 would not pay, those in the next band of €513-855 would pay anything exceeding €513 in a single month, with the government paying the rest, and those receiving more than €855 would pay the whole cost of their treatment.
Christofi emphasised that this is as the law stands now, and said he expected the House Health Committee to change the amounts payable by pensioners, as it might appear at present that “high-income” pensioners are being dealt with unfairly. “My basic concern, though, is that we guarantee the required revenues to the Fund,” he said.
Christofi said that companies offering health insurance will not be included in the new system, since it is designed to cover the whole population. “We talked to the Insurance Association of Cyrpus. We told them: ‘We don’t need you for our system, so it’s up to you how you attract customers.’ It is a matter of personal choice.”
The aim is that the system will be financially self-sustainable through the application of global budgeting, under which expenses will not exceed contributions. One idea being looked at is reserving a contingency, for example of 10 per cent, to cover exceptionally high demand that might otherwise exhaust an annual budget before year-end.
Money will leave the system in the form of payments to service providers from both the public and private sectors. The HIO will negotiate a rate per visit for family doctors, and a tariff per specialisation for each inpatient hospital service – including X-rays, scans, etc – using the Diagnosis Related Groupings (DRG) model.
DRG is an EU-standard tool for categorising and calculating hospital case files according to similar clinical and cost characteristics. As an effective medical management tool recognised worldwide, it is extensively applied in such areas as medical spending management, medical performance assessment, etc. DRG will include protocols for each illness to ensure an approved minimum standard of treatment. All service providers will also be required to have professional liability insurance.
The HIO intends to set an all-in “price” for each service or procedure, which will then apply to all providers on the basis of signed agreements. Christofi said that if a service provider overcharges or surcharges, it may be struck off the list of providers.
The HIO has set up separate teams to deal with each category of service provider. “We’re currently working out the basic principle that will apply to service providers,” Christofi said. “We’re looking at the operating methods and process, as well as the basic qualifying requirements in terms of what each provider offers.”
Christofi said that the processing of claims for payment poses a big problem, which the HIO is still studying. “Our aim is to deal with payments on a monthly or bimonthly basis. Rather than take on extra staff, we are looking to outsource this part of the system, but with monitoring and regulatory safeguards,” he said.
In application of the PPP model, the plan is for existing public hospitals to be organised into autonomous establishments under the wider public sector. They will each have their own board, will maintain financial independence and will be expected to compete with other hospitals – both public and private – for the provision of healthcare. This implies a radical shif
t in the way public hospitals are run, requiring them to minimise costs and reflect market practices and prices.
Since – in the interest of equal treatment and competition – the HIO will no longer make a distinction between public and private sector facilities, any funding for plans to expand or build new facilities will in future have to be financed. Even government money will have to be treated as a loan to be repaid.
A politically sensitive – not to say explosive – issue is the status of staff in existing public hospitals under the new system. There will no longer be direct government funding, and each hospital will have to balance its own budget. Christofi said that the Health Ministry is handling this issue, and has already opened negotiations with PASYKI and PASYDY, the two main public health sector unions. “Shift-work, 24-hour operating, weekend working – all of this will have to be agreed upon,” he said. “In my personal opinion, they have to work out two proposals: the first is, if you want to continue to work in the new health system, these are the terms; the second is a redundancy package for those who don’t want to continue working.”
When asked to comment by the Sunday Mail, Pancyprian Union of Government Doctors (PASYKI) President Dr Stavros Stavrou was scathing: “Talk of negotiations between the Ministry and the trade unions is just for publicity. We have not even been informed about what is being proposed for the new system. Once invited to participate in a real discussion, we’ll give our position. Right now, we have been left completely in the dark.”
Regarding the PPP basis of funding the system, Stavrou was again unequivocal: “They’re only interested in how to dissolve the public hospitals long-term. The hospitals cannot be dissolved – they are the mainstay of the poor.”
He added: “Honestly, they’re building castles in the air. There is no cash available for the health plan, so the only way is to sell off the public sector. It started with the Bank of Cyprus Oncology Centre, and is carrying on with the Limassol Oncology Centre. The least they can do is inform those most closely involved, in other words the doctors.”
There will also be payments into and out of the system stemming from medical tourism facilitated by the new EU directive on cross-border healthcare. The HIO is waiting for clarifications from the Health Ministry regarding the tariff for services, both domestically and under the cross-border healthcare system, and these and other details finalised so far by the HIO will need to be approved by the House of Representatives Health Committee before the current draft bill is passed into law.
The HIO asked for the new law to be tabled in order to reflect the more detailed stage of the plan today, compared to the framework covered by the 2001 law. “I hope this will happen as soon as the House resumes its work in the autumn,” Christofi said, adding: “I have been told it is high up on the list, and I anticipate that they will pass the new law without too much delay.”
The Health Ministry said recently that the NHS should be up and running “in the second half of 2011”. As major components of the new NHS – like the integrated IT system or the training programme to produce “family doctors” – need to be created from scratch, Christofi suggested that the timeline may slip beyond 2011.
The pros and cons of a public-private system
On the positive side, moving from a choice between limited state provision and relatively expensive private sector provision to a “mixed” system will almost certainly offer a much wider and better range of healthcare options for most of the population.
However, it remains to be seen to what extent private medical practices – which, after all, are businesses designed to make a profit – will maintain their profit margins under the tariff to be agreed with the HIO. There is also the risk of medical/clinical service providers cherry-picking more “lucrative” patients in terms of what a procedure will cost them versus the agreed tariff.
Christofi said that the HIO is studying ways of combating abuse of the system, including checks on waiting-lists, prices and the acceptance of inducements (fakelakia).
Advocates of universal healthcare systems strongly oppose the idea of a healthcare facility being reliant on private finance for funding and on “paying customers” for income, as they consider that this reduces a person’s health to a commodity to be marketed for profit.
They also argue that market mechanisms and other commercial pressures on private healthcare providers can affect medical outcomes, in terms of the suitability of the prescribed treatment, quality of care and even hygiene standards.
As a result of the competitive market conditions which apply today in the UK’s NHS for example, there have been documented cases of poor hygiene in hospital wards as a direct result of low-cost cleaning contracts that stipulate a fixed quantity of detergent or a fixed number of water-changes per cleaning round.
Christofi said that “hygiene standards will be a matter for the service providers, but will be monitored by the HIO. Hygiene is included in the criteria being worked out for service providers.” He added that any complaints by patients will be handled by a separate regulatory body and a dedicated ombudsman, to be appointed by the Council of Ministers.
The EU cross-border healthcare directive
On 2 July 2008, the European Commission published a proposal for a Directive on the cross- border provision of healthcare services in Europe, as part of its Renewed Social Agenda.
The directive’s stated aim is to codify and clarify the rules that have already been laid down by the European Court of Justice on the right of patients to receive healthcare in another EU Member State. In practice, this may well ease congestion in countries that have long waiting-lists for operations, but another effect – intended or not – will be to help create a European market in healthcare.
The directive on cross-border healthcare – which so far has been approved by the European Parliament – may have a significant impact on the way different EU countries and regions organise, manage and finance their healthcare services. Under its proposals, patients will be able to travel freely to another country and receive treatment there, in most cases without first getting the authorisation of their domestic health system.
The main exception – which was strongly argued for by the UK government – is hospital care. Health Department officials were concerned that the plan could threaten the stability of NHS finances, as on the one hand the UK will lose revenue to hospitals overseas, and on the other Britons living abroad will be able to charge the UK’s NHS for all their medical care, rather than relying on private medical insurance to cover local treatment.
A predominant lack of prior authorisation could mean that most EU health systems will be unable to accurately forecast the demands on their systems and allocate the necessary resources to respond to that demand.
EU Health Commissioner Androulla Vassiliou is on record as saying that “it is up to each health authority and each hospital to manage patient flows. The Directive does not forbid authorities to refuse foreign patients if they do not have the capacity to take them on.”
There are two other major questions flowing from the development of a European healthcare market. Firstly, existing problems of shortages of qualified healthcare workers – due either to low pay on offer or migration of their own professionals to other regions – are likely to be made worse.
Secondly, there is a risk that the “market price” of medical procedures will be driven up, as private healthcare providers in relativ
ely cheaper countries hike up their prices to take advantage of advantageous health scheme tariffs in more expensive countries. Such price increases and a focus on lucrative medical tourists might also affect the availability of treatment to locals.
Concerns that chronic diseases will not be treated correctly under new NHS
What worries specialists like Dr Michael Angastiniotis, Medical Advisor to the Thalassaemia International Federation (TIF), is that the proposed NHS will result in chronic diseases like thalassaemia not being treated correctly.
“The general health scheme now is no different to what applies in the rest of Europe – there is the same kind of architecture. I am worried that the proposed new system is focusing on providing a primary healthcare service, and is being designed to pay for treatment of an episode,” he said.
“But chronic diseases need special care, which involves a multi-disciplinary approach. What is an episode when dealing with a thalassaemia patient? His whole life is an episode! The best service for thalassaemia patients is provided by reference centres staffed by a range of experts, but these seem to come under a tertiary scheme according to the new plan – it is rather vague. What is certain is that the level of care that exists now will be destroyed unless we change it.
“Dutch thalassaemia patients are suffering more now, following recent changes to their health system. Chronic diseases bring complications, they need to be monitored. But instead of monitoring patients, now they wait for an episode to occur before referring the patient to a specialist.”
He explained that under the current system in Cyprus, cardiologists, for example, will monitor thalassaemia patients without waiting for a heart episode to occur.
“Thalassaemia requires a prevention programme. Is it there in the new NHS plan? We don’t know,” he said.
“TIF has helped to set up the Cyprus Rare Diseases Alliance, to try to bring together organisations representing rare diseases, including thalassaemia, in order to lobby more effectively at national and European levels. About a year ago, we held a conference which was attended by an HIO representative. He seemed to be hearing what we had to say for the first time. He said he would relay our concerns, but since then, we are becoming increasingly concerned that chronic diseases simply aren’t present in the NHS plan.”
Is a fully-integrated IT system feasible?
The plans for the new NHS include the strategic design and architecture of an IT system to support the whole NHS in all of its processes and interfaces.
On paper, it is certainly an attractive prospect. It would help to improve the quality of health services, increase the effectiveness and efficiency of procedures, and support decision-making and health policy formulation.
But the sheer scale of the IT challenge is worrying in terms of feasibility. For example, the Sunday Mail knows of one patient at the new Nicosia General Hospital who had to wait over five weeks for the result of a biopsy. A surgeon told him that the extra two-week delay on top of the normal two to three weeks required was due to the fact that the General Surgery Department could not access the result on the hospital’s central IT system. This was down to technical problems that had still not been resolved two and a half years after the hospital opened to the public, and after repeated visits by the IT contractors. The result is that biopsy results still have to be typed, printed out and then delivered by hand to the relevant department – all of which takes as much as two weeks.
Tenders for a fully-integrated IT system covering the whole of the proposed NHS have been invited under the EU’s directive for “competitive dialogue” in public procurement. The gremlins have appeared early: one unsuccessful contractor – Logicom – appealed to the Tenders Review Authority (TRA), which delayed the tendering process for over a year, and then applied unsuccessfully for a Supreme Court order to stop the process altogether.
Christofi said: “The most significant obstacle to moving forward has now been removed. Competitive dialogue will now start on 22 September with the remaining two tendering companies, IBM and NCR.”
