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Ethiopia has made great strides in improving population health but sustaining health system and population health improvements in the current fiscal environment is challenging. Provider payment, as a function of purchasing, is a tool to use limited health resources better. This study describes the design and implementation of Ethiopia's provider payment mechanisms (PPMs) and how they influence health system objectives and contribute to universal health coverage goals. The research team adapted the framework and analytical tools of the Joint Learning Network for Universal Health Coverage guide for assessing PPMs. Data were collected through literature review and key informant interviews with 11 purchasers and 17 health care providers. Content analysis was used to describe PPM design and implementation arrangements, and thematic analysis was used to distill effects on equity in resource distribution and access to care, efficiency, quality of care, and financial sustainability. The study revealed the PPMs had positive and negative consequences. Line-item budgets were perceived to be predictable and sustainable but had little effect on efficiency and provider performance. Fee-for-service was perceived to have negative effects on efficiency and financial sustainability but viewed positively on its ability to incentivize quality health services. Capitation and performance-based financing effects were viewed positively on equity in distribution of resources and quality respectively, but both were perceived negatively on their high administrative burden to providers. Ethiopia may consider a more nuanced approach to design blended provider payment to mitigate negative consequences while providing incentives for better quality of care and efficiency.

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BACKGROUND: Provider payment reforms (PPRs) have demonstrated mixed results for improving health system efficiency. Since PPRs require health care organisations to interpret and implement policies, the organizational characteristics of hospitals may affect the effectiveness of PPRs. Hospitals with more autonomy have the flexibility to respond to PPRs more efficiently, but they may not if the autonomy previously facilitated behaviours that counter the PPR's objective. This study examines whether hospitals with higher autonomy responds to PPRs more effectively. METHODS: We used data from a matched-pair, cluster randomized controlled PPR intervention in a resource-limited Chinese province between 2014 and 2018. The intervention reformed the reimbursement method from the publicly administered New Cooperative Medical Scheme (NCMS) from fee-for-service to global budget. We interacted measures of hospital autonomy over surplus, hiring, and procurement (drugs, consumables, equipment, and overall index) with the difference-in-difference estimator to examine how autonomy moderated the intervention's effect. RESULTS: Autonomy over surplus (p < 0.01) and procurement of equipment (p < 0.01) were associated with relatively faster NCMS expenditure growth, demonstrating worse PPR response. They were also associated with higher expenditure shifting to out-of-pocket expenditures (p > 0.05). Post hoc analysis suggests that hospitals with surplus autonomy had higher OOP per admission (p < 0.01), suggesting profiteering tendencies. Other dimensions of autonomy demonstrated imprecise association. DISCUSSION: Hospitals with more autonomy may not necessarily respond more effectively to PPRs that incentivise efficiency when they had previously been encouraged to maximise profit. Policymakers should assess the extent of perverse incentives before granting autonomy and adjust the incentives accordingly.

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Purpose: The medical-pharmaceutical separation (MPS) reform is a healthcare reform that focuses on reducing the proportion of drug expenditure. This study aims to analyze the impact of the MPS reform on hospitalization expenditure and its structure in tertiary public hospitals. Methods: Using propensity score matching and multi-period difference-in-difference methods to analyze the impact of the MPS reform on hospitalization expenditure and its structure, a difference-in-difference-in-difference model was established to analyze the heterogeneity of whether the tertiary public hospital was a diagnosis-related-group (DRG) payment hospital. Of 22 municipal public hospitals offering tertiary care in Beijing, monthly panel data of 18 hospitals from July 2011 to March 2017, totaling 1242 items, were included in this study. Results: After the MPS reform, the average drug expenditure, average Western drug expenditure, and average Chinese drug expenditures per hospitalization decreased by 24.5%, 24.6%, and 24.1%, respectively (P < 0.001). The proportions of drug expenditure decreased by 4.5% (P < 0.001), and the proportion of medical consumables expenditure increased significantly by 2.7% (P < 0.001). Conclusion: The MPS reform may significantly optimize the hospitalization expenditure structure and control irrational increases in expenditure. DRG payment can control the tendency to increase the proportions of medical consumables expenditure after the reform and optimize the effect of the reform. There is a need to strengthen the management of medical consumables in the future, promote the MPS reform and DRG payment linkage, and improve supporting measures to ensure the long-term effect of the reform.

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In response to a government audit report in 2021, the Philippine health insurance system transitioned its case-based payment system back into a fee-for-service model capped at individual case rates. This commentary discusses the adverse effects of this policy on health care accessibility and affordability in the country. A rapid review of data shows that it may have resulted in delayed insurance payments, increased denial rates, and reduced coverage, and weakened the strategic purchasing capacity of public health insurance, hugely affecting vulnerable populations and public health care facilities. The commentary calls for a reconsideration of the policy and emphasizes the importance of aligning financial auditing procedures with the needs of health-financing institutions. It advocates for a transformation of audits, moving beyond their traditional role as compliance checks, to become valuable tools supporting a nation's health care purchasing strategies, ultimately benefiting both health care providers and the broader public.

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BACKGROUND: This study aimed to investigate the associations between provider payment methods and expenditure of depressive patients, stratified by service types and hospital levels. METHODS: We used a 5 % random sample of urban claims data in China (2013-2017), collected by China Health Insurance Research Association. Provider payment methods (fee-for-services, global budget, capitation, case-based and per-diem payments) were the explanatory variables. A generalized linear model was fitted for the associations between provider payment methods and expenditure. All analyses were adjusted for patient"cioeconomic and health-related characteristics. RESULTS: In total, 64,615 depressive patient visits were included, 59,459 for outpatients and 5156 for inpatients. Female patients accounted for 63.00 %. The total and out-of-pocket (OOP) expenditure significantly differentiated by provider payments. Among outpatient services, when comparing with fee-for-services, capitation payment was associated with substantial marginal reduction in total and OOP expenditure (-$34.18, -$9.71) in primary institutes, yet increases ($27.26, $24.11) in secondary hospitals. Similarly, global budget was associated with lower total and OOP expenditure (-$13.51, -$1.61) in secondary hospitals, while higher total and OOP expenditure ($7.43, $32.27) in tertiary hospitals than fee-for-services. For inpatients, total and OOP expenditures under per-diem (-$857.65, -$283.48) and case-based payments (-$997.93, -$137.56) were remarkably smaller than those under fee-for-services in primary and secondary hospitals, respectively. Besides, case-base payment was only linked with the largest reduction in OOP expense (-$239.39) in inpatient services of tertiary hospitals. LIMITATION: Only urban claims data was included in this study, and investigations for rural population still warrant. And updated data are needed for future studies. CONCLUSIONS: There were varying correlations between provider payment methods and expenditure, which differed by service types and hospital levels. These findings provided empirical evidence for optimizing the mixed payment methods for depression in China.

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BACKGROUND: In response to the increasing prevalence of people with chronic conditions, healthcare systems restructure to integrate care across providers. However, many systems fail to achieve the desired outcomes. One likely explanation is lack of financial incentives for integrating care. OBJECTIVES: We aim to identify financial incentives used to promote integrated care across different types of providers for patients with common chronic conditions and assess the evidence on (cost-)effectiveness and the facilitators/barriers to their implementation. METHODS: This scoping review identifies studies published before December 2021, and includes 33 studies from the United States and the Netherlands. RESULTS: We identify four types of financial incentives: shared savings, bundled payments, pay for performance, and pay for coordination. Substantial heterogeneity in the (cost-)effectiveness of these incentives exists. Key implementation barriers are a lack of infrastructure (e.g., electronic medical records, communication channels, and clinical guidelines). To facilitate integration, financial incentives should be easy to communicate and implement, and require additional financial support, IT support, training, and guidelines. CONCLUSIONS: All four types of financial incentives may promote integrated care but not in all contexts. Shared savings appears to be the most promising incentive type for promoting (cost-)effective care integration with the largest number of favourable studies allowing causal interpretations. The limited evidence pool makes it hard to draw firm conclusions that are transferable across contexts.

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BACKGROUND: The Government of The Gambia introduced a national health insurance scheme (NHIS) in 2021 to promote universal health coverage (UHC). Provider payment systems (PPS) are strategic purchasing arrangements that can enhance provider performance, accountability, and efficiency in the NHIS. This study assessed healthcare workers' (HCWs') preferences for PPS across major service areas in the NHIS. METHODS: A facility-based cross-sectional study was conducted using a probability proportionate to size sampling technique to select an appropriate sample size. Health care workers were presented with options for PPS to choose from across major service areas. Descriptive statistics explored HCW socio-demographic and health service characteristics. Multinomial logistic regressions were used to assess the association between these characteristics and choices of PPS. RESULTS: The majority of HCW did not have insurance coverage, but more than 60% of them were willing to join and pay for the NHIS. Gender, professional cadre, facility level, and region influenced HCW's preference for PPS across the major service areas. The preferred PPS varied among HCW depending on the service area, with capitation being the least preferred PPS across all service areas. CONCLUSION: The National Health Insurance Authority (NHIA) needs to consider HCW's preference for PPS and factors that influence their preferences when choosing various payment systems. Strategic purchasing decisions should consider the incentives these payment systems may create to align incentives to guide provider behaviour towards UHC. The findings of this study can inform policy and decision-makers on the right mix of PPS to spur provider performance and value for money in The Gambia's NHIS.

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Gaining wide prominence in the global health arena, scaling-up increases the coverage of health innovations emerging from pilots and experimental projects to a larger scale. However, scaling-up in the health sector should not follow a linear 'pilot-diffusion' pathway in order to better facilitate local adaptation and policy refinement. This paper puts forth 'scaling-up through piloting' as a distinctive pathway for the strategic management of scaling-up in the health sector. It analyses the recent development of provider payment reforms in China, focusing particularly on the ongoing pilot programmes, namely diagnosis-related groups (DRGs) and diagnosis-intervention packet (DIP), that are being piloted in a dual-track fashion since 2020. Data were drawn from extensive documentary analysis and 20 in-depth interviews with key stakeholders, including decision-makers and implementers. This paper finds that scaling-up through piloting helps Chinese policymakers minimize the vast uncertainties associated with complex payment reforms and maximize the local adaptability of provider payment innovations. This pathway has forged a phased implementation process, allowing new payment models to be tested, evaluated, compared and adjusted in a full spectrum of local contexts before national rollout. The phased implementation creates a 'slower is faster' effect, helping reduce long-term negative consequences arising from improperly managed scaling-up in a complex system. Error detection and correction and recalibration of new policy tools can support national-level policy refinement in a more robust and dynamic fashion. Several key factors have been identified as crucial for strategic scaling-up: necessary central steering, a pragmatic piloting design, strong technical capacity and effective policy learning mechanisms.

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Strategic purchasing is noted in the literature as an approach that can improve the efficiency of health spending, increase equity in access to health care services, improve the quality of health care delivery, and advance progress toward universal health coverage. However, the evidence on how strategic purchasing can achieve these improvements is sparse. This narrative review sought to address this evidence gap and provide decision makers with lessons and policy recommendations. The authors conducted a systematic review based on two research questions: 1) What is the evidence on how purchasing functions affect purchasers' leverage to improve: resource allocation, incentives, and accountability; intermediate results (allocative and technical efficiency); and health system outcomes (improvements in equity, access, quality, and financial protection)? and 2) What conditions are needed for a country to make progress on strategic purchasing and achieve health system outcomes? We used database searches to identify published literature relevant to these research questions, and we coded the themes that emerged, in line with the purchasing functions-benefits specification, contracting arrangements, provider payment, and performance monitoring-and the outcomes of interest. The extent to which strategic purchasing affects the outcomes of interest in different settings is partly influenced by how the purchasing functions are designed and implemented, the enabling environment (both economic and political), and the level of development of the country's health system and infrastructure. For strategic purchasing to provide more value, sufficient public funding and pooling to reduce fragmentation of schemes is important.

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Background: South Korea has utilized its National Health Insurance (NHI) system to adjust the medical fees payable for healthcare services, to financially support the frontline healthcare providers combating COVID-19. This study evaluated the composition of such adjustments to the medical fees-made to secure resource surge capacity against the pandemic-in South Korea. Methods: Descriptive statistics and schematization were employed to analyze 3,612,640 COVID-19-related NHI claims from January 1, 2020, to June 30, 2021. COVID-19 suspected and confirmed cases were evaluated based on the proportion of fees adjustment, classified into space, staff, or stuff (3S) using diagnosis codes. The proportion of fees adjustment was investigated in terms of the healthcare expenditure, number of patients, and number of healthcare services covered. Findings: First, in terms of cost, medical fee adjustments covered over 96% of the total costs arising from the increased demand for testing (stuff) and isolated spaces among patients suspected of having COVID-19. Second, medical fees were adjusted to cover over 80% of the cost attributable to COVID-19 confirmed cases, in relation to isolated spaces and medical staff support. Third, the adjustment of less than 10% of the various types of medical fees, if selected strategically, can effectively induce a surge in resource capacity. Interpretation: South Korea has improved its existing surge capacity by adjusting the medical fees payable through NHI to healthcare providers. Particularly, through the provider payment system of fee-for-service, the Korean government could prevent the spread of infection and protect the medical staff assigned to respond to COVID-19. However, additional studies on alternative payment systems are needed to control costs while maintaining an effective pandemic response system in the face of the prolonged COVID-19 outbreak.

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To make progress toward universal health coverage (UHC), most countries need to commit more public resources to health. However, countries can also make progress by using available resources more effectively. Health purchasing, one of the health financing functions of health systems, is the transfer of pooled funds to health providers to deliver covered services. Purchasers can be either passive or strategic in how they transfer these funds. Strategic purchasing is deliberately directing health funds to priority populations, interventions, and services, and actively creating incentives so funds are used by providers equitably and aligned with population health needs. Strategic purchasing is particularly important for countries in sub-Saharan Africa because public funding for health has often not kept pace with UHC commitments. In addition, there is wide variation in progress toward UHC targets and health outcomes on the continent that does not always correlate with per capita government health spending. This paper explores the critical role strategic purchasing can play in the movement toward UHC in sub-Saharan Africa. It explores the rationale for strategic purchasing and makes the case for a more concerted effort by governments, and the partners that support them, to focus on and invest in improving strategic purchasing as part of advancing their UHC agendas. The paper also discusses the promise of strategic purchasing and the challenges of realizing this promise in sub-Saharan Africa, and it provides options for practical steps countries can take to incrementally improve strategic purchasing functions and policies over time.

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Abrupt jumps in reimbursement tariffs have been shown to lead to unintended effects in physicians' behavior. A sudden change in tariffs at a pre-defined point in the treatment can incentivize health care providers to prolong treatment to reach the higher tariff, and then to discharge patients once the higher tariff is reached. The Dutch reimbursement schedule in hospital rehabilitation care follows a two-threshold stepwise-function based on treatment duration. We investigated the prevalence of strategic discharges around the first threshold and assessed whether their share varies by provider type. Our findings suggest moderate response to incentives by traditional care providers (general and academic hospitals, rehabilitation centers and multicategorical providers), and strong response by profit-oriented independent treatment centers. When examining the variation in response based on the financial position of the organization, we found a higher probability of manipulation among providers in financial distress. Our findings provide multiple insights and possible indicators to identify provider types that may be more prone to strategic behavior.

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In 2007, Thailand's Civil Servant Medical Benefit Scheme (CSMBS), one of the three main public health insurers, adopted a new payment mechanism for hospital admission. There has been a shift from fee-for-service toward Diagnostic Related Group (DRG)-based payment that transfers financial risk from the government to health care providers. This study investigates the effects of this policy change on hospital admission, frequency of admission, length of stay (LOS), type of hospital admitted, and out-of-pocket (OOP) inpatient medical expenditure. By employing nationally representative micro-level data (Health and Welfare surveys) and difference-in-difference approach, this study finds a 1 percentage point decline in hospitalization, a 10% higher chance of admission at community hospitals (the lowest level inpatient public health care facility), and a 7% less chance of admission at higher level public health care facilities like general hospitals. No significant change was observed in LOS, frequency of admission, or OOP inpatient medical expenditure associated with the post-2007 payment mechanism change. Our results emphasize the effectiveness of a close-ended payment mechanism for health care in developing countries. This study also adds to the limited literature on using micro-level data to investigate payment mechanism change in the context of low- and middle-income countries.

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Provider payment methods are a key health policy lever because they influence healthcare provider behaviour and affect health system objectives, such as efficiency, equity, financial protection and quality. Previous research focused on analysing individual provider payment methods in isolation, or on the actions of individual purchasers. However, purchasers typically use a mix of provider payment methods to pay healthcare providers and most health systems are fragmented with multiple purchasers. From a health provider perspective, these different payments are experienced as multiple funding flows which together send a complex set of signals about where they should focus their effort. In this article, we argue that there is a need to expand the analysis of provider payment methods to include an analysis of the interactions of multiple funding flows and the combined effect of their incentives on the provision of healthcare services. The purpose of the article is to highlight the importance of multiple funding flows to health facilities and present a conceptual framework to guide their analysis. The framework hypothesizes that when healthcare providers receive multiple funding flows, they may find certain funding flows more favourable than others based on how these funding flows compare to each other on a range of attributes. This creates a set of incentives, and consequently, healthcare providers may alter their behaviour in three ways: resource shifting, service shifting and cost shifting. We describe these behaviours and how they may affect health system objectives. Our analysis underlines the need to align the incentives generated by multiple funding flows. To achieve this, we propose three policy strategies that relate to the governance of healthcare purchasing: reducing the fragmentation of health financing arrangements to decrease the number of multiple purchaser arrangements and funding flows; harmonizing signals from multiple funding flows; and constraining providers from responding to undesirable incentives.

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Provider payment reforms, such as capitation, are very contentious. Such reforms can drop off the policy agenda due to political and contextual resistance. Using the Shiffman and Smith (Generation of political priority for global health initiatives: a framework and case study of maternal mortality. Lancet 2007; 370 1370-9) framework, this study explains why Ghana's National Health Insurance capitation payment policy that rose onto the policy agenda in 2012, dropped off the agenda in 2017 during its pilot implementation in the Ashanti region. We conducted a retrospective qualitative policy analysis by collecting field data in December 2019 in the Ashanti region through 18 interviews with regional and district level policy actors and four focus group discussions with community-level policy beneficiaries. The thematically analysed field data were triangulated with media reports on the policy. We discovered that technically framing capitation as a cost-containment strategy with less attention on portraying its health benefits resulted in a politically negative reframing of the policy as a strategy to punish fraudulent providers and opposition party electorates. At the level of policy actors, pilot implementation was constrained by a regional level anti-policy community, weak civil society mobilization and low trust in the then political leadership. Anti-policy campaigners drew on highly contentious and poorly implemented characteristics of the policy to demand cancellation of the policy. A change in government in 2017 created the needed political window for the suspension of the policy. While it was technically justified to pilot the policy in the stronghold of the main opposition party, this decision carried political risks. Other low- and middle-income countries considering capitation reforms should note that piloting potentially controversial policies such as capitation within a politically sensitive location can attract unanticipated partisan political interest in the policy. Such partisan interest can potentially lead to a decline in political attention for the policy in the event of a change in government.

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AIM: This work aimed to evaluate a pre/post-reform pilot study from 2015 to 2018 in a rural county of Zhejiang Province, China to realign the provider payment system for primary health care (PHC). METHODS: Data were extracted from the National Health Financial Annual Reports for the 21 township health centers (THCs) in Shengzhou County. An information system was designed for the reform. Differences among independent groups were assessed using Kruskal-Wallis H-test. Dunn's post hoc test was used for multiple comparisons. Differences between paired groups were tested by Wilcoxon signed-rank test. Two-tailed P < 0.05 indicated statistical significance. Data were processed and analyzed using R 3.6.1 for Windows. FINDINGS: First, payments to THCs shifted from a "soft budget" to a mixed system of line-item input-based and categorized output-based payments, accounting for 17.54% and 82.46%, respectively, of total revenue in 2017. Second, providers were more motivated to deliver services after the reform; total volumes increased by 27.80%, 19.22%, and 30.31% for inpatient visits, outpatient visits, and the National Essential Public Health Services Package (NEPHSP), respectively. Third, NEPHSP payments were shifted from capitation to resource-based relative value scale (RBRVS) payments, resulting in a change in the NEPHSP subsidy from 36.41 to 67.35 per capita among the 21 THCs in 2017. Fourth, incentive merit pay to primary health physicians accounted for 38.40% of total salary, and the average salary increased by 32.74%, with a 32.45% increase in working intensity. A small proportion of penalties for unqualified products and pay-for-performance rewards were blended with the payments. The reform should be modified to motivate providers in remote areas. CONCLUSION: In the context of a profit-driven, hospital-centered system, add-on payments - including categorized output-based payments to THCs and incentive merit pay to primary care physicians (PCPs) - are probably worth pursuing to achieve more active and output/outcome-based PHC in China.

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We examined the role of billing processes in health care utilization by exploiting a shift in provider payment from fee-for-service reimbursement towards fee-for-service direct disbursement for outpatient services in Thailand. Specifically, prior to October 2006, affected patients had to pay the full cost of outpatient treatment and subsequently received reimbursement; thereafter, these payments can be sent directly to the providers, without patients having to pay anything upfront. By using nationally representative micro-data and a difference-in-difference methodology, we show that the direct disbursement policy leads to an increase in outpatient utilization among the sick. This non-price change has long-lasting impacts and particularly increases the health care utilization of sick individuals who are living in rural areas, are less educated and earn low incomes. These findings suggest that direct disbursement helps to increase liquidity constraint individuals' health care utilization. The results emphasize the effectiveness of behavioural interventions in health policy making.

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Provider payment mechanisms (PPMs) are important to the universal health coverage (UHC) agenda as they can influence healthcare provider behaviour and create incentives for health service delivery, quality and efficiency. Therefore, when designing PPMs, it is important to consider providers' preferences for PPM characteristics. We set out to uncover senior health facility managers' preferences for the attributes of a capitation payment mechanism in Kenya. We use a discrete choice experiment and focus on four capitation attributes, namely, payment schedule, timeliness of payments, capitation rate per individual per year and services to be paid by the capitation rate. Using a Bayesian efficient experimental design, choice data were collected from 233 senior health facility managers across 98 health facilities in seven Kenyan counties. Panel mixed multinomial logit and latent class models were used in the analysis. We found that capitation arrangements with frequent payment schedules, timelier disbursements, higher payment rates per individual per year and those that paid for a limited set of health services were preferred. The capitation rate per individual per year was the most important attribute. Respondents were willing to accept an increase in the capitation rate to compensate for bundling a broader set of health services under the capitation payment. In addition, we found preference heterogeneity across respondents and latent classes. In conclusion, these attributes can be used as potential targets for interventions aimed at configuring capitation to achieve UHC.

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Patients treated at in-network facilities can involuntarily receive services from out-of-network providers, which may result in "surprise bills." While several studies report the surprise billing prevalence in emergency department and inpatient settings, none document the prevalence in ambulatory surgery centers (ASCs). The extent to which health plans pay a portion or all of out-of-network providers' bills in these situations is also unexplored. We analyzed 4.2 million ASC-based episodes of care in 2014-17, involving 3.3 million patients enrolled in UnitedHealth Group, Humana, and Aetna commercial plans. One in ten ASC episodes involved out-of-network ancillary providers at in-network ASC facilities. Insurers paid providers' full billed charges in 24 percent of the cases, leaving no balance to bill patients. After we accounted for insurer payment, we found that there were potential surprise bills in 8 percent of the episodes at in-network ASCs. The average balance per episode increased by 81 percent, from $819 in 2014 to $1,483 in 2017. Anesthesiologists (44 percent), certified registered nurse anesthetists (25 percent), and independent laboratories (10 percent) generated most potential surprise bills. There is a need for federal policy to expand protection from surprise bills to patients enrolled in all commercial insurance plans.

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Global budget (GB) arrangements have become a popular method worldwide to control the rise in healthcare expenditures. By guaranteeing hospital funding, payers hope to eliminate the drive for increased production, and incentivize providers to deliver more efficient care and lower utilization. We evaluated the introduction of GB contracts by certain large insurers in Dutch hospital care in 2012 and compared health care utilization to those insurers who continued with more traditional production-based contracts, i.e., cost ceiling (CC) contracts. We used the share of GB hospital funding per postal code region to study the effect of contract types. Our findings show that having higher share of GB financing was associated with lower growth in treatment intensity, but it was also associated with higher growth in the probability of having at least one hospital visit. While the former finding is in line with our expectation, the latter is not and suggests that hospital visits may take longer to respond to contract incentives. Our study covers the years of 2010-2013 (2 years before and 2 years following the introduction of the new contracts). Therefore, our results capture only short-term effects.

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