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Health benefits and service costs in Europe

Final Report Summary - HEALTHBASKET (Health benefits and service costs in Europe)

Since the Kohll / Decker judgments of the European Court of Justice, it has become increasingly clear that health services can no longer be regarded as operating in isolation from other European Union (EU) Member States. Increasingly, there are flows of patients from one Member State to another, sometimes as a matter of individual choice, sometimes organised through ministries of health or sickness funds.

There is, however, widespread agreement among Member States that the 'financial balance' of national health systems within the EU should not be undermined by the movement of patients.

A basic requirement to protect this financial viability is the availability of accurate information on the basket of services offered in the different Member States, how these are defined, how often they are used for particular patients, what their costs are and what prices are paid for them. This knowledge will enable both Member States and the European Commission (EC) to formulate coherent policies to order patient movements in a way which will not threaten the financial viability of existing health systems and the treasured principles of universality, equity and accessibility. Furthermore, if patients are to benefit from the opportunity offered by the EU's internal market, they too will need to know what services are available elsewhere, and at what cost.

The objectives of the HEALTHBASKET project have therefore been two-fold: to consider policy as well as methodological challenges. It has addressed both needs in a clear and unambiguous manner, by focusing specifically on the basket of services and by reviewing and developing methodologies to assess costs and prices of individual services across EU Member States. The project also supports a more coherent policy vision by developing and testing an innovative approach to the analysis of costs at the micro-level which will be internationally comparable, and by assessing cost variations between Member States using a selection of inpatient and outpatient services.

To our knowledge, the HEALTHBASKET project has provided the first in-depth analysis of the benefit baskets and the benefit catalogues in nine European countries, representing a heterogeneous mix of health care systems. The country studies have shown that information on this issue is often difficult to access, since it is highly fragmented and non-systematic. The use of a common framework and terminology to scan the different health systems in searching for benefit catalogues has allowed us to gather heterogeneous information in a highly comparative manner. The methodology followed in our study could be applied to explore and describe the health baskets and catalogues in other European (as well as non-European) countries.

The comparative analysis of health benefits in the countries under study reveals that, despite their differences in the financial and organisational arrangements, there is a clear trend towards a more explicit definition of benefit baskets and benefit catalogues in European health care systems. Those countries which have recently introduced new health care legislation have more explicitly defined benefit catalogues. Other countries with older health care legislation have, at least at the legal level, rather more implicitly defined benefit baskets. However, as of now, no country has one uniform catalogue - benefit baskets consist of a mixture of differently defined lists (entitlements, payment, guidelines…).

Even though country approaches to benefit definition vary greatly, only minor variations exist between countries if benefit entitlements are analysed by category. Most countries exclude similar benefits: cosmetic surgery, vaccination for travelling purposes) and certain non-conventional treatments (e.g. acupuncture). Since the taxonomy applied to sort and describe health services (and to a lesser degree, goods) differs widely from country to country - even if most tend to sort ambulatory care primarily by physician specialty and inpatient care primarily by diagnosis and procedure - it remains somewhat unclear whether entitled services are actually the 'same'. In contrast with this lack of clarity, clinicians seem to have a relatively uniform understanding of what constitutes 'medicine' across different countries.

Contrary to widespread opinion, the motivation to establish an explicit benefit basket of services is not always cost-containment or rationing. In the two countries with a regionalised National health system (NHS), the purpose of the definition of a health basket is to assure equity among the regions. The devolution of health services to the autonomous (regional) governments made evident the need to define a minimum basket of health services common to all in order to avoid unacceptable differences in health service provision. The regional health authorities are, however, allowed to add further benefits, provided that they have adequately covered the minimum.

In most of the countries, the aspects considered in the decision-making process and the ultimate reasons underlying decisions on the health basket are not transparently and systematically documented. Explicitly defined benefit catalogues, however, require clear and transparent decision criteria for the inclusion or exclusion of benefits. This has been recognised by policy makers, as shown by the fact that sets of criteria to guide decision-making have been mentioned. Most countries officially state that (cost)-effectiveness is an important decision criterion. However, further inquiries often demonstrate that a true formalisation of the process is still lacking for many health care categories and is often restricted to one or few sectors of the health care system, e.g. pharmaceuticals or medical devices, and not generalisable to all products or services. Transparency is still lacking concerning the interpretation, operationalisation and application of the criteria in the process of decision-making.

The review revealed that there is no universally accepted costing methodology. There are several appropriate methods to estimate the (unit) costs of a particular service. In general, accountants define costs in terms of the historical value of economic resources, while economists use a different concept of costs, frequently described as opportunity cost. Both accountant and economic literature agree on the basic principles of costing. Costing exercise starts with:
(a) the formation of a well-defined decision problem, including the objectives of costing, the perspective of costing, and the time horizon; as well as
(b) the description of a particular service (cost object).
Once a service has been defined in detail, the methodologies for its costing follow three distinctive steps:
(c) the identification of resources used to deliver the service;
(d) the measurement of resource utilisation in natural units; and
(e) attaching monetary value to resource use.
In addition, there is a consensus on the need to address the robustness of the results by means of sensitivity analysis and statistical tests.

Overall, while differences in average costs were significant between countries, within-country variation was also unexpectedly large - in some cases, larger than between-country variation. These differences are partly due to different accountancy standards, but also due to prices per input unit and, most importantly, due to large and apparently real differences in practice (and therefore, differences in actual coverage of services). Other explaining factors include data recording, cost-shifting to patients, exchange rates, demarcation of service to other sectors etc.