The Newly Established Unified Healthcare Fund (EOPYY): Current Situation and Proposed Structural Changes, towards an Upgraded Model of Primary Health Care, in Greece ()
1. Introduction
Nowadays, the challenging economic environment motivates many governments in and beyond the European Union to increase efficiency and contain expenditure in health care systems. This evolution requires either unconventional reforms or reforms subsistent in nature. In this context, the 2011 reform in the Greek health social insurance market resulted in a unified central fund (National Organization for Healthcare Provision―EOPYY) [1] , which simultaneously undertook the majority of PHC provision. Although EOPYY is considered to be the most promising reform after that of NHS (ESY), its performance doesn’t seem to have met the stakeholders’ expectations. This paper imprints the results of a relevant research project which was undertaken in order to record systems’ and organizations’ parallel to Greek PHC’s current situation. Its first results revealed both a deficient and a non-integrated primary care function [2] . Moreover, the Greek government’s supervision is restrictive, imposing a significant reduction in public health expenditure in the near future. This situation inspired us to conduct a comparative analysis on international health systems and health insurance organizations (e.g. AOKGermany, UNCAM-France, Kaiser Permanente-USA, FAHIF-Austria), in an effort to propose best practices with regard to structure, financing and providers’ reimbursement. We conclude that major interventions are needed, including redefining and harmonization of the basic insurance package, supply control in the public and private sector, as well as control of the expected substitution of private health services with that of public. All of them are designed with the purpose of upgrading PHC around patients’ needs [3] .
2. EOPYY
2.1. Establishment and Goals
EOPYY is a public corporate body established under Greek Law 3918/2011 and it is supervised by the Ministry of Health (MoH) [until 1st April 2012 Ministry of Labour and Social Security (YPAKP) was a co-supervisor]. The organization launched its operations on 1st January 2012.
EOPYY’s primary mission is the provision of health services to active members, pensioners and their family dependents registered to the merging healthcare funds [4] . EOPYY unified the majority of healthcare funds, amongst them being the Private Employees’ Fund (IKA), the Public Employees’ Fund (OPAD), the Farmers’ Fund (OGA) and the self-employed/Entrepreneurs’ Fund (OAEE). As a result, EOPYY covers over the 98% of the insured population (close to 11 million). This monopsony model is similar to the French National Union of Health Insurance Funds (UNCAM) [5] , while significant similarities exist with the German “AOK Berlin” regional sickness fund [6] and the Federation of Austrian Health Insurance Funds (FAHIF) [7] respectively. For PHC, EOPYY also undertakes the operational coordination and the cooperation between (public and private) healthcare units and health professionals constituting the PHC network [4] . This role also includes regulative policy reform in quality and effectiveness, management and control of funding and the rational use of available resources. Moreover, EOPYY sets the major preconditions required for contractual commitment with providers of Public and Private primary and secondary care. The organization’s role is also extended to provide key quantitative data to the MoH relevant to cost structure, beneficiaries’ demographics and budget execution.
2.2. Financing Health Services through EOPYY
The United Regulation of Health Benefits [8] describes nine possible sources of financing EOPYY: 1) Employees’ and employers’ contributions; 2) Annual subsidies from the state budget up to 0.6% of GDP; 3) Income from any social resources; 4) Property revenues, return on capital and reserves; 5) Donations, legacies and bequests; 6) Financial revenues; 7) Income from fines and other penalties; 8) Revenues from services provided to privately and non-domestically insured population; and 9) Rebate inflows from pharmacies and pharmaceutical companies.
Table 1 represents the structure of EOPYY’s financing. The initial projections of 2012 showed that total income would exceed 8 billion Euros, the majority of which would be derived from insurance contributions (56.6%) and the government’s involvement (18.6%). Additional revenue would be achieved by adjusting the contributions of the four largest funds. However, this scenario was never achieved as the governments’ subsidies were subsequently reduced by 0.4% (due to memorandum contractual conditions) and the partial readjustment of contributions (due to pressure from trade unions). Consequently, a revenue shortfall of over 2.5 billion Euros is estimated for 2012. Moreover, as shown in Table 2, the financial transfer between EOPYY and the unified
Table 1. EOPYY’s revenue, initial 2012 budget (in million EUR).
Source: [9] .
Source: [9] .
funds was deficient by approximately 1.66 billion Euros. Data of Table 3 reveals that EOPYY’s 2012 revenue budget (approximately 5.8 billion Euros) is insufficient to cover health expenditure of the insured population, whilst at the same time, there are significant liquidity problems. The expenditure budget is dominated mostly by pharmaceutical and hospital care, a phenomenon which in combination with under-financing reduces the PHC’s ability to respond to the increased demand for its role as a gate-keeping tool.
Apart from the under-financing and low-liquidity problems, another emerging threat is that of rampant domestic unemployment that has two major characteristics: high levels of undeclared work (contribution evasion) and direct insurance reduction. Both of them imply a potential revenue shortfall. More specifically, at the end of 2011 the total number of EOPYY’s beneficiaries was estimated at 11.35 billion, 6.38 billion directly insured (56%) and 4.97 billion indirectly insured (44%) [9] . This proportion is expected to change in the near future (2013-2014) towards a movement to the indirect system of health insurance (about 2/3 of total beneficiaries). At this point, another distortion arises from the fact that the total insured population exceeds the resident population recorded by the 2011 census (10.81 billion) [10] . This deviation is explained by the phenomenon of double insurance and/or the abstention from census. Despite the distortions described above, EOPYY is not threatened by social obsolescence this due to beneficiaries not having the right of statutory health insurance from another insurer. This kind of “free choice” refers to a state-controlled competition applied both in the Netherlands [11] and Germany [12] .
The most recent projections on EOPYY’s revenue budget are summarized in Table 4. In 2013 the total revenue is budgeted at least 6.2 billion Euros, the largest part of which comes from insurance contributions (70%) and state subsidies (18%). However, contribution evasion still exists and implies a revenue loss approximating 20% (800 million Euros). The expenditure budget of the same year (Table 5) shows that PHC services
Table 3. EOPYY’s expenditure, 2012 budget (in million EUR).
Source: [9] .
Table 4. EOPYY’s revenue, 2013 and 2014 budget (in million EUR).
a2/2013 projections. Source: [13] ; bProposal.
represented by total non-hospital services, absorb 1/6 of the total expenditure (at least 1 billion Euros). Additionally, NHS hospital expenditure decreased 10% on average per year since 2010. In 2009, expenditure was over 6 billion Euros, in 2012 over 5 and 2013 less than 5 (only 1/5 of this has been reimbursed by EOPYY under a DRG scheme which was established in parallel). Pharmaceutical expenditure had similar reductions. Pharmaceutical expenditure blowouts have over the past decades been attributed to many factors [14] . Expenditure gradually decreased from 2009 to 2012 (over 10% on average per year). The demanding effort to rationalize pharmaceutical expenditure in Greece appears to be on course, based on results of price regulation, being achieved in a stressful and volatile environment, caused by the Greek economic crisis. However, the financing gap remains the organization’s “open wound”. Another important issue is that this gap passes on the private sector, disrupting the providers’ cash cycles, through extraordinary payment delays [15] [16] .
3. Provision of PHC through NHS and EOPYY
The Greek legislative framework [4] [17] specifies that PHC is provided by publicly-owned entities (hospitals, health centers etc.), privately-owned entities (private hospitals, diagnostic laboratories etc.), EOPYY’s units and contracted with EOPYY health professionals. Table 6 summarizes the manpower and structures of the Greek
Table 5. EOPYY’s expenditure, 2013 and 2014 budget (in million EUR).
a2/2013 projections. Source: [13] ; bProposal.
PHC at the beginning of 2013. Unfortunately, the exact quantification of the manpower of public and private hospitals and other private structures was impossible, due to lack of official data provided by MoH and relevant researches.
With respect to the composition of physicians in Greece, there is a small proportion of GPs in the total number of PHC physicians (9.4%), whilst the corresponding proportion is even lower regarding the contracted with EOPYY physicians (7.7%) (Table 6 calculations). These figures overestimate the current situation comparing with OECD’s data whereby total GPs occupy only 5% of total Greek physicians (including those of secondary and tertiary care) [16] . That reveals a significant deviation from advanced European health systems whose (EU- 25) average reaches 30% [19] . In other words, the figures above reinforce our concerns about both the relaxed participation of family physicians in the Greek NHS and their low contribution to the gate-keeping mechanism.
Furthermore, the figures of Table 6 indicate that Greek PHC has adopted a physician-driven organizational structure, since physicians outnumber by far all other health professionals. This is endorsed by quantitative data i.e. Greece has by far the highest number of physicians per capita among European countries (6.1 physicians per 1000 population in 2010) [19] . On the other hand, the density of nursing manpower of PHC providers is markedly lower in Greece (0.46 in PHC (Table 6), 3.3 totally [19] ). Compounding this shortfall, nursing staff have limited and inflexible responsibilities which implies a regressive nursing management [20] . Finally, it should be taken into account that apart from these 26.000 total PHC staff at NHS and EOPYY, an equivalent number of professionals work as solo practice (doctors or other health professionals) or group practice within diagnostic centers. Private payments on PHC estimated another billion Euros in Greece [2] .
The provision of PHC in Greece has additional features which are irregular and uncommon. First of all, PHC controlling authorities have not managed to apply a rational geographical distribution of contracted EOPYY physicians. Their concentration in Athens and Thessaloniki respectively (the two most congested cities) is approximately 62% of total physicians, whist at the same time there is complete lack of some specialties across the
Table 6. Manpower and units of Greek PHC at NHS and EOPYY.
cContractual relationship (self-employed and enterprises); eEmployees (salaried); pProperty relationship; Source: [4] [13] [18] .
whole country with the exception of the five largest counties [4] . That means that urban areas tend to attract both providers and patients [21] . Internal medicine, cardiology, obstetric-gynecology, general practice and orthopedics are classified as the five most populous specialties corresponding to 63% of total physicians.
Another problem is the subordinate role of health centers and regional offices in spite of the growing demand for them. Despite the positive steps of decentralization and regionalization of administration of the health care system, these units remain substandard, including personnel shortage, inadequate resources and a lack of medical record documentation [22] . Nursing staff employed in these centers and offices are to large extent untrained, playing mainly traditional/tight roles [23] .
An interesting evolution deriving from the current domestic debt crisis is the structural change in the demand for health services. More specifically, patients are led to public services mainly due to the negative impact of crisis on their disposable income. For example, laboratory tests in public units increased by 18% while visits to health centers increased by 22% (2010-11 change), signifying a significant market share loss to private diagnostic laboratories [24] . Subsequently, this evolution requires managerial intensification to actively curb “clientalism”, a phenomenon that has dominated the public sector [25] .
Moreover, the gate-keeping mechanism functions poorly not only because of the shortage of GPs, nurses and midwives, but also because of the “free choice” institution [26] , i.e. the chance allowed to the insured population to choose freely any provider of NHS or EOPYY. France (UNCAM) [5] and Austria (FAHIF) [7] apply a similar system. Generally, Greek citizens seem to prefer inpatient/hospital PHC services as they consider them more effective. Typically, 9% of them visit public hospitals’ outpatient clinics, 11% health centers and regional offices, 30% EOPYY’s units, 25% contracted professionals, 20% private hospitals and 5% other structures [27] . The “free choice” perception is highlighted further with the additional healthcare load of non-insured and illegal immigrants who receive care (mainly public) [28] , whilst visits of foreigners to outpatient services are not recorded [29] .
4. A Proposed Model for PHC Provision and Financing
Having already noticed the organizational and financial weaknesses, the starting point of our proposal revolves around EOPYY’s conversion from a provider to a “contractual agency” which would continue to act as monopsony and subsequently be the chief receiver of total public health financing. For example, contributions should be collected either directly by EOPYY or indirectly by pension funds. In the latter case the transfer to EOPYY must be immediate in an online monthly basis.
As shown in Table 4, the proposed consolidated model results in annual revenue of about 11 billion Euros during 2014. To ensure the feasibility of this plan several actions are required: 1) EOPYY should take on the pension funds’ role of contribution evasion management and impose stricter fines. Given that contribution evasion reaches 20% in 2013 [30] or close to 800 million Euros (see Table 4), its effective management could minimize evasion at 6.0% - 6.5%, resulting in additional revenue of up to 600 million Euros; 2) EOPYY should also be the controlling agent for the receipt of state payroll subsidies for NHS employees, compensating NHS hospitals on the total cost of the newly established DRG system [31] that is currently under relative revision (the relevant revenue is estimated to be at least 3 billion Euros, covering over 50% of NHS Hospitals expenditure); 3) Government subsidies for benefits and operational costs of NHS units must be transferred to EOPYY for the same reason resulting in a further 2 billion Euros for health care coverage in 2014; 4) Return on assets could be doubled (from 53 to 110 million Euros) by outsourcing the assets management to private corporations. To account for the possibility of revenue shortfalls, other measures such as earmarked taxes or increase of insurance contributions could be taken respectively.
This proposal allows for PHC provision in Greece to be undertaken by the professionals and units as indicated in Figure 1 and should be financed under an annual global budget taking into account geographical distribution (population etc.) and performance data (see below). More specifically:
Up to 200 merged NHS health centers and 1500 regional offices (220 health centers and 1530 regional offices in 2013) both of which are staffed by 3500 physicians (about 500 of which are GPs initially), 2100 nurses and 2300 allied administrative and technical staff (7900 total staff). Up to 200 merged EOPYY (merging in NHS) units (400 polyclinics and medical offices in 2013) which are staffed by 6000 physicians (about 500 of which are GPs initially), 2800 health staff and 1400 allied administrative and technical staff (10,300 total staff). 7000 contracted physicians implying that additional contracts and a reallocation of human resources are needed in 2014. Additional contracts refer to an extra 580 GPs (420 in 2013) and an extra 794 pediatricians (206 in 2013). Obviously the purpose is to boost the family physician (GP) and the family pediatrician primary healthcare delivery.
Figure 1. Proposed PHC network in Greece.
2400 diagnostic laboratories contracted with EOPYY (reductions will be based on quality standards and certification criteria. This should be implemented immediately). Other contracted professionals (i.e. pharmacists, physiotherapists, etc.). Other NHS (outpatient clinics) and contracted with EOPYY (rehabilitation, recovery and daycare centers).
Regarding health care units, our proposal estimates the need of no more than 400 health centers (200 NHS mainly in agricultural and semi-urban areas and 200 EOPYY in urban areas), including total mergers of small EOPYY urban clinics, while no more than 1500 agricultural medical offices should remain to service islands, mountainous villages and other isolated areas. This adjustment fits with the new 350 municipalities of Kallikratis plan, plus a further 50 in the large metropolitan areas-cities [2] .
Summarizing, PHC in Greece will be provided mainly by 16,500 physicians. The role of family physician will be constantly upgraded with 2000 family physicians (1000 self-employed, plus 1000 salaried, all under an extra pay-for-performance system) and 1000 family pediatricians in the beginning of 2014. Their numbers should be further increased in 2015-2016 in an attempt to get closer to the international standards (paid on a capitation basis).
Concluding, Table 5 represents the proposed expenditure budget of 2014. Among the same outflows with that of 2013, payments to contracted physicians are expected to rise by 40 million Euros due to the contracts with additional GPs and pediatricians. However, the sum of the corresponding to 2013 outputs will fall down at about 5.5 billion Euros after the effective activation of the gate-keeping mechanism. In 2014, EOPYY’s total expenditure will approach 10.4 billion Euros, entailing a surplus of about 600 million Euros (paid for past debts) coming from social insurance evasion.
According to the proposed model, PHC will continue to absorb over 1 billion Euros hence 1/10 of total expenditure. This amount will be allocated regionally and through the PHC providers’ network based on global budgets that are represented totally in Table 7. During the preparation of the global budgets, we only considered catchment population and utilization criteria, whilst further we propose a Resources Allocation Working Party (RAWP) formula [32] for the future, in which morbidity and other health indices which are not available now should be included, as well as poverty or unemployment ratios. As follows, NHS providers absorb over 20%, EOPYY’s units under 25%, while contracted professionals and units 55% of the total budget.
5. Reimbursement Model of PHC Providers
Greek PHC providers are reimbursed in a quite simplified manner. Self-employed health professionals and enterprises, contracted with EOPYY (physicians, physiotherapists, rehabilitation centers etc.), are reimbursed on a feefor-service payment based on the State Invoice of Medical Procedures [1] . Simultaneously, there is an additional 10 Euros co-payment for each visit to a contracted physician’s office, a mixed system also found in the Netherlands (EUR9 per visit) [33] . It’s important to note that there is a maximum remuneration of 200 visits per month for each physician. That causes another phenomenon whereby physicians ask patients for out-of-pocket payment with the pretense that they have exceeded the ceiling (under-the-table payments [34] ). This model in combination with poor auditing in some cases creates favorable conditions for wasting resources and induced demand. On the other
Table 7. Proposed PHC global budget per health provider and district (in million EUR).