Designing and Implementing Health Care Provider Payment Systems

How-To Manuals

Editors John C. Langenbrunner Cheryl Cashin Sheila O’Dougherty

Designing and Implementing Health Care Provider Payment Systems

How-To Manuals

Designing and Implementing Health Care Provider Payment Systems

How-To Manuals Edited by John C. Langenbrunner Cheryl Cashin Sheila O’Dougherty

Washington, D.C.

© 2009 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org E-mail: [email protected] All rights reserved 1 2 3 4 12 11 10 09 This volume is a product of the staff of the International Bank for Reconstruction and Development / The World Bank. The findings, interpretations, and conclusions expressed in this volume do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgement on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The International Bank for Reconstruction and Development / The World Bank encourages dissemination of its work and will normally grant permission to reproduce portions of the work promptly. For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copyright Clearance Center Inc., 222 Rosewood Drive, Danvers, MA 01923, USA; telephone: 978-750-8400; fax: 978-750-4470; Internet: www.copyright.com. All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2422; e-mail: [email protected] ISBN: 978-0-8213-7815-1 eISBN: 978-0-8213-7824-3 DOI: 10.1596/978-0-8213-7815-1 Library of Congress Cataloging-in-Publication Data Designing and implementing health care provider payment systems : how-to manuals / edited by John C. Langenbrunner, Cheryl Cashin, and Sheila O’Dougherty. p. ; cm. Includes bibliographical references and index. ISBN 978-0-8213-7815-1 (alk. paper) 1. Medical economics. 2. Medical fees. I. Langenbrunner, John C. II. Cashin, Cheryl. III. O’Dougherty, Sheila. IV. World Bank. [DNLM: 1. Rate Setting and Review—methods. 2. Reimbursement Mechanisms. 3. Developing Countries. 4. Health Policy. 5. National Health Programs. 6. Reimbursement, Incentive. W 74.1 D457 2009] RA410.5.D47 2009 338.4’73621—dc22 2008052039 Cover design: Edelman

Contents Preface

xi

Acknowledgments

xiii

List of Contributors

xv

Abbreviations Glossary Overview: What, How, and Who: An Introduction to Provider Payment Systems

1.

2.

xviii xix 1

Aims and Readership of This Volume Provider Payment Systems and Methods: An Overview Main Characteristics of Provider Payment Methods The Way Forward Organization of This Volume Notes References

1 3 12 19 20 24 24

Primary Health Care Per Capita Payment Systems

27

Overview of PHC Provider Payment Systems Defining the Health Policy Context Methodology for Developing a Per Capita PHC Payment System Defining a PHC Package of Services Setting the PHC Pool and Calculating the Base Per Capita Rate Calculating Risk Adjustment Coefficients Developing an Enrollment Database Calculating Each Provider’s Per Capita Budget Designing a Finance and Management System Designing a Monitoring and Quality Assurance System Expan